Business Daily #1200 December 23, 2016

Sino-Luso trade dips 10.3 pct y-o-y in first 10 months of year Trade Page 2

Friday, December 23 2016 Year V Nr. 1200 MOP 6.00 Publisher Paulo A. Azevedo Closing Editor Kelsey Wilhelm Gaming

Okada says Philippine casinos will soon surpass Singapore’s Page 7

Enough is enough Very seldom do some of the worst stories related to the taxi services in Macau reach the media. Either because tourists and residents don’t have the time to pursue and prolong the agony or simply because the system here tends to protect a ‘service’ that everyone recognises is far from being good.

The story published by the Portuguese newspaper Hoje Macau this week of a citizen attacked by several taxi drivers after refusing to leave the taxi when he realised none of them stationed outside Galaxy Hotel in Taipa wanted to take the service is unacceptable. Revolting.

We all know cases of taxi drivers refusing to take customers, cases of drivers trying to rip off fares, especially when it is raining or during typhoons, and still there’s no apparent solution.

Authorities tend to protect taxi drivers. Better, they protect the owners of the taxi licences. We can only speculate why.

It is more than time to clean the sector up of all the drivers who cheat or disrespect - and especially those who are violent towards customers.

We can only blame the government for not solving this situation, once again perpetuating this ugly service that shames us all. And shames the good drivers – who thank goodness also exist – who need to live and work under the general perception everyone is bad when we are talking about their profession.

Fines are not enough. Drivers that are proven guilty of outrageous behaviour must be expelled from the job.

Nothing else is acceptable.

They should lose their licence if they own it. They should lose the job and the owner of the licence must pay a heavy fine and get a strong warning in case the driver works for a third party. No leniency.

Time is up. No more delays and excuses to clean up one of the sectors that has been a stain on Macau’s image, both locally as well as internationally.

For the sake of customers, the city and the drivers who scrupulously follow the code of conduct of their profession.

www.macaubusinessdaily.com

Investigation

Real estate

‘Idle’ Future Bright Hengqin land under investigation, possible RMB41 mln fine Page 3

Xi calls for more measures to curb property market Page 8

Wages

Galaxy Macau workers have joined hands with the Macau Civil Servant’s Association.

Demanding better working conditions.

Plus salary adjustments pegged to the cost of living.

Chinese New Year bonuses and compensation leave for holidays on workers’ days off are on the agenda, too. Page 5

Asia Standard on warpath

Dissatisfaction with the new Land Law. The Executive Director of Asia Standard International says the company will take legal action if the gov’t reclaims its land plot.

A morass of bureaucracy is tempting the company to seek legal counsel.

Corruption concerns

Society Local residents prefer a corruption-free environment. More than a prosperous and fair society, according to a study. The Ao Man Long graft trial signalled a turning point.

Quality of life and financial issues also figured in society’s concerns. While a ‘free’ society ranked last. Page 4

Close Sesame!

E-commerce Blacklisted again. Mainland Chinese e-commerce giant Alibaba Group Holding Ltd. has fallen foul of Uncle Sam. The Office of the Trade Representative of the U.S. says online shopping platform Taobao is one of the ‘notorious markets’. Citing ‘unacceptable’ counterfeiting and pirated products. Page 9

Happy Hols!

21,636.20 -173.60 (-0.80%) Worst Performers

+0.97%

Cathay Pacific Airways Ltd

-0.19%

China Shenhua Energy Co

-3.10%

Industrial & Commercial

-1.54%

Swire Pacific Ltd

+0.27%

Lenovo Group Ltd

-0.21%

PetroChina Co Ltd

-2.18%

Ping An Insurance Group Co

-1.53%

+0.11%

Henderson Land Develop-

-0.25%

CNOOC Ltd

-2.12%

China Petroleum & Chemical

-1.41%

+0.07%

Hong Kong & China Gas Co

-0.29%

China Life Insurance Co Ltd

-1.72%

China Unicom Hong Kong

-1.33%

Sands China Ltd

-0.30%

Li & Fung Ltd

-1.63%

AAC Technologies Holdings

-1.32%

BOC Hong Kong Holdings

-0.18%

18° 21° 19° 20° 19° 22° 16° 24° 14° 20° Today

Source: Bloomberg

CK Hutchison Holdings Ltd

SAT

sUN

I SSN 2226-8294

Mon

Tue

Source: AccuWeather

Due to the Christmas Holiday, the newspaper will not be published on Monday, 26th December and will return on Tuesday, 27th December.

Land plots Page 3

Best Performers

Hang Seng Bank Ltd

Trump appoints China critic Peter Navarro to head new trade council Page 14

Workers’ Wish-List

HK Hang Seng Index December 22, 2016

AIA Group Ltd

Politics

2 Business Daily Friday, December 23 2016

Macau Aid

Bank loan interest subsidies to firms grow in Q3

M

acao Economic Services approved MOP111.2 million (US$13.9 million) to subsidise the interest on bank loans by local enterprises during the third quarter of the year, which grew by 27 per cent from the MOP87.5 million registered during the second quarter of the year.

The subsidies were approved via the Bureau’s Interest Subsidy Scheme on Bank Loans to Enterprises, which aims to provide a maximum subsidy of four per cent interest for local enterprises’ bank loans, while the maximum subsidised period is four years from the date of the loan repayment.

For the first three quarters of the year, the bureau granted MOP284.5 million in subsidies under the scheme, benefiting 70 applicants.

Of the total beneficiaries, 19 were engaged in the transport and freight business, which received subsidies

Trade

of some MOP60.7 million during the nine months, accounting for 21.3 per cent of the total for the period.

The second biggest group of recipients were those from the wholesale industry, which received some MOP59.5 million, accounting for 20.1 per cent of the total.

In addition, nine companies engaged

in construction and public works were granted subsidies totalling MOP45.5 million, accounting for 16 per cent of the total, followed by those running restaurants and hotel establishments who received subsidies of MOP28.1 million for the period, occupying 9.8 per cent of the total.

Cumulatively, the scheme has

approved subsidies totalling MOP2.42 billion for 595 enterprises since it was implemented in 2003. As at the end of last year, those in wholesale industry received MOP423.9 million in subsidies, representing 18.4 per cent of the total, followed by those engaged in public services, social benefits and in private services. K.L.

Of China’s three largest Lusophone trading partners, Portugal was the only one to see bilateral trade increase between January and October 2016

Adverse trade winds Sino-Luso trade in the first ten months of 2016 dropped 10.3 per cent year-on-year as bilateral trade with China’s two largest trading partners in the Lusophone world - Brazil and Angola - continued to decrease Trade between China and Portuguese-speaking countries fell 10.3 per cent year-on-year to US$75.5 billion (MOP603.6 billion) between January and October 2016, according to statistics published by the Forum for Economic and Trade Co-operation between China and Portuguese-speaking Countries (Forum Macao).

Of the total, China’s imports from Portuguese-speaking countries decreased 2.5 per cent year-on-year to US$51.7 billion whilst its exports to Lusophone countries decreased 23.6 per cent year-on-year to US$23.8 billion.

On a month-to-month comparison, Sino-Luso trade in October went down 28.5 per cent to US$6.4 billion. China’s imports from Portuguese-speaking countries in October fell 37.2 per cent month-on-month to US$3.9 billion, while its exports decreased 8.7 per cent month-tomonth to US$2.5 billion.

Portugal the largest player

Of China’s three largest trading

partners in the Lusophone world, Portugal was the only one to register a year-on-year increase in trade in the first ten months of 2016, with bilateral trade value amounting to US$4.6 billion. The amount represents a rise of 26 per cent compared to the same period of last year.

Between January and October, China’s exports to Portugal reached US$3.4 billion, a 39 per cent increase, whilst imports from Portugal rose slightly by 1 per cent to US$1.27 billion.

Powerhouse Brazil

For the first ten months of the year, Brazil was China’s largest trading partner, with trade valued at US$56.3 billion, although the total amount represents a year-on-year decrease of 7.9 per cent.

The decrease in trade value between the two countries in the ten months was due to China’s exports to the South American country plunging 25.6 per cent year-on-year to US$17.7 billion.

Nevertheless, China’s imports from

Brazil rose 3.3 per cent year-on-year to US$38.7 billion in the first ten months of 2016.

Angola freefall

African Portuguese-speaking country Angola maintained its position as China’s second largest Portuguese-speaking trading partner for the first ten months of the year albeit seeing a 25.5 per cent year-on-year fall to US$12.8 billion in total trade value.

China’s total exports to the African country dropped a considerable

56 per cent year-on-year to US$1.4 billion, while total imports to China from Angola fell 18.5 per cent yearon-year to US$11.4 billion in the ten months.

Asia’s single player

East Ti m o r, th e o n l y P o rt u guese-speaking country in Asia, given Macau is not included in the data, saw the biggest year-on-year increase in trade value with China during the first ten months of 2016, surging almost 100 per cent year-onyear to US$137.7 million.

Science Fund

Macau looks to scientific co-operation with Ireland Macau and Ireland hope to further promote scientific co-operation, business co-operation and exchanges of scientific and technology personnel, as initiated in an exchange last Friday, according to a press release published by the MSAR Science and Technology Development Fund (FDCT) on Wednesday.

Peter Rya, Consul General of Ireland to Hong Kong and Macau, and Barry McMahon, Chief Physicist of Trinity College from the University of Dublin, visited the MSAR to discuss the future of scientific co-operation and development with Ma Chi Ngai, Chairman of the FDCT. The Chairman introduced the current situation of the FDCT and remarked that this fund was set up is to encourage both local and overseas researchers conduct co-operative research.

Mr. Ma noted that co-operative research with the Mainland Ministry of Science and Technology, the National Natural Science Foundation of China and the European Union have all been conducted by the FDCT, further

noting that the FDCT would explore different co-operative plans with the Mainland and foreign institutions based ipon the current situation of Macau and the needs of researchers in the city in the future.

Meanwhile, Mr. Ma hopes local science researchers can co-operate with their Irish counterparts to apply for EU research and innovation programme Horizon 2020, to further explore science through co-operation. A.L.

Business Daily Friday, December 23 2016 3

Macau

Land plot

Asia Standard to sue government on land claim Following the introduction of the new Land Law, and facing difficulty given the mandated halt to construction, developers are seeking legal action if the government reclaims land without providing compensation

Cecilia U cecilia.u@macaubusinessdaily.com

E

XECUTIVE Director of Asia Standard International Group Phileas Kwan Po Lam has declared that the company will take legal action against the MSAR if it reclaims its land plot.

Mr. Kwan said that the new Land Law contradicts the Articles of the Basic Law relating to the protection of private property.

According to Hong Kong newspaper Ming Pao, the Executive Director claimed that the Macau Government’s

action of taking back land sitting idle for more than 25 years was tantamount to robbing citizens of their property.

Mr. Kwan said that the plot located near Seac Pai Van in Coloane occupying some 185,000 square feet, was meant to be used for the construction of an industrial factory when it was purchased in 1989. However, the Macau Government announced in 1993 that the area would be used for residential development, thus the Hong Kong-listed company agreed to fall in with the changes made by the government.

Following the company’s

Investigation

Future Bright land under investigation A land plot on Hengqin Island is under investigation by authorities in Zhuhai Hengqin New Area to determine if Future Bright Holdings Limited, of which Legislator Chan Chak Mo is Managing Director, has left the plot idle for more than one year after its development milestone, according to the group’s filing with the Hong Kong Stock Exchange.

