Macau Business Daily December 7, 2015

MOP 6.00 Closing editor: Oscar Guijarro

Climate talks reach climax

Xi Jinping strengthens links with African leaders

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Page 9

Year IV

Number 935 Monday December 7, 2015

Publisher: Paulo A. Azevedo

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Government nixes extension of Pearl Horizon’s land concession

Avoiding Catastrophe

Putting the population first. Alexis Tam painted it in large letters for legislator Fong Chi Keong. Following a lively exchange in the Legislative Assembly. The President of the Kiang Wu Hospital Charitable Association and Secretary Tam disagreed on the aggressive recruitment of medical personnel by the gov’t. Human and capital resources were the familiar battleground in the Policy Address discussion. Despite ‘Cannon’ Fong’s protestations, “The population do not consider the new hospital a catastrophe. For them a catastrophe would be to be discussing this in five years from now”, said Secretary Tam Page

2

Circuit breaker A new set of rules. On the way to improving stock market safety on the Mainland. Authorities announced circuit-breaker mechanisms to prevent systemic risk when the bourse falls. The far-reaching measure takes effect on New Year’s Day

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Brought to you by

HSI - Movers December 4

Nice for MICE

Good times. At least for Meetings, Incentives, Conferences and Exhibitions. With receipts surging 26.4 pct y-o-y for Q3. While expenditure jumped 13.7 pct in the period. Some 213 MICE events were held in Q3

www.macaubusinessdaily.com

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Loans up

Name

%Day

China Mengniu Dairy C

+4.52

CNOOC Ltd

+1.35

Hang Lung Properties L

+1.09

China Overseas Land &

+0.73

Power Assets Holdings

+0.57

Tencent Holdings Ltd

-2.20

PetroChina Co Ltd

-2.29

Sands China Ltd

-2.38

China Life Insurance Co

-2.43

Interview

Bank of Communicatio

-2.69

Handling the headwinds

Source: Bloomberg

Domestic loans on a roll in October. With local banks granting MOP388.8 bln to the city’s private sector.

A remarkable increase on a yearly basis. Although slightly down on September

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Positive feedback on F & B. Almost full occupancy of its hotels. And a sense of mass market strategies clicking with the consumer. Kevin Clayton, chief marketing officer of Galaxy Entertainment Group, describes a satisfactory performance to date by the company’s Phase II offerings. And tells Business Daily that a corporate culture of continuous improvement is making the difference. Visitation is up, while Broadway offers particular opportunities for Macau’s SMEs

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2 | Business Daily

December 7, 2015

Macau

Hiring of doctors for Islands Hospital stokes controversy The president of the Kiang Wu Hospital Charitable Association recently voiced concern that the government is hiring doctors from the private hospital, to which Alexis Tam responded that the interests of the population are his foremost consideration João Santos Filipe

jsfilipe@macaubusinessdaily.com

Secretary Alexis Tam (C) during Friday’s session

T

he discussion about the health system of Macau following the Policy Address in the Legislative Assembly became quite heated when the president of the Kiang Wu Hospital Charitable Association, legislator Fong Chi Keong, accused the government of “stealing doctors” from the private sector. The controversy resulted from Alexis Tam’s policy to start hiring doctors and nurses for the Islands Hospital. While the hospital is not expected to open until at least 2017, the professionals hired will be working in Hospital Conde São Januário to expand the capacity of existing public services.

“The public sector is hiring doctors from the private sector and some have gone from Kiang Wu to work for the government. This creates problems for the private sector. Please listen to our opinion and learn how you can improve our situation. I hope you can step out of your world, and see the world outside”, Mr. Fong said on Friday on the second day of the Policy

Alexis Tam Chon Wang stressed that while he understood and is willing to help the private health sector, his main focus is to meet the demands and interests of the local population

Address for Social Affairs and Culture.

Fong Chi Keong also said it would be a “catastrophe” if the public sector totally commandeered the human resources of the private sector.

Instead of hiring more doctors, the legislator suggested Secretary Tam outsource from existing local private and non-profit organisations in the territory, justifying this with the increases in budget.

“One of the largest shares of the public budget is controlled by you. There was an increase in the budget from MOP5 billion to MOP7 billion in one year. Why don’t you use outsourcing to address the lack of capacity of public hospitals?”

‘Cannon’ Fong asked the Secretary.

“The public services have many human resources and doctors.

Secretary, you don’t need to show off to demonstrate your strong position”.

Specialised services option for private sector

Alexis Tam Chon Wang stressed that while he understood and is willing to help the private health sector, his main focus is to meet the demands and interests of the local population.

“Probably you would like us to have more services for Kiang Wu… And maybe that’s a very good suggestion. If the recruitment by the government has created problems for Kiang Wu and other non-profit organisations focused on the health sector, we are sorry for that. However, we are working for the population, and people want the new hospital to improve the services of the public services”, Alexis Tam stressed. “The population do not consider the new hospital a catastrophe. For them a catastrophe would be to be discussing this in five years from now”.

“The government already invests MOP900 million a year in outsourcing services from the Kiang Wu hospital.

Mr. Fong, you are very well aware of this fact. And you also know that I have authorised Kiang Wu to hire

non-resident workers and I will continue to do so”, Tam said.

The Secretary also said that in his viewpoint, the private sector should hire more specialised doctors, as in regions such as Hong Kong and Singapore, instead of overly focusing on general clinical services.

“We guarantee you opportunities to bring in foreign workers. I’m aware of the cultural differences that may be a challenge, but this is an opportunity for you to bring more specialised doctors”, Mr. Tam said.

During the discussion, Fong Chi Keong also revealed that eight members of the Legislative Assembly are members of the board of Kiang Wu Hospital, which in turn is controlled by the Chui family.

Scolding University

The Secretary also scolded the University of Macau (UM) for its

intention to cut the budget for Portuguese education and the offering of Portuguese elective courses. The session was attended by the Rector of the UM, Wei Zhao.

“Recently there were some unhappy incidents at the University of Macau. We cannot cut the resources of investing in Portuguese education. The University of Macau has financial and administrative autonomy, but Portuguese education has to be better”, Alexis Tam said.

“Macau Polytechnic Institute (MPI) is doing very well in Portuguese education. The Rector of MPI asked me for more resources and I agree with him. I hope UM can improve in this respect. We cannot deny that Portuguese language is one advantage to Macau. I hope the University of Macau will follow the policy of the territory defined by the Chief Executive”, he added.

During his speech, Alexis Tam also stressed the importance of Macau as a platform between Mainland China and the Portuguesespeaking Countries and the trend on the Mainland to increase the number of degrees focused on the Portuguese language education.

This episode was also commented on by legislator and lawyer Leonel Alves, who said that there “seems a disconnect between the political speech of the region and its implementation”.

“There is autonomy, but the University of Macau belongs to Macau. MPI has done a brilliant job in teaching Portuguese and this happens because the rector speaks both Chinese and Portuguese. This is not the case in UM and, without any disrespect to the UM rector, this seems to have its origins in the fact that UM rectors do not speak the two languages and it seems to be happening due to the lack of a certain sensitivity to this issue”, Leonel Alves said.

Not losing sleep over slump The number of tourists visiting Macau has been declining this year in comparison to 2014. However, as long as the region continues to keep its cultural landmarks and Portuguese heritage the industry will be strong, the Secretary believes.

“The tourism [strategy of] other places, such as Korea, is to target Mainland customers, which increases competition for us. Also, the [activity] in the stock exchange markets in Mainland China is affecting tourists. But I’m confident about this issue because there’s a huge market and we have good tourism offerings”, he said after being questioned by local legislator and businessman Chan Chak Mo. “This reduction in the number of tourists is not a problem for now, as long as we

develop more tourist resources and are able to keep the cultural heritage. We do not need anything new but to save our patrimony. We are also the only Chinese city allowed to develop gaming and this is an advantage. The Hong Kong‑Zhuhai‑Bridge will also increase the number of tourists.

I am confident”, he added.

Legislator Chan Chak Mo criticised Alexis Tam’s plan of creating more tourism offerings because he wants it to be developed by the private sector.

“Having the government investing is not a good solution because it will be competing with the private sector. The idea should be that the government create the right conditions for private entrepreneurs to develop these opportunities”, he said.

Business Daily | 3

December 7, 2015

Macau

Loans up double-digits y-o-y in October Total loans granted by the local banking sector posted a double-digit increase from one year ago, although the amount represented a slight drop compared to the month before Kam Leong

kamleong@macaubusinessdaily.com

L

ocal banks’ approval of domestic loans to the private sector registered a year-on-year increase of 17.3 per cent in October, in addition to a year-on-year jump of 11.2 per cent apropos the granting of external loans, according to the latest data released by the Monetary Authority of Macau (AMCM).

In October, local banks granted a total of MOP388.8 billion-worth (US$48.6 billion) of domestic loans to the city’s private sector. Although the amount represents a notable growth compared to the same period last year, it represented a drop of 0.4 per cent month-on-month from MOP390.2 billion.

Of the total, 65.5 per cent was denominated in Hong Kong dollars (HKD), amounting to MOP254.6 billion, followed by Patacas (MOP), which occupied 27.5 per cent, or MOP105.6 billion. In addition, renminbi (CNY) and US dollar (USD)-denominated domestic loans accounted for 0.8 per cent and 5.9 per cent of the total, respectively.

Meanwhile, external loans approved by the sector in October

posted a month-on-month decrease of 0.3 per cent to MOP387.1 billion.

Nearly half of the total external loans, 48.7 per cent of the total, were USD-denominated, amounting to MOP188.5 billion. MOP, HKD and CNY accounted for 1.4 per cent (MOP5.5 billion), 24.3 per cent (MOP94.0 billion) and 20. 2 per cent (78 billion) of the total, respectively.

