Year I | Number 1 | April 2 2012 Editor-in-chief | Tiago Azevedo Deputy editor-in-chief | José I. Duarte Macau | Hong Kong $ 6.00 www.macaubusinessdaily.com
Government’s spokesman, Alexis Tam Chon Weng
Clouds in a bright future T
he government faces hurdles as it tries to diversify Macau’s economy and integrate it with the Pearl River Delta’s. Even though there is hard work ahead, the government’s spokesman, Alexis Tam Chon Weng says in an interview with Business Daily that the city’s future is bright. Gaming revenue Taking care of the interests of residents is a guiding growth falls in March principle, and improving the qualifications of workers, both residents and importers, is a must if the city is to be competitive, he says. Mr Tam is confident the development of Hengqin Island will give Macau’s economic diversification a new lease of life, while praising the on-going political reform process.
P.6
More on pages 4&5
P.8
Wynn sued by pension fund
2012-4-2
2012-4-3
2012-4-4
19˚ 24˚
18˚ 24˚
17˚ 23˚
HANG SENG INDEX 20600 20540 20480 20420 20360 20300
March 30
HSI - Movers Name
% Day
TINGYI HLDG CO
3.695
Blessed by the luck of the seahorse
WANT WANT CHINA
2.118
HENGAN INTL
2.951
The cover image for the first edition of Business Daily is a symbol of the territory’s multicultural background and a charm for good luck. The image created by Patrícia Fonseca shows a seahorse embedded in a Portuguese-style pavement. Although the image is typically seen in pedestrian malls and footpaths, it has a deep historical heritage and has been embraced as a symbol of Macau – particularly since the handover in 1999. Look closely out in the city’s streets. The black and white stones outline the seahorse’s image. A tiny animal, yet revered by Chinese as a dragon of the sea. To sight one is auspicious. To have it on the front page of Macau’s newest, best-produced, English-language newspaper is a good omen for Macau.
BANK OF CHINA-H
1.623
IND & COMM BK-H
1.623
WHARF HLDG
-2.877
NEW WORLD DEV
-2.406
SINO LAND CO
-3.577
HENDERSON LAND D
-2.503
SUN HUNG KAI PRO
-13.141
P.10
Home sales resume climb
Source: Bloomberg
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business daily April 2, 2012
MACAU
Hard work ahead
The government faces hurdles as it tries to diversify Macau’s economy and integrate it with the Pearl River Delta’s. In an interview with Business Daily, the government’s spokesman, Alexis Tam Chon Weng, says he believes Macau’s future is bright, even though there are some clouds on the horizon. Taking care of the interests of residents is a guiding principle, and improving the qualifications of workers is a must if the city is to be competitive, he says. By Tiago Azevedo, tiago.azevedo@macaubusinessdaily.com José I. Duarte, jid@macaubusinessdaily.com
With a little more than half its term in office to go, how does the government assess the work it has done so far? The Macau SAR Government has done a lot in this couple of years. This is supported by statistics numbers, which show that our GDP growth is among the best in the world and our unemployment rate is very low, stable at 2.1 percent. The government is doing a lot for local people, in terms of social security, public housing, education and health. Macau is on a good track and people in Macau are satisfied with its government, as compared to our neighbours. The director of the State Council’s Hong Kong and Macau Affairs Office, Wang Guangya, said during a visit last year that Macau needed to address basic issues such as housing and inflation. Has the government done enough to tackle these issues? Definitely. We are doing well financially and using those resources to help improve people’s livelihood. By the end of this year, 19,000 public housing units will be complete and, in between, several social security policies have been implemented. As the chief executive once said, if the inflation rate goes up the government will act to help local people cope with difficult times. Wouldn’t that be interfering with the market? I don’t think so. Macau’s economy is booming and the wealth gap between rich and poor is widening, so it’s a must for the government to put in place some measures to attain two goals: social efficiency and equity. Every government should do something to help underprivileged people. Does the government know how the mainland authorities assess its performance? I think the central government is pleased with what Macau has achieved. Macau is very small in dimensions, we have over half a million people living here and the economic growth is impressive. Recently, during the meetings in Beijing, national leaders gave us a positive feedback. We know there are obstacles and this is no easy task because we need to adapt to the economic boom. Macau’s economy is growing too fast. At times, it’s hard for us to cope with such level of development and be able to tackle all problems that come up down the road. But the feedback we got indicates that we should keep this path. Loosening the regulations that allow companies to hire abroad
is often regarded as a practical solution. Will the government relax the existing guidelines? The main principle of the Macau government is to protect local workers. We don’t want outsiders stealing job opportunities from local people. We have to protect the local population. In many fields, however, it’s hard to find adequate candidates for some positions and we have to recruit from abroad. It’s a must and the Human Resources Office is doing its best. The economy is growing too fast and it
takes time to tackle this issue. Is the administration also facing problems in attracting and retaining workers? Of course. This is a very serious situation that affects both the public and the private sectors. Companies from the private sector approach many civil servants with better offers. There’s a brain drain from the administration to the private sector. It’s a pity and the government is trying to prevent that from happening.
Macau relies heavily on imported workers – holders of the blue card, as the working visa is known. However, they don’t have access, as residents have, to the health care system and education. Isn’t it time to offer them similar benefits? The issue is being studied. Not only to give them better conditions but also to be a way to attract talented people to work and live in Macau. We need to have better incentives in place to attract the right people to Macau.
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business daily April 2, 2012
MACAU Economic growth shows no signs of slowing but the government acknowledges the need for diversification. How important is the Hengqin Island project in that regard? It’s a wonderful opportunity for Macau and its people. The central government knows that Macau has limitations. It is impossible to diversify our economy because we don’t have land to develop other industries. We now have the opportunity to jointly develop other sectors in Hengqin. It would be quite easy for us to lease it, but the plan for Hengqin Island is to be developed jointly, which is a very good plan because we can coordinate efforts with our neighbours. Is Macau ready to deal with greater competition? Macau workers benefit from government preferential policies, which to some extent restrains competition. Can that be a problem? Yes it can and we are aware of it. Currently, Macau is a blessed place to live in, but many observers have suggested that Macau people are overprotected. It could be quite bad if local residents don’t improve their qualifications in order to deal with greater competition in years to come. The next generation will probably have to compete much more with outsiders than we do today. Currently, under the protection of government policies, it is very easy for a resident to get a
Hengqin opportunities What benefits are there to attract investors to Hengqin Island? Hengqin will become one of China’s top economic zones. Some preferential policies have been approved to attract investors and these incentives are far better than those from other economic zones in the mainland, giving it a free trade zone status supported by import duty exemptions and lower tax rates. The business community wants the Macau-Zhuhai border open 24 hours a day. Will that be possible in the near future? Sooner or later we’ll have to do it. We are so close to Zhuhai, why should we close our borders? Perhaps there is not yet sufficient traffic to justify it, but we can do it gradually. The government proposal is to extend the working hours, opening the border one hour earlier at 6am until 1am, instead of midnight. It’s fair to do it like this and expand it further in the future, especially considering Hengqin Island. It’s a must if we want to promote circulation of people and goods within the region. If we plan to promote Hengqin Island as a top economic zone, we have to introduce more policies to support it. In 10 years’ time, how do you imagine Macau? I do imagine it as a very important international city. In the past, no one knew Macau. That has changed dramatically and Macau is known everywhere now. Our international image will keep growing as the city transforms itself into an international tourism and leisure centre. It won’t only be Macau but the region itself – the Pearl River Delta. It is the most active and dynamic region in the world. The integration between Macau, Hong Kong and Guangdong province is of much importance to all parties
because we will be complementing each other. In a few years’ time, people will take an hour from Macau to Guangzhou and even less to Hong Kong. It also takes an hour’s flight from Macau to Taiwan. It will be really easy to travel within the region. I’m very optimistic about Macau’s future but we’ll have to work hard to build Macau into an international centre that is able to thrive in a more competitive environment.
Electoral reform speeds up A second round of public consultation about the revision of the electoral laws is underway. Can it be completed this year? Yes it can. The plan is to finish the process this year, taking into consideration that the election for the Legislative Assembly will be held next year. It will also introduce changes to the chief executive election that takes place in 2014. Few legislators have expressed their concerns over how the process was carried out. Are the results in line with the government’s expectations? We’re satisfied with the results. There are many people taking part in this consultation process and many of those are young people who want to engage in the debate, which is very encouraging. The procedure is going quite well and it’s open to everyone. Does the actual composition of the Executive Council reflect different views in society? It looks like it’s missing representatives from key sectors like education and health. Has the possibility of increasing the number of members ever been discussed? We have to be prudent. The population of Macau is not huge and for now the number of members of the Executive Council is adequate. Of course, there are many ways to listen to local needs and we do so. For now the system has worked well but perhaps in the near future the Macau government will consider that possibility. Since Fernando Chui Sai On took office, has the government discussed any proposal to in-
crease the number of secretaries or create deputy secretaries? It has not. For now, everything is working well and to increase the number of secretaries would involve a lot of resources. The government should do it according to needs.
‘It could be quite bad if local residents don’t improve their qualifications in order to deal with greater competition in years to come’ Alexis Tam Chon Weng
Spokesman narrows the gap The government spokesperson system was created a few months after Fernando Chui Sai On took office as chief executive in 2009. Did it achieve the goals you wanted it to? It has been up and running for two years now. It was created from scratch and in the beginning it was quite tough. We had to convince every department to cooperate and that was a hard task. We’ve managed to do so and now it is quite easy to manage the system. One of the reasons behind its creation was to open up not only to the press but also to the community. Do you feel that the government is now closer to the population? I have no doubts that it helped close the gap between the government and the population. The government should be more open and provide accurate information to the press and the general public. The mentality has changed and every public department knows that it’s our duty to provide information to the community.