If the group is found ‘without good justifications as permitted by the law to be an idle land for not more than 1 year,’ according to the filing, the group would be liable to a RMB41.87 million (MOP48.19 million/US$6.03 million) ‘surcharge’, amounting to 20 per cent of the land acquisition cost.

‘This land investigation will last for 30 days from the receipt of such notice. The Group will also provide all necessary information and documents to Hengqin Land Authority to co-operate with such investigation,’ notes the filing.

The investigation is being conducted by the Planning and Land Bureau

of the Administrative Committee of Zhuhai Hengqin New Area.

The group further notes that it has ‘made submission applying for an extension of time on certain development milestones for its property development […] on the ground that such delay in meeting the first development milestone of obtaining the foundation work permits by 28 November 2015 has been due to many reasons beyond its control (force majeure and others). Furthermore the group claims that the said delay has ‘in turn led to a delay in meeting the second development milestone of obtaining the overall main construction permit,’ by November 28 of this year.

The group notes it has completed the soft soil treatment and its tender for the foundation work ‘in accordance with the foundation work drawing plan’ and submitted documents to apply for early commencement permits of the foundation works. K.W.

agreement, Mr. Kwan indicated that no planning outline has been received from the government in the past decades, saying the company has questioned the government about the development of the area in question.

Without a solid direction for the destiny of the land, Asia Standard was forced to halt development of its land.

Declaring invalidation

Despite not receiving any official notice from the government, according to Mr. Kwan, the website of the Land, Public Works and Transport Bureau has revealed that the current status of the land, as shown on the website is: ‘in the process of declaring invalidation’.

Mr. Kwan declared that if the issue cannot be resolved by the local courts the company might consider passing the issue to the National People’s Congress, as well as seeking legal action by the international courts.

Similar issues have also been encountered by local gaming operator

Lawmaker: How about the idle plot for Ocean World?

The status of another land plot which has remained idle after being approved two decades ago was questioned by Legislator Ella Lei Cheng I in an enquiry regarding the status of the Ocean World land plot located on the Taipa coastline near the Pearl on the Lough residential complex.

The legislator enquired as to the reason for its ‘idleness’ and denounced the opaqueness of the government’s plot arrangement and management.

According to Lei’s enquiry

Sociedade de Turismo e Diversões de Macau, SA (STDM) and Hong Konglisted company Kerry Properties Limited, with the delay in the development of land allegedly due to the uncertainties of the government.

In particular, due to the impact of the UNESCO-classified Penha Hill view, the project at Nam Van Zone C formally owned by Kerry Properties was forced to freeze construction. The property company will take legal action if the MSAR Government reclaims the land without compensating the company, Ming Pao reported.

The implementation of the new Land Law has also resulted in one of the most controversial land scandals; namely, that of the Pearl Horizon residential project. In the dispute, Polytex Corporation Ltd. failed to complete its project before Boxing Day of last year, while its attempt to extend the land contract was rejected

by Secretary for Transport and Public Works Raimundo do Rosário.

document, the map showing the land distribution in the city in 2008 in an official published document indicates that the plot for Ocean World was by that time considered an expired lease plot.

As such, the legislator enquired whether the plot is listed as idle land, asking if the government will commence reclamation procedures in order to ensure the full use of the plot.

The legislator further demanded the government increase its transparency in dealing with idle land plots by introducing new mechanisms.

Vehicle emission

New vehicle exhaust emission regulations The city’s vehicle exhaust emission standards will be implemented starting July 1 next year, according to a report by local TDM Chinese Radio on Wednesday.

The MSAR Government also plans to tighten compulsory vehicle inspections based upon the vehicle’s age category.

A committee member of the transport advisory committee, Kou Kun Pang, told reporters that the new regulations will create a burden for

certain drivers but it is still too difficult to estimate how many people will voluntarily give up driving in the city.

Sammie Lun, Chairman of the Green Environment Protection Association of Macau, said that control of the city’s vehicles lies in the enforcement of the law. Mr. Lun also notes that he believes the government will provide incentives to the public to switch to environmentally friendly vehicles. A.L.

4 Business Daily Friday, December 23 2016

Macau Society Satisfaction indicators have increased overall since the 1999 handover to China

Corruption heads society’s concerns A survey conducted by Hong Kong University reveals that MSAR residents prefer a corruption-free society more than a prosperous and fair society

M

ore than prosperous, fair and free, Macau residents would prefer to have a society free of corruption, according to a survey conducted by the Hong Kong University Public Opinion Programme (HKUPOP).

According to survey results, gathered from 520 MSAR residents, 33.9 per cent of all respondents stated they want to have a society ‘free of corruption’, while 20.8 per cent stated they primarily want a ‘prosperous’ society, while 17.8 per cent of respondents want a society focused on general wellbeing, and 9 per cent desire a ‘free’ society.

The most common preference for a ‘corruption-free society’, found in the annual Macau survey conducted by the university during Macau’s handover anniversary celebration on December 20, has become a common theme in recent years, although it wasn’t always the case. The change occurred in 2007, when it first became the greatest aspiration held by Macau residents, having been the fourth and least commonly held view just the previous year.

However, it was in 2006 that the MSAR’s largest corruption scandal broke, involving former Secretary for Land and Public Works Ao Man Long. Detained in December 2006, the disgraced senior official faced trial and was sentenced in three separate cases for corruption and money laundering, abuse of power and unjustified enrichment, receiving a 29-year prison sentence, just one year shy of the maximum sentence allowed.

At the top of the list are problems associated with quality of life, with 73.6 per cent of respondents citing it as their main concern, followed by financial problems, at 21.7 per cent of respondents, and lastly political problems make up 1.4 per cent of respondents’ concerns.

This order has kept stable in recent years with some exceptions - as in 2008 when Macau residents were more worried about the economy - making up 50.6 per cent - than quality of life issues, with 44.3 per cent.

In 2000 that difference was even more marked with financial woes at 79.4 per cent compared to just 16.1 per cent concerned with quality of life.

Political concerns have registered at the bottom of residents’ worries since the territory’s handover to China in 1999, with the highest percentage registered last year, hitting 5.3 per cent.

Popularity contest

The HKUPOP survey also covers items such as the popularity index of Macau’s Chief Executive. At the moment, Chief Executive (CE) Fernando Chui Sai On, currently in his second and last term, registers 60.7 points on a scale of 0 to 100 visà-vis the 55.5 points registered in 2009 when he took office.

However, when compared to 2009, the number of respondents who stated they would vote for the current CE if a vote was held immediately is lower - 43.8 per cent - compared to 46.2 per cent in 2009. The Macau Chief Executive is elected from an electoral college of 400 members.

The survey also covers levels of satisfaction with government performance in global and specific terms, including topics such as sustainable economic prosperity, protecting human rights and f r e e d o m s, i m p r o v i n g l i v i n g conditions, the pace of democratic development, and Macau’s relations with China.

Currently, most indicators report an increase in satisfaction levels by local residents. Lusa

Better quality of life

The results of the survey, conducted at the beginning of the month by HKUPOP, also rank the primary concerns of Macau residents.

Hengqin

Counterfeit

Latin America Centre established

MOP30,000-worth of counterfeit cigarettes seized

Hengqin New District, together with Jinan University, established a Latin America Centre in Hengqin’s Inno Valley yesterday, local broadcaster TDM Radio News reported.

A strategic co-operation framework agreement was signed between the city and the university.

The head of the Hengqin Administrative Committee, Niu Jing, indicated that the centre is to serve as a platform for co-operation for the government, schools, enterprises and industries, with hopes that resources can be combined for the district’s development as well as the operation of the university.

Mr. Niu also said that both the city and the university will commence planning for co-operation with Latin

American countries, as well as setting up policy research.

He added that the co-operation with Jinan University will provide support and advice for the development of economic and trade co-operation agreements with Latin America, revealing that the city has been co-operating with several Latin American associations in Macau.

Meanwhile, Mr. Niu commented that the scheme for Macau-licensed vehicle to enter the island has been generally successful, adding that the next batch of vehicles is ready to apply for the scheme.

Mr. Niu added that application procedures will be simplified soon once more evaluations have been done. C.U.

Th e M a c a o C u st o m s S e r v i c e found two souvenir shops selling counterfeit cigarettes under the brand ‘Chunghwa’, a Chinese cigarette brand produced by the Shanghai Tobacco Group, a subsidiary of China Tobacco, in the Central District of Macau, according to a press release published by Macao Customs Service.

Police seized 61 batches of counterfeit cigarettes, with each batch containing 10 boxes of cigarettes.

The street value of the counterfeit cigarettes is estimated at MOP30,000 (US$3,752).

The case was reported by the Zhuhai authorities to Macao Customs through the cross border enforcement cooperation mechanism on December 10.

The suspected shops sold one batch of counterfeit cigarettes for MOP500 plus MOP50 for each box.

Police arrested two local female

suspects aged 51 and 52; the case has been referred to the judicial authorities.

According to Macau Customs Service, the Zhuhai Municipal Police Security Bureau together with the tobacco department have launched several inspections to date and have seized counterfeit cigarettes worth more than RMB370,00.

The fake brands include Chunghwa, Hongtashan, Huanghelou and Shuangxi, among others.

The Zhuhai authorities found that the counterfeit cigarettes flowing into Macau were smuggled from the Mainland by Macau residents.

Macao Customs and the Zhuhai Municipal Pubic Security Bureau together held a meeting on combating cross-border counterfeit cigarettes last month to strengthen law enforcement co-operation between the two regions and further crack down on crime. A.L.

Business Daily Friday, December 23 2016 5

Macau Gaming Gaming workers association demands a wage increase along the same

lines as the recently announced 2.46 per cent increase for civil servants

Filing a complaint An association of Galaxy Macau workers joined hands with the Macau Civil Servant’s Association to demand that all six gaming operators update their workers’ salaries relative to the cost of living, maintain workers’ Chinese New Year bonuses, and grant compensation leave when holidays fall on workers’ days off Nelson Moura nelson.moura@macaubusinessdaily.com

L

ocal gaming operators should update their workers’ salaries to the cost of living, maintain workers’ Chinese New Year bonuses and grant compensation leave when holidays fall on workers’ days off, stated an association of workers from gaming operator Galaxy Entertainment Group (GEG) during a joint press conference held with the Macau Civil Servant’s Association (ATFPM).

The association, representing 1,000 workers from Galaxy Macau, demanded that with gaming operators’ revenues having begun to increase in year-on-year terms in the second half of 2016, the salaries of gaming workers should be adjusted to account for inflation and increase in the cost of living in the city.

According to the association representatives, the gaming operator usually discusses possible salary increase adjustments of between 2 per cent and 5 per cent in July but failed to do so this year.

The city’s gaming industry saw total gross gaming revenue rise 14.4 per cent

year-on-year to MOP18.8 billion (US$2.4 billion) in November, according to data from the Gaming Inspection and Co-ordination Bureau (DICJ), while in the first ten months of the year the average composite consumer price index (CPI) saw an increase of 2.55 per cent year-on-year, according to data from the Statistics and Census Service (DSEC).

The gaming workers representatives also stated that, of the six concessionaires and sub-concessionaires operating in Macau, only Wynn Resorts (Macau) S.A. performed a salary increase this year.

Although not specifying an amount for

Not a threat

Legislator Coutinho also told Business Daily that the legalisation of integrated resorts in Japan “raises some concerns” but that he is confident the city’s gaming sector will be able to cope.

“Chinese will still continue to come to the city to gamble. The infrastructure has quality and we still have a privileged position as the only region

ATFPM and Galaxy Workers

the wage increase, the association representatives note that it should be in line with the 2.46 per cent increase seen in public servants’ wages, announced by the government in its 2017 Governance Action Lines (LAG).