As at the end of October, the loanto-deposit ration for the resident sector grew 0.7 percentage points from September to 66 per cent,

according to AMCM. Meanwhile, the one-month and three-month current assets to liabilities ratios stayed at relatively high levels, marked at 61.1 per cent and 60 per cent respectively.

Total deposits drop

On the other hand, total deposits with the local banking sector dropped 0.5 per cent month-on-month to MOP863.2 billion. The shares of MOP, HKD, CNY and USD in total deposits were 19.6 per cent, 41.7 per cent, 10.6 per cent and 24.7 per cent, respectively.

In the month, resident deposits registered a decrease of 2.7 per cent year-on-year, or a drop of 1 per cent month-on-month, amounting to MOP466.1 billion. The decrease is primarily due to the drop in residents’ time deposits.

Moreover, according to AMCM, resident deposits of CNY registered a sharp decline of 17.2 per cent compared to September, while MOP and HKD denominated-deposits increased 1.5 per cent and 2.1 per cent, respectively.

Non-residents’ deposits with local banks rose 1.5 per cent to MOP273.9 billion. On a year-on-year comparison, the amount represents a surge of 17.2 per cent. However, public sector deposits decreased 3 per cent to MOP123.1 billion in the month.

As at the end of October, currency in circulation had increased by 1.7 per cent month-on-month. Money supply (M1) and quasi-monetary liabilities grew 3 per cent and dropped 1.4 per cent from September. Hence, M2, the sum of the two items, posted a slight decline of 0.9 per cent to MOP478.1 billion.

4 | Business Daily

December 7, 2015

Macau 155 new temporary residency applications in Q3 The Macau Trade and Investment Promotion Institute (IPIM) received a total of 155 new applications for temporary residency during the third quarter of the year. Of the total, 83.2 per cent, or 129 of the total applications applied under the scheme for management and technical personnel status, while the authority approved 53 of them, involving 95 people. Meanwhile, the other 38 applications filed under major investment or investment plan, of which only one was given the green light by IPIM.

MICE organisers receipts up 26.4 pct in Q3 Nevertheless, their expenditure during the period grew 13.7 per cent Kam Leong

kamleong@macaubusinessdaily.com

Organisers saw financial support from the local government increase 8.9 per cent year‑on‑year in Q3

M

ICE (Meetings, Incentives, Conferences, Exhibitions) organisers saw receipts generated by their exhibitions in the city surge 26.4 per cent year-on-year for the third quarter of the year, while expenditure during the same period jumped 13.7 per cent from one year ago, statistics released last week by the Statistics and Census Service (DSEC) reveals.

Between July and September, some 213 MICE events were held in the territory, up 32 year-on-year.

In addition, the total number of participants and attendees rose 40.8

per cent to more than one million due to an increase in large-scale exhibitions. The average duration of events was 2.4 days, while total floor area used for the events was 178,122 square metres.

According to the MICE organisers of 28 exhibitions surveyed by DSEC, their receipts totalled MOP44.26 million (US$5.53 million) in the three months, of which those organised by nongovernment organisations accounted for 97.6 per cent of the total. These 28 exhibitions attracted 1,842 exhibitors, mostly from Macau (42.5 per cent) and Hong Kong (24.4 per cent).

Some 61.1 per cent of organisers’ receipts were earned from the rental of exhibition booths, which amounted to MOP27.08 million. The number, compared with MO19.3 million one year ago, surged 40.2 per cent yearon-year.

In addition, organisers saw financial support from the local government increase 8.9 per cent year-on-year during the three months.

They gained a total of MOP17.1 million in financial aid from the government, accounting for 38.6 per cent of their total receipts for the period.

Expenditure of these exhibitors increased to MOP65.29 million from MOP57.24 million during the same period of last year. The growth in expenditure is primarily due to increased costs in production, construction & decoration services,

and publicity & public relations, which amounted to MOP18.25 million and MOP17.8 million, respectively.

For exhibitors, 767 interviewed parties by the government department claimed that 94.3 per cent of their receipts were from sales of product, while rental paid for exhibition booth and booth decoration accounted for 68.5 per cent and 14.2 per cent of their expenditure.

MICE events cumulatively up this year

Accumulatively, some 637 MICE events were held in the city during the first nine months of the year, up 77 year-on-year. The total number of participants and attendees jumped by 8.7 per cent year-on-year to 1.67 million.

In terms of event type, 582 of the total were meetings and conferences, of which the number of participants decreased 20.4 per cent to 56,313, while the other 55 were exhibitions, of which the number of attendees rose 10.1 per cent year-on-year to 1.6 million.

For the three quarters, the surveyed organisers of 53 exhibitions claimed that their receipts totalled MOP122 million, up 4.5 per cent. Some 63.6 per cent of their total receipts were generated by the rental of exhibition booths. Meanwhile, their expenditure during the period reached MOP152 million from 146.2 million one year ago, with publicity & public relations and construction & decoration services accounting for half of the total.

Polytec: Gov’t nixes extension of Pearl Horizon concession The government will release a legal analysis report, as well as announcing its stance on the issue, on or before Thursday

D

eveloper Polytec Asset Holding Ltd.’s application to extend the land concession for its high-end residential Pearl Horizon project has been rejected by the Macau Government, it told Hong Kong Stock Exchange on Friday evening.

‘The application for an extension of the expiry date for the concession has been declined by the

relevant department of the Macau SAR Government.

The company will continue to take all necessary and appropriate actions to protect its interests,’ the developer wrote in the filing.

Last month, Polytec applied to the government for an extension of the expiry date for five years to December 25, 2020. Its current land-use term for the project plot expires on the

25th of this month but the project construction is only estimated to be completed by 2018, according to the company’s previous filings.

‘The delay in completion of the Project was caused by the delay of the Macau SAR Government in granting the requisite approvals and permits for the development of the Project,’ the developer said in the Friday filing.

It also said that it is

planning to file the case with the city’s Administrative Court (Tribunal Administrativo) in order to apply for remedies to continue and complete the project, claiming the application would be made by its legal representative as soon as practicable.

The company did not include information in the filing on when the government would reclaim the land plot located on Lote P in Novos

Aterros da Areia Preta on the Peninsula.

Polytec said recently that it had only been issued with a construction permit for the housing project in August 2014, after it had submitted an environmental assessment report in 2011. The delay in construction has triggered the project’s off-plan buyers petitioning the government several times whilst a protest on the issue was staged the previous weekend.

The government, having claimed that the new land law would not allow the extension of the land concession, will release a legal analysis report, as well as announcing its stance on the issue on or before this Thursday. The report seeks a proposal to protect the interests and benefits of unit owners of the project.

K.L.

6 | Business Daily

December 7, 2015

Macau

Galaxy Ent. CMO: Broadway, new phase of Galaxy successfully pulling in crowds Macau-based casino-resort operator Galaxy Entertainment Group has so far reported a satisfactory performance of its businesses in the new Galaxy Phase II and mass appeal Broadway Macau properties, which were launched in late May, says Kevin Clayton, the company’s chief marketing officer. The operator is also confident in its non-gaming offerings and eyes continuous improvements while the industry rides a gaming downturn Paulo Azevedo and Stephanie Lai newsdesk@macaubusinessdaily.com

We have to say that we’re satisfied with our launch

the number of covers has gone up significantly in our business upon the opening of the new outlets.

Galaxy has developed these different segments of businesses and Broadway Macau is an answer to the mass market. Has Broadway Macau been doing well in the non-gaming part; for instance with its line of local restaurants? Has the project been a successful crowdpuller?

KC: We have to say that we’re

satisfied with our launch. We increased visitation – weekend visitation is about 70,000 to 80,000 people, for Broadway and Galaxy Macau incorporated. And mid-week, we have a visitation of about 45,000 to 60,000, depending upon the time you go and the period. So that is a significant increase on where we were in Phase 1. No doubt we are increasingly attractive and no doubt we have become a key attraction in Macau.

We are an attraction for Macau and with Macau because Broadway also provides a fantastic platform for SMEs, especially in the context of authentic Macanese fare. And many SMEs are located around Macau and for the very first time they’re in a vibrant street environment where somebody can walk along the street and have up to 30 to 40 different styles of food and different occasions in a single location, matched with free entertainment – whether that’s Band on the Run in terms of live band entertainment, or whether it’s the street buskers. You can also go to the drinking establishments, including Road House.

So our casino [in Broadway Macau] is a fairly small entity relative to other casinos in Macau.

But we see that as a fantastic addition to what we see as being the total proposition for Galaxy and Galaxy Macau. Broadway Macau actually starts to talk to existing segments that we’ve got within our own business of Galaxy Macau here. It starts to attract audiences that are looking for a particular style of delivery and occasion.

What are the successful products in Galaxy Phase II that have been receiving better feedback? And what needs improvement?

KC: There are lots of headlines.

Let me start by saying that any business that is successful has to continue evolving. And Kevin [Kelly, chief operating officer of Galaxy Entertainment Group], in particular, is always on our case with regards to continuously improving our products, services and therefore experiences. That is a continuous process. It is a continuous feedback process from the customer and we work with our partners – whether that’s retail partners or food and beverage partners or hotel partners or otherwise, to make sure that we continuously improve on what we see as being a standing in the market. Let me start by saying that our standing in the market has always been built on high quality delivery of product, and high quality service.

We’re renowned for having the best service in Macau. Seriously; our customers tell us that. We are proud of that. And we can qualify that. Having the best service in Macau means having a great

team. We recruit some of the very best people and we train the very best people. So we have to be proud about how we go about our work. We have a large number of employees. We spend a large amount of money on training and development. We have a fairly sizable structure in support of that.

And we therefore build a loyal team – a team that likes to work for the business, and we like them working in our business. So that’s first and foremost.

The headline stuff that we’re getting feedback on at the moment is the 99.9 per cent hotel occupancy. It is testament to the fact that people like our hotels and people like our facilities generally in terms of hospitality.