Apart from heading the spokesperson system, you were also in charge of relations with Taiwan. Macau has had official representation in Taipei since last December. How would you describe these first three months? We have a very positive feedback. Our office in Taiwan does not only promote commercial ties but it also provides help to Macau residents living and studying in Taiwan. We have some 4,000 students in Taiwanese universities. We are very satisfied with the cooperation level we’ve achieved with Taiwan and that is something that will keep improving in years to come. Macau and Hong Kong have now closer ties with Taiwan. Is this a result of the better ties between the mainland and Taiwan? It reflects the improved relations between the mainland and Taiwan. Usually, Macau is a step ahead of its neighbours when it comes to cooperation with Taiwan. In the past, Macau was the first city to provide a connection flight between the mainland and Taiwan. We’ve set a good example to others. We want to do more, but it depends on the central government and the Taiwanese government.
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business daily April 2, 2012
MACAU
From March hare to tortoise Growth in gross gaming revenue may have fallen by as much as half at end of first quarter by Associate Editor
T
he growth rate for March gaming revenue may be half of what it was last year when official figures are released later today. The suggestion comes amid conflicting messages on the health of China’s manufacturing sector. Macau high rollers generally have investments in manufacturing or real estate in the mainland and if manufacturing there slows, the VIP gambling market tends to be hit first and hardest, rather than the massmarket segment. Macau casinos, where high-stakes baccarat alone accounted for 72 percent of revenue in the fourth quarter of last year, depend on VIP players for most of their income. The good news on gaming revenue in March — a month in which visitors tend to rein in spending after Chinese New Year — is that even with a slowdown the absolute numbers are likely to be considerably better than last year. The not-so-good news is that if the pattern of the first 25 days of March is followed, the rate of year-on-year increase could be nearly halved, compared to the records set last year when March revenue was up 48 percent year-on-year.
Year-on-year change in Macau’s March gaming revenue 2009-2012
March Gross gaming revenue (MOP millions)
Percentage change
2009
9,531
2010
13,569
42.4
-
2011
20,087
48.0
2012
25,000*
24.5*
Source: Gaming Inspection and Coordination Bureau * JP Morgan estimate
Clashing indicators Any slowdown in Macau gambling could chime with the HSBC China Purchasing Managers’ Index for March, complied by Markit Economics, a financial information services company. The index released yesterday fell to 48.3 in March from 49.6 in February. A result less than 50 represents a contraction in manufacturing activity. The index is based on interviews with purchasing managers about new orders, inventory levels, production, supplier deliveries and employment levels. China’s official measure of manufacturing growth, also released yesterday by the Federation of Logistics and Purchasing and the National Bureau of Statistics, rose to 53.1 in March, its highest level in 12 months, compared with 51.0 in February. The rival HSBC index gives more weight to small firms that have limited access to credit compared to state
companies and joint ventures with foreign partners. That index has underperformed compared to the official PMI figure in recent months. Investment bank JP Morgan estimates that up to March 25, Macau gaming revenue reached MOP20.2 billion (US$2.53 billion) for the month. The bank said, with daily rev-
enue between MOP730 million and MOP860 million, the total March gaming revenue was likely to be around MOP25 billion, a 25 percent increase on March last year. The figure was MOP13.6 billion in 2010. But the correlation between China’s economic growth and Macau revenue growth is not absolute. Macau’s gaming revenue numbers
are net of government gambling tax and player wins. The city’s most popular game is baccarat. The amounts the casino wins or players win is volatile. Any yearon-year slowdown in revenue growth could partly be because the house was particularly lucky the previous year and the hold this year may have “normalised”.
Ambrose So steps down as chairman of two key SJM committees D r. Ambrose So Shu Fai, Executive Director and CEO of Macau casino operator SJM Holdings, has resigned as chairman of the company’s Nomination Committee and of its Remuneration Committee. SJM gave the news in a filing on Sunday evening to the Hong Kong Stock Exchange. Chau Tak Hay and David Lan Hong Tsung have been appointed as new chairmen of the Nomination Committee and Remuneration Committee respectively. Dr So will remain a member of both committees and of the main
board, said the filing. The new committee chairmen are listed as ‘Independent Non-executive Directors’ on SJM’s latest list of directors, suggesting they have no allegiance to either of the Ho family factions that late last year struggled for control of SJM Chairman Dr Stanley Ho’s shares in SJM’s parent company STDM. And as nonexecutive directors it would appear their leadership of the two key committees will be advisory rather than policy forming. The primary purpose of the Nomination Committee is “to identify and
recommend individuals qualified to serve as a director on the board of directors and to fill vacancies on the Board” according to an explanatory filing also made by SJM last night. The latest terms of reference for the Remuneration Committee, additionally filed to HKSE last night, state “The chairman of the Committee should be an independent nonexecutive Director.” Given that Dr So was previously chairman of the committee and is an SJM executive director, this amounts to a change in corporate governance procedures for SJM.
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business daily April 2, 2012
MACAU
Pension fund sues to block Wynn donating to university fund Macau institution again caught in crossfire of two battling gaming billionaires
A
police pension fund in the United States has sued Wynn Resorts — which owns and operates Wynn Las Vegas, Encore and Wynn Macau — to block further instalments of the MOP1.1 billion (US$137.5 million) the company has pledged to the University of Macau Development Foundation over the next 11 years. Even if the Louisiana Municipal Police Employees’ Retirement System wins its case in a Nevada court, the timetable for the construction of the university’s new campus on Hengqin Island should remain largely unchanged. The MOP9.8 billion (US$1.23 billion) project is being funded directly by the Macau government and could be finished in December this year. But the United States lawsuit is an embarrassment for the university
and the Macau government. Both have become entangled in a battle not of their making. The dispute emerges from a fallout between two gaming industry billionaires, Steve Wynn and his former business partner Kazuo Okada, over whether to invest in a project in Manila Bay, Philippines, more than a thousand kilometres from Macau. Mr Okada is keen to invest; Mr Wynn is not, citing concerns about business probity in the Philippines. Both the publicity and the U.S. regulatory inquiry that came in the wake of the dispute over the Manila Bay project alerted the pension fund to the university issue. Wynn Resorts Limited is traded on the Nasdaq Global Select Market and is part of the Standard and Poor’s 500 and the Nasdaq-100 Indexes. The pension fund owns stock
Happier times – Steve Wynn presents his first donation to the University of Macau Development Fund in May 2011
in Wynn. The fund, which filed the case in the U.S. District Court in Las Vegas on March 27, accuses the company of mismanaging finances and claims damages. Wynn Resorts made its first donation of MOP200 million to the university at a ceremony last May attended by Edmund Ho. Mr Ho was the first chief executive of Macau after its handover to China by Portugal in 1999. He is also a vice chairman of the Chinese People’s Political Consultative Conference. It was at the ceremony that it was announced Wynn Resorts would contribute an additional MOP80 million to the university for each of the next 11 years. Wynn Resorts reported the announcement of the donation to the US Securities and Exchange Commission last May. No objections from shareholders were reported at the time. Newspaper reports called the donation a “goodwill gesture” to the Macau community, though some comments linked the timing with Mr Wynn’s desire to build a second Macau casino on the Cotai Strip. By January, Mr Okada was suing Wynn Resorts in a court in Clark County, Nevada, challenging the company’s right to spend money on the university. It was then that disagreement between Mr Okada and Mr Wynn over the Philippines escalated and the university’s development foundation came to be caught in the crossfire. I. Nelson Rose, a U.S.-based expert on gaming law and a visiting professor at the University of Macau, says in his latest blog ‘Gambling and the Law’ that the publicity surrounding the case could prove counterproductive to Wynn’s efforts to secure another Cotai project. “Wynn Resorts seemed to be getting all it asked for. But there is now the danger that Macau officials and regulators will think that if they give Wynn the licences, it will
be because they were bribed,” says Prof. Rose. “Even though there is no evidence of a quid pro quo, in politics, perception can often be stronger than reality,” he states, adding for the record he has no personal financial or professional interest in the course of events. Associate Editor
Wynn boots out Okada brand Wynn Macau Ltd. is following the lead of its parent in Las Vegas and will soon close its Okada restaurant. This is another consequence of the conflict between Wynn Resorts Inc boss Steve Wynn and Kazuo Okada, a Japanese businessmen who made his fortune from pachinko machines. All slot machines provided by Aruze Gaming America Inc., a company owned by Mr Okada, have already been taken from Wynn casinos. That, and now the closure of the Okada restaurants in Las Vegas and Macau, shows that the conflict will be a bitter one, sources said. Mr Wynn has rejected a suggestion that the Okada restaurants be renamed Otaki. Mr Okada continues to invest in restaurants. He intends to open three restaurants and a 10,000-bottle wine cellar in Hong Kong, where he has the right to reside. A Japanese restaurant there will bear his name, a Chinese restaurant will be called Yu Lei and an Italian restaurant will be called Messina.
