Macau Business Daily, January 28, 2013 by Business Daily

Coming election results ‘predictable’

Year I Number 208 Monday January 28, 2013 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP 6.00 www.macaubusinessdaily.com

The public shouldn’t expect any major changes in the way the city is governed after the legislative elections later this year says Eilo Yu Wing Yat of the University of Macau. The current electoral system is designed to maintain the status quo rather than to produce surprises explained Mr Yu, associate professor in the university’s department of government and public administration. He gives only a modest grade to the current Legislative Assembly, suggesting its members haven’t always done enough to make government accountable to the people.

Pages 6 & 7

Okada targets Wynn Cotai land deal A new lawsuit in the United States by Kazuo Okada to block his proposed ousting next month from the Wynn Resorts’ board is also seeking scrutiny of a US$50 million payment the casino developer made to third parties to secure some of the land for its planned Wynn Cotai resort. In an interview last May with Business Daily’s sister publication Macau Business, the Wynn Resorts’ chairman Steve Wynn said the U.S. Securities and Exchange Commission examined the transaction to check it hadn’t breached the U.S. Foreign Corrupt Practices Act - which prohibits American companies from bribing foreign officials – and gave it a clean bill of health. But Japanese billionaire Mr Okada is asking in the new suit for fellow Wynn Resorts directors to investigate the deal. Page 8

Gongbei border to double capacity

Govt acts over milk powder ‘emergency’ With fears growing over a worsening of the baby milk powder shortage as more visitors flock to Macau during the Lunar New Year, the government described it as a “public health emergency issue”. According to a new coordinated rationing scheme, suppliers will have to prioritise selling infant formula to resident parents registered at public health centres. They will be able to get five tins of infant milk powder at most per month. Authorities stressed the measure is temporary. Page 2

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HANG SENG INDEX

The expanded border crossing facilities in Gongbei will be fully operational in a couple of months, the mayor of Zhuhai, He Ningka, confirmed. The two new customs inspection buildings will allow the crossing to handle 500,000 travellers a day, almost twice as many it does now. The next challenge is for authorities on both sides to agree on how to simplify the customs checks system. Page 2

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23480

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HSI - MOVERS Name

Royal outlets stretched by labour shortage The Royal Supermarket chain has opened an outlet targeting the growing expatriate community. Goods will be imported from the West on a weekly basis to stock it. The company has plans for further expansion and has applied for more non-resident workers. The city’s labour shortage is already making it hard to keep its existing stores open and is forcing workers into overtime, the general manager says. Page 3

%Day

HENGAN INTL

2.28

CHINA PETROLEU-H

2.16

HSBC HLDGS PLC

1.47

MTR CORP

1.46

CHINA OVERSEAS

1.26

CITIC PACIFIC

-2.19

COSCO PAC LTD

-3.01

CHINA LIFE INS-H

-3.02

ALUMINUM CORP-H

-3.32

CHINA UNICOM HON

-3.47

Source: Bloomberg

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business daily January 28, 2013

macau Sands China issues dividend Sands China Ltd will pay an interim dividend of HK$0.67 (US$0.09) per share to its shareholders, the gaming operator told the Hong Kong Stock Exchange on Friday. The dividend will be paid “on or about February 28,” the firm said. The first-ever Sands China dividend – for the fourth quarter of 2011 – was for HK$0.58 per share. Sheldon Adelson, chairman of Sands’ parent company Las Vegas Sands Corp, told analysts on November 1: “We have every intention of increasing the dividend in the years ahead.”

Govt imposes rationing of scarce baby formula The shortage of baby milk powder has led to rationing, with residents to be given priority Stephanie Lai

sw.lai@macaubusinessdaily.com

The government has described the shortage of baby milk powder as a public health emergency

he government begins rationing baby milk powder today, making resident parents register at public health

centres to get a ration of up to five tins per month. The provisional rationing scheme is meant to ensure babies under 12

months get enough milk. The scheme is the result of an inter-departmental meeting on Friday presided over by Chief Executive Fernando Chui Sai On. “The new provisional measure aims to address what is a sudden public health emergency issue. Local parents ought to be able to purchase infant formula first,” Mr Chui told the meeting. “The administration will review the new measure while it is being implemented,” he added. The Health Bureau issued on Saturday a written statement saying resident parents must register at public health centres, presenting the identity cards of their babies. Retailers will be obliged to give registered parents priority in buying the Mead Johnson, Friso, Nestle, Abbott, Wyeth, Snow Brand and Cow & Gate brands of infant formula. The bureau said infant formula was being imported in “normal”

quantities, which should be enough to meet the demand for Macau babies.

Buying spree However, the bureau acknowledged that “other factors” meant that the supply of popular foreign brands was tight. The Macau Pharmacies Association told Business Daily last week that stocks of infant formula could rapidly diminish as waves of mainland Chinese tourists bought up as much they could as Lunar New Year approached. Before the government announced its rationing scheme, some pharmacies were allowing customers to buy only to two tins of infant formula at a time. Hong Kong is also short of infant formula. The government there had a meeting last week to discuss what to do about it. Hong Kong’s secretary for food and health, Ko Wing Man, told reporters on Friday that Hong Kong would not follow Macau in giving the government a central role in solving the problem. “The situation in Macau is different from Hong Kong in several respects, including the characteristics and size of the market and population,” Dr Ko said. He said the Hong Kong government had decided that suppliers of infant formula should warn retailers if their sales practices were undesirable, restrict their supply if they persisted with such practices and, if they still persisted, cut off their supply.

Gongbei crossing work nearly done The capacity of the Gongbei border will soon be nearly twice what it is now, the mayor of Zhuhai says

nce expansion of the customs inspection facilities in Gongbei is complete, Macau’s busiest border crossing will able to handle up to 500,000 travellers a day, according to the mayor of Zhuhai, He Ningka. The crossing now handles 260,000 to 300,000 travellers each day, Mr He says. “We are buying the necessary inspection equipment and installing it,” he told reporters on Saturday on the sidelines of a meeting of the Guangdong Provincial People’s Congress. Work on adding two customs inspection buildings to the east and west wings of the main building began in 2010. The expansion will cost about 400

million yuan (US$63 million). Mr He said the expanded border crossing facilities would be in use a couple of months. An inspector at the Gongbei customs post, Lao Ngai Leong, told reporters earlier this month that the expanded border crossing facilities would probably be put to use in the first half of this year. Mr He said that, together, the present or future border crossings in Gongbei, on Hengqin Island, on the artificial island where the western end of the Hong Kong-Zhuhai-Macau Bridge will land and in Ilha Verde could have the capacity to handle 1.2 million travellers per day. “The next move is to work on the customs checks system,” said Mr He. The governments of Zhuhai and

Macau have already agreed that it would be simpler if only outgoing travellers on each side of the border went through customs and quarantine checks.

“And if both the Zhuhai and Macau governments cooperate on it, there is nothing that we can’t achieve,” Mr He said. S.L.

January 28, 2013 business daily | 3

MACAU

Royal Supermarket targets expats The Royal Supermarket chain opens an outlet meant for expatriates, but its managers say plans for more expansion are on hold because they cannot get the staff

editorial

Growing (old) pains

Tony Lai

tony.lai@macaubusinessdaily.com

Vítor Quintã

vitorquinta@macaubusinessdaily.com

The opening of its first Supreme Food Market means Royal Supermarket now has 27 supermarkets in Macau

acau’s largest supermarket chain, Royal Supermarket Co Ltd, has opened its first Supreme Food Market outlet, which is meant to cater to the growing expatriate community. “Our Royal Supermarkets target mainly Chinese families, but we realised that as there are more casinos, more employees of other nationalities are coming to Macau,” Royal Supermarket’s general manager, Jeff Chang Hing Cheng, told Business Daily at the opening ceremony on Friday. “They have their own demands for food, but Macau wasn’t catering to them,” Mr Chang said. The Supreme Food Market is on Taipa, which is popular among expatriate workers. It has two floors with a combined area of about 460 square metres. Royal Supermarket has invested between 6 million patacas (US$751,216) and 7 million patacas, in the new outlet. Mr Chang expects the Supreme Food Market to break even in three years. Macau had over 110,500 nonresident workers at the end of last year, over 30 percent of the city’s employed labour force, data from the Human Resources Office show. Mr Chang said the food sold in the Supreme Food Market would be different from the food in Royal Supermarkets. The outlet will sell goods imported from the West every week. “This is a pilot scheme. If the feedback we get is good, we will consider setting up a few more stores

We will continue to open new stores and introduce some changes to our operation model, including concept stores like Supreme Jeff Chang Hing Cheng, general manager, Royal Supermarket

like this in Macau,” Mr Chang said. However, he said the city’s labour shortage was an obstacle to further expansion. “It is relatively difficult for us to hire workers as the employees in this store here should have basic English skills,” he said.

Under pressure Royal Supermarket was founded in 1997 as a subsidiary of Weng Fung Group, which also has pharmacies here. Royal Supermarket now has about

500 employees. But the scarcity of suitable workers is hampering the whole company. “Our company right now has 27 stores in its chain but we are still lacking about 100 staff. This means our employees have to work overtime,” Mr Chang said. Royal Supermarket will open its 28th supermarket near the Gongbei border crossing before Lunar New Year. Mr Chang said this would put even more pressure on its workforce. The company is negotiating with the government to get permission to hire foreign workers. “There are few locals who are willing to work in this sector, so we have no other way, Mr Chang said. The surge in rents that has held back many businesses here does not worry Royal Supermarket as most of its outlets, including the Supreme Food Market, occupy premises owned by the company. Mr Chang said Royal Supermarket’s revenue had grown at a “double-digit” rate last year and that its share of the market had risen to about 30 percent from about 20 percent, but he would not be more precise. “We’re positive on the company’s future as we see a bright future for the retail industry,” he said. “We will continue to open new stores and introduce some changes to our operating model, including concept stores like Supreme,” he said. “We have not confirmed new plans yet. We have some properties available but the major factor will be human resources.”

recent report by ratings agency Fitch warns that, just like many other advanced economies, Macau will have to get more of its residents working until a later age. With the population ageing fast, a long-term economic slowdown could be on the cards. According to the Census 2011, 12.7 percent – or 5,071 – of all residents over 64 were still working. Unfortunately, many of those were doing so not because they wanted to and were using their experience to make good money, but because they had no other choice. High inflation – particularly on basic necessities such as food and home rents – and a still developing social welfare system pushes too many elderly into low-paid work as doormen or paper collectors. Despite the usually strong family network supporting the elderly Macau, the retirement pension must gradually increase up to an amount that proves to be enough for a dignified living. Only then will the – still – non-mandatory fund be really attractive to residents still enjoying the financial good times. At the same time, it is important for Macau to learn from the mistakes that many European countries made in their welfare state policies. When launching a new social security system, just like the one Macau is assembling, that will demand a constant flow of money from future generations, it is important to prepare for the bad times. Just days after the Monetary Authority predicted that the city’s economic growth will slow down to a “low-single digit” percentage this year, it is clear that sustaining a 27 percent economic growth seen in 2010 is impossible. As such, the retirement pension amount should not simply be increased for all on an annual incremental basis. There should always be a correlation between the pension amounts; the rate the population is ageing; and what contributions working-age residents have made to the pension fund. If not, then Macau will face the kind of structural problems seen in Europe’s welfare systems – too many claimants claiming too much, and not enough contributors. That’s not an argument for keeping lowqualified, poor people working after 64. It should be the people with high qualifications and even higher know-how. Another report warned that labour productivity in East Asia remains only onefifth of that in the developed economies and the European Union, despite robust improvement in the last few years. There are no available data on Macau’s labour productivity and that represents a gaping hole in what could invaluable knowledge for the government. The evolution of gross domestic product must not be the only measure for economic development. The government should also be interested in knowing whether the overtime work that so many people routinely provide in Macau is in fact helping the economy. It does not make sense for residents and – particularly – non-residents to work an average of 46.6 hours per week if it does not mean they are working better. For many, more working hours simply means less time with their family and friends, more domestic problems and health issues. The time is ripe for the government to consider setting standard working hours, which would be offset by a further opening of the hiring of non-resident workers.