“Since public employees have already managed a salary increase we would like gaming operators to follow suit. We hope employers take into account inflation, the cost of living and the considerable increase in price of essential goods to update their employees’ salaries,” the ATFPM President and Director, as well as direct-elect Legislator José Pereira Coutinho, told Business Daily.

A fatter red envelope

The Galaxy Macau workers association

in China where gambling is legal,” said the legislator.

With 2016 coming to an end, he believes workers are confident that 2017 will be a “better year” as more economic policies are put in place, and infrastructure projects such as the Hong Kong-Zhuhai-Macau Bridge, the fourth bridge plan, and policies such as Macau vehicles being allowed to drive to Hengqin come into play.

also demanded gaming operators maintain the Chinese custom of granting a yearly bonus, equivalent to one month’s salary, in the upcoming Chinese New Year from January 27 to February 2.

According to the association, last Chinese New Year gaming operators granted a bonus only equivalent to 65 per cent of the monthly wage, adding MOP2,800 after complaints were received from workers.

“All six gaming operators have had profits so why shouldn’t the venues’ employees get their bonus? We hope for a little bit of effort from gaming companies in giving something extra to their employees,” stated Legislator Coutinho.

The association also stated that compensation holidays should be granted when holidays fall on non-working days, with Legislator Coutinho stating employees in that situation “end up losing one day, something deeply unfair and not correct”.

In response to Business Daily’s enquiries, Galaxy Macau said it would ‘study and take into consideration time-off measures on public holidays that fall on non-working days,’ noting that employees are eligible for a ‘Special Bonus Award’ at ‘Senior Manager grade or below […] as per the rules of the Award’ and have a “Special Share Award” programme in place to award company shares to employees.

Trains

Gongbei gets expanded high-speed rail network Three new train lines seek to facilitate the economic development of both the Mainland and Macau The Guangzhou Railway Group and Zhuhai reached an agreement on Wednesday that the three long distance high-speed train service lines will open on January 5 to Shanghai, Guiyang and Changsha from Gongbei, according to Chinese newspaper Macao Daily yesterday.

The new train lines come in addition to the opening of the Beijing and Guilin lines from Gongbei at the end of last year.

The new train lines seek to provide increased offerings for tourists from the Mainland to travel to Macau as well as promoting the economic development of Zhuhai and Macau.

The new train service from Zhuhai to Changsha will operate daily, with a total travelling time of four hours.

The Zhuhai to Changsha line will stop at Guangzhou South, Shaoguan, Chenzhou West, Hengyang East and Zhuzhou West.

The Zhuhai to Guiyang line will also operate daily, with a total journey time of seven hours. This line will stop at Guangzhou South, Zhaoqing East, Guangning, Hezhou, Gongcheng, Guilin West, Jiangnan, Rongjiang, Duyun East, Guiding County and Longdongbao.

However, the new train service from Zhuhai to Shanghai will only operate four times a week, running on Mondays, Fridays, Saturdays and Sundays. The journey will last about 13 hours, stopping at Guangzhou South, Shenzhen North, Huizhou South, Xiamen North, Ningbo and Hangzhou East.

The residents of Zhuhai and Macau will be able to save travelling time in the south of Guangzhou, which also makes it cheaper for commercial and logistics activities to take place.

The new train lines will stimulate the economic development of Zhuhai and Macau, in addition to increasing tourism.

Guangzhou Railway Group also revealed that the new train lines have been introduced based upon the medium and long-term railway network planning for the ‘eight vertical and eight horizontal’ high-speed rail network on the Mainland, of which Zhuhai is a hub for the major highspeed rail network in the ‘eight vertical’ segment between Beijing, Hong Kong and Macau. A.L.

6 Business Daily Friday, December 23 2016

Gaming Expansion

Conquering the sea The Ministry of the Sea refuses to recognise a Setubal Municipality accord for wharf reclassification

T

he Ministry of the Sea refuses to recognise an accord between the Setubal Municipality, in Portugal, and local gaming operator Macau Legend, for the requalification of the seafront city’s wharf, underscoring that no transfer of the land is underway.

In response to a question by People’s Party (CDS-PP) legislator Nuno Magalhães, the Ministry of the Sea affirms that it ‘was informed of the eventual dossier prepared by the Setubal Municipality and the Port Authorities, summarised as a Powerpoint presentation’, as well as a ‘brochure edited by the Port Authority of Setubal and Sesimbra

and by the Setubal Municipality’. ’The Ministry of the Sea does not have any knowledge of the existence of the accord signed by the Setubal Council and the Macau company Macau Legend for the reclassification of the wharf, only of the interest of the Municipal Council in developing nautical recreation on the wharf of Setubal,’ reads a response sent to the legislator.

The authority additionally announced that ‘title of the area under the port jurisdiction belongs to the State, with no transference process under way’.

Anchor

In July, in Macau, a memorandum

Macau Legend Executive Director and CEO, Mr. David Chow Kam Fai

of understanding between Macau Legend Development and the Municipal Council of Setubal came to light, signed by Council president Maria das Dores Meira.

‘The Ministry of the Sea, together with the Port Authority of the Ports of Setubal and Sesimbra, is available to analyse in a responsible form any project that could contribute to the growth and the requalification of the city of Setubal and collaborate in its realisation, always with the essential concern of guaranteeing that it follows the laws in place in our country, as well as guaranteeing it won’t affect the growth of the Setubal port, the anchor of the industrial development in the Setubal region,’ reads the response.

Nuno Magalhães, the parliamentary leader and elected legislator, expressed to Lusa her “surprise that with just one question by the People’s Party we came to know that the government and the Setubal Municipality had a complete absence of dialogue”.

“One or the other: either the Municipal Council announced a project that it doesn’t actually have, or the Ministry of the Sea is negating accords it sets up in an electoral year. We will not stop from, in all our bodies, in parliament and in the Municial Assembly, confronting the president of the Council and the Ministry about these two opposing visions regarding such an important issue as the wharf,” she said.

Transformation

On July 7, Macau Legend Development entered into a memorandum of

understanding with the Setubal Municipal Council relating to a tourism, leisure and entertainment project, the first phase of which includes a hotel, commercial and residential areas, a multi-sport pavilion, a car park and a marina.

The CEO and Executive Director of Macau Legend did not want to disclose the total amount of investment, the first of the group in Portugal and in Europe, only noting it was “at least 150 million euros”.

If the government “gave me more land we would invest more” he stated, pointing out that this would also have to take into account the proportion and maximum height allowed for the project.

The president of the Setubal Municipal Council, Maria das Dores Meira, noted at the time that “everything is being negotiated” and although displaying interest in “conceding the maximum” amount of land, explained that a “detailed plan of the area” is being elaborated upon.

Maria das Dores Meira pointed out that the area involves “various management authorities” – the port, the central government, the municipality – as well as private interests, requiring a detailed plan which could take between six months to a year to finalise. A plan “in which all the entities agree on the transformation and acquisition by one single entity, which is Macau Legend”.

“From the municipality’s side we will do everything possible,” she noted, referring to the speed of the procedures, pointing out that the project depends upon the “creation of wealth, socio-economic development and tourism for the municipality”, including job creation, estimated at between 1,000 to 3,000 positions. Lusa

Graft

Gaming

Philippine Immigration head ordered to return money from Jack Lam

Goa draws on Macau gaming law

Philippine Secretary of Justice Vitaliano Aguirre has ordered the country’s Bureau of Immigration Commissioner Jaime Morente to return 20 million pesos (MOP3.2million / US$400,000) of the 50 million pesos two Immigration officials had allegedly extorted from Macau gaming tycoon Jack Lam, according to the country’s media reports.

The Justice Secretary issued the order on Wednesday, asking the Immigration Commission to return the money either to his department or the National Bureau of Investigation for “safekeeping.”

‘In order to preserve the evidence of such extortion activity, you are hereby directed to turn over within twenty-four hours the remaining 20 million pesos to this department for safekeeping or to the National Bureau of Investigation (NBI), the agency conducting the investigation of the alleged extortion incident,’ the memorandum reads, as quoted by the Manila Times.

The one-page memorandum also cited the Philippine Immigration Commissioner’s admission that he had offered “guidance” to the counter-intelligence operation against the extortion activities of the two

officials, planned by the Bureau’s former Intelligence chief Charles Calima.

Last week, a Philippine newspaper column revealed that two officials from the Immigration Bureau, Al Argosino and Michael Robles, had allegedly extorted money totalling 50 million pesos from Lam through retired police Chief sSuperintendent Wally Sombero in exchange for the release of 600 undocumented Chinese workers who were among those arrested at the Fontana Leisure Park and Casino Hotel in Pampanga.

The two alleged officials admitted later in a press briefing that they had received 30 million pesos from Sombero. Nevertheless, they claimed they were “set up,” saying the recipient of the money from the gaming boss was only a “ploy” used in a sting operation, not a bribe.

At the beginning of this month, the nation’s President Rodrigo Duterte ordered the arrest of the local gaming tycoon, founder of junket group Jimei International Entertainment Group Limited, based upon charges of economic sabotage and bribery.

The businessman is believed to have left the Philippines prior to the arrest order being made public.

India is amending its gaming rules to follow the MSAR’s gaming regulations Sheyla Zandonai

India’s state home department has withdrawn a draft file on gaming rules and revised it based upon Ma­cau’s legal framework, with the redrafted proposal to be sent to the state gov­ ernment for approval next week, according to The Times of India.

The rules have been redrafted to mirror Macau practices, including the ways of recording visitation to casinos, higher standards of CCTV camera recording, and the length of storage of CCTV footage, commented a senior home department officer cited by the same publication.

The lack of a clear definition for various terms in the Goa Public Gambling (Amendment) Act – first approved in 1976 as the Goa, Daman and Diu Public Gambling Act, with the latest amendment issued in 2012 – prompted the home department to recall the file from the law department.

Amongst the terms singled out as requiring further definition in the gaming rules are the area, casino, electronic gaming, live gaming, offshore, offshore casino, onshore casino and capacity terms.

Casino jurisdictions

Chapter 1 of the latest Macau Gambling Law (Law no. 16/2001) specifics the definition of games, interactive games, and areas where gambling can be performed – namely, Articles II, III, IV, and V. Currently, only two states in India have casino gambling operations, Goa and Sikkim, with the majority of the exiting casinos located in Goa – fifteen onshore and cruise-ship casinos – and only two land-based casinos in Sikkim.

The Union Territory of Daman and

Diu also allow casino gaming but its first casino is awaiting the approval of its gaming licence.

Untapped market

A report from Global Market Advisors, a gaming, tourism and hospitality consultant, terms India an untapped market, with the potential to generate US$10 billion (MOP80 billion) in annual revenues.

With a US$2.2 trillion (MOP17.6 trillion) GDP in 2015, India is the world’s seventh largest economy. Although its GDP per capita income performs poorly – at just US$1.578 (MOP12.614) some 50 times lower than Macau SAR’s GDP per capita at US$78.585 (MOP628.242), according to World Bank data – India’s billion-plus population and rapidly expanding middle class represent a promising gaming market, Forbes reported.

Receipts from Macau’s gaming market reached US$30 billion (MOP239.95 million) in 2015, according to the local Statistics and Census Service (DSEC).

In the Asia Pacific region, Japan the latest jurisdiction to legalise casino gambling with a bill passed in the Diet’s Upper House on 14 December 2016 - has a potential estimated gaming market of US$40 billion (MOP320 million), according to experts.