Weather Beijing 13/5 o C Changchun 5/-3 o C
Harbin 0/-6 o C
Xian 20/0 o C Shanghai 24/9 o C Chengdu 25/11 o C Kunming 24/10 o C Haikou 26/20 o C Sanya 30/24 o C
Guangzhou 28/18 o C
MACAU (2-8 April) Day
Temperature
Humidity
04/02
19/24 o C
60/90 %
04/03
18/24 o C
55/95 %
04/04
17/23o C
55/90 %
04/05
19/23 o C
70/90 %
04/06
18/23 o C
75/95 %
04/07
17/22 o C
60/85 %
Shenzhen 24/20 o C
ASIA (today)
Hong Kong 23/19o C
Manila
SINGAPORE
TOKYO
Jacarta
33/25 o C
37/27 o C
134 o C
32/26 o C
Macau 19/24 o C
Bangkok
SEOUL
K. lumpur
taipei
37/27 o C
14/2 o C
33/25 o C
30/20 o C
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business daily April 2, 2012
MACAU
Home prices resume climb
Buyers back into the housing market as homes in two new projects go on sale, sending average prices upward again after January’s dip By Vítor Quintã
S
ales at two new residential projects in March helped reverse the downward trend in housing prices seen in the first two months of the year, property industry analysts believe. Data released by the Financial Services Bureau on Friday show that residential space cost, on average, MOP41,201 (US$5,150) per square metre in February, 4.9 per-
cent more than a year before but 9.5 percent less than in January. The number of homes sold was 461. That was 20.2 percent more than in January, mostly because of 80 flats sold on the peninsula, but 41.1 percent fewer than a year before. February was the second month in a row that the average price had fallen from its one-year peak of MOP53,254, reached in December,
when flats in three, high-end properties went on sale. Midland Macau managing director Ronald Cheung said prices had picked up last month as homes in La Scala and Manhattan went on the market. “Starting already from the end of February, the market is becoming more volatile. There are more buyers coming back onto the playing field
and they are looking for the brand new properties,” Mr Cheung said. One new target for investors was the HK$20-billion (MOP20.6 billion) La Scala residential complex, close to the airport. Each of the first 100 flats on sale there had a price tag starting at HK$13 million. And Apollo Manhattan Holdings II Ltd is selling 84 of the 88 flats in The Manhattan’s South
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business daily April 2, 2012
MaCAU Tower, which it bought last year. The government tried to cool the housing market last year, introducing the Special Stamp Duty to curb speculation. But Mr Cheung said 80 percent of the buyers in the market are residents and the rest from the mainland and Hong Kong. He believes residents are taking advantage of low interest rates, with the benchmark six-month Macau Interbank Offered Rate remaining below 0.6 percent in March. Also, volatility in the stock markets was pushing investors into the property market, where they could make “a steady-growth investment for the long run”, he said. Other sources of buyers came from homeowners upsizing or parents arranging homes for their children. Mr Cheung expects prices to continue to rise this month, which is considered a peak season for real estate, but to level off in May. Leung said he would build more Future outlook
public housing, increase land supply, and provide tax-breaks to help resiYet not all realtors believe April will dents buy their own homes
still be a good month for the local property market. Transactions are expected to decline in the second and third quarters, said Mr Sek Po Tak, regional director of Centaline Macau. Mr Sek said in a press conference last week that pre-sales of uncompleted flats and demand from local buyers fuelled the market rebound. But he expects buyers’ purchasing power to decrease in the following quarters, causing a decline in transactions. Transactions in the traditionally weak period of January reached a three-year low, said Mr Sek, because of the sales of affordable housing units and the influence of the global market.
He added that flat visits and sales rebounded in February, partially because some buyers returned to the private market after leaving the affordable housing waiting list. The price of the two residential projects whose pre-sales were launched last month – La Scala and Manhattan – was 10 percent to 15 percent lower than the expected price, attracting many buyers from the second-hand property market, the executive said. However, Mr Sek said the investors would not easily take the plunge as there are still unknown factors affecting the market this year. He expects transactions in the second and third quarters to significantly drop while the price may remain the same, as the market needs time to “recover its purchasing power”. Centaline Macau managing director Stanley Poon also said in the conference that the government should strengthen regulations on the presales of uncompleted flats to protect buyers’ rights and boost their confidence. The current property registration system should also be refined, he said, as official statistics are not updated fast enough to reflect the market situation.
Second-hand flats Property transactions have began increasing after Chinese New Year and the price of second-hand properties has increased by around five percent, according to some real estate companies. A property agent in the northern Macau district told Chinese-language Macau Daily News that flat visits by clients aiming to change
apartments rose drastically in the recent months. Second-hand property prices also had a growth of five percent to eight percent, according to him. He added his business has increased by around 50 percent after Chinese New Year, and there was a lack of apartments in the rental market, where demand was high even though rental prices have grown 30 percent from last year. Another real estate company said a 20-year-old apartment with two bedrooms ranging from 700 to 800 feet charges over MOP2 million while it costs over MOP6 million with three bedrooms. The company also said the property rental market has become more prosperous as the supply is scarce, pushing the rental prices up by 10 percent to 15 percent last month. The extra 30,000 foreign workers expected this year would further boost the price, it added. Some second-hand property owners may put their units for rental instead of selling them, the company said.
Key points La Scala, Manhattan pushing up prices Residents dominate sales More flats sold in February Prices to level off in May
InBrief
Chui looks south for cheap food The government will attempt to increase the supply of food imports from Southeast Asia, Chief Executive Fernando Chui Sai On said yesterday. The move would reduce the effect of price hikes in food imported from the mainland. Inflation hit 5.8 percent year-onyear as of February, according to the Statistics and Census Service. In December, Mr Chui met leaders from both authorities in Beijing, in an effort to strengthen imports, increase suppliers, stabilise bulk imports and regulate retail.
Melco Crown gives boss options worth US$2.2m Casino operator Melco Crown Entertainment Ltd. has given its co-chairman, Lawrence Ho Yau Lung, share options worth US$2.2 million (MOP 17.6 million), the company told the US Securities and Exchange Commission. The options are for 474,399 shares at an exercise price of US$4.6967 each, although their value had fallen by US$100,000 when Melco Crown stock closed in New York on Thursday at US$4.4267.
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business daily April 2, 2012
MACAU
Photo: Manuel Cardoso
Thanks for coming, now go home
Diaspora bonds ease homecoming path for Macau’s migrant workers
T
he Philippines is considering setting up a diaspora bond scheme that would allow its millions of migrant workers – including those in Macau and Hong Kong – to plan financially for their homecoming or retirement. Other countries that tend to export workers, including Indonesia and Sri Lanka, are also understood to be looking at such schemes. A potential benefit of diaspora bonds for migrant workers in Macau is that they are a more capitalefficient way for to send money home than going to a money transfer shop. The World Bank says anything from 2 percent to 22 percent of remittances can be swallowed up by transfer charges or fees for middlemen. Having more capital-efficient savings schemes for migrant workers in Macau could help to reduce wage inflation pressure. “Most migrant wages start slightly below the wages for the same job done by Macau residents,” says Kenneth Lei, administrator of the Small and Medium Enterprises As-
‘I think any scheme that makes it easier for migrants to go home when their contract is finished is probably good for everyone’ Kenneth Lei Administrator of the Small and Medium Enterprises Association of Macau
sociation of Macau. “But migrant workers do settle here because of the disposable income they have. Some say they can’t afford to go home. Labour associations in Macau are not always happy about migrant workers settling in Macau. “I think any scheme that makes it easier for migrants to go home when their contract is finished is probably good for everyone. “Macau SMEs are happy to have migrant workers because the local economy needs them. “I would say 60 percent of migrant workers in Macau are from China, but workers from the Philippines who speak English are important – especially for restaurants and other service industries that want to attract foreign tourists.” A diaspora bond – also known as a development bond – is simple. Governments in developing countries such as the Philippines can issue bonds to their citizens working in wealthier places such as Macau in return for their cash. The bonds are used by the home government to
pay for things such as schools and roads and earn the investor annual interest plus a lump sum when the bond matures. The Commission on Filipinos Overseas told Business Daily in a statement from Manila: “Development bonds are one of the things we are looking at in cooperation with the central bank, Department of Finance and other monetary regulatory institutions.” There were just under 14,000 nonresident workers from the Philippines in Macau at the end of February, according to figures from the Human Resources Office. The Commission on Filipinos Overseas estimates that in December 2010 9.5 million Filipinos were working abroad, meaning the Macau contingent represents only a fraction of 1 percent of the total. But they are important for support services in Macau. More than half of the 14,000 are domestic workers, with most of the rest in the hotel trade, the casinos and recreation services. The advantage of diaspora bonds for poor-world governments is that their citizens tend to be less jittery and more knowledgeable about their country’s economy than foreign investors in sovereign debt. A disadvantage is that sometimes migrants do not trust their government to spend money wisely or fairly. Some migrant workers leave home citing corruption or red tape as the catalyst for their departure, according to the International Organization for Migration (IOM), an intergovernmental body based in Switzerland. But in January Moody’s Investors Service, a ratings agency, gave a Ba2 rating to the Philippine government’s bond issue maturing in 2037, describing the outlook as “stable” because of the country’s efforts to control its debt. The rating is one notch down from the highest non-investment grade. Gauging the amount of all remittances sent is hard. The World Bank estimates the equivalent of US$23 billion (MOP184 billion) was sent home by Filipinos in 2011. But the IOM says that in India, Indonesia, Pakistan, the Philippines and Sri Lanka, up to 30 percent of remittances are not recorded in official accounts. Since the terrorist attacks on the United States in 2001, however, the international trade in remittances has come under more scrutiny. The Monetary Authority of Macau has a remittance reporting threshold of MOP8,000 (US$1,029) as part of the anti-money laundering measures it introduced in November 2006. By Associate Editor
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business daily April 2, 2012
MACAU
Machinery sales fuel record exports growth A boom in machinery sales to Hong Kong helped push exports to a record-high in February By Vítor Quintã vitorquinta@macaubusinessdaily.com
ing categories, including gold jewellery, watches, handbags and wallets, footwear and beauty products, are aimed at feeding the growing retail sector. It was the first time since December 2007 that exports outpaced imports. However, according to an industrial survey also released on Friday, exporters are less optimistic about Macau’s exports in the next few months. A survey carried out by the Economic Services Bureau in February shows that the percentage of exporters who are confident about future business dropped from 37 to 11.9 percent in six months. Meanwhile, more than half of all the companies believe exports will remain more or less unchanged in the next six months. Even worse, the number of manufacturers who believe in a downturn rose from 26.9 to 34.6 percent. “This data show that industrial companies have an uncertain outlook on exports’ evolution,” the bureau conceded. Companies see business coming from the United States, Canada, Hong Kong, Japan and other countries from the Asia-Pacific region. The main reason for the loss of optimism seems to be the rising prices of raw materials, which 79 percent of exporters say will be the biggest challenge this quarter. Increasing international competition and staff shortages are also concerns for almost half of the businessmen surveyed.