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business daily January 28, 2013

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HOSPITALITY Thickening concentration The complete figures for last year show that growth in the number of visitors has stalled. Last year 80,013 more people visited than in 2011. That is an increase of just 0.29 percent – for practical purposes, no increase at all. Mainland China remained the biggest source of visitors. It was the only one of the three main sources to send more tourists last year than the year before. However, the annual rate of growth in the number of mainland visitors fell to 4.6 percent last year from 22.2 percent in 2011. The number of visitors from Hong Kong, the second-biggest source of visitors, fell by 6.6 percent last year, having risen by 1.5 percent in 2011. The number of visitors from the third-biggest source of visitors, Taiwan, fell by 6 percent last year, having fallen by 11.7 percent in 2011.

Fewer non-residents in construction sector Construction stood out in December as the only industry in which non-resident staff decreased Stephanie Lai

sw.lai@macaubusinessdaily.com

he number of non-resident workers had a slight monthto-month rise of 0.4 percent to 110,552 by December end last year, Human Resources Office data show. The construction sector, the third largest employer of imported labour, saw a month-to-month drop of 3.7 percent to 15,378 non-resident workers by December end. But in the same period, all sectors have recorded a slight increment in their non-resident workforce. Most non-resident construction workers, including the ones directly employed by gaming companies, are from mainland China. Mainlander construction workers reached 13,934 by end-December, followed by 1,285 non-resident workers from Hong Kong. Last month hotels and restaurants,

the city’s largest non-resident workforce, employed 34,022 nonresident staffs, a slight rise of 1 percent when compared with November. Non-resident employees working in hotels and restaurants are predominantly from mainland China, Philippines and Vietnam. The nu m ber o f m ai n la n de r workers alone reached 25,344 by end-December. The second largest group of nonresident labour is domestic helper, which reached 18,085 last month, a slight rise of 0.6 percent compared to the previous month. The December figures released on Friday show that the main sourcecountries for domestic helpers remain the Philippines, Vietnam and Indonesia. The Macau and mainland

Malo postpones opening of mainland clinics This means the tourism industry in particular and the economy in general are increasingly dependent on visitors from the mainland. Mainlanders made up 60.2 percent of all visitors last year, having made up 53 percent in 2011 and 57.7 percent in 2010. Although fewer visitors came from Hong Kong and Taiwan, the proportion of visitors from Greater China as a whole increased slightly last year to 90 percent.

Beijing clinic to be open in March, Guangzhou facility in the first half, says Malo Group

J.I.D.

Malo Clinic & Spa opened in Macau in 2009

17.7 % T

Cumulative fall in visitors from Taiwan since 2010

he opening of two clinics that Malo Group had planned for the mainland China market this month will be postponed, the company confirmed to Business Daily. The president and chief executive of the group, Paulo Maló, had said in November that the success in Macau

was the reason for the opening of the two new clinics this month in Beijing and Guangzhou. The Beijing clinic, however, will only be in operation in March, the company said. It attributed the postponing to some “minor delays in the construction work”.

governments announced they are ready to allow domestic helpers from Guangdong and Fujian province to serve in the city this year. Still, the December figures show a slight rise in the domestic helpers from Philippines (8,342) and Vietnam (6,244). In the same period, Indonesia, the third biggest source-country for domestic helpers, saw a drop of 0.3 percent to 3,227 employees.

110,552

non-resident workers by end-December

The clinic in Guangzhou, Guangdong province, will open at a later stage, but a date is not yet set. Malo Group said it will have a Chinese partner in the Guangzhou clinic, and the group will invest its experience, name and management. The company aims to have the clinic in Guangzhou up and running “in the first half of this year,” it said, adding that it is still going through “the final stage of negotiations”. Mr Maló, the founder of MaloClinic Health and Wellness, told Business Daily in a November interview that the group also had plans for a clinic in Shanghai. The third mainland clinic, in Shanghai’s central business district, was planned to open in the second half of this year but the opening has also been delayed. “The fact that we did not get the permit from the local [Shanghai’s] authorities to set up the clinic in the building we had chosen, led to such delay,” the company said. Malo Group is now “looking for a suitable place” to set up the clinic, it added. The group has also plans to expand to Hong Kong and Singapore, but there is yet no timetable for tapping those markets.

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business daily January 28, 2013

macau

Legislative Assembly results ‘predictable’

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Inflation as leveller The Statistics and Census Service publishes three consumer price indexes. Usually, when the CPI is mentioned, it refers to the general index, based on the prices of goods and services that people in general buy. But changes in prices affect various kinds of people differently, depending on how much money they spend and what they spend it on. So the Statistics and Census Service compiles two other indexes. One, the CPI-A, is based on the prices of goods and services bought by low-spending households – those that spend between 6,000 patacas (US$750) and 18,999 patacas per month. The other, the CPI-B, is based on the prices of goods and services bought by high-spending households – those that spend between 19,000 patacas and 34,999 patacas per month.

The general CPI, CPI-A and CPI-B have all behaved similarly in the past three years, and the relationships among them have remained stable. The inflation rate for lowspending households is consistently lower than the inflation rates for high-spending households and people in general. Assuming that low-spending households are those with lower purchasing power, then inflation is eroding the purchasing power of poorer people marginally less than the purchasing power of the better-off. Conversely, the inflation rate for high-spending households is consistently higher than the inflation rates for low-spending households and people in general. And the CPI-B seems to be pulling away from the general CPI. This suggests that the prices of goods and services bought by the better-off are rising faster than the average. So inflation may, in effect, be closing the income gap between poorer people and those more comfortably off, albeit only marginally.

The public shouldn’t expect any major changes in the way the city is governed after the legislative elections due later this year says Eilo Yu Wing Yat. The current electoral system is designed to maintain the status quo rather than to produce surprises, explained Mr Yu, professor in the University of Macau’s department of government and public administration. In a wide ranging interview with Business Daily, he gives only a modest grade to the current Legislative Assembly, suggesting its members haven’t always done enough to make government accountable to the people. Nonetheless he thinks that pressure is now coming from the bottom up, as citizens get more engaged in politics. That could create some impetus for the government to reform its institutions and communicate more effectively with the people. By Luciana Leitão

leitao.luciana@macaubusinessdaily.com

Photos by Manuel Cardoso

Do you expect any surprise results in the coming legislative elections? There must be some new candidates who will join existing legislators. People from different camps may nominate people for the two directly elected seats. For example, Jason Chao [president of the pandemocrat New Macau Association] together with my colleague Bill Chou may run for these elections in an independent list rather than running with Au Kam San [New Macau Association legislator]. Some businessmen as well as young people are now mobilised. They include people from proestablishment forces that are considering nominating a candidate list in the elections. At the same time, others defeated in the last election, like my colleague Agnes Lam, may probably run the election again. Once we [Macau] have two more directly elected seats, those legislators who would like to be re-elected for direct election should not have problems. New candidates or new associations that would like to run [in] the election would most likely [try to] grasp the two new directly elected seats. The Kai Fong association would like, for instance, as usual, to nominate Ho Ion Sang. The Kai Fong association only grabbed

one seat in the previous election. This year, if we have more directly elected seats, the association may try to grab one more seat and so that will mean there will be one remaining seat [for which] to compete. But, supposing other incumbents as well as their associations continue to nominate their candidates, the results may not be that surprising. Since 2005 the election results were not surprising. Of course, the number of votes for those on the individual lists may be up or down, and that’s normal. But in terms of someone defeated or elected, the results have been predictable. The political landscape may not have a big change after these elections. Does the fact that the results are predictable have to do with the current electoral system? The proportional representation system

is favourable to small groups, and of course we have so many small groups. Although we have the pro-democracy or proestablishment groups, within each camp we have different factions. But you can see, especially in the pro-establishment forces, it is quite stable. Before the nominations, they are negotiating and calculating whether they can grab a seat. They try to distribute the seats formally or informally - I don’t know how they cooperate or if they have their mechanisms to cooperate or just avoid open competition in the election, so that everyone may get one or two seats. It’s quite clear that it’s very difficult for most incumbents, once they decide to run, to be defeated. Perhaps that means only the last two

J.I.D. The content of this column is the work of Business Daily’s journalists.

12.3 %

Cumulative rise in consumer prices since 2010

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MACAU candidates who receive the last votes may be at risk. Overall, within the dozens of directly elected members over 70 percent can easily be re-elected. Some of them may be elected with marginal votes, but at least the results are not very surprising. One or two may be defeated. At the same time, the number of directly elected seats in Macau is not that much, so it’s quite easy to predict the results. So, the discussion of and amendments to the electoral laws haven’t actually changed anything? More people [than before] seem to be radical in Macau, but it seems it’s still not the majority. It is quite normal, especially in a developing economy. We have [develop] better education and then some people would like to express their doubts. Some people would say that Au Kam San and Ng Kuok Cheong were radicals, but now others will say that the approach of the young people coming out and criticising the government is radical. Now we can see Ng Kuok Cheong was soft. People may find Ng Kuok Cheong and Au Kam San’s approach did something to Macau’s democracy, but their strategy needs to change. In the past they were trying to educate the people, but they were not talking about democracy. You label them democrats, but when you ask them, they will say they were trying to teach the people the ideas of civic rights. Once the people recognised these [rights], they could go a step further - to ask for the political reform. Now, when we were talking about the political reform, it’s quite natural that we have some hardliners using a radical approach to push the authorities and at the same time some short-liners would like to negotiate with the government so that we can have an agreement for how to reform. That’s what we can observe in other countries, when they are observing the process of democratisation. In the past, people would say you have so many private relationships [in Macau] that once you are too bold it will hurt your job. But it’s not the case now in Macau. People tend to be more independent, economically and politically. At the moment the majority in Macau seems to be observing the radical campaign, but they are not having a radical approach. The political leaders have a lot of headaches, but to me it’s quite normal. Are Macau citizens more active in politics? It’s hard to say what is ‘politics’. If you ask the people, they still will say ‘I’m not talking about politics’, but when we study political science, when you talk about public affairs – which is to push the government to improve something – it is a type of politics. Even when you talk about heritage management/ conservation, this is politics. I can see people are more active in public affairs, as they tend to be more vocal. People call to the [local] radio programme[s] to talk and people are afraid that the television programme Macau Forum is discontinued [not coming back]. People are asking [for] more platforms to express their opinion. It’s quite clear that Macau people seem to be more active and would like to express their opinion, but before people were afraid and kept silent. Now, at least they would like to express [things]. If we define [politics] with broad definition related to public affairs, then people are more active; but of

It’s quite clear that it’s very difficult for most incumbents, once they decide to run, to be defeated

course, to what extent? In Macau, it’s not like Hong Kong, but at least people are coming out to talk about this. If people are more engaged in public affairs, does that mean something is changing in local society? As political scientists, we have theories of modernisation. In an under-developed economy like Macau before the handover, people were struggling for daily life rather than talking about civil rights. When we get money, then we want to improve our quality of life. Part of it is freedom. Five years ago, the government talked about how to improve the quality of life. Ten years ago, this was predictable, but still [the] Macau government has actually failed to reform the institutions. What institutions did the government fail to reform? You have to prepare to respond to people’s demands, but many people still criticise the government for using an old mentality to consult the people. Actually they are merely informing the people how to do it, they are not involving the people to make the policies.