Business Daily Friday, December 23 2016 7

Gaming Growth

Philippine casinos will soon surpass Singapore, says Okada Philippine gross gaming revenue will probably reach US$3 billion this year and could reach US$3.6 billion in 2018 Ian Sayson and Siegfrid Alegado

U

niversal Entertainment Corp. Chairman Kazuo Okada said the Philippine gaming market could soon surpass Singapore’s, as improved ties with China promises more tourists and raise the prospects for his upcoming US$2.4 billion casino.

The Japanese gaming tycoon said in Manila on Wednesday that Philippine President Rodrigo Duterte’s move to thaw relations with China as well as his efforts to fight drugs and crime will increase the number of Chinese visitors. At the same time, he sounded a note of caution about jumping into the world’s newest casino market in Japan due to its aging population.

“A lot of Chinese are coming into the Philippines, and that will improve more as improving bilateral relations between China and the Philippines increase tourism here,” said Okada in an interview ahead of a public preview of his resort, starting Dec. 21 and lasting till its official opening in the first quarter of 2017. “The Philippine gaming market will become bigger than Singapore” within years, he said, without giving a specific timeframe.

The Philippines is competing with Macau and Singapore to become a gambling hub targeting Asia’s rising middle class, even as the prevalence of high-stakes Chinese gamblers has been weakened by government crackdowns on corruption and capital outflow. Competition in the region is set to become more crowded, with Japan’s parliament passing a bill legalizing casinos Dec. 15, paving the way for billions of dollars of potential investments.

Details of Japan’s casinos, or socalled integrated resorts, must still be laid out in an implementation bill before any casinos can be built -- meaning none are likely to open their doors in time for the 2020 Tokyo Olympics.

Universal Entertainment shares rose as much as 2.4 per cent in Tokyo

trading Thursday, the most since Dec. 14 on an intraday basis. The benchmark Topix index fell 0.5 per cent. The company’s shares have surged 37 per cent this year.

Low expectations

“I am very much interested in investing in Japan also for a casino - but I feel that the rules would take a year to be fully-established, so we will consider it for one year,” said Okada, whose company is a manufacturer of gaming machines known as pachinko. “It’s one way to promote tourism to Japan, and it’s also a way in Japan to provide a different form of gaming other than pachinko to the people.”

While Yokohama and Osaka have been touted as potential venues for Japan’s first casino resorts, Okada said he sees the northern city of Sapporo as an attractive location due to its natural resources and good seafood, and its existing popularity with tourists. Still, the 74-year-old is keeping his expectations low.

“I don’t have very high expectations when it comes to the gaming industry in Japan because economic growth has been very stable,” he said.

“Another reason is that Japan is an aging society, so probably not a lot of people will be spending.”

Entertainment city

Instead, he’s keeping his focus firmly on Okada Manila, which will be the Philippine capital’s largest casino resort with over 26,000 square metres (280,000 square feet) of gaming space, and the third to open in Entertainment City, a 120-hectare (297 acres) site along the city’s bay that the government is developing into a casinos and leisure hub.

Philippine gross gaming revenue will probably reach US$3 billion this year and could reach US$3.6 billion in 2018, as new entrants like Okada and improving relations with China bring in more overseas gamers, said Rommel Rodrigo, an analyst at Maybank ATR Kim Eng. By comparison, gross gaming revenue

Online

Philippines President says he will stop all online gambling Philippine President Rodrigo Duterte announced on Thursday he would halt all online gambling in his country.

Duterte made the comment while announcing a 2017 budget that focused heavily on populist measures.

He gave no timeframe for such a ban or details on its scope.

The firebrand former mayor has been a worry for the country’s

booming online gambling industry and in August scrapped one firm’s 13-year monopoly of gambling in licensed online cafes.

The Philippine gambling industry is one of Asia’s most freewheeling, attracting many online foreign companies over the last decade to set up servers aimed at overseas punters, and has lured investments of billions of dollars in casino resorts. Reuters

from Singapore’s two casino resorts was US$4.8 billion in 2015, according to data compiled by Bloomberg.

Okada expects his Manila casino, which missed its previous deadline to start operations in November, to be profitable in its first year of operations and to give a return on his investment in three to five years. The venture could seek a listing on the Philippine Stock Exchange in a year, he said.

China pivot

“The gaming market here in Philippines has a lot of room for growth,” Okada said. Duterte’s controversial fight against drugs and crime is expected to improve the image of the country and draw foreign tourists, in turn boosting the local economy, he said. “We are very positive.”

Duterte, who assumed office in June 30, has made a pivot to China in a bid to attract investments from the world’s second-largest economy and thaw relations that cooled in the previous six years due to a territorial dispute.

In a state visit in October, Duterte secured US$24 billion of investment and credit pledges, supporting his push to veer foreign policy away from the U.S., the Philippines’ top military ally.

“Our initial target is to have 30 per cent of the guests from the international segment, but we would eventually like to bring that up to 50 per cent,” said Okada. “ We are looking at China, Taiwan, Korea and Japan - if you think about it from proximity, a lot of our guests will initially be coming from China and Taiwan.” Bloomberg

8 Business Daily Friday, December 23 2016

Greater China Property

Xi calls for wide-ranging measures to regulate hot property market

P

resident Xi Ji n p i n g said China’s approach to regulating its red-hot p r o p e rt y m a r k et w i l l include financial, fiscal, tax, land, and regulatory measures as Beijing looks to develop a long-term mechanism for an industry prone to speculation.

China’s home prices rose at the fastest pace on record in November.

Prices are rising by more than 20 per cent annually in many major cities, making housing increasingly unaffordable for the middle class.

“The country should accurately understand the residential feature of housing and form a housing mechanism that serves both purchase and rental purposes and meets housing demands of a new urban population,” Xi said on Wednesday, according to comments carried on state media Xinhua after a meeting in Beijing.

China will strictly limit credit flowing into property speculation

in 2017 and restrain property bubbles and prevent price volatility, the country’s top leaders said at a key economic meeting last week.

The government has highlighted the need for a well-developed rental market as people are priced out of

owning a home.

China has for years mulled an annual property tax, though little progress has been made since a limited tax was implemented in Shanghai and Chongqing in 2011.

In November the finance minister

at the time said China was actively p u shi n g f o r w a r d r ef o r m s o n property taxes.

Xi said the market will play the leading role in meeting varied housing demand, while the government will satisfy basic housing demand. Reuters

Trade

WTO rules largely in favour of Taiwan in steel row with Canada Canadian Trade Minister said Canada will review the decision before deciding whether to appeal A dispute panel of the World Trade Organization (WTO) largely ruled in favour of Taiwan on Wednesday on its complaint over anti-dumping duties imposed by Canada on some of its steel goods.

The ruling, related to certain carbon steel welded pipes and certain provisions of Canada’s underlying legislation, found that Canada had contravened the WTO’s AntiDumping Agreement but that Taiwan had failed to establish some points.

Canada slapped duties on some imports of carbon steel welded pipes from Taiwan in 2012 and Taiwan brought the complaint to the WTO in Jan 2015. The annual value of Taiwan’s exports of carbon steel welded pipes to Canada dropped from around US$19 million before the anti-dumping duties were imposed to around US$5 million, Taiwan officials said at the time of the filing.

A spokesman for Canadian Trade Minister Chrystia Freeland said

Canada will review the decision before deciding whether to appeal.

Both sides have 60 days to decide whether to appeal any of the panel’s findings.

“Canada takes its WTO trade obligations seriously and is also

committed to maintaining a strong trade remedy system,” spokesman Alex Lawrence said in an email.

The panel found that Canada acted inconsistently with certain obligations under the WTO and recommended that Canada bring its measures into conformity.

Taiwanese trade officials said that while they welcomed the ruling on Thursday, they also expect Canada

will appeal the decision.

“In our filing, we requested the Canadian government to amend its laws,” said Jack Hsiao, an official in the trade negotiation office of Taiwan’s cabinet.

Hsiao added that Canadian regulations regarding dumping investigations were problematic and if their appeal were rejected Canada would need to revise its rules.

Joseph Galimberti, president of the Canadian Steel Producers Association, said the group is “disappointed but not surprised” by the ruling.

Galimberti said the impact of the decision on Canada’s steel industry is not hugely significant but declined to quantify the impact. The group’s member companies produce about 13 million tonnes of primary steel as well as over 1 million tonnes of steel pipe and tube products annually, for sales of about US$4 billion.

“We would not want speculate on an amount of business on which Canadian companies could conceivably lose out or how market shares would shift as a result of the ruling,” Galimberti said in an email. Reuters

to get 300 million people on the ski slopes, generating a projected RMB600 billion by 2020. Authorities also plan to build 2,000 recreational vehicle camp grounds by the end of the decade.

The country is increasingly relying on consumers to drive growth. Such spending accounted for 71 per cent of economic expansion in the first

three quarters of 2016.

Airborne sports are “high-technology, fashionable, and can clearly drive related sectors,” according to a government document outlining its plans. The goal is to build 2,000 “flying camps,” create 1,000 clubs for airborne activities and lure 20 million people to participate in airborne sports. Bloomberg

Economy

China to boost economy by getting people to jump out of planes China has targets for just about everything, from ethanol production to reaching Mars.

Now the top economic planning body wants to get more tourists to hit the road, and has even announced targets for skydiving, water skiing and mountain climbing, as authorities push for more consumer spending to aid the economic transition away from old industrial drivers.

The goal is for RMB7 trillion (US$1 trillion) in tourism spending in 2020 and 20 per cent average annual growth in investment in the industry by then, the National Development and Reform Commission said this month. The planning body also wants to make outdoor activities a RMB900 billion industry by decade-end.

Authorities have even more specific annual targets for 2020: total output of RMB200 billion from airborne sports, RMB300 billion of aquatic activities,

and RMB400 billion of mountain sports such as hiking, climbing and biking, NDRC officials said at a recent briefing in Beijing.

All those targets are intended to serve an overarching objective: President Xi Jinping’s plan to double 2010 gross domestic product by 2020 and keep the world’s second-largest economy chugging along with average growth of at least 6.5 per cent for five years.

“Chinese residents have moved from waves of emulative spending to more individualized, diverse and high-quality consumption” in sectors ranging from tourism to culture to sports, Cong Liang, director of the NDRC’s national economy department, told reporters at a recent briefing. “There’s a huge potential to unleash.”

China, host of the 2022 winter Olympics outside the capital, wants

Business Daily Friday, December 23 2016 9

Greater China E-commerce

Alibaba again named ‘Notorious Market’ in blow to overseas push The Hangzhou-based company said it was disappointed by the decision of the U.S. Office of the Trade Representative Selina Wang and Lulu Yilun Chen

A

libaba Group Holding Ltd. has again been labelled a haven for knockoffs with an embarrassing return to a U.S. blacklist for fakes just four years after getting its name removed.

The U.S. Office of the Trade Representative on Wednesday restored Alibaba’s Taobao to its lineup of “Notorious Markets,” citing an unacceptably high level of reported counterfeiting and piracy. The Hangzhou-based company said it was disappointed in the decision.

While Alibaba has argued it’s doing all it can to combat fakes, Asia’s biggest Internet company now finds itself on the same list as torrent website Pirate Bay and flea markets in Brazil and Nigeria. The decision damages Alibaba’s credibility in the U.S., where its shares trade and it’s trying to cultivate relationships with retailers, brands and entertainment companies.

“It’s more political than anything else,” said Billy Leung, an analyst at Haitong International Securities Co. in Hong Kong. “When people buy on Alibaba it’s not because they intend to buy into a good quality supply, they know what Taobao is.”