Frankly, it hasn’t been difficult to sell our rooms. And hopefully that continues. And it should continue based on the feedback on our service. We work closely with JW Marriott, with Ritz-Carlton, with Banyan, with Okura and obviously with our own team in the context of Galaxy Macau to enhance room amenities, to enhance services and welcome services to our guests.

So that’s one testament to having high-quality product and highquality service.

The other aspect that we get some very good feedback on at the moment is the diversity and quality of our food. We have significantly increased our diversity with over 120 different eateries, including Broadway Macau. The quality of our food is second to none. We get regular feedback from our own research that they like our food, they like our service, and

It seems that some products are similar in different resorts. For example, the shopping malls.

They’re different in terms of architecture, and how they position the shops and so on. But many brands are the same – the Guccis, the Pradas, the Dolce and Gabbanas. Is this because they have space for the same brands in different areas, so again let’s build it because there will be customers? Or there’s no other way to do it?

KC: Shopping is an occasion.

And the shopping occasion really links to people going for a spa treatment; people going shopping and going to the cinema; people go shopping and they stay in a hotel; people go shopping and they go to a café. It’s all of the above. Therefore, in the context of The Promenade, what really sets it apart at the moment is the shopping occasion. And the shopping occasion is bringing in all of the diversity and quality of an integrated resort. Hence the reason for the ‘Ultimate Shopping Experience’, the promotion that we’re running at the moment, is actually talking to the customers and tapping in their psyche. The shopping is really about ‘build me, and deliver for me an occasion’.

On the entertainment side, how is Galaxy trying to position itself from other properties nearby, like Sands China with The Cotai Arena, and Studio City?

KC: I think entertainment operates on about four to five different levels. Firstly, it’s cinema because it’s incredibly popular. The UA Cinema that we have here is one of the most popular cinemas in Asia. And so people love to come her to see blockbuster movies. It’s part of everybody’s entertainment portfolio.

We’ve got China Rouge for a more discerning style of customer.

And we’ve got streetscape entertainment. And streetscape

Business Daily | 7

December 7, 2015

Macau entertainment is not just about Broadway called the street of entertainment, but also about what occurs as the environmental entertainment in the property – it’s about people playing the violin, people playing the piano, people playing the harp, the high fashion with the stilt artists through the Promenade.

And finally, which is the Arena stroke of experience that people are establishing in Macau, we have a theatre in Broadway, and it’s a much more intimate style of entertainment. And therefore, the core proposition of Broadway is about being up close and personal – whether you are touching the entertainment on the street, whether it’s the service in the casino or the number of SMEs and restaurants on the streets.

When you’re in the Broadway theatre, even if you’re in the back row, you’re so close to the stage relative to other arenas and theatres. So we’ve landed on what we see as being a proposition that works for us and works for our customers.

shopping, food, cinema, theatre and obviously casinos in the context of mass gaming. No doubt the market is going through a form of transition, but when we talk about Macau, I think we’d better be talking about Macau in the context of what the operators provide and facilitate as a function of destination and attractiveness as well as other infrastructure projects as you see around town.

We know that the light rail will facilitate the ease of access and convenience. And it will certainly help in terms of traffic. And we know that [LRT Taipa section] is due for completion if not next year shortly thereafter. We know that the bridge connecting Hong Kong together with Macau is another facilitator of increased level of traffic and convenience.

And we see an increasing level of traffic come through the airport, even though I’m sure most of the operators would like to see that expand further because there is no doubt a customer who arrives by air is a potentially high-yield customer. So I think it’s the mix of what an operator is doing locally within the context of its property, quality, and diversity as well as in terms of affordability. And we are all playing that game – Galaxy, in particular, in terms of Phase 2 and Broadway offering a greater level of diversity. But that’s a power play in the context of the total fabric of Macau. So we have to work in partnership, and we’re working in partnership with government to make sure that Macau does become the entertainment, the leisure attraction that it deserves to be internationally as well as regionally. With no doubt a major play on China because they are on our doorstep.

With your nine years in Macau and the experience of working for half of the gaming operators in town, is Macau now what you thought it would be – is it better, or worse? What is Macau now for you?

KC: It’s a good question. Look, I have the benefit and the pleasure of working in, obviously, Galaxy twice now. And in MGM, and Sands China [before]. They have very different operations, very different cultures, and obviously very different views on how they see themselves in Macau and the world generally.

It’s a good question about the market and how the market has evolved in those nine years. When I first arrived here in 2007, the market really was in its infancy.

It’s interesting really because there was a level of expectation at that particular time in terms of how the market could be and the respective scale. I don’t think anybody at that particular time truly understood how big, how bold, and how important Macau could become.

You know, we hadn’t seen [the potential] on that particular day of The Venetian opening. We haven’t seen Cotai being developed at that particular time. The vision was there, but there was still a question of how it would translate.

I think Cotai, without question, has become a truly remarkable destination with a number of world-class properties within a locality. But what’s been also surprising – surprising for me, anyway, although not necessarily for the operator – is just how well the [Macau] Peninsula has continued to do. I commented about two or three years ago whilst doing my short stint working for Grant [Bowie] in MGM that the Peninsula still has its place in the [resort] universe.

When we did some research for MGM at that particular time, without obviously giving away any commercial secrets, what we identified was that the Peninsula had actually developed its own place in the world in the context of Macau where customers sought a greater level of intimacy. An intimacy translated into superior service. Because of the scale of those individual properties, they still have their place in the world in terms of attraction and attractiveness for regular visitors to Macau. Therefore, it’s not suggesting that Peninsula

customers don’t come to Cotai. But there is a particular customer that comes to Macau seeking that level of intimacy.

And Cotai has obviously become a much bigger pie based on the diversity of products, the scale of individual properties and also the diversity by brand of individual product in the context of City of Dreams, Sands Cotai Central, The Venetian, Galaxy, Broadway and Studio City. So if you think about this logically from the customer’s [perspective]: diversity is key; quality is being central; and also in the context of diversity and quality, I think we are attracting a far more discerning customer now to Macau than we probably were historically.

And that could only be a good thing for the market generally; and it could only be a good thing obviously for the operators in Macau.

The headwinds over the last 18 months [mean] we’re really starting to look at how we can compete not necessarily on putting on more promotions or allocating more spend against particular initiatives which erode margin, but it really has now started to create a sense of focus on how we can compete, collectively as well as individually, for the betterment of Macau.

However, gaming operators in Macau need to do something to compensate for the fifty per cent drop in VIP revenue. The logic would be to have more mass market clients. But to have more mass market clients, the city needs to cope with millions

The headline stuff that we’re getting feedback on at the moment is the 99.9 per cent hotel occupancy. It’s testament to the fact that people like our hotels and people like our facilities generally in terms of hospitality

more visitors. Are you confident that Macau will be able to receive more people so that the mass gaming market and MICE business can bring revenue to compensate for the loss of VIP gaming?

KC: Look, the drop in gross gaming revenue, which obviously has been mainly a VIP phenomenon, no doubt [means that] the mass has got to make up some of that shortfall. And when we say mass, mass in the context of gaming as well as non-gaming revenues.

So it isn’t just about the casino floor but the total package of

But we’ve seen delays in the light railway and the Pac On Terminal project. And the Macau airport connection is still mainly with Mainland China and a couple of mid-haul destinations and that means it’s not exactly an international airport. So in order for Macau to be more international, as the government wants, shouldn’t society and the government bring more so Macau can speed up its development so everybody can recover easier and faster from those headwinds?

KC: The market is still an incredibly large one in the context of retail, hotel, food and beverage, and casinos. It’s still obviously an incredibly large market – and it’s one that Galaxy, as much as the other concessionaires, need to work with the government and separately from government in the context of competition with each of us in charge of making our products and services truly remarkable in terms of being attractive to a much larger audience.

You could argue that there’s still insufficient capacity in the services already available in Macau, whether that’s transportation or otherwise. Without doubt we’re continuing to press ahead to attract an increasingly large audience to Galaxy Macau, Broadway, StarWorld and other properties. And I’m sure it’s the same with each one of our competitors. So, if we’re saying there are restrictions in terms of timing with the key infrastructure projects that shouldn’t stop us and hasn’t stopped us as a business from continuing to say we want to attract a much larger audience to Macau.

8 | Business Daily

December 7, 2015

Greater China

Beijing unveils stock market risk controls, IPO reforms expected soon The initiatives reflect both liberalisation and tightening at the same time

C

hina on Friday announced circuitbreaker mechanisms to prevent systemic risk in case of sharp stock-market falls, and it appears close to pushing ahead long-awaited reforms for initial public offerings.

The circuit-breaking rules for all Chinese exchanges were

announced by the Shanghai Stock Exchange and will take effect on January 1. Sources told Reuters that plans for IPO reforms will be rolled out as early as next week.

Deng Ge, a spokesman for China Securities Regulatory Commission (CSRC), told a briefing on Friday introducing the circuit breaker mechanism

will “provide a cooling period when there are sharp fluctuations in the market”.

That in turn “will help maintain market stability and market orders and protect investors’ rights and interests and help promote stable and health development of the capital market in the long term,” he said.

China’s moves highlight rising confidence in Beijing that it can move to tweak market structure without destabilising its main indexes, which have gained around 25 percent since a market crash that began in June bottomed out in August.

The initiatives reflect both liberalisation and tightening at the same time.

Resuming a move toward converting the IPO market to a registration system instead of an approval system would address long-standing distortions in pricing and also eliminate a source of official corruption.

IPOs were frozen over the summer as Beijing tried to stabilise crashing stock markets - which some blamed on an IPO glut that sapped market liquidity - but they were recently resumed.

The sources did not have details on what the plan would contain, only that its publication is imminent.

The establishment of circuit breakers is part of on-going efforts to suppress market volatility even at the cost of market vigour.

On the same day as the circuit breaker announcement, the Shanghai Futures Exchange said it will scrap a rule that allowed some kinds of highfrequency trading - a financial innovation many brokerages and funds had invested heavily in developing.