In the past, we had a gap, but we could accept it. Of course we were not very satisfied about the government’s performance, but now if we want to improve the quality of life, we have to ask the government to develop the residents. We say we need more, but since the government does not listen and cannot understand what people need, it cannot deliver. That is a gap between the government and the people. Even though [there are] so many consultative committees, it doesn’t mean they can improve. As they are about to finish their term this year, how do you classify the work being done by the current legislators? I’m a bit disappointed. After the Ao Man Long incident, the legislators did a very good job by setting up some committees to study public finance, administration, as well as the land use. In this term, the legislators agreed to establish a committee to observe and study the government performance in public reform as well as finance or housing, but this committee did not function well. This is a bit disappointing, but of course the government has been trying to cooperate with the legislators in terms of [the] plan for legislation. Legislators always complain about the government schedule, but the government does not do a good work [job] on scheduling, as it is always changing. There is still a lot of room for improvement. Did the legislators fulfil the goals? I don’t think [laws] should be an indicator to measure the performance of legislators, because usually the legislator is always complaining against [a] bill proposal by the government. The quality is not very good. So, if the

quality is not very good, how come you push the legislators to approve the bill? So, they ask government to revise and revise. I think we cannot use the term ‘legislators’ efficiency’ to measure the performance, but rather the legislators’ ability to check the government’s performance. I hope some newcomers, once they enter the Legislative Assembly, can introduce some ideas to make the government become more accountable. Some political analysts have said to expect more candidates directly related to the gambling industry in the coming elections. Do you agree? Many businessmen still have relationships with casinos. Even if they do not directly own a casino, they have some business with a casino. It’s hard to say, how do you define a casino-background candidate. Some may have connection with junket operators or with the agents/middlemen. They have these types of connections. Like other candidates, some casino-background candidates may be interested in running the elections, that’s true. Do you expect in the next term of the Legislative Assembly to have better balance between businessmen and other people? I’m optimistic on equalisation [being achieved] but it should be at a very gradual place. The election seems to be predictable, so I don’t think this [next Assembly’s composition should have a big change - perhaps one or two seats. There is also a chance that the chief executive would nominate elite [people] with backgrounds other than business. More people in the Legislative Assembly can dilute the presence of the businessmen. I think this is a strategy of the government.

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business daily January 28, 2013

macau

Okada homes in on Wynn Cotai land deal New lawsuit to block his proposed ousting from Wynn Resorts board seeks scrutiny of US$50 mln payment over Tien Chiao site Michael Grimes

michael.grimes@macaubusinessdaily.com

Japanese pachinko businessman Kazuo Okada

he battle between former casino b u s i n e s s partners Kazuo Okada and Steve Wynn has taken a new twist

with a fresh lawsuit focusing on issues including the land deal for the planned Wynn Cotai. Ostensibly the new suit launched on Thursday United

States time in Nevada by Mr Okada is to block an attempt – scheduled for a Wynn Resorts shareholders’ meeting on February 22 – to eject the Japanese billionaire from the firm’s board. But the new lawsuit has also introduced questions about how Wynn Resorts acquired the 21-hectare (52acre) Wynn Cotai site – nearly half of which previously belonged to a third party. In 2006 Mr Wynn’s executives were exploring possible sites for Wynn Cotai. In an interview last May with Business Daily’s sister publication Macau Business, the Wynn Resorts’ chairman said his team became aware of a 10.9-hectare (21 acre) site earmarked by the government for Tien Chiao Entertainment and Investment Company Ltd. That firm was incorporated in Macau in 2005 with the goal of investing in entertainment and tourism, according to its registry documentation. It had two stakeholders; Hong Kong ID-holder Ho Hoi, who was the controlling shareholder, and Zhang Luchuan from Beijing. Wynn Resorts eventually paid US$50 million

(400 million patacas) in compensation to the putative developers of the land in order to consolidate it into the Wynn Cotai site near Macau International Airport. Mr Wynn told Macau Business the U.S. Securities and Exchange Commission examined the transaction to check it hadn’t breached the U.S. Foreign Corrupt Practices Act which prohibits American companies from bribing foreign officials – and gave it a clean bill of health.

More mudslinging But in Thursday’s new lawsuit Mr Okada said the deal raised questions about what Wynn Resorts got in return for the US$50 million. Wynn Resorts hasn’t so far responded in court filings to that point. Mr Okada is asking in the new suit for fellow Wynn Resorts directors to investigate the deal. But on Friday Wynn Resorts described the new action in its entirety as a diversion. “This is just the latest ploy in Mr Okada’s increasingly desperate campaign to divert attention from the real issue – his misconduct as a director of Wynn Resorts,” said Michael

Weaver, Wynn’s senior vice president of marketing. Mr Okada – who until February last year controlled a near 20 percent stake in the casino company – filed his latest suit in the U.S. District Court in Las Vegas, asking for an injunction to stop a special meeting of Wynn shareholders seeking a two-thirds vote to remove him as a director. Wynn Resorts claimed that he is “unsuitable” and that “it is essential from a gaming regulatory standpoint” to remove him. Wynn Resorts cited its own previous investigations of alleged impropriety as well as a more recent inquiry by the Nevada Gaming Control Board. Wynn Resorts contends Mr Okada and his associates provided hospitality and gifts to Philippine gaming regulators in violation of U.S. anti-bribery laws. Mr Okada has said his actions were not illegal. He countered in the latest lawsuit that the Wynn Resorts special meeting next month is part of “a calculated effort” by that company’s founder and chairman Steve Wynn “to reconsolidate power in his hands”. With Reuters/ Bloomberg News

PYE succeeds in raising HK$3.2 billion for casino scheme Upsize option ‘has not been, and will not be, exercised’ adds Hong Kong filing Michael Grimes

michael.grimes@macaubusinessdaily.com

aul Y. Engineering Group Ltd has raised HK$3.2 billion (US$413 million) toward the cost of a US$800 million casino project in Macau, the company said in a filing to the Hong Kong Stock Exchange. It consisted of a placement of shares worth HK$1.998 billion and an aggregate of HK$1.202 billion in convertible bonds. The firm added in the filing that an ‘upsize option’ “has not been, and will not be, exercised”.

Boutique casino for land adjacent to One Oasis site (Photo: Manuel Cardoso)

According to nasdaq.com an upsize option “is an option in IPO [initial public offering] to increase the size of offering when the demand is high”. A person with knowledge of the process told Business Daily last Tuesday that the Macau government is yet to give out any permission for gaming facilities on a 65,000 square feet (6,038 sq. metres) plot adjacent to the One Oasis residential project on the Cotai-Coloane border that is to be acquired by PYE for the casino scheme.

Tom Lau Ko Yuen, PYE’s deputy chairman told Business Daily last week that PYE was making a 100 percent investment in Falloncroft – an entity holding the piece of land – “as a service provider to a [Macau gaming] concessionaire/ sub-concessionaire, taking account of the risks on whether gaming approval is granted to that concessionaire/subconcessionaire or not.” A company called Falloncroft Investments Ltd, a British

Virgin Islands-incorporated private firm, is chaired by Stephen Hung. Mr Hung helped broker a 2007 Macau deal that saw Las Vegas-based Caesars Entertainment Corp. – then known as Harrah’s Entertainment Inc. – buy a Cotai golf course for US$577.7 million. At this stage the Cotai boutique casino project is known as ‘Casino Louis XIII’ – the final two words a reference to one of France’s more successful kings who reigned in the 17th century.

The name is already familiar to wealthy Chinese because of its associations with luxury goods. French winemaker Rémy Martin produces two expensive limited-edition cognacs named after the king. According to ‘The Gaming Table: Its Votaries and Victims’ a book by Andrew Steinmetz, at the start of Louis XIII’s reign gaming was actually outlawed in France and 47 licensed gambling houses in Paris closed down.

January 28, 2013 business daily | 9

GREATER CHINA

Central banks warns on currency wars Chinese economy to continue growing by ‘7 to 8 percent’, says central bank official abated in recent months. Lawrence Summers, the former top economic adviser to United States President Barack Obama, said January 14 that China’s yuan is no longer as undervalued as it was five years ago. The currency has appreciated about 17 percent against the dollar since the end of 2007. Mr Yi said that he expects China’s current account deficit to narrow, which would slow the accumulation of foreign reserves.