Shares of Alibaba fell 0.7 per cent to US$89.25 in New York on

Wednesday.

The U.S. agency warned last December that Alibaba needed to do better if it wished to avoid the designation, reserved for websites and markets where there’s large-scale copyright infringement.

In October, Alibaba said it had tightened policies against copyright infringement and made it easier for brands to request fakes be removed.

It took down 380 million product listings and closed about 180,000 stores on its Taobao platform in the 12 months to August, the company said in a letter to the USTR. Alibaba suggested its new designation could have been influenced by politics. President-elect Donald Trump has been critical of U.S.-China trade agreements, threatening to rip them up and impose high tariffs on Chinese imports. Over the weekend, he accused China of stealing an underwater drone from the U.S. Navy in an “unprecedented act.” China’s state-run English-language newspaper, China Daily, warned Monday that Trump’s inexperience in diplomacy might lead to confrontations between the two nations.

“Our results speak for themselves,” Alibaba President Mike Evans said in a statement. “Unfortunately, the USTR’s decision leads us to question whether the USTR acted based on the actual facts or was influenced by the

current political climate.”

Still, investors have grown more skeptical about Alibaba’s ability to expand in the U.S. since its record-breaking 2014 initial public offering. As the company controlled by Jack Ma, China’s richest man, seeks to bring in more than half its revenue from overseas, winning the trust of foreign brands will be key to expansion.

“While recent steps set positive expectations for the future, current levels of reported counterfeiting and piracy are unacceptably high,” the USTR said in its report. “Not only do counterfeit and pirated goods pose a grave economic threat to U.S. creative and innovative industries,” they undermine the Chinese and global

market for legitimate U.S. products.

Alibaba makes money from Taobao through advertising, with third-party merchants posting products for sale such as toys, food and medical equipment. Since those goods aren’t in Alibaba’s possession, independent verification can be difficult.

In 2015, Alibaba appointed former Apple Inc. cybercrime and counterfeits investigator Matthew Bassiur to oversee its international efforts to combat piracy.

The USTR’s action compounds Alibaba’s woes in the world’s largest economy after the company revealed in May that it’s under investigation from the U.S. Securities and Exchange Commission for its accounting practices. Bloomberg

10 Business Daily Friday, December 23 2016

Greater China In Brief Court

Beijing court accepts P2P fraud case Beijing First Intermediate People’s Court announced Thursday that it is hearing a high-profile P2P fraud case involving tens of billions of yuan. Investigations suggest that Ezubao, an online peerto-peer lending platform, has cheated members of the public out of nearly RMB60 billion (US$8.6 billion) through fake investment projects advertized on its website from June 2014 to December 2015. The company reportedly defaulted on loans worth more than RMB38 billion. Beijing People’s Procuratorate on December 15 filed charges of fraudulent fund-raising against Ezubao’s parent companies, Yucheng Holdings and Yucheng Global, and ten people. A further 16 individuals were charged with illegally absorbing public deposits. The defendants were also charged with smuggling precious metals, illegally possessing weapons and undocumented border-crossing.

Transport

China’s Uber for trucks Huochebang fetches US$1 bln valuation Lulu Yilun Chen

T

ruck Alliance Inc., an Uber-type service for trucks known in China as Huochebang, raised about US$115 million in a financing round that valued the startup at US$1 billion.

The two-year-old company backed by Tencent Holdings Ltd. and Hillhouse Capital secured the capital in a round led by new investors International Finance Corp. and All-Stars Investment Ltd. Tencent, Genesis Capital and DCM Ventures also participated, the start-up said in a statement.

Trucking remains by far the primary means of ferrying goods across China.

More than 80 per cent of goods are delivered via roads in a country whose logistics sector was worth US$1.6 trillion in 2013, Deloitte has estimated. But the industry remains

fragmented and inefficient.

Huochebang competes against 200 rival applications trying to minimize the amount of time that cargo-haulers stand empty, a rate that currently hovers around 40 per cent, according to Industrial Securities Co. “As one of the earliest investors, Tencent is optimistic about the prospects of integrating the logistics industry with the internet,” said Li Zhaohui, an investment manager at Tencent, which remains the largest shareholder at Huochebang. Tencent, the developers of WeChat, will help build the start-up’s computing and big data platform, he added.

Based in the southwestern province of Guizhou, Huochebang - which means “truck gangs” - wants to match the country’s 20 million trucks with commodities in need of transport, vacant parking lots and service centers it operates. That’s essential because more than 90 per

cent of the nation’s road haulers are owned by individuals, according to the Industrial Securities report.

Huochebang works with 2.3 million trucks and handles as much as 100,000 orders daily to haul everything from seeds and farming tools to bulkier items such as cement and coal. The company processes as much as US$120 million in shipping fees daily and has about 1,000 service centers sprinkled across China supporting drivers.

Largest rival Yunmanman has said it is also in the process of raising funds, and already counts Sequoia, Yunfeng Capital and Wang Gang - Didi Chuxing’s angel investor among its backers.

Unlike Uber, which takes a cut from every ride, Huochebang makes money primarily from selling toll cards, taking a cut from the card top-ups, and helping truckers with financing. Bloomberg

Safety

China’s tallest building resolves issues that delayed opening The Shanghai Tower, China’s tallest skyscraper, said it has resolved fire-safety issues that have delayed its full opening for 18 months.

Fire inspections have been completed for all of the 632-meter (2,074-foot) building, located in Shanghai’s Lujiazui financial district, except for two upper areas that house a hotel, Shanghai Tower Construction & Development Co. said in a statement dated December 20.

It didn’t give an opening date for the building’s full opening. The tower is the latest addition to a city skyline that already boasts some of the world’s tallest skyscrapers including the 492-meter Shanghai World Financial Center. “Being the first property project more than 600 meters high in China, there are many technical difficulties,” the operator said in the statement. “The existing inspection standards don’t apply to some new techniques and materials used in the tower, so we had to advance the inspection work step by step.”

Corruption

Chinese court jails former coal group chiefs for bribery A Chinese court has jailed two former chiefs of state-owned Shanxi Coking Coal Group for bribery, the court said on Thursday, the latest in a series of company chiefs brought down by China’s crackdown on corruption. Shanxi Coking Coal Group is the largest coking coal producer in China, with annual coal production of over 100 million tonnes. The court in Jiangsu, in the eastern province of Jiangsu, jailed Bai Peizhong, former group chairman, for 13 years and six months for taking and offering bribes, it said in a statement after Wednesday’s trial. He was fined RMB3 million (US$432,000).

The court also jailed Liao Shuanzhu, former deputy manager, for 16 years and fined him RMB 2 million on charges of corruption, bribery and illicit gains. The two were arrested in 2011. Shanxi Coking Coal Group did not immediately respond to a request for comment.

Environment

China launches carbon dioxide monitoring satellite China on Thursday launched a satellite to monitor carbon dioxide levels, state media said, making the Asian giant the third country to track the potent contributor to global warming from space.

The TanSat probe will allow China to keep a close eye on greenhouse gas emissions and give it a “louder voice” in future negotiations on carbon reduction, according to the official Xinhua news agency.

The technology will “trace the

sources of greenhouse gases and help evaluate whether countries are fulfilling their commitments” to reduce pollutants under environmental pacts, it said.

China is a signatory to the Paris climate change agreement, the first universal action plan for curbing global warming.

The US and China are together responsible for some 40 per cent of the world’s emissions, so their participation in the agreement is crucial

for its success.

The satellite launch comes after US president-elect Donald Trump, an avowed climate sceptic, reportedly threatened to gut the US space agency NASA’s climate change monitoring program.

China is the third country after the US and Japan to launch a CO2 monitoring satellite. The three-year mission will take readings every 16 days.

“The TanSat has very good ‘vision’ and can distinguish changes in atmospheric CO2 as small as 1 per cent,” Xinhua quoted the satellite’s chief designer Yin Zengshan as saying.

Lin Chao, who was also involved in developing the technology, said it will allow China to “collect carbon data from all over the world, all year round, and record the carbon contributed by both developed countries and the developing countries”.

China is the world’s largest emitter of greenhouse gases, due to its heavy reliance on coal to provide electricity to its population of 1.37 billion.

The country has been fast moving away from coal -- driven in large part by major air pollution concerns including a crisis this month that has choked large swathes of the country.

After growth of 5.3 per cent per year from 2005 to 2014, China recorded a decline of 0.7 per cent in 2015 and is set for a 0.5 per cent drop in 2016. AFP

Business Daily Friday, December 23 2016 11

Asia Public Finance

Japan plans record US$830 bln spending in FY2017/18 The budget was approved by the country’s cabinet yesterday Tetsushi Kajimoto

J

apan’s cabinet approved on Thursday a record US$830 billion spending budget for fiscal 2017 that counts on low interest rates and a weak yen to limit borrowing, underscoring the challenge Tokyo faces in curbing the industrial world’s heaviest debt burden.

The 97.5 trillion yen (US$830 billion) general-account budget for the fiscal year starting on April 1 marks an increase of 733 billion yen from this year’s initial plan due to a rising social security bill to fund the cost of services for a fast-ageing society.

The budgeted plan highlights a struggle Prime Minister Shinzo Abe faces in curbing spending, which is a key to his ambitious aim of achieving a primary budget surplus - excluding debt servicing and new bond sales by the fiscal 2020.

“This budget does not mark a shift away from reflationary policies.

Chances are high for Abe to compile additional stimulus budgets later next year,” Toru Suehiro, senior market economist at Mizuho Securities, said.

Incoming U.S. President Donald Trump’s reflationary policies should encourage Abe to follow suit, and calls for more fiscal stimulus will increase given the possibility that the premier may call a snap general election next

year, Suehiro added.

Already, Koichi Hamada, a key advisor to the premier has called for more government spending to maximise the impact of monetary policy.

Finance Minister Taro Aso stressed that Abe will stick with reflationary policies with monetary easing and “flexible” fiscal spending.

“Abe cabinet is not pursuing austerity but we are aiming to balance (the budget) by expanding the economy,” Aso told reporters.

The Ministry of Finance said this budget was aimed at reviving the economy and achieving fiscal

consolidation. But analysts say a thorough spending reform is needed to restore public finances.

The government’s plan to keep new bond issuance slightly below this year’s initially-planned 34.43 trillion yen assumes rosy tax income estimate that counts on a weak yen to boost corporate profits, and greater investment return from foreign reserves.

Extra Budget

When compiling an initial budget, the government tends to limit spending in a show of resolve to rein in snowballing debt, but it is prone to adopt extra budgets as the year progresses, budgetary tactics that loosen fiscal discipline, analysts say.

The fiscal slippage isn’t helped by the Bank of Japan’s aggressive monetary stimulus, which has pushed borrowing costs to a record low.

Since Abe took office four years ago, the government has compiled extra spending totalling more than 20 trillion yen.

Key Points Budget presents test of PM Abe’s resolve to fix public finances Abe counts on weak yen, low interest rates to limit borrowing PM keeps reflationary policy with flexible fiscal spending - Aso Analysts doubt fiscal discipline at work, demand spending reform Abe’s cabinet endorsed on Thursday a third extra budget for this fiscal year, including additional issuance of deficit-covering bonds worth 1.75 trillion yen to offset lower-than-expected tax revenue due to the yen’s gains earlier this year.

The extra budget has brought the amount of annual budget spending to 100.2 trillion yen for the current fiscal year, the highest in three years.