Also on Friday, regulators announced tweaks to futures market trading hours.

Last week, regulators cracked down on the use of over-the-counter derivatives swaps to fund stock trading, and markets crashed over 5 percent in a single day on Friday.

According to the new regulations, a 5 percent rise or fall in the CSI 300 benchmark index will result in a 15 minute trading suspension for all the country’s equity indexes, while a 7 percent move up or down will trigger suspension of trade for the rest of the day.

If a 5 percent move occurs after 2:45 pm, it will also halt trade for the rest of the day.

Reuters

EU solar panel producers win Chinese import curb extension The Commission’s decision to start a so-called expiry review extends the current arrangement for at least a year

E

uropean solar panel manufacturers have won an extension of restrictions on Chinese imports after the European Commission agreed yesterday to a review that keeps curbs in place for at least a year.

Seeking to resolve a dispute about cheap Chinese imports, the Commission in 2013 set a minimum sales price and a limit on the number of Chinese-made solar panels, wafers and cells sold in the European Union.

The restrictions were due to expire this month but the Commission said it had decided to consider a request

by EU ProSun, an association of EU producers, to extend them.

“The request is based on the grounds that the expiry of the measures would be likely to result in continuation of dumping and recurrence of injury to the (EU) industry,” the Commission said in its Official Journal, referring to EU industry concerns that Chinese rivals would be able to import free of tariffs.

The Commission’s decision to start a so-called expiry review extends the current arrangement for at least a year while it is assessed.

“As long as Chinese manufacturers fail to comply with basic international trade and competition rules, the EU must maintain the measures in full force and effect,” EU ProSun said in a statement.

European producers accuse China, whose solar exports to the EU rose to 21 billion euros (US$21.2 billion) in 2011, of using soft loans and export credits to try to corner the EU market.

China denies any wrongdoing, arguing that its products are more competitive.

Reuters

Business Daily | 9

December 7, 2015

Greater China

Xi cheers African leaders with pledge of US$60 bln for development

Yellow alert for smog China’s weather observatory issued a yellow alert for smog that will cover the country’s northern regions from Sunday evening to Monday evening. Beijing, Tianjin, parts of the neighbouring provinces of Hebei, Henan and Shandong, as well as parts of eastern Jiangsu Province will be shrouded in moderate smog, and the southern part of Beijing will be choked by heavy smog, the National Meteorological Center (NMC) said. The smog will be dispersed by a cold front next Thursday, the NMC said.

Chinese influence is broadly seen by Africans as a healthy counterbalance to the West Joe Brock and Stella Mapenzauswa

Steel companies report ten months loss China’s large and medium-sized steel mills suffered a loss of 72 billion yuan (US$11.34 billion) in the first ten months of 2015, according to China Iron and Steel Association (CISA). Of the 101 steel mills tracked by CISA, the average sales margin stood at minus 1.5 percent during Jan.Oct. period, the worst of the year, said the CISA report. Slowing investment in the property and infrastructure development, as well as weakening manufacturing, have dragged down domestic demand for steel, which in turn reduced profit for steel makers and forced small players to exit the market, according to the report.

Li says zombie firms to go “under the knife”

“Here is a man (Xi) representing a country once called poor. A country which never was our coloniser ... He is doing to us what we expected those who colonised us yesterday to do,” said President of Zimbabwe Robert Mugabe (pictured)

C

hinese President Xi Jinping told African leaders on Friday his country would pump US$60 billion into development projects, cancel some debt and boost agriculture under a three-year plan that will extend Beijing’s influence in the continent.

Xi said China would not interfere in African countries’ internal affairs, a stance that drew applause from leaders such as Zimbabwe’s Robert Mugabe who have faced Western criticism of their human rights record.

But China too has irked some Africans in the past for using Chinese firms and labour to build state-funded roads and railways in Africa while buying up commodities and leaving little for local economies, an image Xi is keen to change during a twoday conference in South Africa that ends on Saturday.

“To ensure the successful implementation of these 10 cooperation plans, China has decided to provide a total of US$60 billion of funding support,” Xi told the summit of the Forum on China-Africa Cooperation.

Despite its own slowing economy, Xi said China would step up investment in factories manufacturing goods for export in Africa, in addition to building roads, ports and railways on a continent long seen as a major commodities source for China.

South African President Jacob Zuma, co-chair along with Xi of the summit, said African countries needed Chinese help to process their abundant natural resources, which he said had made the continent vulnerable to exploitation in the past.

“That way what is buried in the belly of the soil will translate into benefit for the bellies of our citizens.”

Commenting on Xi’s plans,

Standard Bank China analyst Jeremy Stevens said: “I think it’s significant in the sense that it confirms China’s longstanding agenda on the continent ... despite the economic difficulties (in China).”

China is Africa’s largest trading partner and the trade volume between them amounted to US$220 billion in 2014, according to China state news agency Xinhua.

However, Chinese direct investment in Africa fell some 40 percent in the first half of 2015 to US$1.19 billion, China’s commerce ministry said last month, due to declining global prices of the commodities the continent produces. “(The) slide in trade between China and Africa is not due to falling demand but falling resource prices. I don’t think we need to panic about fluctuations in trade volumes,” China’s special representative on African Affairs Zhong Jianhua said.

No meddling in local politics

One Western diplomat struck a sceptical note about Xi’s announcement, saying: “It is difficult to tell what the deals involve beyond the headlines. Most of it is loans but it’s not clear if these are old or new deals.”

Chinese influence is broadly seen by Africans as a healthy counterbalance to the West, though Western governments accuse China of turning a blind eye to conflicts and rights abuses as they pursue trade and aid policies there.

Sticking to that Chinese tradition of non-interference in local politics, Xi said: “China strongly believes Africa belongs to the African people and African problems should be handled by the African people.”

Mugabe, whose government signed 10 economic accords with China

KEY POINTS Xi unveils plans to boost infrastructure, skills Mugabe hails China’s support to Africa Zuma seeks Chinese help to process African resources China is Africa’s largest trading partner

when Xi visited Harare earlier this week, including a deal on expanding Zimbabwe’s largest thermal power plant, praised Beijing’s role in Africa.

“Here is a man (Xi) representing a country once called poor. A country which never was our coloniser ... He is doing to us what we expected those who colonised us yesterday to do,” said Mugabe, who is also chairman of the African Union, to loud applause by the delegates.

In his speech, Xi said China would cancel existing debts with zero interest loans for least developed countries that mature by the end of 2015. He did not elaborate.

African countries were expected to push for loan moratoriums following the weakening of metal and crude prices which has hit their currencies.

Xi announced plans to help African countries improve agriculture through large-scale farming and fight diseases by establishing an African Centre for Disease Control.

Reuters

China plans to spend around two years tackling serious overcapacity in some industries and will ruthlessly deal with socalled zombie firms, Premier Li Keqiang said in remarks seen on Friday. Li also said China’s survey-based unemployment rate had been gradually falling in the last three months, but no details were given. Li’s comments were published on the central government’s website which quoted him as saying overcapacity and zombie firms, or long-term loss-making companies that continue to operate, would go “under the knife”.

Beijing starts building 2nd biggest offshore wind farm China’s top wind power company has started building the country’s second-largest offshore wind farm, state media said, as Beijing aims to boost the nation’s clean power industry and cut dependence on fossil fuels that are contributing to smog.

Construction of the project in the eastern coastal Fujian province, which is majority owned by Longyuan Power Group Corp Ltd, will take three years at an estimated cost of 8.2 billion yuan (US$1.28 billion), Fujian Development and Reform Commission records show. Local government gave the greenlight for the project last month.

Draft rules to regulate fledgling drone industry China’s aviation regulator published on Friday draft operating guidelines for the fledgling drone industry after several security breaches involving the unmanned aircraft. The guidelines by the Civil Aviation Administration of China cover unmanned aerial vehicles weighing no more than 116 kgs and include maintaining up-to-date records on remote pilots and providing data on the exact location of drones in heavily populated areas. The guidelines, published on the regulator’s website, also stipulate that drones must keep out of restricted airspace and follow unspecified rules set by the military and the government.

10 | Business Daily

December 7, 2015

Greater China

Top cop targets bankers after locking up security czar Now a deputy minister for public security, Fu Zhenghua investigated financial crimes in 2008, when he put away Huang Guangyu, China’s richest man at the time

Friday, China Merchants Securities Co. said a former general manager of its fixed-income division had been arrested and fired over undisclosed allegations.

Like the Gome case, the probe of the securities industry is politically charged in part because all three firms are units of state-owned companies.

Moreover, state media had fanned the rally that precipitated the crash, and concerns arose over the government’s ability to manage the crisis after regulators imposed and then lifted a series of measures to arrest the slide.

Interest groups

The market has recovered from its late-August low, and the benchmark Shanghai Composite Index is now up more than 10 percent for the year.

“The probe into the industry is sensitive because it can offend different interest groups,” said Hu Xingdou, an economics professor at the Beijing Institute of Technology.

“Xi has taken on a tough job by cleaning up a sector where notoriously murky finances feel very comfortable and corruption is everywhere.”

Fu has drawn both the respect and ire of police officials in his time as a cop. In 2010, he led a campaign against prostitution, including a bust at a karaoke club then said to cater to the political elite. The raids resulted in 1,000 arrests and footage of the busts -- featuring alleged prostitutes and their clients sitting on couches and hiding their faces -- was aired repeatedly on state television.

Big Vs

The appointment of Fu Zhenghua underscores the importance that President Xi Jinping has given the investigation into possible securities fraud linked to the US$5 trillion wipe-out in June and July

T

he high-ranking cop who brought down one of China’s top Communist Party officials has been put in charge of a corruption probe of the securities industry in the wake of a summer stock crash, said a person familiar with the matter.