Photo: Manuel Cardoso
Overall exports to Hong Kong more than doubled to MOP357.3 million in February.
E
xports were on the rise in February after a drop in January. Sales grew by 82.4 percent year-on-year to MOP653 million (US$81.6 million), the fastest pace since the Statistics and Census Service began collecting data in 2000. The increase was mostly fuelled by re-exports, which almost doubled to MOP481 million. In February re-exports were almost three-times higher than domestic exports, MOP172 million. Even the flagging textile manufacturing saw its exports grow by 40.9 percent to MOP75.4 million — the first year-on-year growth since last
May. But the rebound was mostly based on other goods. The fastest growth was registered in machinery, which increased almost four-fold to MOP90.9 million. Machinery exports to Hong Kong took up the biggest slice, jumping from just MOP15.4 million to MOP76.6 million. In fact, overall sales to the neighbouring territory more than doubled to MOP357.3 million. Telecommunication equipment exports grew almost seven times to MOP78 million while jewellery sales increased four times to MOP50.8 million. The year-on-year increase was
made easier because of the previous February, which included the Chinese Lunar New Year. Nonetheless, Macau recorded a trade deficit of MOP5.1 billion, up by 62.3 percent year-on-year, as imports also grew by 64.4 percent, the fastest in eight years, to MOP5.7 billion. The mainland strengthened its rank as the territory’s biggest supplier, with imports growing 70.4 percent to MOP1.7 billion. The European Union sold goods worth MOP1.3 billion, up by 51.5 percent. Consumer goods remain Macau’s biggest imports, worth MOP3.4 billion. But many of the fastest grow-
82.4% Macau exports posted a record-high monthly year-on-year growth in February
16 |
business daily April 2, 2012
GREATER CHINA
PMI falls again below 50
Split on China manufacturing outlook adds to interest rate rumours
C
hinese manufacturing gauges for March offered a mixed snapshot of the nation´s slowdown, underscoring a split among economists over whether the central bank will lower interest rates. A Purchasing Managers´ Index rose to a one-year high of 53.1, exceeding economists´ estimates, a report from the logistics federation and the statistics bureau showed today. The gauge has a pattern of rising in March. A separate PMI from HSBC Holdings Plc and Markit Economics fell to a four-month low of 48.3. China’s Premier, Wen Jiabao, has pledged to “fine-tune” economic policies if needed, as weakness in export demand and a cooling housing market restrain an economy that probably grew at the slowest pace in almost three years in the first quarter. “As inflation pressures continue to ease, weaker export growth is likely to prompt further easing measures,” said Qu Hongbin, a Hong Kong-based economist for HSBC Holdings Plc. “Once the easing measures filter through, growth is likely to start bottoming out in the second quarter and rebound modestly in the second half.” It was the fifth consecutive month that HSBC’s PMI showed new orders shrinking. New export orders rebounded from an eight-month
It was the fifth consecutive month that HSBC’s PMI showed new orders shrinking
low in February but still contracted in March. The HSBC index gives more weight to small firms that have limited access to credit compared to state companies and joint ventures with foreign partners. Some economists have warned against reading too much into
China’s January and February economic data because they are distorted by the Lunar New Year holiday, but HSBC noted its average PMI readings in the first quarter were the worst in three years. Even so, some analysts are hopeful China’s economy will speed up af-
ter March if Beijing further loosens monetary policy and unveils more state spending. Mr Qu expects China to further reduce the amount of cash banks must hold as reserves before the end of June by cutting the reserve requirement ratio by 100 basis points.
InBrief Tighter rules planned for China IPOs The
Congratulations on the Launch of
Business Daily
China
Securities
Regulatory Commission (CSRC) has published proposals for tighter rules on initial public offerings by mainland companies. They include increasing the liquidity of newly-listed shares and monitoring pricings for IPOs to curb speculative trading and regain investor confidence. In March China’s two stock exchanges strengthened rules to guard against excessive volatility in newly-listed shares. Of the 583 stocks that debuted in Shenzhen between early 2010 and end-February this year, 497 now trade below their initial prices, including 33 that more than doubled on the first day of trading.
Taiwan doubles mainland independent tourist quota Taiwan will double its quota of independent tourists from the Chinese mainland, allowing up to 1,000 a day, the government announced yesterday. It’s less than a year since Taipei lifted a ban on solo travel from the mainland. The move, effective from April 28, will help promote friendship and tourism, the Taiwan’s Mainland Affairs Council said in a statement. Travel between Taiwan and the Chinese mainland stopped at the end of a civil war in 1949. Government tallies indicate that as of March 26, more than 56,000 Chinese have visited Taiwan as individual tourists since the ban was lifted. While currently only people from Beijing, Shanghai and Xiamen are allowed to visit independently, under the new measures six more cities will be admitted to the scheme, with another four more added later in the year. In 2011, more than 1.78 million Chinese visited Taiwan - most of them on organised group tours - making China the biggest source of visitors to the island, according to the Tourism Bureau.
18 |
business daily April 2, 2012
GREATER CHINA
InBrief Foxconn chairman pledges Oil companies compensate fishermen
U.S. energy giant ConocoPhillips and China’s top offshore oil and gas producer CNOOC have agreed to pay Rmb305 million (US$48 million) in compensation to Chinese fishermen after a major oil spill last year, state media reported. The spill was in the Bohai Bay area of the Yellow Sea in northeastern China. The cash compensation will be distributed through the Qinhuangdao city government in the northern province of Hebei, state-owned China National Radio said.
Starbucks goes for new markets in China Starbucks Corp. is planning a bigger push into smaller cities in China as the world’s largest coffee- shop operator triples stores in the country. China will become its second-biggest market by 2014. The company will have 1,500 stores in more than 70 Chinese cities by 2015 and expansion through smaller cities is “most definitely” a viable way to grow, John Culver, head for China and Asia Pacific, said yesterday. China’s coffee shop market is forecast to surge 55 percent to Rmb4.5 billion (US$714 million) in 2015 from Rmb2.9 billion last year, data from Euromonitor International show.
to raise pay in China
iPhone and iPad workers to get higher pay and shorter hours by as much as half at end of first quarter By Lee Chyen Yee and Jeanny Kao
F
oxconn Technology Group will increase worker salaries in China and cut work hours, Chairman Terry Gou said yesterday, after it came under fire for poor working conditions for employees making Apple iPhones and iPads. As part of its efforts to relieve the pressure on its existing factories in Chinese cities such as Shenzhen and Chengdu, Mr Gou said Foxconn would be building high-tech manufacturing facilities on the Chinese holiday island of Hainan, as well as expanding operations in Brazil. “We are a saying now in the company, ‘you work fewer hours, but get more pay’,” Mr Gou told Reuters at the 2012 Boao Forum for Asia in Hainan island province. “We won’t stop here and will continue to increase salaries.” “Salaries in Brazil are even higher but we will continue with our investments there. We’ve just entered a deal with Hainan Airlines and they will eventually be our way of connecting our supply chain (from China to Brazil).” The 61-year-old Taiwanese tycoon said Foxconn would lift workers’ overall salaries as some employees at its sprawling factories in Shenzhen had complained that they would not make enough money if hours were reduced. Improved conditions Apple and Foxconn agreed last week to improve conditions among the 1.2 million workers assembling iPhones and iPads in a landmark decision that could
Foxconn International Holdings Ltd employees walk past a banner bearing a portrait of CEO Terry Tai-Ming Gou
change the way Western companies do business in China. According to the agreement reached with Apple, Foxconn Technology Group, whose subsidiary Hon Hai Precision Industry assembles Apple devices in China, will hire tens of thousands of new workers, eliminate illegal overtime, improve safety protocols and upgrade housing and other amenities. The move is in response to the independent U.S.-based Fair Labor Association’s findings of violations of labour laws by Foxconn, such as allowing long work hours and unpaid overtime. Foxconn now supplies 50 percent of the world’s consumer electronics. Its units assemble handsets for the industry’s best-known names such as Nokia Oyj and Huawei Technologies Co Ltd, as well as Apple. Foxconn has also been diversifying
Congratulations on the launch of Business Daily
into other Asian markets, such as Vietnam, partly to reduce its reliance on China, though the move has been limited so far. “Vietnam’s development hasn’t been as fast as China,” said Mr Gou, who is Taiwan’s third richest man according to Forbes.