“If Japan adopts extra stimulus budget, that will cause more debt issuance,” said Hidenori Suezawa, fiscal and markets analyst at SMBC Nikko Securities. “Given such possibility, I don’t think fiscal discipline is at work with this budget.” Reuters

Expansion

Trade

Ford expands Australian R&D budget after manufacturing halt

Vietnam enjoys trade surplus of US$2.59 bln as of mid-December

Ford Motor Co said on Thursday it will boost spending on design capability in Australia by AUD150 million (US$109 million) in 2017 at a plant where the company shuttered production in October.

Ford ended 91-years of making cars in Australia when it closed its production line in the Melbourne suburb of Broadmeadows amid a decline in Australian manufacturing and the dwindling popularity of the big sedans it made there.

The company will now spend a total of AUD500 million on Australian research and development over three years, it said in a statement. It will

spend AUD450 million in 2017, an increase of AUD150 million compared with last year, and AUD50 million over three years to upgrade design and testing facilities.

Ford’s Australian design facility is one of three “key centres” capable of full vehicle development worldwide, alongside Detroit, Michigan and Cologne, Germany, spokesman Wes Sherwood told Reuters.

Ford spent US$6.7 billion on research and development globally in 2015, according to its 2015 annual report, and a fortnight ago announced it would borrow US$2.8 billion to spend on developing new technology.

“Ford, like the other big carmakers in the US, got caught making too big cars that were a bit outdated and they’re still scrambling to catch up,” said Michael Rafferty, an associate professor at the school of management at the Royal Melbourne Institute of Technology University.

Rival auto makers GM Holden and Toyota are set to follow Ford and close down their Australian production lines next year, acting on decisions taken in 2013 when the Australian dollar was above parity against the U.S. dollar, making local manufacturing expensive. Reuters

Vietnam’s trade surplus hit over US$2.59 billion as of mid-December 2016, said the latest data released

by Vietnam Customs on Thursday.

Since the beginning of this year to mid-December, the country’s total import-export revenue reached nearly US$333.06 billion, up 6.4 per cent year-on-year.

As of the end of December 15, the country earned some US$167.83 billion from exports, up 8.5 per cent year-on-year. Among which, the foreign direct investment (FDI) sector had export revenue of over US$117.99 billion, up 11.5 per cent year-on-year, accounting for 70.3 per cent of the

national total export revenue.

The year 2016 registers the second consecutive year that Vietnam has failed to hit the set target of export growth of 10 per cent due to difficulties in exports of agroforestry-fishery, plunge in oil price as well as in exports of cell phones and electronic products, local Bao Dau Tu (Vietnam Investment Review) online newspaper quoted analysts as saying on Thursday.

The situation is unlikely to be improved in the coming year, so the export growth target was set at 6 to 7 per cent for 2017 by the country’s National Assembly, reported Bao Dau Tu. Xinhua

12 Business Daily Friday, December 23 2016

Asia In Brief Economy

Bank of Korea chief says policy rate is low enough to support growth South Korea’s central bank governor said on Thursday its current policy rate, a record low of 1.25 per cent, is low enough to support economic growth. Bank of Korea Governor Lee Ju-yeol was answering a lawmaker’s question as to whether rates were supportive enough, The question was raised during a regular sub-committee session at parliament. Rates have been kept steady since they were lowered by 25 basis points in June.

Security

Indonesia beefs up security in capital during year-end holiday Some 150,000 police and military personnel have been deployed to secure the capital city of Jakarta during the year-end holiday season, according to Indonesian police on Thursday. “Our main task is to anticipate terror attacks and moves that could breach public order and spark conflicts and act of crimes,” Indonesian Police Chief General Tito Karnavian said at a ceremony to officiate the “Candle Operation” to ensure security during the year-end season.

Tito said the operation will run from December 23 to January 1, 2017, and it is extendable, based on developing situation. Similar operations will also be launched in other parts of the country.

Aviation

Flights dropping human waste from air to be fined in India India’s top environment court has reportedly ruled that airlines will be fined 50,000 Indian rupees (US$800) if their planes drop poop into the air during flight. The National Green Tribunal has also directed India’s civil aviation regulator to conduct surprise checks to ensure that airlines don’t flout its ruling, in the wake of a plea by a retired Indian Army official who accused planes of dumping human waste over residential areas in the national capital. “The DGCA (Directorate General of Civil Aviation) shall also issue directions that aircraft on landing shall be subjected to surprise inspection to see that human waste tanks are not empty,” the court was quoted by the media as saying.

Business Daily is a product of De Ficção – Multimedia Projects

Insurance

Troubled Indonesian insurer Bumiputera in uphill battle to find white knight Eveline Danubrata and Cindy Silviana

I

ndonesian authorities seeking to shore up troubled life insurer Bumiputera have had little luck in finding a strategic investor and engineering a backdoor listing, increasing the likelihood that some form of state aid may have to be considered.

Despite restructuring under the stewardship of Indonesia’s Financial Services Authority (OJK) since 2013, the century-old firm still has liabilities of around 20 trillion rupiah (US$1.5 billion), more than assets worth 13-14 trillion rupiah, according to its statutory manager.

Pressure on Bumiputera, formally known as Asuransi Jiwa Bersama Bumiputera 1912, has begun to mount with plans for its backdoor listing marred by confusion while there has been no sign that approaches to foreign insurers are paying off.

Failure to resolve problems for a firm with 6.7 million policyholders many of them civil servants - could also pour cold water on growth prospects for Indonesia’s underdeveloped life insurance sector, where foreign companies have bought stakes in

domestic firms in the last few years.

“A potential government bailout, maybe in part if there should be some other solutions, might have to be seriously considered,” said Peter Meyer, services committee chair at the American Chamber of Commerce in Indonesia and who has around 30 years of experience in Indonesia’s insurance industry.

Financial authorities stress they are doing their utmost to make sure Bumiputera’s woes are resolved without government funds, scarred in part by the public furore that erupted over a taxpayer bailout of lender Bank Century in 2008.

“We are trying our best such that not a single cent has to come from the government to overcome this,” Adhie Massardi, Bumiputera’s OJK-appointed statutory manager, told Reuters.

But he also said state-owned enterprises including insurer PT Taspen have been sounded out about subscribing to a rights issue that will be part of the planned backdoor listing.

Taspen is analysing Bumiputera’s financial condition and business prospects but has not made a decision yet, investment director Iman Firmansyah told Reuters.

Lucky Bayu Purnomo, an analyst at Danareksa Sekuritas, said he felt a government bailout may be a last resort.

“The government had a bitter experience when it bailed out Bank Century for 6.7 trillion rupiah. It has to look for other ways of restructuring.”

Failed approach, confusing plans

Foreign companies approached by Bumiputera in the last few months include Hong Kong’s FWD Group, the UK’s Prudential Plc and South Korea’s Hanwha Life Insurance Co Ltd, Massardi and Dumoly Pardede, an official at the regulator, told Reuters.

FWD walked away from talks with Bumiputera mainly due to concerns about its liabilities, a person with direct knowledge of the matter said.

A FWD spokesman declined to comment while Massardi said he had no knowledge of FWD walking away.

Prudential declined to comment, while a spokesman for Hanwha said there had been no contact from Indonesia about an investment and it was not considering any such investment.

Bumiputera’s muddled backdoor listing through Jakarta-listed textile materials trader PT Evergreen Invesco Tbk has also done little to bring investors on side.

Evergreen, which plans to conduct a rights issue to acquire a holding company set up by Bumiputera, said in September it was seeking 30 trillion rupiah. It then lifted that to 40 trillion rupiah before cutting it this month to 10.3 trillion.

Adding to the confusion, Evergreen said in its prospectus that the stand-by buyer for the offering was Bumiputera itself. Indonesia’s capital market supervisor has since said new documents about the rights issue do not make mention of this.

Originally slated for end-2016, the rights issue has been delayed until next year.

Evergreen did not respond to several requests for comment made by phone and emails. Reuters

Aviation

Myanmar pledges to implement new int’l airport as national project Myanmar Vice President U Henry Van Thio has pledged to implement the new Hanthawaddy International Airport project during the time of the incumbent government as a national project, Myanmar News Agency reported Thursday.

Upon completion of the project, it will become a major gateway for international airlines to use and operate their businesses, the second vice president told the leading committee on the airport construction in Nay Pyi Taw Wednesday chaired by himself.

He disclosed that the project being implemented is based on a private-public partnership (PPP) system tendered in 2012.

The Hanthawaddy international airport in central Bago region will be the fourth and the largest of its kind in Myanmar.

By 2020 when the new Hanthawaddy international airport is to be put into service, all international airlines will be moved there from the

current Yangon International Airport, reports said.

The project tender was won by a consortium of Yongnam and Changi Airport Planners and Engineering (CAPE) from Singapore and Japan’s JGC Corporation in 2014 for the design, construction and management of the airport on the basis of the public-private partnership.

The airport, which is being

implemented on more than 3,645 hectares of land, will help bolster the flow of business and leisure travelers as the country witnesses growth in trade and tourism industries, officials said.

The development of the airport will increase commercial and industrial activities around Bago Region and beyond and raise the local residents’ standard of living through new job creation over the time in phases.

Once operational, it is projected to handle up to 12 million passengers a year and will become a major international gateway into Myanmar and a regional aviation hub. Xinhua

Founder & Publisher Paulo A. Azevedo, pazevedo@macaubusinessdaily.com Editorial Council Paulo A. Azevedo; José I. Duarte; Mandy Kuok Newsdesk Mike Armstrong; Óscar Guijarro; Kam Leong; Nelson Moura; Annie Lao; Kelsey Wilhelm; Matthew Potger; Cecilia U Group Senior Analyst José I. Duarte Design Aivi N. Remulla Web & IT Janne Louhikari Photography Cheong Kam Ka, Ruka Borges, Gonçalo Lobo Pinheiro, António Mil-Homens, Carmo Correia Contributors James Chu; João Francisco Pinto; José Carlos Matias; Larry So; Pedro Cortés; Ricardo Siu; Rose N. Lai; Zen Udani Assistant to the Publisher Lu Yang, lu.yang@‌projectasiacorp.‌com Office Manager Elsa Vong, elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd. Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong, Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 E-mail newsdesk@macaubusinessdaily.com Advertising advertising@‌macaubusinessdaily.‌com Subscriptions sub@‌macaubusinessdaily.‌com Online www.‌macaubusinessdaily.com

Business Daily Friday, December 23 2016 13

Asia Games

Nintendo’s mobile Mario game sets download record But Nintendo shares have lost 13 per cent since the launch Makiko Yamazaki

N

intendo Co Ltd’s first Mario smartphone title has set a download record but gamers have baulked at the one-time cost of unlocking content, pushing the Japanese game maker’s stock to a one-month low.

Super Mario Run topped 40 million downloads just four days after its December 15 release in 150 countries on Apple Inc’s App Store, becoming the fastest game to reach the milestone in App Store history, Nintendo said.

But Nintendo shares have lost 13 per cent since the launch as the latest game to feature the princess-rescuing Italian plumber received negative reviews from users mainly complaining about its US$9.99 one-time cost, rather than the usual model of paying small amounts for special features.

“Mario is arguably the most popular gaming franchise in the world, yet we see only about 8 per cent of those who try the game actually purchasing it,” said Sensor Tower analyst Spencer Gabriel.

“I don’t think this is a statement on the game’s quality ... but rather the perceived value when compared to free-to-play games that offer much more content with optional microtransactions that enable players to experience it sooner.”

their children play the game, a Nintendo spokesman told Reuters.