The appointment of Fu Zhenghua underscores the importance that President Xi Jinping has given the investigation into possible securities fraud linked to the US$5 trillion wipeout in June and July. Fu has had several promotions since Xi came to power in 2012, and oversaw the case against former Politburo Standing Committee member Zhou Yongkang, said three people familiar with the case, who asked not to be identified because Fu’s role hasn’t been made public. Zhou was sentenced to life behind bars in June.

The 60-year-old former Beijing police chief, who also led a corruption case against one of China’s richest men and busted a huge prostitution ring in 2010, is overseeing a probe under which police have questioned dozens of executives at securities firms amid allegations of insider trading and other malfeasance stemming from the crash, one of the people said.

The investigations have intensified in recent weeks, sending fear through China’s finance firms and chilling their investment strategies.

‘Capable assistant’

“Fu is a capable assistant to Xi because his cutthroat style would help the investigation get to the very bottom of things, and to make sure things under Xi’s full control,” said Zhang Lifan, a Beijing-based political commentator. “An investigation into the financial sector could easily damage the interests of some power havens, and Fu is more than qualified to fight Xi’s battle as he’s famous for

not being afraid of offending anyone.”

Now a deputy minister for public security, Fu made it clear that he was leading the securities probe while running a meeting in early July where officials from the securities regulator, the police, and the party’s anticorruption watchdog first discussed an investigation, the person said. In a document cited there, Xi urged the ministry to give a thorough probe of market manipulators and protect regular investors, the person said.

‘Malicious’ investments

Details of the meeting were not publicly disclosed, though the official Xinhua News Agency reported that Fu’s ministry urged those involved to crack down on crimes connected to the stock and futures markets, and to investigate evidence of “malicious” short selling. Another deputy public security minister, Meng Qingfeng, later visited the regulator’s offices in Beijing, in a pointed message to violators, while Fu’s role hasn’t previously been known. The Public Security Ministry didn’t respond to a faxed request for comment.

Huang, the billionaire founder of Gome Electrical Appliances Holding Ltd., was sentenced to 14 years in prison for bribery and insider trading.

The case was politically sensitive.

Former Assistant Public Security Minister Zheng Shaodong was later convicted of corruption over his links to Huang and received a suspended death sentence.

Since August, official media have reported the detention of several senior executives of Citic Securities Co.-- China’s biggest brokerage -on suspicion of insider trading and leaking sensitive information. Other top securities firms such as Guosen Securities Co. and Haitong Securities Co. are under investigation. On

An investigation into the financial sector could easily damage the interests of some power havens, and Fu is more than qualified to fight Xi’s battle as he’s famous for not being afraid of offending anyone Zhang Lifan, Beijing-based political commentator

In 2013, Fu oversaw a clampdown on “Big V’s,” popular bloggers whose sometimes anti-establishment comments drew the ire of party leaders. He was promoted to deputy public security minister, the agency Zhou once ran before becoming a member of the Politburo Standing Committee.

In March, Fu was promoted to deputy party secretary of the ministry.

His portfolio includes the Central 610 Office, responsible for ensuring social stability and controlling religious groups the government considers cults such as the Falun Gong.

Fu is one of the few senior officials to publicly advocate easing restrictions on police carrying firearms. After a knife attack at a train station in the south-western city of Kunming that left 33 people dead last year, Fu donned a black police SWAT uniform and toured Beijing Railway Station.

Wearing a holstered pistol, he told police “kill the enemy with one shot” in the event of attack, according to Xinhua.

He was seen by reporters from the official Legal Evening News wearing the same gear on New Year’s Day while patrolling Wangfujing Avenue, an area near Tiananmen Square that’s popular with tourists.

Drinking ban

Earlier this year, Fu demanded police work longer shifts, prompting a wave of resignations. The agency told those who wanted to quit he would transfer them to remote stations, according to two people familiar with the matter.

In January 2014, Fu also ordered police to sign a document promising not to drink alcohol outside their own homes, the people said. The Beijing Youth Daily reported at the time that a wife of a Beijing police wrote a letter of thanks to Fu, saying the alcohol ban “really changed” her husband.

“Most of these people used to work with him but he didn’t dwell on the old relationships,” a friend of Fu’s said, according to the official Oriental Outlook magazine. “He knows what to do when handling major problems.”

Bloomberg News

Business Daily | 11

December 7, 2015

Asia

Japan’s Q3 GDP to be revised up to positive Capital expenditure, a major component of GDP, is being revised up to a 0.7 per cent gain for the quarter from a preliminary 1.3 per cent drop Kaori Kaneko

J

apan’s third-quarter economic growth is expected to be revised up from negative to just over flat - dodging a technical recession of two straight declining quarters - thanks to a rise in capital investment, a Reuters poll found.

The Cabinet Office will issue revised third-quarter GDP data at 8:50 on Tuesday.

A revision showing even just a glimmer of growth would be a boon for policymakers struggling to energise Japan’s listless economy and to convince sceptics that the government’s “Abenomics” policies are working.

The poll of 20 analysts found the economy probably grew an annualised 0.1 percent in July-September, versus the initial estimate of a 0.8 percent contraction.

That would translate into a flat reading from the previous quarter compared with the 0.2 percent fall recorded in the first estimate.

“There are still uncertainties over the economic outlook, but we expect the economy will return to a moderate growth trend,” said Hidenobu Tokuda, senior economist at Mizuho Research Institute.

“Capital spending may

The government will release core machinery orders on Wednesday

slow down temporarily as machinery orders have been weak recently. But I think firms are still willing to increase business investment because of solid earnings.

Spending to renew old equipment will likely grow gradually.”

Capital expenditure, a major component of GDP, is seen being revised up to

a 0.7 percent gain for the quarter from a preliminary a 1.3 percent drop, the poll showed.

“Although the revised GDP will likely be better than the preliminary data, growth for July-September is expected to be nearly zero after it contracted in AprilJune. So there is no change to our view that the economy

in the first half of fiscal 2015 was stagnant,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

Separately, the government will release core machinery orders on Wednesday. Although highly volatile, it is regarded as a useful leading indicator of capital expenditure in the

Vietnam sees 2015 robust growth, maps development by 2020 The World Bank said Vietnam will need to rely more on internal resources to finance its development agenda by enhancing expenditure efficiency Ho Binh Minh

V

ietnam's economy is expected to post annual growth of 6.55 percent this year, Prime Minister Nguyen Tan Dung said on Saturday, accelerating from the 5.98 percent growth posted in 2014.

Vietnam has projected growth of 6.5 percent to 7 percent a year in the 20162020 period, Dung told foreign donors and diplomats in an international conference in Hanoi, in line with a

development roadmap drafted by the ruling Communist Party.

He said Vietnam was committed to securing faster and more sustainable economic growth, development of culture and social equality, protecting the environment and extending the reach of the market economy.

"In the next five years, along with opportunities and favourable conditions, Vietnam will also face

major challenges and difficulties," Dung said.

Dung noted Vietnam's lack of competitiveness and low productivity put it at a disadvantage in penetrating export markets, particularly given the slow recovery in the global economy.

Still, Vietnam has been among Asia's stronger performers due to robust exports, solid growth in manufacturing - mostly electronics

coming six to nine months.

The poll found core machinery orders were expected to fall 1.5 percent in October following a 7.5 percent rise in September and a 5.7 percent drop in August.

From a year ago, core orders were seen likely to grow 1.4 percent after a 1.7 percent slip in September, the poll showed.

The Cabinet Office will issue the machinery orders data at 8:50 a.m. on Wednesday.

Next week’s indicators include the current account balance on Tuesday, which is seen likely to show a surplus of 1.6 trillion Japanese yen (US$13 billion) in October.

The corporate goods price index (CGPI), which measures the price companies charge each other for goods and services, is seen falling an annual 3.8 percent in November following a 3.8 percent fall in October. The Bank of Japan will issue the data on Thursday.

The government will compile a supplementary budget slightly exceeding 3 trillion yen to be announced on December 18, sources told Reuters.

Reuters

and textiles - and expected record levels of foreign investment, with inflows boosted by the country's accession to the Trans-Pacific Partnership agreement (TPP) and other trade pacts.

Last month, Vietnam concluded negotiations in the 12-country TPP and has earlier this week signed a free trade agreement with the European Union.

Vietnam's productivity growth rate is below 4 percent and declining, Victoria Kwakwa, World Bank director in Vietnam, told the conference, noting that it was significantly below levels seen in China and South Korea when those countries were at a similar stage in their development.

"Current productivity growth rates are unlikely to deliver the sustained rapid growth that could see Vietnam follow the development trajectory like Korea or Taiwan," Kwakwa said.

Vietnam will need to rely more on internal resources to finance its development agenda by enhancing expenditure efficiency, avoid building up unsustainable debts and use official development aid more effectively, the World Bank said.

Reuters

12 | Business Daily

December 7, 2015

Asia

South Korea protesters plan third nationwide rally on December 19 The protests put further pressure on Park as she prepares to reshuffle her cabinet, and probably nominate a new finance minister Andy Sharp and Jungah Lee

S

outh Korean protesters plan to hold another rally in two weeks after tens of thousands took to the streets of Seoul Saturday to protest against President Park Geun Hye’s plan to reform the labour market and adopt a state-approved history textbook for high schools.

The demonstrations will be held in 16 cities across the nation on December 19, Joo Je Jun, chairman of policy at Korea Alliance for Progressive Movement, said by phone yesterday. About 50,000 people from some 1,000 groups, including civic organizations and labour unions, rallied Saturday to urge the government to tackle the problems of unemployment and soaring rice prices, and to oppose a plan allowing greater leeway to employers to fire workers, he said.

The gathering followed one last month that drew more than 100,000 people.

The protests put further pressure on Park as she prepares to reshuffle her cabinet, and probably nominate a new finance minister, with incumbent Choi Kyung Hwan (pictured) said to be stepping down to contest parliamentary elections in April.

Last month’s demonstration attracted 130,000 people

The person who replaces Choi will need to spearhead labour reforms.