Foreign reserves

he deputy governor of China’s central bank signaled he’s comfortable with the yuan’s exchange rate and urged Group of 20 nations to improve collaboration if socalled currency wars are to be avoided. “Right now, it is pretty much close to the equilibrium level,” Yi Gang said in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland. On a global level, there needs to be “better communication and

coordination” on foreign exchange among G-20 countries. Debate has reignited as Japan’s new prime minister, Shinzo Abe, pushes for laxer monetary policy, sparking a slide in the yen. Bundesbank president Jens Weidmann has warned against “increasing politicisation of the exchange rate” that might undermine the Bank of Japan’s independence. At the same time, criticism over China’s exchange rate regime has

China’s foreign-exchange reserves, the world’s largest, rose the least since 2003 last year, according to data published January 10. The holdings increased to US$3.31 trillion at the end of December from US$3.18 trillion a year earlier. Reserves may rise to US$3.45 trillion this year, according to the median estimate of 16 economists in a Thursday Bloomberg survey. “Accumulation of official reserves would be slower and converging to a more or less stable level,” Mr Yi said. Earlier, during a panel discussion, Mr Yi said that “for the foreseeable future probably we still have the potential of 7 to 8 percent growth.” Growth will be mainly be led by domestic demand “as people’s income continues to increase.” China is seeking to shift from exports and investment to a consumer-driven economy and achieve a more sustainable growth trajectory than the rates of 10 percent and more over the past decade. At the same time, the Communist Party leadership headed by Xi Jinping needs to head off any social unrest. The rising wages fueling gains in Chinese consumption are eroding the nation’s role as the world’s low-cost manufacturer. Twenty-five provinces raised minimum pay by an average 20.2 percent last year, the Ministry of Human Resources and Social Security said on Friday. Mr Yi’s growth estimates are in line with projections from the nation’s

statistics bureau, which show that the world’s second-biggest economy is entering a period of slower growth as the working-age population declines and resources become scarcer. “China’s double-digit growth is no longer the norm” and its traditional model is no longer sustainable, Zeng Peiyan, a former vice premier in charge of economic planning, said at a forum in Beijing Saturday. The nation is “entering a singledigit phase of growth,” said Mr Zeng, who now heads the China Center for International Economic Exchange. China may grow 7.8 percent to 7.9 percent in the first quarter, Zhang Xiaoqiang, the deputy head of the National Development and Reform Commission, said in an interview in Davos on Saturday. That compares with the 8.1 percent median estimate in a Bloomberg News survey of 30 analysts this month and 7.9 percent in the fourth quarter. Mr Yi, who also heads the State Administration of Foreign Exchange, said he is concerned about the potential fallout from quantitative easing in the world’s advanced economies. “Quantitative easing for developed economies is generating uncertainties,” he told reporters in Davos. The foreign-exchange regulator has renewed concerns that China will see fresh speculative inflows of money after the United States and Japanese central banks said they would pump more funds into their financial systems. “The policies in major economies of monetary easing and low interest rates will boost global liquidity, increase risk preferences in the market and drive speculative funds into China,” the regulator said in a statement on its website on Friday. Speaking in Beijing, Lou Jiwei, head of the country’s sovereign wealth fund, said he expects loose monetary policies to continue. “When everybody talks about whether the U.S. will have a QE4 [fourth round of quantitative easing], I say no,” Mr Lou, chairman of China Investment Corp., said at a forum. “The feature in the future is called QE infinite. Global central banks will adopt an infinite QE policy.” Bloomberg

Insurance watchdog warns of cash crunch, low returns Hard landing in sight for insurers, regulator warns, while promising reform

ome Chinese insurers may face a cash crunch this year as many policies mature, and as the sector faces sliding investment returns and rising costs, the China Insurance Regulatory Commission (CIRC) said. Insurance companies need to broaden their investment channels to improve their returns, the CIRC said late on Thursday in its annual work report.

The commission said it would also promote reform on the launch of infrastructure and real estate debt projects and introduce new types of investors. “We see many more difficulties in ensuring steady growth of the insurance industry this year due to a comparatively lower investment return rate and the imminent peak of due payments on policies,” Xiang Junbo, the commission’s

chairman said in the report. With existing average investment returns for insurers being lower than the interest rate of five-year deposits, more policyholders are expected to surrender th ei r p o l i ci es – a tr en d which may cause a number of insurers to face a cash crunch, the CIRC said. After enjoying an average growth of more than 20 percent in the past two decades, China’s insurance

premium income slowed to single-digit growth in 2012. The premium income increased 8 percent to 1.55 trillion yuan (US$249 billion) last year, with health insurance

premiums leading the growth, the commission said, while total assets of the insurance industry jumped 22.29 percent on year to 7.35 trillion yuan. Reuters

10 |

business daily January 28, 2013

GREATER CHINA New urban jobs reached 12.7 mln: ministry China created 12.7 million new jobs in urban areas in 2012, the Ministry of Human Resources and Social Security, said on Friday. The increase from 2011’s 12.2 million new urban jobs left China’s urban jobless rate steady at 4.1 percent at the end of 2012 – the 10th straight quarter officials say it has been at that level. The urban jobless rate is China’s only official unemployment indicator, but analysts say it grossly underestimates unemployment because it excludes about 250 million migrant workers from its surveys.

HK journalists plan petition against privacy law revision Government proposal raises fears over transparency of city’s financial centre “Hong Kong’s claim to be the regional hub of information, as well as a financial centre, will be jeopardized.” The plans, put forward by the Financial Services and the Treasury Bureau and the city’s Companies Registry to “enhance protection of the privacy of personal information,” were proposed in November as part of a consultation paper on a new companies ordinance. The move comes amid growing media scrutiny of the assets of China’s leaders.

Business Relationships

ong Kong journalists plan to publish a petition in five local newspapers today, calling on the city’s government to drop a proposal for a law that would limit access to information about company directors. Signatures of 1,768 reporters, editors, media teachers and students will be carried on the petition protesting against the government’s plans to make it more difficult for the public to trace company directors’ residential addresses and personal

identification numbers, Mak Yin Ting, chairwoman of the Hong Kong Journalists Association, said at a press briefing yesterday. The Hong Kong Confederation of Trade Unions is considering a march in protest against the proposals, while the Hong Kong Small and Medium Enterprises Association will write to the administration, representatives said at the briefing. If the bill becomes law, “the free flow of information will be suffocated,” said Ms Mak.

Bloomberg News last year relied on Hong Kong and Chinese identity card numbers contained in filings to chart the business relationships and assets of the families of China’s incoming president, Xi Jinping, ousted Politburo member Bo Xilai and the descendants of veteran revolutionaries, known as the Eight Immortals, who ran China after the death of Mao Zedong in 1976. The New York Times newspaper traced assets owned by the family of outgoing premier Wen Jiabao, also with the help of Hong Kong records, according to an October article. Although the effects of the plans are

hard to assess, “it definitely damages the reputation of Hong Kong as a free place to trade and do business,” Danny Lau Tat Pong, life honorary chairman of the Small and Medium Enterprises Association, said. Workers use the registry to find employers that abscond owing wages or redundancy payments, according to Confederation of Trade Unions chief executive officer Mung Siu Tat. The confederation has received more than 500 complaints about unpaid salaries and more than 350 claims relating to overdue redundancy payments in the past two years, he said. “We are lobbying the political parties to vote against the bill if the government doesn’t change anything,” said Mr Mung. “Unfortunately the government is only listening to the 1 percent of people who hold the most money and power in Hong Kong.” The petition, organized by the Hong Kong Journalists Association, the Hong Kong Press Photographers Association and Journalism Educators for Press Freedom, are due to be published by Apple Daily, am730, Hong Kong Economic Times, Ming Pao and the South China Morning Post. Bloomberg

Industrial firms’ profits climb for fourth month ChinesePower, food processing sectors shine in fourth-quarter recovery

rofits earned by China’s industrial companies rose 17.3 percent in December from a year earlier to 895.2 billion yuan (US$143.91 billion), official data showed on Sunday, as a fourthquarter recovery helped offset poorer corporate results in the third. The data from the National Bureau of Statistics is the latest sign of a gathering rebound in activity in the world’s second-largest economy. The December rise moderated from November’s 22.8 percent increase but still marked the thirdfastest growth last year. Industrial profits totalled 5.56 trillion yuan in 2012, up 5.3 percent from a year earlier, China’s National Bureau of Statistics said on its website, strengthening from a 3

percent increase in profits in the first 11 months of 2012 versus 2011. China’s economy grew at 7.9 percent in the fourth quarter, snapping a streak of seven consecutive quarters of slowdown. Among 41 sectors surveyed by the bureau, 29 reported rising profits last year, led by a 69 percent jump for power generation firms, a nearly 21 percent rise for food processing firms and an 8 percent rise for electric equipment makers. But some sectors are still struggling. Profits at steel firms tumbled 37 percent, while earnings for chemical companies fell 6 percent. According to a Reuters poll, analysts predict China’s annual economic growth would rebound a

Official data show a rebound in the world’s second-largest economy

shade to 8.1 percent this year. The HSBC flash purchasing managers’ index, the earliest indicator of China’s industrial

activity, saw growth in China’s giant factory sector accelerated to a twoyear high in January. Reuters

January 28, 2013 business daily | 11

ASIA Vietnam signs US$9-bln oil refinery deal Vietnam inked a deal with firms from Japan and Kuwait yesterday to build an oil refinery complex worth nearly US$9 billion. The Nghi Son refinery, which is due to start operating by 2017 in Thanh Hoa province will turn Kuwaiti oil into petrol and other petroleum products. It will be able to process 10 million tonnes of crude oil a year, the government said. Vietnam has offshore oil reserves but still spends several billion dollars each year to import petroleum products to feed its growing economy.

Japan’s ruling party wants ‘friendly’ central bank chief Despite criticism, Japanese govt eyes governor who sides with yen-weakening policy

he replacement for Bank of Japan governor Masaaki Shirakawa, whose term ends in April, should be someone who shares the views and responsibilities of the government, a senior ruling party official said. “It all comes down to whether the person can share the nation’s views and take upon challenges together,” Shigeru Ishiba, secretary general of the Liberal Democratic Party (LDP), said in a program on public broadcaster NHK yesterday. Prime minister Shinzo Abe, who has called for “bold monetary policy” to end deflation and weaken the yen, has a chance to reshape the central bank when his government nominates successors to Shirakawa and his two deputies. The Bank of Japan last week decided to adopt a 2 percent inflation target and begin open-ended asset purchases next January. Mr Ishiba said a joint statement released by the central bank and the government after the January 22 policy board meeting means that reviving

economic growth is “something they are jointly responsible for.” The government should present its choices for the three central bank officials to parliament by the end of next month, LDP upper house

parliamentary affairs chief Masashi Waki said on January 21. The current deputies’ terms end in March. Mr Abe’s nominees must win approval in the opposition-

controlled upper house. Among potential successors to Mr Shirakawa are former deputy governor Toshiro Muto, who said in a January 21 interview that no potential monetary step should be considered “taboo,” and Asian Development Bank president Haruhiko Kuroda, a former Finance Ministry currency official, who in 2002 advocated “innovative” central central bank policies and a 3 percent inflation target. The yen has slid more than 7 percent in the past month, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes, in anticipation that the central bank will join Mr Abe’s administration in strengthening measures to lift the economy. Economy minister Akira Amari denied Japan’s new government is actively targeting a weaker yen, taking to the international stage to argue that economic policy is instead aimed at defeating deflation. Japan is “absolutely not deviating from global standards,” Mr Amari told the World Economic Forum’s annual meeting in Davos, Switzerland on Saturday. “I don’t comment on a foreignexchange rate because it should be determined by the market. What we do is to implement policies.” Mr Amari spoke at the end of a week in which German and Canadian policy makers joined a worldwide chorus highlighting a recent plunge in the yen as a worry. Bloomberg

Singapore’s deals hit by property curbs City-state’s severe property curbs cools down corporate takeover deals

ingapore’s latest round of measures to curb record property prices has become a stumbling block in the city-state’s two-biggest corporate takeover deals. Overseas Union Enterprise Ltd (OUE) this week gave up its two-month S$13.8 billion (US$11.2 billion) tussle against Thai billionaire Charoen Sirivadhanabhakdi for property and drinks company Fraser & Neave Ltd., citing the measures. Wheelock Properties Ltd., which tried to thwart a plan by SC Global Developments Ltd.’s chief executive officer to buy out the company, dropped the fight less than a week after the new rules, citing “market

developments.” Singapore’s latest curbs – from higher taxes to tougher mortgage requirements – have been described by broker Knight Frank LLP as the “most severe” since the government started cooling the market more than three years ago. Announced acquisitions of Singapore property companies and real estate investment trusts were worth US$37.3 billion last year, the top destination for property deals behind the United States, according to data compiled by Bloomberg. “It’s a game changer,” said Bryan Go, an analyst at Phillip Securities Research Pte.