He added that Foxconn saw Hainan developing as one of its manufacturing bases in the southern part of Asia although some incentives, such as taxes, and the availability of labour still needed to be ironed out. “We’ll be breaking ground in Hainan at the end of this year and the facilities will be making high-tech products - that I can say. But as to what kind of products and other details, I can’t divulge too much now,” Mr Gou said. Reuters
20 |
business daily April 2, 2012
ASIA
Suu Kyi vote success could end sanctions
InBrief
Foreign companies looking for opportunities in one of the last closed markets in Asia
M
yanmar dissident Aung San Suu Kyi won a parliamentary seat in by-elections yesterday, a member of her party said. The poll is being closely watched as the U.S. and European Union consider lifting sanctions if they deem it fair. Large companies with Western and Asian interests such as the consumer and industrial conglomerate General Electric Co. and the financial services specialist Standard Chartered Plc are barred under the sanctions from investing in the country of 64 million people bordering China and India. But Chinese companies and other Asian investors are already active there. Myanmar’s political opening is moving in parallel with efforts to rewrite investment laws and unify multiple exchange rates that impede trade. The country is adopting a managed float of its currency this month, scrapping a 35-year fixed rate in a move to modernise the economy, the central bank said in a March 28 statement. The country is rich in natural gas, gold and gemstones and represents one of Asia’s last untapped frontier markets, attracting investors such as Jim Rogers, the chairman of Rogers Holdings, who predicted a global commodities rally in 1999.
Myanmar’s opening is “a gamechanger,” Bank of America Corp.’s Merrill Lynch said in a March 29 research note. Honda Motor Co. is interested in building a motorcycle plant in Myanmar, Hiroshi Kobayashi, president and chief executive officer of Asian Honda Motor Co., told reporters in Thailand at the weekend. The decision will depend on circumstances in the country and international consensus, he said.
U.S., EU watching American sanctions ban investment in Myanmar and imports from the country, restrict money transfers, freeze assets and target jewellery with gemstones originating in the nation. The European Union bans weapons sales and mineral imports. The by-elections “are a tangible moment in the path to reform, just like the release of political prisoners in January,” Derek Mitchell, U.S. special envoy to Myanmar, told reporters on March 15. “We will respond after the elections in an appropriate fashion if we believe they were free, fair and transparent.” Myanmar invited a limited number of election monitors and journalists from the U.S., EU and neighbouring countries. Voters will pick from
17 parties and seven independent candidates to fill 37 seats in the lower house, six in the upper house and two for regional assemblies, according to Network Myanmar, a U.K.- based organisation that promotes reconciliation in the country. The by-elections “are a key moment in national reconciliation and should allow a substantial review of EU policy vis-a-vis Myanmar,” Catherine Ashton, the EU’s foreign policy chief, said in a March 28 statement. Ms Aung, who won the Nobel Peace Prize during her 15 years under house arrest, was among the winners of 43 of 664 seats in the national legislature up for grabs, San Maung, a data collector for her National League for Democracy party, said by phone from Yangon. Official results have not yet been released. “It’s more than words, I’m very, very happy,” May Nwe Soe, a 33-year-old garment factory worker, said of voting in Suu Kyi’s district yesterday. “I just want Daw Suu to go to parliament,” she said, using a respectful title for Ms Aung. President Thein Sein has aimed to modernise Myanmar’s political and economic system since taking power a year ago in moves geared toward ending the country’s international isolation.
Japan banks eye lending opportunities Japan’s lenders are seeing opportunities to grow abroad thanks to the solid health of its financial system while overseas rivals struggle, the new head of the nation’s banking industry lobby said. Yasuhiro Sato, who became chairman of the Japanese Bankers Association on Sunday, said such a trend is especially pronounced in Asia, where European rivals are reducing lending to protect their capital and ride out a financial storm at home. “Asia is our home ground. Strategies may differ among banks but it’s definitely a chance to expand our presence there,” he said in an interview with Reuters. Mr Sato is also president and CEO of Mizuho Financial Group.
Vietnam company closures up 6 pct Company closures in Vietnam rose 6 percent from a year earlier in the first quarter due to high borrowing costs and “limited” access to credit, Vu Duc Dam, chairman of the Government Office said. Closures totalled 11,900 during the period, including 2,200 companies that shut permanently. Gross domestic product rose 4 percent from a year earlier in the first quarter, government data released on March 29 showed, the slowest pace since 2009.
Fuel price bill rejected in Indonesia The President of Indonesia,
Aung Sun Suu Kyi won one of the 43 contested seats
Susilo Bambang Yudhoyono, failed to gather support for a fuel price increase. The proposal submitted to the Indonesian Parliament was rejected by two coalition parties. This suggests that support for government policies is weakening and that the coalition is under increasing strain. The proposal, if approved, would have resulted in a 33% increase in the price of gasoline. Not surprisingly, the proposal faced stiff popular opposition and is affecting his popularity.
22 |
business daily April 2, 2012
MARKETS Hang Seng Index - last 6 months
Hang SENG INDEX
22000
Price
Day %
VOLUME
(H) 52 W
(L) 52 W
28.45
1.246
39433552
29.9
19.84
ALUMINUM CORP OF CHINA LTD-H
3.74
1.081
13196000
7.8
3.2
BANK OF CHINA LTD-H
3.13
1.623
348028583
4.5
2.2
3328
BANK OF COMMUNICATIONS CO-H
5.87
0.514
51585214
7.845
4.15
23
BANK OF EAST ASIA
29.2
-1.518
2564084
34.45
21.85
1880
BELLE INTERNATIONAL HOLDINGS
13.94
-0.429
8855820
17.54
11.38
2388
BOC HONG KONG HOLDINGS LTD
21.45
-0.694
14586947
25.6
14.24
293
CATHAY PACIFIC AIRWAYS
14.38
-2.575
17829313
20.15
11.8
1
CHEUNG KONG HOLDINGS LTD
100.3
-2.998
13813594
131.8
79.1
1898
CHINA COAL ENERGY CO-H
8.71
-0.229
27535221
11.66
6.59
939
CHINA CONSTRUCTION BANK-H
6
0.503
218484625
7.58
4.41
2628
CHINA LIFE INSURANCE CO-H
20.15
0.249
18836916
30.6
17.04
144
CHINA MERCHANTS HLDGS INTL
26
0.971
3975363
37.6
19
941
CHINA MOBILE LTD
85.45
1.545
23677116
87.5
68.05
688
CHINA OVERSEAS LAND & INVEST
14.76
0.682
35346021
17.86
386
CHINA PETROLEUM & CHEMICAL-H
8.46
0
68260317
291
CHINA RESOURCES ENTERPRISE
27.1
-0.184
9473298
1109
CHINA RESOURCES LAND LTD
13.42
0.299
17270900
15.92
836
CHINA RESOURCES POWER HOLDIN
14.38
2.276
4481125
16.2
1088
CHINA SHENHUA ENERGY CO-H
32.75
0.153
20483423
40.2
762
CHINA UNICOM HONG KONG LTD
13.16
1.075
21989036
267
CITIC PACIFIC LTD
13.08
-0.153
2
CLP HOLDINGS LTD
67
-0.298
883
CNOOC LTD
15.96
0.251
1199
COSCO PACIFIC LTD
11.72
0
330
ESPRIT HOLDINGS LTD
15.6
101
HANG LUNG PROPERTIES LTD
28.45
11