The police’s estimate of the number of people at Saturday’s rally

was markedly lower than Joo’s. About 14,000 people marched peacefully through the city centre, a police officer at the Seoul Metropolitan

Police Agency, who asked not to be identified, said by phone.

A farmer remains in critical condition after suffering a stroke when he was knocked down by a police water cannon during a rally on November 14, the Korean Confederation of Trade Unions said on their website. Last month’s demonstration attracted 130,000 people and more than 500 were injured in clashes with police, the confederation said.

A Seoul court ruled Thursday that Saturday’s rally could go ahead, after police tried to ban the protest.

Fragile five economies now less so Sujata Rao and Vincent Flasseur

E

merging economies not long ago deemed at risk of crisis are seeing steady balance of payments improvements, while for oil exporters in the Gulf and elsewhere once-mighty cash surpluses have all but melted away.

The so-called taper tantrum of mid-2013 unleashed a wave of selling of assets from developing countries whose big funding or current account deficits left them vulnerable to the withdrawal of cheap money resulting from a slowdown, or taper, in the rate of U.S. money printing.

With oil prices at the time over US$100 a barrel these tended to be fast-growing energy importers such as India

and Turkey, which, along with Indonesia, Brazil and South Africa, were lumped together as the Fragile Five.

But thanks to the halving of oil prices since mid-2014 and sharply weaker exchange rates, gaps are narrowing, as this graphic shows.

India’s deficit has shrunk to 0.9 percent of annual economic output this year, according to data compiled

by JPMorgan, while Ukraine should post a surplus versus an 8 percent gap in 2012.

Others have improved less, with Turkey running a 5.2 percent deficit this year and Brazil, despite economic recession, seeing a bigger deficit than in 2012 at 3.4 percent.

“Lower oil prices are clear-

ly helping to move trade balances so this is positive,” UBS strategist Manik Narain said.

“However none of the current account improvements have come through stronger exports,” he said. “Governments have inflicted quite a lot of pain on domestic demand to get the current accounts under control.”

But if oil and currency adjustments are shrinking some deficits, commodity-reliant countries with fixed exchange rates are seeing the opposite.

Venezuela’s 2.9 percent surplus in 2012 for instance has swung into an 8.1 percent deficit. There are also dramatic declines in the Middle East, where the six Gulf Cooperation Council (GCC) countries will

run a 3.8 percent surplus this year - down from 22 percent in 2012 and 13.2 percent in 2014.

Oil earnings this year for the bloc comprising Saudi Arabia, Kuwait, Qatar, Oman, Bahrain and United Arab Emirates will be US$275 billion less than 2014, according to the International Monetary Fund.

Moreover, all GCC currencies except Kuwait peg their currencies tightly to the dollar. So with little relief on the exchange rate front, governments will need to slash budget spending to dampen import demand.

Jason Tuvey, Middle East economist at Capital Economics says the headline surplus is down to Kuwait and Qatar,

Bloomberg News

which mask a Saudi deficit of as much as 7 percent of GDP. Smaller Oman and Bahrain have even bigger funding gaps.

While some reckon governments will have to loosen currency pegs, Tuvey reckons spending cuts are more likely, noting that Saudi Arabia reacted to the 1980s oil price collapse by slashing capital spending more than 98 percent.

“A repeat of this would wipe out the budget deficit and push the current account position back into a sizeable surplus,” he added.

Other oil exporters which allowed their currencies to weaken have fared better, with Russia’s surplus at 5 percent of GDP compared with 3.5 percent in 2012.

Malaysia’s surplus has halved since 2012 but with the ringgit almost 30 percent weaker since the taper tantrum, there may be signs of a turnaround - imports are contracting and data on Friday showed exports growing twice as fast as expected Reuters

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Business Daily | 13

December 7, 2015

Asia

Pain but no gain: Indonesia’s corruption crackdown Indonesia consistently ranks among world’s most corrupt countries Randy Fabi and Kanupriya Kapoor

India gets cash flowing in flood-hit south India’s banks worked yesterday to aid residents left without food, power and access to money in the flood-hit southern city of Chennai and surrounding areas, as cash dispensers have been emptied or lost power due to electricity outages. India’s fourth largest city was swamped by torrential rains - the heaviest in a century - during the past five days, and the government has asked banks to restore basic services and supply cash machines as swiftly as possible, replenishing cash by boat or providing mobile ATMs if necessary.

Japan’s securities watchdog to recommend fine for Toshiba Japan’s securities watchdog will recommend that Toshiba Corp should be fined 7.37 billion yen (US$59.84 million) for accounting violations, a person familiar with the process told Reuters on Saturday. The source said the Securities and Exchange Surveillance Commission will make the recommendation, which would be a record fine for accounting violations, to the Financial Services Agency today. Toshiba, whose business spans household electronics to nuclear power, has said it inflated profits by about 155 billion yen (US$1.26 billion) in a period spanning about seven years.

I

ndonesian bureaucrats are holding off spending billions of dollars on everything from schools and clinics to garbage trucks and parking meters, fearful that any major expenditure could come under the scanner of fervent anti-corruption fighters.

The paralysis is so bad that President Joko Widodo, desperate to pull Southeast Asia’s largest economy out of a slump, is considering a decree that would shield civil servants from graft busters until big-ticket projects are completed.

“There are concerns of criminalisation,” Boediarso Teguh Widodo, the finance ministry’s director general of regional budgetary spending, told Reuters. “In order to overcome this issue, the government has been asking relevant agencies ‘to calm down’ and not investigate until projects are finished.”

The official is not related to the president.

Similar problems are playing out in China, Indonesia’s top trading partner, where an unprecedented clampdown on graft has hamstrung investment and state spending.

But in Indonesia, which consistently ranks among the world’s most corrupt countries, it appears to be a lose-lose situation.

Economic growth, already under pressure because of weak commodity prices, is not getting the lift it needs from public expenditure because bureaucrats are afraid to take decisions. But the drive to root out corruption itself has had scant success since Widodo came to office just over a year ago.

In recent months, the police and the Attorney General’s Office (AGO) have moved into the territory of the Corruption Eradication Commission (KPK), which was weakened by attacks from rival law enforcement agencies, parliament and Widodo’s own political party.

The police and the AGO are seen as quick to round up suspected offenders and usually cast a wide net. Although there have been few

Malaysia exports rise more than expected

prosecutions, this has had a chilling effect on bureaucrats, who fear being caught up in investigations.

Sucked in

In a recent high-profile case brought by the AGO, two Jakarta transport officials were jailed after their boss was arrested for taking bribes in public bus tenders.

“We are afraid if the boss gets in trouble, all of the staff below will be sucked in,” said Heru Budi Hartono, head of Jakarta’s financial and asset management board, which handles spending for the city government.

“All of our staff are very careful and afraid,” he added. “Even the police chief has told us to go ahead (and spend) but we are still going carefully.”

To avoid “aggressive” investigators, some bureaucrats will block the paperwork needed to approve funding.

In Jakarta, a multi-million-dollar contract to build dozens of schools was postponed until next year because of “administrative issues”, according to Hartono.

The AGO denies there is a turf war with other investigating agencies, but conceded that there were problems with its approach to quashing corruption.

“We realise our handling (of such cases) can be improved,” said Amiryanto, a spokesman for the AGO. “We don’t intend to criminalise. We only want to follow the law.”

Few major corruption arrests have been made by the AGO or the police this year.

By contrast, the KPK’s biggest catches were three cabinet ministers of the previous administration and the chief of the constitutional court, all of whom were charged in cases ranging from bribery to marking up government procurement contracts.

President Widodo, who has made reviving economic growth his top priority, is banking on public spending to build the power plants, seaports and roads needed to attract much-

All of our staff are very careful and afraid,” he added. “Even the police chief has told us to go ahead (and spend) but we are still going carefully Heru Budi Hartono, head of Jakarta’s financial and asset management board

needed investment. But spending delays due to red tape and policy disarray within his cabinet have stood in his way.

The economy expanded by an annual 4.73 percent in the third quarter, slightly faster than in previous quarters, but not enough to suggest a real turnaround. The government has said growth this year will be the slowest since 4.6 percent in 2009.

In Jakarta, only 40 percent of the city’s 2015 budget of nearly $5 billion had been spent as of November, raising concerns about the progress of much-needed infrastructure projects in the gridlocked capital of 10 million people.

Jakarta officials expect as little as half of the budget will be spent this year, with the rest being carried into 2016.

“If you want to build Jakarta, we have to do it together. If something goes wrong, please report it immediately and give some advice so nobody needs to go to jail,” Hartono said.

Reuters

Malaysia’s exports in October surged 16.7 percent from a year earlier, increasing for a fifth consecutive month, supported by demand for electrical and electronic products, government data showed on Friday. October’s exports had the highest year-on-year growth since April 2014, more than twice the 7.9 percent growth forecast by economists in a Reuters poll. Imports were almost flat, down 0.4 percent on lower imports of electronic integrated circuits. The poll expected a 4.3 percent drop in imports following September’s sharp rise of 9.6 percent.

Thailand’s AIS plans to invest in 4G Advanced Info Service Pcl (AIS), Thailand’s largest mobile operator by number of subscribers and revenue, plans to invest 14.52 billion baht (US$405.36 million) in the first phase of an 1,800 MHz network under the fourth generation (4G) technology, Chief Executive Somchai Lertsuthiwong said on Friday.

The company expects to install the 4G network in 6,000 locations by January when the service will start operating, said Somchai, adding nationwide rollout was planned for next year. AIS’s wholly-owned Advanced Wireless Network Co Ltd (AWN) unit won an auction for the 4G mobile frequency licence last month.

South Korea regulator probing Samsung C&T merger South Korea’s financial regulator is looking into whether any insider trading or market manipulation had taken place during the merger of two Samsung Group affiliates earlier this year, two regulatory officials said on Friday. Another regulatory official said the stock market operator had passed on details of trades that might have used undisclosed information to buy large amounts of Cheil Industries shares before the merger was announced.