“The new measures are some of the key considerations in both of these M&A [merger and acquisition] deals. They will now evaluate differently on discounting deals.” A group led by OUE, which in November tried to outbid Charoen for Fraser & Neave (F&N), said January 21 it won’t match the billionaire’s higher offer, bowing out of the battle. OUE wanted F&N’s property assets, which include serviced apartments, shopping malls and residential projects in Singapore, and are the biggest contributor to the company’s sales.

OUE “would need to significantly increase the offer price to a level which is no longer as attractive to OUE, in particular, given the potential impact of the recent measures taken by the Singapore government in relation to the property market,” the company said in a statement. “Potential buyers will be most concerned about overpaying for assets and the recent measures will have an impact on the profitability of targets,” said Alvin Lim, head of Singapore advisory for HSBC Holdings Plc. “Hence, buyers will offer less and sellers will have to reset value expectations.” Bloomberg

12 |

business daily January 28, 2013

MARKETS Hang SENG INDEX PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

30.85

0.3252033

42580902

CHINA UNICOM HON

12.24

-3.470032

47348535

POWER ASSETS HOL

ALUMINUM CORP-H

3.78

-3.324808

26831862

CITIC PACIFIC

12.52

-2.1875

10898802

SANDS CHINA LTD

BANK OF CHINA-H

3.76

-0.5291005

326555024

BANK OF COMMUN-H

6.39

0.4716981

34124212

NAME AIA GROUP LTD

NAME

CLP HLDGS LTD CNOOC LTD

65.3 -0.07651109

2442180

15.82

0.3807107

72431420

NAME

PRICE

DAY %

66.4

0.3779289

VOLUME 2211083

38.55

-1.026958

7222065

SINO LAND CO

15.18

0.1319261

9711287

SUN HUNG KAI PRO

129.9

-0.4597701

4681152

BANK EAST ASIA

31.8

-0.4694836

2036314

COSCO PAC LTD

12.24

-3.011094

9482487

SWIRE PACIFIC-A

98.5

0.6642821

1462468

BELLE INTERNATIO

17.3

-0.4602992

11125001

ESPRIT HLDGS

10.96

-1.9678

6571159

TENCENT HOLDINGS

267.2

-1.329394

5161556

26.45

-0.1886792

20197761

HANG LUNG PROPER

29.2

-0.8488964

6865527

TINGYI HLDG CO

21.65

6214216

15.5

-0.128866

1839176

HANG SENG BK

124.5

0.89141

3472528

WANT WANT CHINA

10.42

0.1923077

28361281

HENDERSON LAND D

WHARF HLDG

68.65

1.179071

6392534

BOC HONG KONG HO CATHAY PAC AIR CHEUNG KONG CHINA COAL ENE-H CHINA CONST BA-H

129.7

-0.2307692

2555158

8.52

-0.3508772

22501001

6.67

-0.1497006

234925269

CHINA LIFE INS-H

25.65

-3.024575

50246680

CHINA MERCHANT

26.85

-0.5555556

3519787

CHINA MOBILE

58.5

0.949094

3897345

HENGAN INTL

76.35

2.277294

4616857

HONG KG CHINA GS

21.55

0.2325581

3553068

HONG KONG EXCHNG

147

-0.8097166

4443034

HSBC HLDGS PLC

86.5

1.466276

30804023

-1.234568

47446058

HUTCHISON WHAMPO

CHINA OVERSEAS

24.2

1.25523

22747466

IND & COMM BK-H

CHINA PETROLEU-H

9.44

2.164502

91523335

87.05

-0.1147447

7948786

5.91

-0.5050505

204336798

LI & FUNG LTD

11.52

-1.369863

44113565

31.35

1.456311

3661223

CHINA RES ENTERP

27.3

0.9242144

2859056

MTR CORP

CHINA RES LAND

22.8

0.6622517

8749942

NEW WORLD DEV

15.06

0.1329787

26107570

CHINA RES POWER

20.4

-0.2444988

4476869

PETROCHINA CO-H

11.04

-0.5405405

57585532

CHINA SHENHUA-H

32.35

-0.7668712

10974480

PING AN INSURA-H

68.65

-1.009373

9675408

MOVERS

5 23705

INDEX 23580.43 HIGH

23700.45

LOW

23488.14

52W (H) 23710.87 23480

(L) 18056.4 23-January

25-January

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

CHINA PACIFIC-H

30.7

-1.444623

13439900

YANZHOU COAL-H

31313746

CHINA PETROLEU-H

9.44

2.164502

91523335

ZIJIN MINING-H

-3.324808

26831862

CHINA RAIL CN-H

8.16

0.4926108

30081900

28.75

-0.1736111

11320160

CHINA RAIL GR-H

4.32

1.17096

31055000

3.76

-0.5291005

326555024

CHINA SHENHUA-H

32.35

-0.7668712

10974480

CHINA TELECOM-H

PRICE

DAY %

VOLUME

AGRICULTURAL-H

4.22

0.2375297

220011488

AIR CHINA LTD-H

6.66

-6.06488

ALUMINUM CORP-H

3.78

ANHUI CONCH-H BANK OF CHINA-H

NAME

6.39

0.4716981

34124212

4.19

-1.411765

76682015

25.95

-2.259887

2691930

DONGFENG MOTOR-H

12.22

-0.6504065

23713550

CHINA CITIC BK-H

5.23

-2.96846

55393640

GUANGZHOU AUTO-H

6.38

-0.3125

11778817

CHINA COAL ENE-H

8.52

-0.3508772

22501001

HUANENG POWER-H

7.27

0.5532503

15828845

CHINA COM CONS-H

7.82

-3.45679

34534886

IND & COMM BK-H

5.91

-0.5050505

204336798

CHINA CONST BA-H

6.67

-0.1497006

234925269

JIANGXI COPPER-H

20.35

-0.7317073

5888162

CHINA COSCO HO-H

4.3

-2.272727

19394451

PETROCHINA CO-H

11.04

-0.5405405

57585532

BANK OF COMMUN-H BYD CO LTD-H

25.65

-3.024575

50246680

PICC PROPERTY &

CHINA LONGYUAN-H

6.38

0.7898894

14192000

PING AN INSURA-H

CHINA MERCH BK-H

18.44

-1.705757

14263410

SHANDONG WEIG-H

CHINA LIFE INS-H

11.5

-2.707276

16492551

68.65

-1.009373

9675408

7.3

-1.351351

17653565

CHINA MINSHENG-H

10.86

-2.513465

51902176

SINOPHARM-H

24.5

0.8230453

4017185

CHINA NATL BDG-H

11.76

-0.5076142

22727600

TSINGTAO BREW-H

45.7

-0.867679

1729249

CHINA OILFIELD-H

16.48

0.7334963

4282945

WEICHAI POWER-H

31.25

-1.419558

2505741

NAME

PRICE

DAY %

VOLUME

13.16

-2.518519

36593151

3.01

-2.588997

75034402

ZOOMLION HEAVY-H

10.36

1.171875

42019660

ZTE CORP-H

14.36

-2.179837

17476186

MOVERS

0 12230

INDEX 12001.81 HIGH

12225.17

LOW

11932.08

52W (H) 12244.15 11930

(L) 8987.76 23-January

25-January

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.82

-1.398601

181620525

CITIC SECURITI-A

13.54

-2.308802

106748881

AIR CHINA LTD-A

5.93

-0.5033557

18990691

CSR CORP LTD -A

4.71

-1.875

41962348

ALUMINUM CORP-A

5.13

0.7858546

16102582

DAQIN RAILWAY -A

7.01

0.4297994

ANHUI CONCH-A

19.21

1.801802

39579474

DATANG INTL PO-A

4.07

BANK OF BEIJIN-A

9.82

1.86722

45302287

EVERBRIG SEC -A

BANK OF CHINA-A

2.96

-1.003344

43193134

GD POWER DEVEL-A

NAME

PRICE

DAY %

VOLUME

16.67

3.155941

31834160

SANY HEAVY INDUS

10.6

1.048618

37288355

32566034

SHANDONG DONG-A

2.564103

6641581

7049658

SHANDONG GOLD-MI

36.69

0.1091405

9587577

13.52

-1.097293

18098899

SHANG PHARM -A

12.02

0.5857741

7367598

2.75

46911349

SHANG PUDONG-A

10.66

0.4712535

89716806

SAIC MOTOR-A

BANK OF COMMUN-A

5.09

-0.1960784

58680247

GEMDALE CORP-A

6.88

-1.854494

62022516

SHANGHAI ELECT-A

4.05

-0.7352941

3318679

BANK OF NINGBO-A

11.8

-1.25523

27035824

GF SECURITIES-A

14.29

-2.722941

36225144

SHANXI LU'AN -A

20.96

-0.6164059

11756672

BAOSHAN IRON & S

4.98

-0.2004008

19170698

GREE ELECTRIC

28.29

0.4259851

13854801

SHANXI XINGHUA-A

37.55

-5.391786

6522443

3894904

GUANGHUI ENERG-A

17.41

-1.47142

21060207

SHANXI XISHAN-A

13.35

0.07496252

14921736 63690196

BYD CO LTD -A

22.46

0.08912656

CHINA CITIC BK-A

4.85

0.2066116

26446700

HAITONG SECURI-A

10.18

-1.832208

51490695

SHENZEN OVERSE-A

6.68

-3.607504

CHINA CNR CORP-A

4.46

-2.620087

46557344

HANGZHOU HIKVI-A

30.98

-0.06451613

3499909

SICHUAN KELUN-A

64.85

4.596774

1515883

CHINA COAL ENE-A

7.77

0.6476684

7315385

HENAN SHUAN-A

66.36

3.284047

2141273

SUNING APPLIAN-A

7.25

-0.137741

44950043

CHINA CONST BA-A

4.69

-1.054852

47019411

HONG YUAN SEC-A

19.43

-2.361809

23659090

TSINGTAO BREW-A

33.42

0.30012

2207423

CHINA COSCO HO-A

4.32

-0.9174312

22588804

HUATAI SECURIT-A

9.06

-1.30719

24267556

WEICHAI POWER-A

23.09

-2.326565

10367025

CHINA CSSC HOL-A

22.52

-2.384049

9843599

HUAXIA BANK CO

11.04

0.4549591

37667923

WULIANGYE YIBIN

25.12

-3.011583