HANG SENG BANK LTD
12
HENDERSON LAND DEVELOPMENT
1044
HENGAN INTL GROUP CO LTD
78.5
2.951
3
HONG KONG & CHINA GAS
19.9
-0.748
CODE
Name
1299
AIA GROUP LTD
2600 3988
20800 19600 18400 17200 16000 (L) 52 W
VOLUME
(H) 52 W
-1.136
4310865
186.5
-1.083
16808315
85.35
56
-1.834
16225337
94.7
53.6
5.01
1.623
326805173
6.75
3.46
17.82
-2.835
35615169
20.9
10.82
3996912
29.2
22.45
58252527
13.226
6.13
CODE
Name
388
HONG KONG EXCHANGES & CLEAR
5
HSBC HOLDINGS PLC
9.99
13
HUTCHISON WHAMPOA LTD
9.67
6.22
1398
IND & COMM BK OF CHINA-H
35.5
24
494
LI & FUNG LTD
7.28
66
MTR CORP
27.8
1.091
10.82
17
NEW WORLD DEVELOPMENT
9.33
-2.406
27.1
857
PETROCHINA CO LTD-H
10.98
2.235
94596143
12.5
8.59
17.68
12.54
2318
PING AN INSURANCE GROUP CO-H
58.7
0.514
8094321
87.9
37.35
3632208
24.6
10.26
6
POWER ASSETS HOLDINGS LTD
3407696
75.2
62
83
SINO LAND CO
75314692
21.3
11.2
16
SUN HUNG KAI PROPERTIES
9668609
17.16
7.52
19
SWIRE PACIFIC LTD-A
-0.763
9442206
36.75
7.55
700
TENCENT HOLDINGS LTD
216.6
0.53
14075298
36.25
20.85
322
TINGYI (CAYMAN ISLN) HLDG CO
22.45
103.2
-1.244
1886351
127
84.4
151
WANT WANT CHINA HOLDINGS LTD
42.85
-2.503
17343181
56.95
33.2
4
WHARF HOLDINGS LTD
3375201
78.5
56.05
12441917
20.65
16.68
Price 20555.58
(L) 16170.35
Price
Day %
130.5 68.5 77.6
99.15
57
0
2344201
64.8
51.1
12.4
-3.577
29072157
14.16
8.482
96.5
-13.141
120526573
129
85.45
87.05
-1.971
2140338
103.896
69.321
0.278
4397562
230.8
139.8
3.695
16998786
26
17.84
8.68
2.118
24295428
9.07
5.99
42.2
-2.877
10494104
59
33.15
(H) 24468.641
23
22
3
Shanghai Shenzhen CSI 300 Name
Price
Day %
VOLUME
AGRICULTURAL BANK OF CHINA-A
2.68
1.132
96216187
AIR CHINA LTD-A
5.88
0.685
7988064
ALUMINUM CORP OF CHINA LTD-A
6.57
0.922
12333571
ANGANG STEEL CO LTD-A
4.28
0.234
6686214
ANHUI CONCH CEMENT CO LTD-A
Name
Price
Day %
VOLUME
CHINA UNITED NETWORK-A
4.23
0.714
101526501
CHINA VANKE CO LTD -A
8.28
1.099
43236556
CHINA YANGTZE POWER CO LTD-A CITIC SECURITIES CO-A
6.52
0.617
9355050
11.59
2.657
73157155
Name
Price
Day %
NINGBO PORT CO LTD-A
2.46
-0.405
7486111
PANGANG GROUP STEEL VANADI-A
6.71
-1.468
48139788
PETROCHINA CO LTD-A
VOLUME
9.69
-0.206
12614723
PING AN INSURANCE GROUP CO-A
36.58
0.938
19483204 49255781
15.78
1.675
26566333
CSR CORP LTD -A
4.44
0.452
16105991
POLY REAL ESTATE GROUP CO -A
11.29
4.537
BANK OF BEIJING CO LTD -A
9.82
1.656
13513149
DAQIN RAILWAY CO LTD -A
7.45
1.915
52067190
QINGHAI SALT LAKE INDUSTRY-A
31.9
-2.267
8929999
BANK OF CHINA LTD-A
2.98
2.055
35279766
DATANG INTL POWER GEN CO-A
5.03
-1.373
4112584
SAIC MOTOR CORPORATION LTD-A
14.83
4.216
37503806 19369027
BANK OF COMMUNICATIONS CO-A
4.71
1.29
38629220
DONGFANG ELECTRIC CORP LTD-A
21.65
-0.046
8164043
SANY HEAVY INDUSTRY CO LTD-A
12.27
-0.406
BAOSHAN IRON & STEEL CO-A
4.77
0.421
17499506
EVERBRIGHT SECURITIE CO -A
11.97
1.269
8338634
SHANDONG GOLD MINING CO LT-A
32.79
-1.413
6686273
7.9
-0.126
5970109
GD MIDEA HOLDING CO LTD -A
13.12
0.923
12929451
SHANGHAI ELECTRIC GRP CO L-A
5.31
0
2290365
SHANGHAI PHARMACEUTICALS-A
11.14
-0.801
15680507
8.93
0.676
50587012
BBMG CORPORATION-A BYD CO LTD -A
28.3
4.044
10245919
CHINA CITIC BANK CORP LTD-A
4.26
0.948
9879058
2.58
1.976
58032525
GF SECURITIES CO LTD-A
GD POWER DEVELOPMENT CO -A
27.18
3.543
9599713
CHINA CNR CORP LTD-A
4.11
0
19654426
GREE ELECTRIC APPLIANCES I-A
20.33
2.109
13519941
CHINA COAL ENERGY CO-A
9.09
2.712
12740071
GUIZHOU PANJIANG REFINED-A
26.5
0.189
3389816
CHINA CONSTRUCTION BANK-A
4.83
1.684
46510422
HAITONG SECURITIES CO LTD-A
9.01
2.27
47256406
CHINA COSCO HOLDINGS-A
4.95
1.227
11913620
HANGZHOU HIKVISION DIGITAL-A
42.6
0.972
488977
32.25
3.068
8363704
HEBEI IRON & STEEL CO LTD-A
2.88
-0.69
15552534
3.58
1.13
11902572
HENAN SHUANGHUI INVESTMENT-A
68.9
0
1337109
CHINA CSSC HOLDINGS LTD-A CHINA EASTERN AIRLINES CO-A CHINA EVERBRIGHT BANK CO-A
2.85
1.064
25585157
CHINA INTL MARINE CONTAIN-A
13.61
0.074
6425109
HUATAI SECURITIES CO LTD-A HUAXIA BANK CO LTD-A
SHANGHAI PUDONG DEVEL BANK-A SHANXI LU’AN ENVIRONMENTAL-A
24.49
0.492
6903970
SHANXI XISHAN COAL & ELEC-A
14.68
-0.542
11469479
SHENZHEN DEVELOPMENT BANK-A
15.71
0.899
10631246
SHENZHEN OVERSEAS CHINESE-A
7.01
0
17025638
SINOVEL WIND GROUP CO LTD-A
15.08
0.199
1149434
9.75
-1.015
40978758
SUNING APPLIANCE CO LTD-A
8.78
1.738
12252712
TSINGTAO BREWERY CO LTD-A
32.57
-1.512
808443
10.73
1.514
14440840
WEICHAI POWER CO LTD-A
30.16
0.033
4763164 18187821
CHINA LIFE INSURANCE CO-A
16.35
1.742
6031784
IND & COMM BK OF CHINA-A
4.33
1.168
38033990
WULIANGYE YIBIN CO LTD-A
32.84
-2.898
CHINA MERCHANTS BANK-A
11.9
0.677
39187875
INDUSTRIAL BANK CO LTD -A
13.32
1.524
28867304
XINJIANG GUANGHUI INDUSTRY-A
23.56
-1.008
5860299
CHINA MERCHANTS PROPERTY -A
20.5
2.912
12936011
INNER MONGOLIA BAOTOU STEE-A
66.76
-1.228
33554678
YANGQUAN COAL INDUSTRY GRP-A
17.23
-1.317
11874245
CHINA MERCHANTS SECURITIES-A
11.35
-0.7
6933629
INNER MONGOLIA YILI INDUS-A
22.04
0.182
6518775
YANTAI CHANGYU PIONEER-A
94.22
-0.758
241521
6.27
2.451
132762711
5.95
-4.187
134498148
YANZHOU COAL MINING CO-A
22.21
0.09
4074427
49.22
1.234
2173582
20.5
-2.288
10582113
CHINA MINSHENG BANKING-A CHINA OILFIELD SERVICES-A
16.67
1.03
7721298
CHINA PACIFIC INSURANCE GR-A
19.29
1.956
17002961
INNER MONGOLIAN BAOTOU STE-A JIANGSU HENGRUI MEDICINE C-A JIANGSU YANGHE BREWERY -A
26.23
0.115
1429733
YUNNAN BAIYAO GROUP CO LTD-A
147.15
-3.508
1936829
ZHONGJIN GOLD CORP-A
CHINA PETROLEUM & CHEMICAL-A
7.19
0.842
17889436
JIANGXI COPPER CO LTD-A
23.91
0.252
6798177
CHINA RAILWAY CONSTRUCTION-A
3.96
0.508
17267670
JINDUICHENG MOLYBDENUM CO -A
12.74
-2.075
12572067
CHINA RAILWAY GROUP LTD-A
2.45
1.24
22200326
JIZHONG ENERGY RESOURCES-A
CHINA SHENHUA ENERGY CO-A
25.61
1.386
13316435
KWEICHOW MOUTAI CO LTD-A
CHINA SHIPBUILDING INDUSTR-A
5.61
1.081
20523869
CHINA SHIPPING CONTAINER-A
2.83
0.712
8528160
LUZHOU LAOJIAO CO LTD-A METALLURGICAL CORP OF CHIN-A
17.17
-0.98
7185637
196.96
-2.083
3795990
39.09
-2.251
5102636
2.55
0
19469249
CHINA SOUTHERN AIRLINES CO-A
4.51
0.895
21241875
NARI TECHNOLOGY DEVELOPMEN-A
31.57
0.445
3060635
CHINA STATE CONSTRUCTION -A
3.05
0.993
44244472
NEW HOPE LIUHE CO LTD-A
16.69
0.907
2365546
ZIJIN MINING GROUP CO LTD-A
4.11
0.244
36403642
ZOOMLION HEAVY INDUSTRY S-A
8.66
0.932
19252893
16.43
2.177
12694968
ZTE CORP-A
Price 10640.16 (L) 2254.57 160
130
(H) 3380.53
10
Hang SENG CHINA ENTREPRISE INDEX Name
Price
Day %
VOLUME
AGRICULTURAL BANK OF CHINA-H
3.33
1.835
138118105
AIR CHINA LTD-H
5.38
2.476
ALUMINUM CORP OF CHINA LTD-H
3.74
1.081
ANHUI CONCH CEMENT CO LTD-H
24.6
BANK OF CHINA LTD-H
3.13
BANK OF COMMUNICATIONS CO-H
Price
Day %
VOLUME
Price
Day %
VOLUME
CHINA MINSHENG BANKING-H
7.03
1.297
45786800
PICC PROPERTY & CASUALTY -H
9.24
-2.532
33497664
26429936
CHINA NATIONAL BUILDING MA-H
9.79
1.979
58897800
PING AN INSURANCE GROUP CO-H
58.7
0.514
8094321
13196000
CHINA OILFIELD SERVICES-H
11.14
1.273
9617925
SHANDONG WEIGAO GP MEDICAL-H
8.87
1.837
6470187
0.408
21147105
CHINA PACIFIC INSURANCE GR-H
24.05
-2.434
15332400
SINOPHARM GROUP CO-H
21.7
-0.686
1693720
1.623
348028583
CHINA PETROLEUM & CHEMICAL-H
8.46
0
68260317
TSINGTAO BREWERY CO LTD-H
41.95
-0.592
1255609
5.87
0.514
51585214
CHINA RAILWAY CONSTRUCTION-H
4.83
-3.4
14463500
WEICHAI POWER CO LTD-H
36.25
0.834
2878825
BYD CO LTD-H
21.7
6.112
6740000
CHINA RAILWAY GROUP LTD-H
2.49
-3.113
35667000
YANZHOU COAL MINING CO-H
16.84
2.683