14 | Business Daily

December 7, 2015

International Greek parliament approves austerity budget for 2016 The Greek parliament approved a 2016 budget featuring sharp cuts in spending and some tax increases to satisfy the country’s international lenders at a time of growing austerity fatigue. The leftist-led government of Prime Minister Alexis Tsipras is under pressure to deliver tangible benefits to its poorest citizens after having signed to a third rescue package from euro zone governments in August worth up to 86 billion euros. The budget makes 5.7 billion euros (US$6.2 billion) in public spending cuts including 1.8 billion from pensions and 500 million from defence.

Paraguay’s economy grows 2 pct Paraguay’s economy expanded 2.0 percent in the third quarter of 2015 compared with the same period last year, led by a rise in farming and industrial output, the central bank said on Friday.

The bank said the June-Sept economic data left economic growth for the first nine months of the year at 3.3 percent.

Soy producing Paraguay cut its growth forecast for 2015 to 3.7 in October from a previous 4.0 percent estimate, blaming low commodity prices and recession in key trade partner Brazil.

Qatar First Bank to list shares in 2016 Qatar First Bank (QFB) plans to list its shares on the Qatar exchange as early as the first quarter of 2016, the chairman of the sharia-compliant financial institution said yesterday. “We hope by the end of the first quarter of next year that we will be ready to list. Things are on the right track,” Abdulla al-Marri said. The firm has long been linked with a flotation, in what would be only the second new listing in Qatar since 2010, although QFB would only put its shares onto the bourse to trade and would raise no new money from the event.

U.S. trade deficit widens The U.S. trade deficit widened unexpectedly in October as exports fell to a three-year low, suggesting that trade could again weigh on economic growth in the fourth quarter. The Commerce Department said on Friday the trade gap rose 3.4 percent to US$43.9 billion, a sign that the worst of the drag from a stronger dollar was far from over. September’s trade deficit was revised up to US$42.5 billion from the previously reported US$40.8 billion.

The government revised trade figures going back to April to incorporate more comprehensive and updated quarterly and monthly data.

PwC to audit the Vatican The Vatican on Saturday announced that accounting giant PricewaterhouseCoopers will carry out its first external audit, as Pope Francis seeks to make the Holy See’s finances more transparent. PwC will work “in close cooperation” with the Vatican’s Secretariat for the Economy, headed by Australian cardinal George Pell, a statement said.

On Thursday the pope unexpectedly took part in a meeting of his economy council to thank its members and encourage them to continue overseeing the Vatican’s administrative and financial workings.

U.S. employment report a green light for Fed interest rate rise Fed chair said the economy needs to create just under 100,000 jobs a month to keep up with growth in the working age population

U

.S. employment increased at a healthy pace in November, in another sign of the economy’s resilience, and will most likely be followed by the first Federal Reserve interest rate rise in a decade later this month.

Nonfarm payrolls rose 211,000 last month, the U.S. Labour Department said on Friday. September and October data was revised to show 35,000 more jobs than previously reported.

KEY POINTS U.S. nonfarm payrolls increase 211,000 in November Unemployment rate holds steady at 5.0 percent Average hourly earnings increase 4.0 cents Employment report likely followed by Dec Fed interest rate rise

The unemployment rate held at a 7-1/2-year low of 5.0 percent, as people returned to the labour force in a sign of confidence in the jobs market.

The jobless rate is in a range many Fed officials see as consistent with full employment and has dropped seventenths of a percentage point this year.

The closely watched employment report came a day after Fed Chair Janet Yellen struck an upbeat note on the economy when she testified before lawmakers, describing how it had largely met the criteria the U.S. central bank has set for the Fed’s first rate hike since June 2006.

Broad gains

The second month of strong job gains should allay fears the economy has hit a soft patch, after reports showing tepid consumer spending in October and a slowdown in services industry growth in November. Manufacturing contracted in November for the first time in three years, according to one business survey.

A strong U.S. dollar and spending cuts by energy companies have been headwinds to the economy. A separate report from the U.S. Commerce Department on Friday showed the international trade deficit widened

in October as exports hit a threeyear low.

Though wage increases slowed last month, economists say that was mostly payback for October’s outsized gains, which were driven by a calendar quirk. Anecdotal evidence, as well as data on labour-related costs, suggest that tightening job market conditions are starting to put upward pressure on wages.

The labour force participation rate, or the share of working-age Americans who are employed or at least looking for a job, rose to 62.5 percent from a near 38-year low of 62.4 percent.

But a broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment rose one-tenth of a percentage point to 9.9 percent. That reflected an increase in part-time workers.

Employment gains in November were broad-based, though manufacturing shed 1,000 positions.

Factory employment has declined in three of the last four months.

Professional services added 27,000 jobs and government payrolls increased 14,000 last month.

Reuters

Impeachment plunges Brazilian economy into turbulent territory Many investors would welcome the impeachment of Rousseff Rosa Sulleiro

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trong winds are forecast for Brazil’s already turbulent economy and there’s no chance of sunshine before resolution of President Dilma Rousseff’s impeachment battle, market observers say.

Volatility is the key word as Brazil’s Congress embarks on what could be months of intense debates over the fate of the unpopular leftist president, whose second term so far has been plagued by deep recession and a giant corruption scandal at the heart of the political and business establishment.

The initial reaction to the launching of the impeachment process last Wednesday was a euphoric jump in the Sao Paulo stock market, up five percent at one point before closing with its best performance of the year up 3.29 percent.

Markets are disappointed with Rousseff’s managing of the economy.

Brazil is in deep crisis now, with inflation more than double the government target of 4.5 percent, a GDP shrinking 4.5 percent yearon-year, and unemployment rising inexorably.

Many investors would welcome

the impeachment of Rousseff, who leads the Workers’ Party, because the constitution requires she be replaced by her centrist vice president, Michel Temer, from the coalition PMDB. Temer is “much more acceptable to the market than the Workers’ Party government of Rousseff,” said Paulo Gomes, chief economist at Azimut Brasil Wealth Management, citing Temer’s expected ability to enact reforms breathing life into the economy.

“Investors would very much like to see a more neo-liberal politician, different to the Workers’ Party,” said economist Felipe Queiroz, predicting “a lot of instability” on the stock market.

Although impeachment itself would be traumatic, Brazil would “come out stronger” in the long term, said Andre Leite, economist at TAG Investimentos.

Uncertainty

However, the flash of enthusiasm was quickly tempered by fear of uncertainty as Brazil’s slow-moving train wreck accelerates, with no clear idea of which way it will turn.

Despite that initial bump,

Ibovespa, the main Sao Paulo index, closed the week 2.23 percent lower.

The real also failed to maintain its post-impeachment announcement gains. So far this year the currency has lost about a third of its value against the dollar.

“Brazil needs economic stability,” Gomes said. “Many support impeachment thinking that it will improve the economic situation in the country. But this is not guaranteed and in the short term it will make the situation even harder, because it will cause problems with passing economic reforms.”

Now the main hope for the presidency appears to be that the impeachment fight ends quickly. A win could mean coming out with a renewed mandate and authority.

“The impeachment is going to bring more clarity. Instead of being a threat hanging over us, we will confront it. When we confront things, it’s generally better,” Finance Minister Joaquim Levy said Friday.

Levy said he looked forward to demonstrating “our objectives, our policies. This is what the government wants to do.”

Reuters

Business Daily | 15

December 7, 2015

Opinion Business

wires

Putting out Indonesia’s fires

Leading reports from Asia’s best business newspapers

Stephen Groff

ADB’s vice-president for East Asia, Southeast Asia, and the Pacific

PHILSTAR The Bangko Sentral ng Pilipinas (BSP) has stepped up measures to provide a safe, secure and healthy cyber environment for the financial services industry.

BSP Governor Amando Tetangco Jr. said the central bank continues to undertake a more proactive monitoring of the cyber environment while promoting the resilience of the entire financial ecosystem.

Initiatives include the conduct of an in-depth study on the industry’s cybersecurity posture in 2014, on-going enhancements of the BSP regulatory framework vis-à-vis emerging cyber-threats, and the creation of a dedicated cybersecurity division.

THE KOREA HERALD South Korea will become the No. 2 non-regional stakeholder in the Inter-American Development Bank’s newly created project management corporation that could help local companies make inroads into Latin America, the government said yesterday. The finance ministry said the IDB’s board has granted Asia’s fourth-largest economy a 4 percent stake in NewCo, which can give it more leverage in the policymaking process. “This can lead to a better flow of information and more opportunities for South Korean companies wanting to do business in Latin America,” it said.

THE TIMES OF INDIA With its listed firms adding over US$100 billion to market capitalisation in the last 15 years, the Tata Group is looking at an increase of nearly US$250 billion by 2025, including through acquisitions. The group will not shy away from global buyout activity and will continue to make significant investments in both existing as well as new businesses, including in the digital space to meet its vision 2025 targets.

It is looking to build on the platform set up by its previous Chairman Ratan Tata, who […] transformed the group from a largely India-oriented entity into a global multinational.

THE JAKARTA POST The Financial Services Authority (OJK) has officially given its permission for domestic multi-finance companies to start expanding their business into several new sectors in an effort to help spur the country’s lacklustre economy. OJK chairman Muliaman D. Hadad said the financial regulator was fully supportive of non-bank finance companies expanding themselves by venturing into other sectors beyond their existing automotive and heavy equipment financing portfolios. Muliaman said that there were at least seven sectors that were traditionally financed by banks, namely agriculture, farming, horticulture, plantation, tourism, infrastructure and electricity.

Joko Widodo, President of Indonesia, visiting one of the affected zones

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very year, forest fires ravage Indonesia, causing massive environmental, social, and economic devastation. This year’s fires are the largest in nearly 20 years, destroying three million hectares of land and causing an estimated US$14 billion in losses related to agriculture, forest degradation, health, transportation, and tourism.