42059608

CHINA EAST AIR-A

3.54

-0.5617978

22441207

IND & COMM BK-A

4.23

-0.4705882

86341082

YANGQUAN COAL -A

14.71

-0.540906

11555098

CHINA EVERBRIG-A

3.35

0.2994012

161331868

INDUSTRIAL BAN-A

18.33

-0.3262643

68433140

YANTAI WANHUA-A

15.86

1.928021

8157110

CHINA INTL MAR-A

13.94

-2.037948

14120952

INNER MONG BAO-A

34.66

-1.056238

28344725

YANZHOU COAL-A

17.63

-0.05668934

3585912

CHINA LIFE INS-A

19.91

-3.161479

22635179

INNER MONG YIL-A

25.65

0.5094044

12629501

YUNNAN BAIYAO-A

76.65

2.541806

2389466

CHINA MERCH BK-A

13.47

-1.463058

90587116

INNER MONGOLIA-A

5.25

-0.9433962

35111031

ZHONGJIN GOLD

15.93

0.3780718

15523960

CHINA MERCHANT-A

10.16

-0.8780488

21048106

JIANGSU HENGRU-A

32.71

4.338118

8235630

ZIJIN MINING-A

3.77

39265304

15446668

JIANGSU YANGHE-A

86.02

-3.995536

5122725

ZOOMLION HEAVY-A

8.91

0.3378378

26500478

JIANGXI COPPER-A

23.68

-0.4205214

9773052

ZTE CORP-A

10.23

19756936

JINDUICHENG -A

12.42

1.222494

14904321

CHINA MERCHANT-A

28.03

-3.344828

CHINA MINSHENG-A

9.33

0.3225806

130079817

CHINA NATIONAL-A

7.45

1.637108

27685705

CHINA OILFIELD-A

16.81

0.358209

5156189

JIZHONG ENERGY-A

14.96

-2.604167

19696175

CHINA PACIFIC-A

21.3

-2.472527

30746247

KANGMEI PHARMA-A

14.67

2.229965

25425012

189.05

-3.52623

8000786 12420065

CHINA PETROLEU-A

6.85

-1.011561

44201808

KWEICHOW MOUTA-A

CHINA RAILWAY-A

5.83

1.039861

30315556

LUZHOU LAOJIAO-A

31.66

-3.387244

CHINA RAILWAY-A

3.1

-0.6410256

31279898

METALLURGICAL-A

2.18

-1.357466

29806962

NINGBO PORT CO-A

2.58

26032778

3.87

-0.7692308

38396756

-0.4424779

CHINA SHENHUA-A

23.87

0.3362757

11319554

CHINA SHIPBUIL-A

4.89

-1.012146

36513513

PANGANG GROUP -A

MOVERS 132

151

17 2665

INDEX 2571.674

CHINA SOUTHERN-A

3.97

0.5063291

25972292

PETROCHINA CO-A

18392909

HIGH

2663.19

CHINA STATE -A

3.66

-0.8130081

84519251

PING AN BANK-A

19.15

-1.542416

61431248

LOW

2571.04

CHINA UNITED-A

3.46

-0.5747126

58614641

PING AN INSURA-A

45.59

-2.041255

26519070

CHINA VANKE CO-A

11.7

-2.09205

86321707

POLY REAL ESTA-A

-3.560831

81481486

CHINA YANGTZE-A

7.32

0.2739726

12355485

QINGDAO HAIER-A

13.53

0.5947955

13829458

CHONGQING CHAN-A

7.64

5.37931

66367263

QINGHAI SALT-A

26.29

0.152381

4765246

PRICE DAY %

Volume

PRICE DAY %

Volume

52W (H) 2717.825 (L) 2102.135

2570

23-January

25-January

FTSE TAIWAN 50 INDEX NAME ACER INC ADVANCED SEMICON

NAME

18280556

FORMOSA PLASTIC

78.8

8340656

TAIWAN MOBILE CO

24.1 -0.4132231

14009959

FOXCONN TECHNOLO

83.8

0.1194743

4692099

TPK HOLDING CO L

4682055

FUBON FINANCIAL

36.4 -0.2739726

12433690

TSMC UNI-PRESIDENT

ASIA CEMENT CORP

36.45

ASUSTEK COMPUTER

337.5

0.7462687

2884216

HON HAI PRECISIO

83.4

1.090909

32755887

0.8403361

81082523

HOTAI MOTOR CO

227

-1.304348

336097

127

0.3952569

5983645

HTC CORP

284

1.067616

13514801

11517302

HUA NAN FINANCIA

16.45

-1.497006

15.7 -0.6329114

5120715

LARGAN PRECISION

742

LITE-ON TECHNOLO

AU OPTRONICS COR CATCHER TECH CATHAY FINANCIAL CHANG HWA BANK CHENG SHIN RUBBE CHIMEI INNOLUX C CHINA DEVELOPMEN

4003158

492.5 -0.2026342

3450636

99 -0.9009009

47903849

51.6 -0.9596929

11741179

-1.315789

30430010

WISTRON CORP

35.05

2.48538

18461028

7058732

YUANTA FINANCIAL

15.15

19927526

-1.066667

2056180

YULON MOTOR CO

52.7 -0.9398496

5721937

40.2 -0.1242236

5983325

2681276

14.65

2.807018

109102900

MEDIATEK INC

322

0.9404389

6979833

7.7 -0.2590674

33411220

MEGA FINANCIAL H

23.2

1.089325

15691575

27.4

0.7352941

16834649

NAN YA PLASTICS

58.1

-1.358234

8017684

CHINATRUST FINAN

16.6

30078740

PRESIDENT CHAIN

159.5

-2.446483

1090929

CHUNGHWA TELECOM

94.4 -0.1058201

7779859

QUANTA COMPUTER

63.6

2.250804

13309701

COMPAL ELECTRON

20.7

-1.193317

14035588

SILICONWARE PREC

30.4

-1.298701

10047870

DELTA ELECT INC

106

0.4739336

3664426

SINOPAC FINANCIA

12.55

0.8032129

12455139

FAR EASTERN NEW

33.1 -0.8982036

6319792

SYNNEX TECH INTL

58.1

-1.525424

4100715

3251149

TAIWAN CEMENT

39.1

0.2564103

8601843

FIRST FINANCIAL

17.5 -0.2849003

8276491

TAIWAN COOPERATI

16.25 -0.6116208

9395677

FORMOSA CHEM & F

77.4 -0.6418485

5823973

TAIWAN FERTILIZE

71 -0.6993007

4689958

FORMOSA PETROCHE

81.5

2996534

TAIWAN GLASS IND

-1.807229

Volume

107 -0.9259259

11.25

PRICE DAY %

UNITED MICROELEC

CHINA STEEL CORP

FAR EASTONE TELE

NAME

-2.439024

27.9

-1.413428

2368353

MOVERS

6 5435

INDEX 5362.08 HIGH

5430.68

LOW

5331.08

52W (H) 5621.53 5330

(L) 4719.96 23-January

25-January

January 28, 2013 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 52.4

35.0

17.4

34.8

17.3 52.0

34.6

17.2

34.4

Max 34.9

Average 34.581

Max 38.9

Average 38.589

Min 34.3

34.2

Last 34.4

Min 38.35

Last 38.55

Max 52.3

Average 52.145

20.8

38.8

20.6

38.6

20.4

38.4

20.2

38.2

Max 20.75

Average 20.402

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

WTI CRUDE FUTURE Mar13

96.17

0.229286087

4.226725913

108.9899979

80.48000336

BRENT CRUDE FUTR Mar13

113.35

0.061793785

3.148603149

118.7999954

90.58999634

GASOLINE RBOB FUT Feb13

285.93

-0.125746621

3.534055111

292.9699898

220.3500032

966

-0.232378002

4.517176089

1026.25

800.5

3.478

0.928612885

3.789913459

4.090000153

3.049999952

GAS OIL FUT (ICE) Mar13 NATURAL GAS FUTR Feb13 HEATING OIL FUTR Feb13 Gold Spot $/Oz Silver Spot $/Oz

308.54

-0.032400207

1.767925581

333.4599972

255.6599855

1670.55

-0.4007

0.3659

1796.08

1527.21

31.725

-0.4628

5.3637

37.4775

26.1513

Platinum Spot $/Oz

1692.48

0.3427

11.5124

1736

1379.05

Palladium Spot $/Oz

726.75

1.0596

3.8719

732.9

553.75

LME ALUMINUM 3MO ($) LME COPPER 3MO ($) LME ZINC

Min 20.15

Last 20.2

3MO ($)

LME NICKEL 3MO ($)

2076

0.1447178

2361.5

1827.25

8095.5

-0.092558312

2.074139453

8765

7219.5

2089

0.191846523

0.432692308

2220

1745

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP

17390

-0.883442576

1.934349355

22150

15236

15.285

0.724876442

16.84000015

14.89999962

724.25

3.723594701

846.25

511

WHEAT FUTURE(CBT) Mar13

768.25

-0.032530904

-1.253213368

948.25

652

SOYBEAN FUTURE Mar13

1434.5

-0.052255705

1.773678609

1728.25

1207.75

COFFEE 'C' FUTURE Mar13

146.55

-2.559840426

1.912378303

237.5

141.25

SUGAR #11 (WORLD) Mar13

18.38

-0.594916171

-5.791901589

25.12999916

18.05999947

AMAX HOLDINGS LT

COTTON NO.2 FUTR Mar13

82.16

-0.880685246

9.342560554

98.5

66.84999847

BOC HONG KONG HO CENTURY LEGEND

AGRICULTURE ROUGH RICE (CBOT) Mar13 CORN FUTURE

Mar13

World Stock MarketS - Indices NAME

20.0

Max 17.34

Average 17.259

Min 17.2

Last 17.28

21.4

21.2

21.0

Max 21.4

Average 21.016

Min 20.85

Last 20.85

PRICE

DAY %

1.0458 1.5801 0.9288 1.341 90.61 7.9866 7.754 6.2224 53.685 29.89 1.2299 29.15 40.665 9675 94.754 1.24542 0.84866 8.344 10.7099 121.51 1.03

-0.4569 -0.2462 0.1615 0.6152 -1.1588 -0.0088 -0.0077 -0.0321 -0.021 -0.3346 -0.1951 -0.3808 -0.0664 0.8786 -0.6976 -0.448 -0.8566 -0.6364 -0.6106 -1.7694 0

YTD %

(H) 52W

20.8

0.7709 -2.3182 -1.4427 1.6679 -4.9774 -0.0426 -0.0438 0.1318 2.4402 2.3085 -0.6911 -0.4014 0.8361 1.2196 -5.7275 -3.0464 -3.9168 -1.5161 -1.676 -6.5344 -0.0097

(L) 52W

1.0857 1.6381 0.9972 1.3487 90.69 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 95.028 1.25692 0.8506 8.4894 10.7712 121.58 1.0314

0.9582 1.5269 0.8931 1.2043 76.03 7.9823 7.7498 6.2105 48.6088 29.63 1.2152 28.913 40.54 8878 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029