18300205
CHINA CITIC BANK CORP LTD-H
4.67
1.082
23565104
CHINA SHENHUA ENERGY CO-H
32.75
0.153
20483423
ZIJIN MINING GROUP CO LTD-H
3.08
0.326
36923477
CHINA COAL ENERGY CO-H
8.71
-0.229
27535221
CHINA TELECOM CORP LTD-H
4.3
0
50168187
ZOOMLION HEAVY INDUSTRY - H
10.34
1.174
16051736
CHINA COMMUNICATIONS CONST-H
7.79
4.424
42993693
DONGFENG MOTOR GRP CO LTD-H
14.02
0.143
22901695
ZTE CORP-H
20.9
3.465
8113880
6
0.503
218484625
7.7
4.62
7620648
AGRICULTURAL BANK OF CHINA-H
3.33
1.835
138118105
ZIJIN MINING GROUP CO LTD-H
3.08
0.326
36923477
CHINA CONSTRUCTION BANK-H CHINA COSCO HOLDINGS-H CHINA LIFE INSURANCE CO-H CHINA LONGYUAN POWER GROUP-H CHINA MERCHANTS BANK-H
Name
GUANGZHOU AUTOMOBILE GROUP-H
4.91
8.389
54955176
HUANENG POWER INTL INC-H
4.22
-1.632
21868000
20.15
0.249
18836916
IND & COMM BK OF CHINA-H
5.01
1.623
326805173
6.49
-0.765
5676720
JIANGXI COPPER CO LTD-H
17.86
0.224
14878227
15.88
3.117
24550436
PETROCHINA CO LTD-H
10.98
2.235
94596143
NAME
PRICE DAY %
Name
Price 2454.90 29
(L) 8058.58
9
(H) 13770.730
2
FTSE TAIWAN 50 INDEX NAME
PRICE DAY %
Volume
Acer Inc
0.902
2703.059
39.15
Advanced Semiconductor Engineering Inc
1.700
6712.086
29.7
Asia Cement Corp
0.721
2351.863
Volume
First Financial Holding Co Ltd
0.870
5749.076
17.75
Formosa Chemicals & Fibre Corp
3.137
4267.854
86.2
35.95
Formosa Petrochemical Corp
1.488
1897.217
92
NAME
PRICE DAY %
Volume
SinoPac Financial Holdings Co Ltd
0.662
7288.503
Synnex Technology International Corp
0.966
1544.603
10.65 73.3
Taiwan Cement Corp
1.088
3692.176
34.55 18.5
Asustek Computer Inc
1.788
752.760
278.5
Formosa Plastics Corp
4.536
6120.840
86.9
Taiwan Cooperative Financial Holding
0.781
4947.619
AU Optronics Corp
1.020
8760.837
13.65
Foxconn Technology Co Ltd
1.220
1172.720
122
Taiwan Fertilizer Co Ltd
0.479
735
76.4
Catcher Technology Co Ltd
1.287
723.796
208.5
Fubon Financial Holding Co Ltd
1.905
6718.311
33.25
Taiwan Glass Industry Corp
0.484
1706.742
33.25
Cathay Financial Holding Co Ltd
2.242
7824.354
33.6
Chang Hwa Commercial Bank
0.565
3931.746
16.85
Cheng Shin Rubber Industry Co Ltd
1.121
1854.356
70.9
Chimei Innolux Corp
0.791
6741.975
13.75
China Development Financial Holding Corp
0.863
11250.646
9
China Steel Corp
2.901
11284.657
30.15
Chinatrust Financial Holding Co Ltd
1.778
11238.437
18.55
Chunghwa Telecom Co Ltd
2.947
3801.149
Compal Electronics Inc
1.252
4420.952
Delta Electronics Inc
1.758
Far Eastern New Century Corp
1.070
Far EasTone Telecommunications Co Ltd
0.824
10.377
10627.373
114.5
Taiwan Mobile Co Ltd
1.285
1676.208
89.9
Hotai Motor Co Ltd
Hon Hai Precision Industry Co Ltd
0.831
409.634
238
TPK Holding Co Ltd
0.719
176.453
477.5
HTC Corp
4.389
862.052
597
TSMC
18.646
25753.417
84.9
Hua Nan Financial Holdings Co Ltd
0.888
6160.736
16.9
Uni-President Enterprises Corp
1.583
4544.369
40.85
Largan Precision Co Ltd
0.498
100.605
580
United Microelectronics Corp
1.600
12987.771
14.45
Lite-On Technology Corp
0.699
2296.218
35.7
Wistron Corp
0.779
2052.140
44.5
MediaTek Inc
2.765
1147.610
282.5
Yuanta Financial Holding Co Ltd
1.311
10016.140
15.35
90.9
Mega Financial Holding Co Ltd
1.519
8544.629
20.85
Yulon Motor Co Ltd
0.563
1170.255
56.4
33.2
Nan Ya Plastics Corp
4.466
7852.299
66.7
2383.486
86.5
President Chain Store Corp
1.090
779.717
164
3672.913
34.15
Quanta Computer Inc
1.895
2874.431
77.3
1596.665
60.5
Siliconware Precision Industries Co
0.951
3116.361
35.8
Price 5503.52 34
14
(L) 4643.05 2
(H) 6265.48
23 |
business daily April 2, 2012
MARKETS GalaXy eNtertaINMeNt
MelCo CroWN eNtertaINMeNt
Last Max Average Min
22.0
21.45 21.80 21.42 21.10
Last Max Average Min
21.8 21.6
30.35 30.75 30.31 29.85
21.0
34.5
14.15
WyNN MaCau ltD Last Max Average Min
16.02 15.94
23.15
22.7 23.10 22.77 22.65
23.02 22.89
29.8
15.78
22.63
29.5
15.70
22.50
CURRENCY EXCHANGE RATES MAJORS
ASIA PACIFIC
0.80 0.75
MACAU RELATED STOCKS (H) 52 W (L) 52 W
Volume CRNCY
ARISTOCRAT LEISU
3.02
1.342
37.273
3.3
1.88
1554186
CROWN LTD
8.69
1.164
7.417
9.2
7.45
1591335
AMAX HOLDINGS LT
0.086
0
-1.149
0.147
0.06
3683000
BOC HONG KONG HO
21.45
-0.694
16.576
25.6
14.24
14586947
CENTURY LEGEND
0.243
1.25
5.652
0.475
0.204
196000
3.33
0
18.929
4.79
2.3
47000
CHINA OVERSEAS
14.76
0.682
13.713
17.86
9.99
35346021
CHINA STAR LTD
0.215
-2.273
-2.273
0.407
0.128
63015
CHINESE ESTATES
10.72
-1.471
-14.24
14.88
10.2
299400
CHOW TAI FOOK JE
12.3
-2.844
-11.638
15.16
12.22
9132346
EMPEROR ENTERTAI
1.43
1.418
28.829
2.09
0.97
847680
0.66
0
57.143
0.76
0.3
1104000
GALAXY ENTERTAIN
21.45
-0.464
50.632
22.45
8.69
12440324
HANG SENG BK
103.2
-1.244
11.991
127
84.4
1886351
HOPEWELL HLDGS
21.3
-1.160
7.251
24.903
18.56
1816726
HSBC HLDGS PLC
68.5
-1.083
16.102
85.35
56
16808315
HUTCHISON TELE H
3.29
-1.201
10.033
3.6
2.13
3844436
23.6
0
-12.915
46.15
19.2
2488942
MELCO CROWN ENTE
35
-2.778
42.857
37.35
22.4
34200
MGM CHINA HOLDIN
14.18
-1.391
47.829
17.183
7.6
3092892
4.08
-1.923
0.990
6.123
2.95
1540087
0.108
-1.818
-2.703
0.158
0.08
110000
NEW WORLD DEV
9.33
-2.406
49.042
13.226
6.13
58252527
SANDS CHINA LTD
30.35
0.165
38.269
32.55
14.9
14179154
SHUN HO RESOURCE
1.2
0
20
1.32
0.82
0
SHUN TAK HOLDING
3.14
-0.633
22.698
4.686
2.241
2811021
SJM HOLDINGS LTD
15.8
-1.619
24.606
21
10.22
12040773
15.94
-3.860
18.601
18.5
9.8
9156199
WYNN MACAU LTD
22.7
-2.575
16.410
27.48
14.807
9363623
ASIA ENTERTAINME
6.52
3.002
10.884
10.869
4.72
64643
BALLY TECHNOLOGI
46.75
-0.107
18.175
47.468
24.74
323087
BOC HONG KONG HO
2.82
4.059
17.638
3.22
1.81
760
GALAXY ENTERTAIN
2.73
0.368
45.989
2.87
1.08
25500
16.79
-0.651
-2.384
19.15
13.38
2783712
JONES LANG LASAL
83.31
0.446
35.994
107.84
46.01
187524
LAS VEGAS SANDS
57.57
0.489
34.730
59.85
36.08
8093062
MACAU CAPITAL IN
0.11
0
10.000
0.11
0.11
500
MELCO CROWN-ADR
13.64
2.711
41.788
16.15
7.05
8343097
MGM CHINA HOLDIN
1.85
1.648
55.241
2.213
1.003
169
MGM RESORTS INTE
13.62
-1.661
30.585
16.05
7.4
16245859
SHUFFLE MASTER
17.6
2.385
50.171
18.380
7.35
557559
SJM HOLDINGS LTD
2.02
0
23.926
2.64
1.28
11500
124.88
-0.040
13.024
165.493
101.02
1289926
WYNN RESORTS LTD
Last Max Average Min
22.76
0.85
INTL GAME TECH
16.10
15.86
0.90
SMARTONE TELECOM
15.80 16.06 15.89 15.76
30.1
0.95
NEPTUNE GROUP
14.33
14.21
1.00
DAY % YTD %
14.39
34.7
Macau Pataca / renminbi exchange rate - last 5 years
MIDLAND HOLDINGS
35.1
SJM HolDINGS ltD
Last Max Average Min
LUK FOOK HLDGS I
35.3
14.45
14.18 14.40 14.24 14.16
21.2
30.4
FUTURE BRIGHT
Last Max Average Min
14.27
30.7
CHEUK NANG HLDGS
35.5
34.9
31.0
PRICE
35.00 35.25 34.89 34.60
21.4
SaNDS CHINa ltD
Name
MGM CHINa HolDINGS
AUD
CROSSES
HKD
PRICE
DAY %
YTD %
(H) 52 W
(L) 52 W
JPY
82.87
-0.857
-7.192
85.53
75.35
GBP
1.601
0.825
2.992
1.675
1.524
CHF
0.903
0.598
3.945
0.960
0.707
EUR
1.334
0.497
2.947
1.494
1.262
AUD
1.035
-0.010
1.342
1.108
0.939
IDR
9146
0.405
-0.842
9367
8458
INR
50.876
1.020
4.302
54.305
43.855
PHP
42.91
0.163
2.167
44.35
41.879
THB
30.83
0.162
2.335
31.96
29.63
TWD
29.505
0.186
2.623
30.716
28.48
SGD
1.258
0.072
3.093
1.320
1.199
CNY
6.299
0.125
-0.056
6.549
6.289
HKD
7.766
-0.017
0.017
7.811
7.753
MOP
7.999
-0.01
0.013
8.045
7.982
EURJPY
110.56
-1.339
-9.859
123.33
97.04
EURCHF
1.204
0.101
1.055
1.324
1.007
EURGBP
0.833
0.429
0.084
0.908
0.822
EURCNY
8.400
0.120
-3.163
9.677
7.967
EURMOP
10.662
-0.399
-2.909
11.951
10.103
AUDJPY
85.726
-0.840
-8.509
90.031
72.057
World Stock MarketS - Indices Name