When deciding to expand into mobile, late president Satoru Iwata criticised titles that charged for rare in-game features which he said generated huge profit but also promoted addiction. He favoured profit via low prices and a large user base.

“We are trying to make applications that appeal to a wide variety of people,” Iwata told shareholders last year when asked about pricing.

Console bridge

Super Mario Run is free to download on the App Store where, in Japan, it is rated 2.5 stars out of 5 based on 1,095 reviews.

“This is a fee app disguised as a free app,” wrote reviewer Racing Game Guy. “You need to pay after playing for 10 minutes. I don’t mind paying but the fee is a bit big. It’s a disappointment after waiting with so much expectation.”

Parental Pricing

Nintendo belatedly decided to enter smartphone gaming after resisting initial pressure from shareholders, concerned about that segment’s threat to its core console gaming business.

Soon after, Pokemon GO - based on Nintendo characters - reached 25 million downloads in a then-record 11 days from about 35 countries via the app stores of Apple and Alphabet Inc’s Google, according to estimates from Sensor Tower.

Nintendo shares more than doubled in price, reaching a six-year high, but plunged soon after the firm said Pokemon GO would have little impact on profit.

With Super Mario Run, the sticking point was known a month prior to release.

“Pricing was designed to reassure parents that they would be charged just once, not multiple times,” when

Nintendo has also repeatedly said profit was not the only focus of its smartphone business.

“We hope to maximize the number of people who interact with our characters on mobile, to bridge them to console gaming and to create synergies,” the spokesman said.

Analyst Hideki Yasuda at Ace Research Institute saw Super Mario Run as a promotional means of luring people to consoles.

“Its main purpose is to create a buzz and boost public awareness of Mario. So all the fuss about the game, including criticism over pricing, is precisely what Nintendo wants.”

Most analysts were expecting the pricing model to jar and were more concerned about what will happen in coming months.

“The stock market had factored in initial disappointment so we now need to see what impact Super Mario Run has on sales of console games,” said Masayuki Otani, chief market analyst at Japan Securities.

Otani said he would next seek guidance from Nintendo on mobile titles Animal Crossing and Fire Emblem to be released by March-end, for which many analysts expect different pricing. Reuters

14 Business Daily Friday, December 23 2016

International In Brief Transport

Uber removes self-driving cars from San Francisco roads Uber Technologies Inc has removed its self-driving cars from San Francisco streets, halting the autonomous program one week after its launch as the company faced a regulatory crackdown.

The California Department of Motor Vehicles said on Wednesday it revoked the registration of 16 Uber self-driving cars because they had not been properly permitted. For the last week, the agency was demanding that Uber shut down its program and comply with regulations requiring a permit to test self-driving cars on public roads. Uber said it was not obligated to have a permit because its vehicles require continuous monitoring by a person in the car.

San Francisco was supposed to be Uber’s second testing ground for its self-driving cars. The company unveiled its self-driving cars in September in Pittsburgh.

Public Finance

Portugal promulgates 2017 budget that shows ‘concern for rigour’ Portugal’s president, Marcelo Rebelo de Sousa, announced on Wednesday that he had promulgated the state budget for 2017 tabled by the Socialist government in October and approved with amendments by parliament last month, saying that the document showed “a concern with financial rigour” that is “a national commitment”. In a short address to the nation, made at the presidential palace at Belém, in Lisbon, the head of state said that he had followed the budget debates in parliament “attentively” and “analysed the version approved in the final overall vote” as well as the final version edited over the past few weeks.

Appointment

Trump picks ‘Death by China’ author for trade advisory role Peter Navarro, an economist who has urged a hard line on trade with China, is to head a new trade council of the U.S. Eric Beech

U

.S. President-elect Donald Trump named Peter Navarro, an economist who has urged a hard line on trade with China, to head a newly formed White House National Trade Council, the transition team said on Wednesday.

Navarro is an academic and onetime investment adviser who has authored a number of popular books and made a film describing China’s threat to the U.S. economy as well as Beijing’s desire to become the dominant economic and military power in Asia.

Trump’s team praised Navarro in a statement as a “visionary” economist who would “develop trade policies that shrink our trade deficit, expand our growth, and help stop the exodus of jobs from our shores.”

Trump, a Republican, made trade a centerpiece of his presidential campaign and railed against what he said were bad deals the United States had made with other countries.

He has threatened to hit Mexico and China with high tariffs once he takes office on January 20.

Navarro, 67, is a professor at University of California, Irvine, and advised Trump during the campaign. He has authored several books including “Death by China: How America Lost its Manufacturing Base,” which was made into a documentary film.

As well as describing what he sees

as America’s losing economic war with China, Navarro has highlighted concerns over environmental issues related to Chinese imports and the theft of U.S. intellectual property.

While Trump in the statement praised the “clarity” of Navarro’s arguments and the “thoroughness of his research,” few other economists have endorsed Navarro’s ideas.

Marcus Noland, an economist at the Peterson Institute for International Economics, likened a tax and trade paper authored by Navarro and Wilbur Ross, who has been named as Trump’s commerce secretary, to “the type of magical thinking best reserved for fictional realities” for what he said was its flawed economic analysis.

‘Don’t poke the panda’

Navarro has also suggested a steppedup engagement with Taiwan, including assistance with a submarine development program.

He argued that Washington should stop referring to the “one China” policy, but stopped short of suggesting it should recognize Taipei, saying: “There is no need to unnecessarily poke the Panda.”

China considers Taiwan a renegade province and has never renounced the use of force to bring it under its control.

China’s foreign minister Wang Yi said in an interview carried on Thursday in the Communist Party of China’s official newspaper that

China-U.S. relations face new uncertainties but with mutual respect for core interests they will remain stable.

“Only if China and the United States respect each other and give consideration to other’s core interests and key concerns can there be longterm, stable cooperation, and effect win-win mutual benefit,” Wang said.

After his November 8 election win, Trump stoked China’s ire when he took a telephone call from Taiwanese President Tsai Ing-wen in a break with decades of precedent that cast doubt on his incoming administration’s commitment to Beijing’s “one China” policy.

In an opinion piece in Foreign Policy magazine in November, Navarro and another Trump adviser, Alexander Gray, reiterated the presidentelect’s opposition to major trade deals, including the Trans-Pacific Partnership.

“Trump will never again sacrifice the U.S. economy on the altar of foreign policy by entering into bad trade deals like the North American Free Trade Agreement, allowing China into the World Trade Organization, and passing the proposed TPP,” Navarro and Gray wrote. “These deals only weaken our manufacturing base and ability to defend ourselves and our allies.”

Trump has vowed to pull the United States out of the TPP, a free-trade pact aimed at linking a dozen Pacific Rim nations that President Barack Obama signed in February. It has not been ratified by the U.S. Senate.

The president-elect has also vowed to renegotiate the NAFTA pact with Canada and Mexico, saying it had cost American jobs. Reuters

Patent

Nokia sues Apple for infringing patents Nokia Corp said on Wednesday it had filed a number of lawsuits against Apple Inc for violating 32 technology patents, striking back at the iPhone maker’s legal action targeting the one-time cellphone industry leader a day earlier. Nokia’s lawsuits, filed in courts in Dusseldorf, Mannheim and Munich, Germany, and the U.S. District Court for the Eastern District of Texas, cover patents for displays, user interfaces, software, antennas, chipsets and video coding.

“Since agreeing a license covering some patents from the Nokia Technologies portfolio in 2011, Apple has declined subsequent offers made by Nokia to license other of its patented inventions which are used by many of Apple’s products,” Nokia said in a statement.

Apple on Tuesday had taken legal action against Acacia Research Corp and Conversant Intellectual Property Management Inc, accusing them of colluding with Nokia to extract and extort exorbitant revenues unfairly from Apple.

Bonds

Russia says yuan bond a priority but no issuance timetable set Samuel Shen and Matthew Miller

Russia and China have not set a timetable for the issuance of a benchmark Russian treasury bond denominated in yuan, as both sides continue to discuss technical and regulatory issues, a Russian finance ministry official said on Thursday.

“It’s a priority project now,” Artem Sharibzhanov, an official in the Ministry of Finance’s Department of Public Debt and Sovereign Financial Assets, told Reuters.

Sharibzhanov was in Shanghai attending a cross-border investment forum hosted by the Shanghai Stock Exchange and Moscow Exchange to promote closer ties between Chinese

and Russian capital markets.

CITIC Securities and Galaxy Securities signed memorandums of understanding with the Moscow Exchange on the sidelines of that event, in deals that will see Chinese brokerages providing access for their clients to Russian securities traded in Moscow.

The deal also could provide assistance for Chinese companies that want to list their securities on the Moscow bourse.

Wang Yuan, a Moscow Exchange supervisory board member, said the cooperation agreements are part of an effort to build financial infrastructure.

Russia has sought to deepen ties

with China since relations with the West soured over the Ukraine conflict in 2014.

U.S. and European Union sanctions and a collapse in global oil prices have hurt the Russian economy and starved it of much-needed foreign investment.

As part of those efforts, Russia has said it wants to raise the equivalent of US$1 billion by issuing OFZ government bonds in Russia denominated in Chinese yuan.

It initially hoped to issue the yuan bonds this year, but the issue is now more likely early next year.

In September Chinese bank ICBC was appointed a clearing bank for settling yuan transactions in Russia, and in March the Russian central bank said it had successfully tested currency swaps with the People’s Bank of China and that they were ready for use to support bilateral trade and direct investment. Reuters

Business Daily Friday, December 23 2016 15

Opinion Business Wires

The Phnom Penh Post State-owned Sihanoukville Autonomous Port (SAP) received its first shipment of four new rubber-tyred gantry (RTG) cranes from Japan this week under a US$22 million investment plan that aims to expand the seaport’s container throughput capacity by 80 per cent, a port official said yesterday. “We received our first shipment of RTG cranes and they will be used in the container yard to move containers off and on to trucks more quickly,” SAP chairman Lou Kim Chhun said yesterday. He added that the expansion project was being financed by the port’s internal budget, and was not linked to a concurrent US$80 million expansion plan financed by the Japanese government first announced in 2014.

According to Chhun, the four new RTG cranes would boost the port’s current handling capacity of 400,000 TEUs, or standard 20-foot (6 metre) equivalent container units, by 50 per cent.

Sustainability in the Trump Era

T NZ Herald Lewis Road Creamery will not pursue part of its legal action against Fonterra because it says a deal between the dairy giant and supermarkets does not include premium brands. Lewis Road Creamery founder Peter Cullinane earlier this month accused Fonterra of negotiating a “greedy” deal with supermarkets which would limit the ability of smaller dairy brands to get space in the chiller. At the time a representative for the Countdown supermarket chain said it was not involved in any deal with Fonterra, while Foodstuffs said agreements were confidential. Cullinane today said lawyers for both sides had found a resolution and had confirmed the deal excluded premium milk products. That means smaller competitors such as Lewis Road would be afforded a reasonable amount of chiller space, allowing them to remain competitive with the milk giant, he believed.

The Straits Times Keppel Infrastructure Holdings will design, build, own and operate Singapore’s fourth desalination plant the first with the ability to treat sea water and fresh water. The fourth plant brings Singapore closer to its aim of meeting 85 per cent of its water needs through desalination and Newater by 2060, when the demand for water is expected to double. It will also help decrease the Republic’s dependence on importing water from Malaysia for its drinking water needs. Expected to be operational in 2020, the new desalination plant will be able to produce 137,000 cubic metres (about 30 million gallons) of fresh drinking water per day.

he forces fighting global warming and battling to strengthen environmental protection must brace for heavy collateral damage as a result of Donald Trump’s victory in the United States’ presidential election. Judging by Trump’s campaign rhetoric, and by statements from his Republican allies, environmental protection in the US will be gutted in a frenzy of deregulation and inducements for domestic oil, coal, and gas producers.