MACAU RELATED STOCKS NAME ARISTOCRAT LEISU CROWN LTD

PRICE

(H) 52W

(L) 52W

3.51

DAY % YTD % 0

11.42857

3.56

2.27

VOLUME CRNCY 3566431

11.71

-1.01437

9.746953

12.04

8.04

2499373

0.08

-2.439024

14.28571

0.119

0.055

15763000

26.45

-0.1886792

9.751036

26.75

20.25

20197761 684000

0.285

7.547176

0.34

0.215

CHEUK NANG HLDGS

6.15

0.3262643

2.671122

6.25

2.8

191000

CHINA OVERSEAS

24.2

1.25523

4.761903

25.6

14.124

22747466

CHINESE ESTATES

12.72

1.76

-2.752293

13.26

8.3

92758

CHOW TAI FOOK JE

12.56

-0.7898894

0.9646336

15.16

8.4

3998200

EMPEROR ENTERTAI

2.01

1.005025

6.349207

2.08

0.99

2050000

FUTURE BRIGHT

1.67

-1.183432

36.88524

1.75

0.44

4656000

GALAXY ENTERTAIN

34.4

-0.7215007

13.34431

35.35

16.62

8008368

124.5

0.89141

4.886271

124.6

99.2

3472528

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

13825.33

0.3338334

5.503531

13879.66016

12035.08984

NASDAQ COMPOSITE INDEX

3130.383

-0.7384095

3.671763

3196.932

2726.68

HANG SENG BK

FTSE 100 INDEX

6261.19

-0.05937835

6.161268

6271.4

5229.76

HOPEWELL HLDGS

32.5

-1.365706

-2.255639

34.4

19.049

972904

DAX INDEX

7763.79

0.2021133

1.988862

7789.94

5914.43

HSBC HLDGS PLC

86.5

1.466276

6.39606

86.65

59.8

30804023

NIKKEI 225

10926.65

2.879049

5.112665

10952.31

8238.96

HUTCHISON TELE H

3.38

-0.2949853

-5.056178

3.88

2.98

7060000

HANG SENG INDEX

23580.43

-0.07826636

4.076061

23710.87

18056.4

LUK FOOK HLDGS I

27.3

-2.150538

11.88525

30.2

14.7

3649050

MELCO INTL DEVEL

12.28

-0.4862237

36.293

12.48

5.12

8248000

CSI 300 INDEX

2571.674

-0.429038

1.931157

2717.825

2102.135

MGM CHINA HOLDIN

17.28

-0.9174312

23.25249

17.7

10.04

6865034

TAIWAN TAIEX INDEX

7672.58

-0.3041844

-0.3496321

8170.72

6857.35

MIDLAND HOLDINGS

3.91

-1.758794

5.675674

5.217

3.249

3126000

NEPTUNE GROUP

0.204

-3.317536

34.21053

0.226

0.084

24371000

NEW WORLD DEV

15.06

0.1329787

25.29118

15.12

7.95

26107570

SANDS CHINA LTD

38.55

-1.026958

13.54933

39.35

20.65

7222065

SHUN HO RESOURCE

1.46

-0.6802721

4.285716

1.59

1.03

-1.193319

4.65

2.56

12366795

KOSPI INDEX

1946.69

-0.9055832

-2.521725

2057.28

1758.99

S&P/ASX 200 INDEX

4835.174

0.5186869

4.005714

4835.2

3985

4422.551

0.08654076

2.452431

4472.108

3635.283

FTSE Bursa Malaysia KLCI

1636

0.04586455

-3.135081

1699.68

1509.49

SHUN TAK HOLDING

4.14

-2.12766

JAKARTA COMPOSITE INDEX

17.1

CURRENCY EXCHANGE RATES

NAME

METALS

51.6

Last 52

39.0

Commodities ENERGY

Min 51.7

NZX ALL INDEX

911.489

0.2307038

3.337219

913.386

732.518

SJM HOLDINGS LTD

20.2

-1.463415

12.22222

21.9

12.34

6428780

PHILIPPINES ALL SHARE IX

3885.29

0.7068393

5.036796

3885.39

3125.49

SMARTONE TELECOM

13.5

-1.603499

-4.119318

17.5

13.1

6509000

HSBC Dragon 300 Index Singapor

634

0.47

2.08

WYNN MACAU LTD

20.85

-1.650943

-0.4773306

25.5

14.62

9612627

STOCK EXCH OF THAI INDEX

1458.7

0.6631748

4.796929

1460.05

1054.84

ASIA ENTERTAINME

4.07

33.00654

7.24

2.4

436727

BALLY TECHNOLOGI

46.69

-0.3415155

4.428542

51.16

40.91

424089

HO CHI MINH STOCK INDEX

468.09

3.46817

13.139

492.44

372.39

BOC HONG KONG HO

3.45

1.173021

12.37785

3.45

2.56

8300

Laos Composite Index

1434.45

-0.2836229

18.08408

1455.82

880.65

GALAXY ENTERTAIN

4.53

0.443459

14.10579

4.53

2.11

14050 3993715

Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.

INTL GAME TECH

15.16

2.018843

6.986591

17.37

10.92

JONES LANG LASAL

88.95

0.1463634

5.968546

89.79

61.39

280757

LAS VEGAS SANDS

52.71

-1.051248

14.18978

58.3216

32.6127

6962245

MELCO CROWN-ADR

20.36

0.1968504

20.90261

20.59

9.13

4029144

MGM CHINA HOLDIN

2.26

-0.4405286

22.16216

2.3

1.3525

2700

MGM RESORTS INTE

12.97

0.2318393

11.42611

14.9401

8.83

8958189

SHFL ENTERTAINME

14.99

5.936396

3.37931

18.77

11.75

369053

SJM HOLDINGS LTD

2.68

-0.3717472

16.01732

2.85

1.65

800

122.68

-0.3654674

9.058585

129.6589

84.4902

1378401

WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily January 28, 2013

Opinion

Writing the future

Jeffrey D. Sachs

Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University

hat does the future hold for the global economy? Will living standards rise worldwide, as today’s poor countries leapfrog technologies to catch up with richer countries? Or will prosperity slip through our fingers as greed and corruption lead us to deplete vital resources and degrade the natural environment on which human well-being depends? Humanity faces no greater challenge than to ensure a world of prosperity rather than a world that lies in ruins. Like a novel with two possible endings, ours is a story yet to be written in this new century. There is nothing inevitable about the spread – or the collapse – of prosperity. More than we know (or perhaps care to admit), the future is a matter of human choice, not mere prediction. Despite the ongoing economic crisis in Europe and the United States, the developing world has sustained rapid economic growth. While the International Monetary Fund forecasts that the advanced economies will grow by just 1.5 percent in 2013, developing-country growth is projected to reach 5.6 percent. Asia’s developing economies, now the world’s pacesetters, are expected to grow by 7.2 percent, with

output in Sub-Saharan Africa set to rise by a healthy 5.7 percent. What is happening is both powerful and clear. Technologies that were once found only in rich countries now belong to the entire world. Mobile phone coverage in Sub-Saharan Africa, for example, has gone from nearly zero subscribers 20 years ago to around 700 million today. And those phones are helping to bring banking, health care, education, business, government services, and entertainment to the poor. Within a few years, the vast majority of the world will have access to wireless broadband.

Southeast Asia, the Caribbean, and Africa’s Sahel region. These environmental disasters are occurring with rising frequency, as they are partly caused by human actions, such as deforestation, coastal erosion, massive pollution, and, of course, the greenhouse-gas emissions that are changing the world’s climate and acidifying the oceans. What is new is that scourges like climate change – until recently described as a future threat – are now clear and present dangers. Scientists have even given a name to our era, the Anthropocene, in

Present dangers Yet there is another truth as well. Last year was the hottest ever recorded in the U.S. Droughts afflicted around 60 percent of U.S. counties, including the breadbasket states of the Midwest and the Great Plains. In October, an extraordinary “superstorm” smashed into the Atlantic coastline around New Jersey, causing losses of around US$60 billion. Climate problems – floods, droughts, heat waves, extreme storms, massive forest fires, and more – also ravaged many other parts of the world in 2012, including China, Australia,

On our current trajectory, shortterm prosperity is coming at the cost of too many future crises

which humanity (“anthropos” in Greek) is having a largescale impact on the planet’s ecosystems. Herein lies our great challenge – the one that will determine whether we follow the path of prosperity or ruin. The rapidly growing developing countries cannot simply follow the economicgrowth path that today’s rich countries travelled. If they try, the world economy will push the planet beyond safe operating conditions. Temperatures will rise, storms will intensify, the oceans will become more acidic, and species will go extinct in vast numbers as their habitats are destroyed. The simple fact is that humanity faces a stark choice. If the world economy’s current growth patterns continue, we face ecological disaster. If the world economy embraces a new growth pattern – one that harnesses advanced technologies like smart phones, broadband, precision agriculture, and solar power – we can spread prosperity while saving the planet.

Business as usual I call today’s growth pattern the business-as-usual option; the smart-technology growth pattern, by contrast, represents the sustainable-development

option. Business as usual can work for a while, but it will end in tears, while the sustainabledevelopment path can lead to long-term prosperity. So, what will it take to write the happy ending? First, we must recognise that we, as a global society, have a choice to make. Business as usual is comfortable. We think we understand it. Yet it is not good enough: on our current trajectory, short-term prosperity is coming at the cost of too many future crises. Second, we must recognise the powerful new tools and technologies that we have at hand. Using advanced information technologies – computers, satellite mapping, image processing, expert systems, and more – we now have the means to grow more food with less environmental damage; improve public health for rich and poor alike; distribute more electricity with lower greenhouse-gas emissions; and make our cities more liveable and healthier, even as urbanisation raises their populations by billions in the coming decades. Third, we should set bold goals for the years ahead – to spread prosperity and improve public health while saving the planet. Fifty years ago, U.S. President John F. Kennedy said that we should go to the moon not because it was easy, but because it was hard – it tested the best in us. In our generation, sustainable development will be our test, encouraging us to use our creativity and human values to establish a path of sustainable well-being on our crowded and endangered planet. I am proud and honoured that United Nations SecretaryGeneral Ban Ki-moon has asked me to help mobilise the world’s expertise as we seek to achieve that goal. The greatest talents in our societies – in universities, businesses, NGOs, and especially among the world’s young people – are ready to take on our greatest challenges, and are joining the UN’s new Sustainable Development Solutions Network. In the months and years ahead, these leaders will share their visions of a prosperous and sustainable global society. © Project Syndicate

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January 28, 2013 business daily | 15

OPINION Business

wires

Leading reports from Asia’s best business newspapers

Taipei Times Chinese funds are eyeing stakes in Taiwan’s hotels, restaurants and healthcare establishments, as booming cross-strait tourism presents massive business opportunities, UBS Taiwan said. Taiwan and China will step up exchanges this year, which is positive for cross-strait tourism and investment activity, Jerry Guo, head of investment banking at UBS Securities in Taipei, said at an annual media briefing. Chinese funds are interested in strategic partnerships with Taiwanese hotels, restaurants, and healthcare providers, and some may make their moves this year, Mr Guo said.

Jakarta Globe As the government kicked off a nationwide campaign explaining its rupiah redenomination plan last week, Indonesian banks expressed their concerns that the planned move to replace the existing currency with a simplified one would disrupt their daily operations. Redenomination involves changing the nominal value for the sake of simplifying a transaction. Officials have mooted the idea of multiplying the nominal value of the rupiah by 1,000, dropping three zeros from amounts. Banks say the redenomination law must provide a clear and strong legal basis to protect banks and financial institutions.