country
PRICE
DAY %
DOW JONES INDUS. AVG
US
13212.04
0.504
8.140
NASDAQ COMPOSITE INDEX
US
3091.57
-0.122
FTSE 100 INDEX
GB
5768.45
0.460
DAX INDEX
GE
6946.83
13289.08
10404.49
18.671
3134.17
2298.89
3.520
6103.73
4791.01
1.043
17.776
7600.410
4965.8
NIKKEI 225
JN
10083.56
-0.309
19.257
10255.15
8135.79
HANG SENG INDEX
HK
20555.58
-0.261
11.507
24468.641
16170.35
CSI 300 INDEX
CH
2454.9
0.482
4.653
3380.527
2254.567
TAIWAN TAIEX INDEX
TA
7933
0.766
12.174
9099.75
6609.11
KOSPI INDEX
SK
2014.04
-0.018
10.314
2231.47
1644.11
S&P/ASX 200 INDEX
AU
4335.242
-0.061
6.870
4976.4
3765.9
JAKARTA COMPOSITE INDEX
USD
YTD % (H) 52 W (L) 52 W
ID
4121.551
0.399
7.838
4195.724
3217.951
FTSE Bursa Malaysia KLCI
MA
1596.33
0.687
4.286
1597.08
1310.53
NZX ALL INDEX
NZ
782.22
0.350
7.182
814.431
700.441
PHILIPPINES ALL SHARE IX
PH
3458.73
0.328
13.586
3464.85
2695.06
FTSE STRAITS TIMES INDEX
SI
3010.46
0.547
13.759
3227.28
2521.95
STOCK EXCH OF THAI INDEX
TH
1196.77
-0.593
16.722
1214.31
843.69
HO CHI MINH STOCK INDEX
VN
441.03
0.318
25.453
488.02
332.28
Laos Composite Index
LO
1033.18
2.525
14.867
1348.88
876.33
Shanghai Shenzhen Composite index and Taiwan 50 index listing the biggest companies by market capitalization. All data supplied by Bloomberg unless otherwise indicated Contact Information
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business daily April 2, 2012
OPINION
China adjusts By Jeffrey Frankel
Professor at Harvard University’s Kennedy School of Government
C
hina watchers are waiting to see whether the country has engineered a soft landing, cooling down an overheating economy and achieving a more sustainable rate of growth, or whether Asia’s dragon will crash to earth, as others in the neighborhood have before it. But some, particularly American politicians in this presidential election year, focus on only one thing: China’s trade balance. True, not long ago the renminbi was substantially undervalued, and China’s trade surpluses were very large. That situation is changing. Forces of adjustment are at work in the Chinese economy, so foreign perceptions need to adjust as well. China’s trade surplus peaked at $300 billion in 2008, and has been declining ever since. (Indeed, official data showed a $31 billion deficit in February, the largest since 1998.) It is clear what has happened. Ever since China rejoined the global economy three decades ago, its trading partners have been snapping up its manufacturing exports, because low Chinese wages made them super-competitive. But, in recent years, relative prices have adjusted. The change can be measured by real exchange-rate appreciation, which consists partly in nominal renminbi appreciation against the dollar, and partly in Chinese inflation. China’s government should have let more of the real appreciation take the form of nominal appreciation (dollars per renminbi). But, because it did not, it has
shown up as inflation instead. The natural price-adjustment process was delayed. First, the authorities intervened in 1995-2005, and again in 2008-2010, to keep the dollar exchange rate virtually fixed.amp#160; Second, workers in China’s increasingly productive coastal factories were not paid their full value (the economy has not completed its transition from Mao to market, after all). As a result, China continued to undersell the world. But then the renminbi was finally allowed to appreciate against the dollar – by about 25% cumulatively during 2005-2008 and 2010-2011. Moreover labor shortages began to appear, and Chinese workers began to win rapid wage increases. Beijing, Shenzhen, and Shanghai raised their minimum wages sharply in the last three years – by 22% on average in 2010 and 2011. Meanwhile another cost of business, land prices, rose even more rapidly. As costs rise in China’s coastal provinces, several types of adjustment are taking place. Some manufacturing is migrating inland, where wages and land prices are still relatively low, and some export operations are shifting to countries like Vietnam, where they are lower still. Moreover, Chinese companies are beginning to automate, substituting capital for labor, and are producing more sophisticated goods, following the path blazed by Japan, Korea, and other Asian countries in the “flying geese” formation. Finally, multinational companies
Ever since China rejoined the global economy three decades ago, its trading partners have been snapping up its manufacturing exports, because low Chinese wages made them supercompetitive
that had moved some operations to China from the United States or other high-wage countries are now movingback. Productivity is still higher in the US, after all. None of this is news to most international observers of China. But many Western politicians (and, to be fair, their constituents) are unable to let go of the syllogism that seemed so unassailable just a decade ago: (1) The Chinese have joined the world economy; (2) their wages are $0.50 an hour; (3) there are a billion of them; and (4) Chi-
nese wages will never be bid up in line with the usual textbook laws of economics, so their exports will rise without limit. But it turns out that the basic laws of economics eventually apply after all – even in China. Like certain other aspects of the US-China economic relationship, China’s adjustment is reminiscent of Japan with a 30-year lag. Japan’s trade balance fell into deficit in 2011, for the first time since 1980. Special factors have played a role in the last year, including high oil prices and the effects of the March 2011 tsunami. But the downward trend in the trade balance is clear. Even the current account showed a deficit in January. This development has received relatively little attention in the US and other trading partners, which is curious, given that, two decades ago, Japan’s big trade surplus was the subject of intense focus and worry – just like China’s now. At the time, some influential commentators warned that the Japanese had discovered a superior economic model, featuring strategic trade policy (among other attractions), and that the rest of us had better emulate them. Either that, or the Japanese were “cheating,” in which case we needed to stop them. Most economists rejected these “revisionist” views, and argued that Japan’s current-account surplus was large because its national saving rate was high, which reflected demographics, not cultural differences or government policies. The Japanese population was relatively young, compared to other advanced economies, but was rapidly aging, owing to a declining birth rate since the 1940’s and rising longevity. That view has been vindicated. In 1980, 9% of Japan’s population was 65 or older; now the ratio is more than 23%, one of the highest in the world. As a consequence, Japanese citizens who 30 years ago were saving for their retirement are now dissaving, precisely as economic theory predicted. As the national saving rate has come down, so has the current-account surplus. China faces a similar demographic trend, and also a push to unleash household consumption in order to sustain GDP growth. As in Japan, the downward trend in China’s saving rate will show up in its current account. The laws of international economics still apply. © Project Syndicate
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