Environmentalists are assessing the potential damage and developing strategies to avoid an onslaught driven by the most extreme antisustainability forces that have ever controlled Capitol Hill. The list of possible victims is long and depressing. If worse comes to worst, America will become much less green, while dealing a crippling blow to international cooperation.

At the recent climate conference meeting (COP 22) in Marrakesh, attention focused on the various ways a Trump administration might kill the climate agreement reached at COP 21 in Paris last year. Death could come by assassination, with Trump tearing up the agreement. Or it could come by starvation, with the US refusing to do or pay its share. Or it could be tortured to death, with the US asking everyone else to do more.

Surely, there are more options, but we are not compelled to contemplate them. We don’t need to – and we shouldn’t. Very little is known about what the Trump administration will actually do. Some hope reason will prevail at least to some extent, particularly given that markets are now pushing the green transition.

Others fear it will not.

But the simple fact is that we don’t know what Trump will do, because he doesn’t know, either. His administration’s environmental policy is not carved in stone; it’s written in water, which always seeks the fastest route to the lowest point. How deep the zealots and the coal lobby will be able to make that point depends partly on the barriers built by the rest of us.

That means concentrating on mobilizing the forces that can strengthen the case for America to remain part of the global move toward environmental sustainability. This will not convince diehards in the new administration, but it may sustain more moderate forces.

So, who is this “we” that must now take action?

First, “we” are US state governments and legislatures, nongovernmental organizations, local communities, and corporations. All need to galvanize Americans’ support for protecting local environments and contributing to global solutions.

Second, “we” are the international community: the almost 200 members of the United Nations that in 2015 adopted the Sustainable Development Goals and the Paris climate agreement. It is critically important that all UN members, whether big or small, insist that these global agreements still direct

“

Bo Lidegaard former editor-in-chief of the Danish daily Politiken, is the author, most recently, of Countrymen

the world’s actions, regardless of what Trump does.

It must be abundantly clear to the incoming administration that the combined economic and environmental interest in pursuing the sustainability agenda will continue to push countries and companies alike in that direction.

It is helpful that China has already said that it will not forego the opportunities inherent in the green transition, and that it will take the global lead if the US bows out.

And China will not be alone. While many will regret the absence of American leadership, or even steps in the opposite direction by the Trump administration, the US is no longer strong enough to make all the difference. Other countries will fill the gap and gain the benefits, and they should make that known loud and clear. Trump’s America can depart the train, which may well happen, but it cannot stop it. The rest of the world will continue to move ahead.

Corporate America and capital markets ought to reinforce that message, not as a political statement, but as a warning that a US economy that sacrifices the opportunities implied by the sustainability agenda will be less attractive to investors – and thus less prosperous.

Last month, 365 major US companies and investors did just that, issuing a public appeal to Trump not to abandon the Paris climate agreement. If Trump is to deliver more jobs and higher incomes to his voters, one vehicle to do so is to promote the green agenda of energy efficiency and renewables.

The fourth component of the “we” who must act are engaged consumers worldwide. Marching in the streets shouting slogans at elected leaders will not make the difference. Acting to organize consumers locally, nationally, regionally, and globally might.

The message needs to be sent not only by individual consumers, but also by organizations with the capacity to encourage and amplify the message: “We will not buy products and services defying the sustainability agenda, and we will give preference to quality products and brands that respect and promote sustainability.” Whatever form it takes, the message should be direct and transparent, and it should also target US corporations taking advantage of any relaxation of domestic environmental and emission standards.

Most of us did not vote for Trump, and we are not obliged to follow his lead. It’s the other way around: the more strongly we organize to stay the course and reinforce action to halt global warming and promote sustainability, the more likely it will be that pragmatic members of the new majority can minimize the damage at home and abroad.

But the simple fact is that we don’t know what Trump will do, because he doesn’t know, either. His administration’s environmental policy is not carved in stone; it’s written in water, which always seeks the fastest route to the lowest point

”

16 Business Daily Friday, December 23 2016

Closing Forex

China may adjust investment in U.S. Treasuries

said Wang Chunying, spokeswoman for the State Administration of Foreign Exchange (SAFE). China’s China may adjust its investment in U.S. Treasuries outbound direct investment while reductions in Treasury has been too much and too fast this year, Wang said. holdings is a tactical move, foreign exchange regulatory The authorities can keep the yuan basically stable, central official Li Hongyan told reporters on Thursday. China bank chief economist Ma Jun said at the same briefing, needs to take “counteras optimism about the U.S. cyclical” steps to control dollar may be overdone. Reuters large capital outflows,

Automobiles

Honda in talks with Google’s Waymo on self-drive tech Both companies stressed that the current talks are about research, rather than full production vehicles John Lippert and Jamie Butters

H

onda Motor Co. said Wednesday it is talking to Waymo, the autonomous driving unit of Google parent Alphabet Inc., to try to strike a deal that would put its self-driving technology into some of the Japanese automaker’s cars.

Both companies stressed that the talks are about research, rather than full production vehicles, at this point.

If all goes well, Honda may provide Waymo with vehicles that are modified to run the self-driving system, and those cars would join the existing Waymo fleet currently being tested in four U.S. cities.

Discussions with Honda underscore that Waymo wants develop the brains behind self-driving vehicle technology rather than build the cars that use it. The talks also show that Waymo, the new name of Google’s Self-Driving Car Project, is eager to work with more car companies as it races to rack up test miles with its autonomous-drive systems and prepare it for commercialization.

“For companies like Apple and Google, it makes more sense to supply the technology than to get into the car business, which is capital intensive and highly regulated,’’ said Michelle Krebs, an analyst at Cox Automotive’s Autotrader.com. “It makes sense for them to provide their technology to companies that are already making cars.’’

Waymo already has a deal with Fiat Chrysler Automobiles NV, which has built 100 Chrysler Pacifica plug-in hybrid minivans equipped with its computers and a suite of sensors, telematics and other systems. FCA’s vehicles will join the company’s fleet of self-driving cars early next year.

General Motors Co. and Ford Motor Co. tried to strike deals with Google’s self-driving unit last year, but were unable to do so.

Automakers had been wary of working with Google, thinking the internet search giant could dominate their businesses, but that attitude is changing, said Mark Bünger, a vice president covering digital transformation at Lux Research.

Honda shares rose 1.2 per cent to 3,570 yen as of the close in Tokyo trading Thursday, compared with a 0.1 per cent decline for the Nikkei 225 Stock Average.

First step

Honda previously announced plans to start selling self-driving cars capable of operating on highways sometime around 2020. That effort will continue, the company said in a statement. But with Waymo’s help, Honda said it could start considering

Court

different technical pathways.

“These discussions are an initial step that will allow Waymo and Honda R&D to further explore the potential of a broad range of automated driving technologies,’’ the automaker said in the statement.

Alphabet announced last week that it was separating the car project into a free-standing business called Waymo as it seeks to sharpen its focus on changing the transportation industry.

John Krafcik, who’d previously worked in management at Ford Motor Co. and as chief executive for Hyundai Motor Co.’s U.S. sales unit, is CEO of Waymo.

Frustrating progress

The Google project lost several top executives this year as some members of the team were frustrated by the pace of progress, especially as traditional automakers and rivals like Uber Technologies Inc. and Tesla Motors Inc. develop their own autonomous-vehicle systems. After revealing the company name last week, Krafcik didn’t offer any details

Consumer prices

on Waymo’s plans for a viable commercial business.

“It shows a lot of momentum for the self-driving car project, which had seemed to stall just a few months ago,” Lux’s Bünger said. “It matters a lot in the sense that there will be more self-driving cars sooner, available from a variety of automakers.”

Waymo said in a statement it’s “looking forward to exploring opportunities to collaborate with Honda to advance fully self-driving technology and make our roads safer.”

Japan’s third-largest automaker, meanwhile, inherited a legacy of fierce independence from its founder Soichiro Honda, who died in 1991. Wednesday’s announcement reflects the growing credibility of Waymo’s self-driving technologies.

It also shows the immense strain automakers face not just in the race toward self-driving, but also in the simultaneous upheavals taking place in ride-sharing and the electrification of the engines to meet emissions limits.

While cautious regarding the need for drivers to maintain responsibility for vehicle operation, Honda has made its semi-autonomous technology package, called Honda Sensing, available on affordable models including its compact Civic. Similar packages of features such as lanekeep assist and adaptive cruise control are typically found on luxury models such as the Volvo XC90, Lexus LS 460 and Mercedes-Benz E-Class.

Partnering with Waymo should help Honda speed development of its own self-driving systems or decide to use what the Google unit has developed.

“If you’re Honda, and you’re a master craftsman, and you have the opportunity to partner with the leading provider of technology in this space, maybe you learn something,” said Mike Ramsey, research director at Gartner Inc. Bloomberg

Public finance

IKEA agrees to US$50 mln settlement ECB sees inflation surge, Philippine President approves in dresser tip-over case firming global recovery US$67 bln budget for 2017 IKEA has agreed to pay a total US$50 million to three families in the United States whose children died when the budget furniture group’s dresser MALM tipped over them, lawyers representing the families said.

The families were represented by Feldman Shepherd Wohlgelernter Tanner Weinstock & Dodig LLP which said in a statement the Swedish retailer had also agreed to donate funds to children’s hospitals as part of the settlement.

IKEA confirmed a tentative settlement had been reached in an e-mailed statement to Reuters, but declined to comment further as the settlement had yet to be approved by court.

Two U.S. toddlers died in separate 2014 incidents when MALM dressers fell on them. A 22-month-old boy was killed this year in a similar incident, which occurred after IKEA had announced a repair programme including a free wall-anchoring kit.

In June, IKEA recalled about 8 million MALM chests and dressers and 21 million other models of chests and dressers in the United States. About 6.6 million were recalled in Canada. Reuters

Euro zone inflation will exceed 1 per cent at the turn of the year, hitting a level not seen since late 2013, and global growth is picking up speed, the European Central Bank said in an economic bulletin on Thursday.

“The medium-term outlook for global activity remains one of strengthening growth, albeit below its pre-crisis pace,” the ECB said.

“Overall, growth appears to be holding up in advanced economies and seems to have bottomed out in emerging market economies.”

Still, the global outlook remains overshadowed by the adverse effect of low raw materials prices on commodityexporters, the rebalancing of the Chinese economy, and policy uncertainty in the United States, the ECB said in an outlook largely consistent with its December 8 policy statement. Reuters

Philippine President Rodrigo Duterte on Thursday signed into law 3.35-trillion-peso (US$67.02 billion) “People’s Budget” for next year, the first under his presidency.

At a signing ceremony in Malacanang, the presidential palace, Duterte said Republic Act No. 10924 or the General Appropriations Act for Fiscal Year 2017 was “pro-people, pro-investment, pro-growth, and pro-development thrust of the government.”

The 2017 budget, so far the biggest annual budget assembled, empowers government agencies by funding expanded and improved social services that will lift Filipinos out of poverty, the Department of Budget and Management (DBM) said.

The Department of Education receives the highest allocation worth 544.1 billion pesos, Duterte said.

The Department of Social Welfare and Development is granted 128.3 billion pesos a significant portion of which is for the Conditional Cash Transfer (CCT) program and monthly rice subsidy for impoverished households. Xinhua