Yomiuri Shimbun Japan’s ruling Liberal Democratic Party and its junior coalition partner New Komeito have agreed not to introduce a reduced consumption tax rate for foods and other necessities when the rate is raised to 8 percent in April 2014. Instead, the two parties agreed to aim for the introduction of the reduced rate when the rate is hiked to 10 percent in October 2015. The two parties also agreed to introduce a system under which the government will provide low-income earners with cash subsidies when the consumption tax goes up to 8 percent, to lessen the impact of the hike.

Viêt Nam News Vietnam plans to develop social housing and housing for the middle class in order to stimulate demand for real estate, the Minister of Construction Trinh Dinh Dung was quoted as saying. According to Mr Dung, the real estate market experienced a difficult period last year with high inventories and prices declining in all segments. “These difficulties would continue in the coming year,” he stressed. The ministry’s statistics showed that the total value of real estate inventories in the country was estimated at 111.963 trillion dong (US$5.3 billion).

A new year of global conflict

Javier Solana

President of the Centre for Global Economy and Geopolitics of ESADE

Ian Bremmer

President of Eurasia Group

n today’s world, identifying and managing hotspots is not simply a matter of pulling out a map, spotting the wildfires, and empowering diplomats to douse the flames. To understand today’s major conflicts and confrontations, we must recognise important ways in which global political conditions enable them. Conflicts are much more likely to arise or persist when those with the means to prevent or end them cannot or will not do so. Unfortunately, this will be borne out in 2013. In the United States, barring a foreign-policy crisis that directly threatens national security, President Barack Obama’s administration will focus most of its time, energy, and political capital on debt reduction and other domestic priorities. In Europe, officials will continue their struggle to restore confidence in the euro zone. And, in China, though the demands of economic growth and job creation will force the country’s new leaders to develop new ties to other regions, they are far too preoccupied with the complexities of economic reform to assume unnecessary costs and risks outside Asia. That is why the world’s fires will burn longer and hotter this year. This does not mean that the world’s powers will not inflict damage of their own. Today, these governments are more likely to use drones and special forces to strike at their perceived enemies. The world has grown used to U.S. drone strikes in Afghanistan, Pakistan, and Yemen, but recent news reports suggest that China and Japan are also investing in unmanned aircraft – in part to enhance their leverage in disputes over islands in the East China Sea. By lowering the costs and risks of attack, these technological innovations make military action more likely.

Cyber-warfare Perhaps the lowest-cost way to undermine rivals and attack enemies is to launch attacks in cyberspace. That is why so many deep-pocketed governments – and some that are not so rich – are investing heavily in the technology and skills needed to enhance this capability. This form of warfare is especially worrisome for two reasons. First, unlike the structure of Cold War-era “mutually assured destruction,” cyber weapons offer those who use them an opportunity to strike anonymously. Second, constant changes in technology ensure that no government can know

how much damage its cyberweapons can do or how well its deterrence will work until they use them. As a result, governments now probe one another’s defences every day, increasing the risk of accidental hostilities. If John Kerry and Chuck Hagel are confirmed as U.S. secretaries of state and defence, respectively, the Obama administration will feature two prominent sceptics of military intervention. But high levels of U.S. investment in drones, cyber-tools, and other unconventional weaponry will most likely be maintained. These technological advances create the backdrop for the competition and rivalries roiling the two most important geopolitical hotspots. In the Middle East, U.S. and European officials will continue to resist deeper involvement in regional turmoil this year, leaving local powers – Turkey, Iran, and Saudi Arabia – to vie for influence. Confrontations

The greatest risk for 2013 is largescale economic conflict in Asia, which would not only harm the countries directly involved, but would also undermine global recovery

between moderates and militants, and between Sunni and Shia factions, are playing out in several North African and Middle Eastern countries. U.S. officials have reason to believe that, over time, they will be able to worry less about the region and its problems. According to current projections, technological innovations in unconventional energy will allow the U.S. to meet more than 80 percent of its oil demand from sources in North and South America by 2020. China, on the other hand, is set to become more dependent on Middle Eastern output.

Real threat Meanwhile, East Asia will remain a potential trouble spot in 2013. Many of China’s neighbours fear that its ongoing economic and military expansion poses a growing threat to their interests and independence, and are reaching out to the U.S. to diversify their security partnerships and hedge their bets on China’s benign intentions. The U.S., eager to boost

its economy’s longer-term prospects by engaging new trade partners in the world’s fastest-growing region, is shifting resources to Asia – though U.S. (and European) policymakers would be wise to move forward with a transatlantic free-trade agreement as well. There is a growing risk that the new Chinese leadership will interpret a heavier U.S. presence in the region as an attempt to contain China’s rise and stunt its growth. We have already seen a series of worrisome confrontations in the region, pitting China against Vietnam and the Philippines in the South China Sea, and against Japan in the East China Sea. While these disputes are unlikely to provoke military hostilities this year, the use of drones and cyber weapons remains a real threat. The greatest risk for 2013 is large-scale economic conflict in Asia, which would not only harm the countries directly involved, but would also undermine global recovery. The first shots in this battle have already been fired. Last summer, disputes over a string of contested islands in the East China Sea led to a furious exchange of charges between China and Japan, the world’s second- and third-largest economies, respectively. The two sides were never in danger of going to war, but Chinese officials allowed nationalist protests to develop into boycotts of Japanese products and acts of vandalism against Japanese companies. Japan’s automobile exports to China fell 44.5 percent, and China’s imports from Japan fell nearly 10 percent – all in just one month. That was a tough hit for a struggling Japanese economy. It is also a clear warning to the rest of us that a fight need not involve troops, tanks, and rockets to exact a heavy price. © Project Syndicate

16 |

business daily January 28, 2013

CLOSING Global warming ‘less than feared’

New Zealand dairy products ‘safe’

New estimates from a Norwegian research project show meeting targets for minimising global warming may be more achievable than previously thought. After the planet’s average surface temperature rose through the 1990s, the increase has almost levelled off to that of 2000, while ocean water temperature has also stabilised, the Research Council of Norway said in a statement on its website. After applying data from the past decade, the results showed temperatures might rise 1.9 degrees Celsius if carbon dioxide levels double by 2050.

Theo Spierings, chief executive officer of Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, said yesterday that New Zealand’s dairy products are safe to consume after a scare over milk contamination. Tests found low levels of the fertiliser aid dicyandiamide, or DCD, in some dairy products last week. “We have strong science and we are providing assurances about the safety of our product,” Spierings said according to an e-mailed statement. “Our testing has found only minute traces of DCD in samples of some of our products. Our products are safe. Customers can rest assured.”

Egypt’s Mursi under fire after killings Ally’s open letter to president on Facebook calls for ‘decisiveness’ Tarek El-Tablawy

More violence in Egypt at weekend

mall groups of protesters clashed with security forces in Cairo early yesterday, raising the prospect of further bloodshed after 32 people were killed in fighting in Port Said and authorities warned that a state of emergency may be declared in the country. The unrest in the Egyptian capital built on two days of violence surrounding the second anniversary of the start of the uprising that ousted Hosni Mubarak from power, and highlighted increasing tensions in the nation since Mohamed Mursi’s election as president in June.

Mr Mursi, who was fielded for office by the Muslim Brotherhood after the vote, faces mounting criticism from secularists and youth activists who contend he has put the Islamist group’s interests ahead of the country’s and failed to fulfill any of his pledges or revive an economy that, since the revolution, has grown at the slowest pace for two decades. Dissatisfaction with Mr Mursi’s handling of the crisis also comes from his supporters, with Mohamed El-Beltagy, secretarygeneral of the Brotherhood’s Freedom and Justice Party, asking: “What more are you

waiting for to happen until intervening with all strength and decisiveness to prevent the killing of civilians, torching of state installations and the blocking of roads and bridges? ‘‘Your responsibility is the immediate intervention to combat this thuggery with all legal means afforded under the constitution and the law,’’ Mr El-Beltagy wrote on his Facebook page in an unusually direct message for Mr Mursi, his prime minister, Hisham Qandil, and the defence and interior ministers. ‘‘God, history and the people will judge you’’ if a strong stand is not taken.

Euro clothing labels found in Bangladesh factory fire Latest blaze – at unlicensed site – claims seven fatalities

abels of European fashion brands have been found in the ruins of an unlicensed Bangladeshi garment factory where seven female workers died in a fire on Saturday. An AFP correspondent sifting through the remains of the Smart Export factory in Dhaka yesterday found labels such as Bershka, a retailer owned by Spanish company Inditex; Sol’s; Scott and Fox; and G Blog, which is part of France’s Gemo. Sourcing by global retailers first came under the spotlight just two

months ago, after Bangladesh’s deadliest garment factory fire killed 111 workers making clothing for Walmart and a variety of Western firms. The November blaze at Tazreen Fashion, which also had no fire department licence, highlighted the Bangladeshi apparel industry’s appalling safety record and labour practices. Since then at least 20 garment factories have been gutted. The fire at the Smart factory employing around 300 workers broke out on Saturday afternoon, leaving at

least seven female workers dead and 15 injured – five of them critically. Worker Laizu Begum said the factory, which paid workers as little as US$37 (296 patacas) a month, had one of its doors closed when the blaze broke out during lunch break, forcing the workers to rush to the other gate in a stampede. Fire officials said the stampede caused most of the deaths. “Burnt foam and clothing created huge smoke. I survived as I was sitting close to a gate,” she told AFP. A senior fire department official

The military was deployed in Port Said on Saturday to quell fighting triggered by a court’s announcement earlier in the day of death sentences for 21 people for their roles in the nation’s worst-ever soccer-related rioting. The violence at a Port Said stadium left more than 70 fans dead during a game Feb. 1 between the city’s al-Masri team and Cairo’s al-Ahly. A final verdict in the soccer case is scheduled for March 9. It will come after a review by the Grand Mufti Ali Gomaa, Egypt’s highest religious authority, the court in Cairo said. Families and supporters of the defendants tried to storm a prison where they were being held, triggering clashes that left 32 people dead and another 322 injured, according to Abdel- Rahman Farag, head of Port Said hospitals. A day earlier, at least nine others were killed and 534 hurt in anniversary-related violence across the country, most in the port city of Suez, where protesters also stormed four police stations, according to the Interior Ministry. Meeting on Saturday for the first time, Egypt’s National Defence Council, which is headed by Mr Mursi and includes the interior and defence ministers, said it may declare a state of emergency and a curfew. Bloomberg News

said the factory, on the second floor of an old two-storey building, had not received an operating licence from the department. “It’s just a factory in name,” Major Mahbubur Rahman, operations director of the Bangladesh Fire Service, told AFP. “The owners set up some sewing machines on a floor without taking care of any safety issues. It did not have any fire exit or fire equipment,” he told AFP. It was not clear whether Smart had won the orders directly from the European companies or was subcontracting for large local factories. Mohammad Akash, an official with Smart, told AFP the company mainly subcontracts from larger Bangladeshi factories including Mactex based at Mirpur on the northern outskirts of Dhaka. Mactex could not be contacted for comment. AFP