MB 100 | August 2012 by Macau Business

AUGUST 2012

Economy & Finance 26 Start the auxiliary engine Domestic demand will be crucial for economic growth this year 30 Broken promises CEPA hasn’t been used much by Macau businesses

Politics 35 Mission accomplished Maria Castillo Fernandez leaves the EU’s Macau office

Greater China 39 Split definitive Hong Kong’s new chief executive faces a hot summer of discontent 42 Dissent not allowed U.S. says human rights are deteriorating in the mainland

Property 44 High tide It is all one-way traffic for property prices: up

Special 50 The top-100 The companies, the people and the facts

AUGUST 2012

Gaming 88 Sands storms Sands China tangled up in several controversies 93 No safe bet Fresh security worries for the gaming industry 94 A long gestation Melco Crown gets a revised land contract for Studio City 98 Speck in the ocean Gaming in Taiwan unlikely to impact Macau casinos 100 Rush for Russia Lawrence Ho and Melco Crown may be gearing up to invest in Vladivostok 103 Electric energy Aspect Gaming says the live table cap is good for slots 106 A losing ticket Calls for more transparency in the administration of the mainland’s lotteries

Tourism 108 Hospitality chain reaction Vocational training alone will not improve service, experts warn

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122

Technology 114 The boss unlikes you What you post online may put your job on the line 117 Waiter! The iPad, please Entaste’s wine list app hits the city’s restaurants

Luxury 118 Raring to grow Motorsport is part of Porsche’s strategy to boost its profile in the mainland 120 Sound business Bang & Olufsen opens their first store in Macau

Human resources 122 Fun, sun... toil White-collars find it hard to switch off when on holiday

Arts & Culture 126 Four parts art Exchange project brings together artists from around Greater China 128 Speaking in tongues Cultural Centre welcomes South Korean performance Bibap

AUGUST 2012

Corporate Social Responsibility 130 Perfect tee off The first Special Olympics Macau Golf International was a winner

Opinion 12 From the publisher’s desk Paulo A. Azevedo 14 Editorial Emanuel Graça 25 Disinformation bureau Bill Kwok-Ping Chou 38 Diversification fairy tale José I. Duarte 43 Democracy genie stays bottled up Keith Morrison 49 Why China can’t adjust Minxin Pei 113 Over the horizon Gustavo Cavaliere

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Editorial Council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder and Publisher Paulo A. Azevedo VOL.1 Nº100

pazevedo@macaubusiness.com

Editor-in-Chief Emanuel Graça emanuel.graca@macaubusiness.com

Senior Analyst José I. Duarte jid@macaubusiness.com Cover photo: António Leong

Hong Kong Bureau Michael Hoare (Chief), Anil Stephen michael.hoare@macaubusiness.com

Special Correspondent Muhammad Cohen info@muhammadcohen.com

Beijing Correspondent Maria João Belchior maria_belchior@yahoo.com.br

Contributing Editors Alexandra Lages, Christina Yang Ting Yan, Dennis Ferreira, Derek Proctor (Bangkok), Filipa Queiroz, Helder Beja, Joana Freitas, João Ferreira da Silva, João Francisco Pinto, José Carlos Matias, Kahon Chan, Kim Lyon, Lia Carvalho, Lois Iwase, Luciana Leitão, Michael Grimes,Sara Farr, Sara Silva Moreira, Sofia Jesus, Xi Chen Regular Contributors Bill Kwok-Ping Chou, Branko Milanovic, David Cheung, David Green, Dominique Moisi, Eswar Prasad, Frank J. Fahrenkopf Jr., Gustavo Cavaliere, Hideaki Kaneda, José António Ocampo, José Sales Marques, Joseph Stiglitz, Leanda Lee, Keith Morrison, Kenneth Rogoff, Kenneth Tsang, Marvin Goodfriend, Pan Yue, Paulo J. Zak, Peter Singer, Richard Whitfield, Rodrigo de Rato, Robert J. Shiller, Sin-ming Shaw, Sudhir Kalé, Sun Shuyun, Vishakha N. Desai, Wenran Jiang Advertising Xu Yu, Irene

Manila Correspondent Max V. de Leon maxdeleon_080975@yahoo.com

Assistant to the Publisher Laurentina da Silva

irene@bizintellingenceonline.com

Advertising Agents Bina Gupta bina@macaubusiness.com

José Reis

ltinas@macaubusiness.com

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Office Manager Elsa Vong

Media Relations

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Art Directors Connie Chong, Luis Almoster design@macaubusiness.com

Photography António Mil-Homens, António Leong, Carmo Correia, Greg Mansfield, Gonçalo Lobo Pinheiro,John Si, Manuel Cardoso, MSP Agency, Agencies

editor@macaubusiness.com

Translations PROMPT Editorial Services, Poema Language Services Ltd, TLS Translation and Language Services Agencies AFP, Lusa Exclusives Gambling Compliance, Project Syndicate Printed in Macau by Welfare Ltd Published every month in Macau. All Rights Reserved. Macau Business magazine is a media product of De Ficção - Multimedia Projects

Illustration G. Fox, Rui Rasquinho

Letters to the editor

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Disclaimer: In Macau Business magazine, the translation of MOP amounts into US$ amounts (and vice-versa) is made at the rate of MOP 8 to US$1 for the purposes of illustration only.