Perhaps even more alarming is the climate impact. Indonesia is already among the world’s biggest carbon emitters. Thanks to the fires, its daily average emissions this September and October were ten times higher than normal. On October 14 alone, emissions from the fires soared to 61 megatons – nearly 97% of the country’s total emissions for that day. As a result, this year’s fires – coming just weeks before the current United Nations Climate Change Conference in Paris, where world leaders plan to finalize a global pact limiting carbon emissions – have underscored the urgent need for Indonesia and its development partners to act quickly to address this regional and global scourge. If we don’t, climate change will be even more difficult to combat.

The cause of Indonesia’s recurring infernos is the common practice of lighting fires to clear land for palm oil production, exacerbated by a prolonged dry spell partly attributable to El Niño. While stricter enforcement of rules against deliberate fires in Indonesia’s 1999 Basic Forestry Law and the 2014 Law on Plantations will help, far more needs to be done.

The reason is simple: Indonesia’s fires aren’t your typical forest fires. The ground holds peat – dense organic matter in the process of becoming coal. When the peat ignites,

the fire can creep beneath the surface and erupt somewhere else, days or weeks later. And, like coal, peat stores massive amounts of carbon, which is released into the atmosphere when the land is burned, cleared, and drained to make way for plantations.

The scale of the fires reflects the difficulty of the enforcement challenge the authorities face. It is much cheaper for farmers to clear land with fire than by other means. Moreover, farmers have few alternatives to operating palm oil or timber plantations.

So every dry season, more and more land is burned.

And every year, the fallout widens. An estimated 75 million people have been exposed to the smoke this year, and 500,000 in Indonesia alone are believed to have contracted fire-related respiratory illnesses.

Five key steps – all being actively debated in Indonesia – would help prevent the fires. For starters, the licenses awarded to develop peat lands should be revoked, and concessions should be taken away from landholders if there are fires. Moreover, a moratorium on new forest clearing should be enforced through local communities.

Re-wetting peat lands and the restoration of degraded peat forests should be the next step, followed by the creation of early warning systems to detect and control forest fires.

Finally, with the support of the private sector, Indonesia needs to establish a community-based forest management system.

Regional cooperation also holds great promise. Indonesia and Malaysia, which together account for 85% of the world palm oil market, have agreed to establish the Council of Palm Oil Producing Countries, which will harmonize standards and

Small farmers need options other than slash-andburn farming to boost their meagre incomes. There is a clear need for an integrated land-management approach involving conservation, rehabilitation, investment in sustainable livelihoods, and institutional reforms

promote environmentally sustainable production practices.

To build on this, consumers and markets also need to send signals to companies that directly or indirectly support slash-andburn farming. The 2014 Indonesia Palm Oil Pledge – in which five major producers committed to more sustainable solutions that preclude deforestation, respect human and community rights, and deliver shareholder value – is a good model.

Small farmers need options other than slash-and-burn farming to boost their meagre incomes.

There is a clear need for an integrated land-management approach involving conservation, rehabilitation, investment in sustainable livelihoods, and institutional reforms.

There is also a growing consensus on the need for broader industry standards for sustainable production and processing of agricultural commodities.

Multilateral development institutions such as the Asian Development Bank (ADB) have a role to play in providing support to ensure that systems, capacity, and market-access initiatives are undertaken in ways that improve compliance.

And national and local regulatory reforms that improve land-use planning, create incentives for forest conservation, and promote the use of low-carbon land must also be supported.

Indonesia is firmly committed to clean, sustainable development.

It recently pledged to reduce its CO2 emissions by 29% through unilateral measures by 2030, and by 41% with international support. Putting out Indonesia’s forest fires for good will be crucial to meeting these targets. For the sake of the planet, all of us need to grab a bucket.

Project Syndicate

16 | Business Daily

December 7, 2015

Closing Japan mulls company property tax exemption

China to become world’s No.1 electric car market

Japan is considering a property-tax exemption for small- and medium-sized businesses that increase capital expenditure, Economy Minister Akira Amari said in an NHK broadcast yesterday.

“I want to achieve something that has never been attempted before,” he said. The plan will be incorporated into broader tax reforms in the fiscal year ending March 31, 2017, Amari said on NHK. Japan’s gross domestic product in the quarter ended Sept. 30 probably remained flat, compared with an earlier prediction of a 0.8 percent decline, Amari said. The GDP is expected to increase in the following quarters, the minister said.

Electric car sales in China are expected to reach 220,000 to 250,000 this year, surpassing the U.S. to rank first worldwide, China Association of Automobile Manufactures (CAAM) forecast.

Worldwide electric cars sales will hit 600,000 and the figure for the U.S. market is estimated to be 180,000, said Xu Yanhua, deputy secretary-gen‑ eral of CAAM. Although China has achieved rapid development in electric vehicles, quality instead of quantity should be focused on for the sus‑ tainable development of the industry, Xu told an industry conference. In particular, vehicle safety and the quality of batteries should be carefully examined and supervised, she added.

Climate funding piles up, but nations argue over how quickly The issue is central to U.N. talks in Paris, where nearly 200 nations are trying to forge a new pact on climate change Barbara Lewis

D

eveloped nations have mobilised some US$80-US$90 billion per year to help the poorest survive a warmer world, delegates at Paris climate talks said, but emerging countries dispute the figures and say a goal of US$100 billion by 2020 is far from reach.

In October, the Organisation for Economic Co-operation and Development (OECD), which represents rich nations, calculated that financial pledges from the developed world totalled US$62 billion in 2014 towards an agreed U.N. goal to reach US$100 billion by 2020.

Since that report, new promises of funding have been made, including from Britain, France, Germany and Japan, the delegates said.

The OECD has yet to update its figures, but delegates at the U.N. talks

said they had used the OECD methodology to analyse the new money.

One national finance expert, speaking on condition of anonymity, said the new total was some $94 billion, while non-governmental organisation Oxfam said the figure was more like US$82 billion.

Developing nations, such as India, have accused the West of a lack of transparency and say the OECD vastly

over-estimated the size of contributions.

An Indian finance ministry report said “the only hard number” was US$2.2 billion that was clearly climate money.

The arguments are bitter as developing nations fight for help to deal with weather impacts they say hit the poorest hardest.

Richer nations, meanwhile, say the world has changed since the 1997 Kyoto Protocol

and countries such as China no longer count as emerging nations.

The European Union is among those to reject criticism it has not been transparent.

Despite its own financial crisis, it says it has been the biggest contributor of climate finance, providing 14.5 billion euros (US$15.78 billion) in public money in 2014.

The EU has also promised to increase funding, but says developing nations must also

help with the cost of switching to lower carbon energy and dealing with extreme weather.

“The European Union is fully prepared to play its part. We have heard some say we do not live up to our responsibilities and this could not be further from the truth,” European Climate and Energy Commissioner Miguel Arias Canete said in Paris.

The OECD said it had sought to provide a robust methodology, but cautioned that projecting how much global climate money would be available by 2020 from a plethora of grants and loans, some public and some private, was complex.

Joe Thwaites, research analyst at the World Resources Institute (WRI), said many more details were needed on how donations were being counted, but the trend was positive.

Reuters

China’s Luye buys australian hospital operator

Key bank warns against CPC to target public institutions ‘uneasy calm’ in global markets in discipline inspections

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T

uye Group Ltd. agreed to buy Healthe Care Australia Pty, the nation’s third-largest private hospital operator, as the Chinese company hunts for expansion opportunities in the Asia-Pacific.

Luye is acquiring Healthe Care from private equity firm Archer Capital Pty and gaining a company that operates 17 hospitals with more than 1,800 beds across Australia, the companies said in a joint statement on Sunday. Luye has a significant stake in Hong Kong-listed drug maker Luye Pharma Group Ltd., according to the statement.

The deal puts Luye in a position to take advantage of opportunities resulting from Australia’s recently signed free-trade agreement with China, according to the company. Foreign acquisitions of Australian companies have almost doubled this year.

“Healthe Care will provide us with a platform upon which we can build a world-class and highly successful healthcare services business,” Luye Chairman Liu Dian Bo said in the statement.

Luye is acquiring the company for A$938 million (US$688 million), the Australian Financial Review reported earlier. Completion of the transaction is expected in the first quarter of 2016, according to the companies.

Bloomberg News

he Bank for International Settlements (BIS) issued a warning yesterday over an “uneasy calm” within financial markets, noting that the global economy remains vulnerable to serious disruptions.

The BIS -- known as the central bank of central banks -- made the call in its quarterly report which is closely watched by investors.

In August and September, markets were shaken after serious concerns emerged about the health of leading emerging economies, especially China.

Interventions from monetary authorities succeeded in stabilising markets to a degree, but the head of the monetary and economic division at the BIS, Claudio Borio, cautioned against being lulled into a false sense of security.

“The present calm is fragile,” Borio said.

He pointed specifically to slowing capital flows and persistent signs of trouble in Brazil and Russia, even if China appears to have stabilised in part.

Emphasising the uncertainty that continues to affect financial markets, Borio noted that investors still remain extremely sensitive to even the slightest surprise in actions from central bankers.

AFP

T

he Communist Party of China (CPC) Central Committee will try to expand its discipline inspections into all government organs and government-sponsored institutions next year, a CPC disciplinary official said yesterday.

Conducting “inspections across the board” has been fixed as a task in a revised version of CPC disciplinary regulations and is considered an important way to govern the Party strictly, said Luo Liping from the office of the CPC Central Committee’s inspection leadership group.

To achieve the aim, inspections at the central level have to cover more than 280 ministries, local governments, major state-owned enterprises (SOEs), financial and public institutions, according to Luo. Discipline inspections have grown more intensive since the 18th CPC National Congress in late 2012. They focus on investigating and punishing officials violating Party or frugality rules, especially those embezzling public money, taking bribes, and selling or buying government positions. Luo noted that more than 100 rounds of inspections would be conducted.

Xinhua