Address: Block C, Floor 9, Flat H, Edf. Ind. Nam Fong, No. 679 Av. do Dr. Francisco Vieira Machado, Macau Tel: (853) 2833 1258 / 2870 5909 Fax: (853) 2833 1487 Email: editor@macaubusiness.com AUGUST 2012

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PAULO A. AZEVEDO FOUNDER AND PUBLISHER

from the publisher’s

ACHIEVEMENT desk AGAINST THE ODDS

W One hundred issues later, without any false modesty, I consider this magazine as a journalism success story

ISSUE 1 - MAY 2004

AUGUST 2012

hile we were planning the launch of the first commercial English-language publication in Macau in 2003, few people went to the trouble of trying to understand the importance of having information about Macau in a language other than Chinese or Portuguese. We had to use tremendous powers of persuasion and, more importantly, consistently provide quality journalism – despite all the limitations of operating in a small city – to convince people. But it didn’t take long for them to agree with us. One hundred issues later, without any false modesty, I consider this magazine as a journalism success story. We had the first-mover advantage and we still lead the market, enjoying a unique role here. Moreover, Macau Business paved the way for a new media group focused on economic and financial news, the only in existence in Macau. To publish 100 editions of Macau Business means much more than to commemorate a united effort from the editorial staff, readers and advertisers. It is a milestone that celebrates the importance of uncompromised journalism – investigative whenever possible. One hundred months later, we face a society that has changed considerably. That is partially because of the growth and increasing influence of the media. Such development has often been despite the on-going, unacceptable discrimination made by some government departments in favouring newspapers over magazines, and even in favour of individual mastheads. It is an issue that should merit greater attention from the Government Information Bureau. Even if nothing changes, we are used to fighting against all odds at Macau Business. Our promise to Macau and our readers is unchanged: a dedication to the continuous task of providing quality journalism and truthful information.

AUGUST AUGUST 2012 2012

emanuel.graca@macaubusiness.com

EMANUEL GRAÇA EDITOR-IN-CHIEF

editorial CELEBRATING VISION

Above all, we owe our success to our readers. You are why our magazine has continuously thrived

ISSUE 68 - DECEMBER 2009

AUGUST 2012

his is a very important issue of Macau Business. It is our 100th edition and we have pulled out all the stops to bring you a special issue to celebrate this achievement. From its first edition, Macau Business has grown to become one of the city’s best regarded and most trustworthy sources of information. We are pioneers in several respects. We were the first independent English-language news medium to become firmly established in Macau. We were also the first publication in a language other than Chinese to pursue a vigorous online strategy. We were pioneers in giving news updates on our website daily and, later, in issuing a daily newsletter – which now reaches decision makers all around the globe. We have also evolved as a news medium. We have refined our reporting, investing more in in-depth stories, exclusives, wide-ranging interviews and special reports. All this has made Macau Business the city’s leading magazine of its kind. Our leading position is public recognition of the magazine’s independence, credibility and quality – but it is also a heavy burden of responsibility. Unfortunately, like other small and medium enterprises here, we suffer from the shortage of available manpower. To ensure that we bring you the best, most accurate stories, presented in a way that is easy to read, a small but tireless team more often than not burns the midnight oil. Without them, Macau Business would not be the same. Ours is a product of the toil of dedicated people. It is also a product of the continuing support of our advertisers and institutional partners. Although Macau Business is an outspoken magazine, never once have they sought to compromise our independence. We believe our advertisers and partners understand the importance of the part played by free news media in making Macau a more open, business-friendly place. Above all, we owe our success to our readers. You are why our magazine has continuously thrived. Our goal has always been to keep you informed so you can make the best investment decisions. To achieve that target, we have striven without rest to bring you the best journalism. We are happy to see that after 100 editions, this recipe still works. Our first 100 issues were guided by the wider vision that journalism should be a principal supplier of independent and precise information about the world around us. That vision will keep on guiding us for the next 100 issues.

AUGUST 2012

NATURAL GAS ON THE WAY The natural gas distribution network is expected to cover the whole city within five years

SHANGHAI EXPO OFFICE SLAMMED

The Commission of Audit released last month a report harshly criticising the Office for Preparation of Macau’s Participation in the Shanghai World Expo for its poor budget management. The commission discovered that MOP34.4 million (US$4.3 million) was missing in the office’s final accounts. The Economic Services Bureau, under which the office was, explained that this was due to different accounting standards used. Macau spent around MOP260 million for the city’s participation in the 2010 Shanghai Expo.

AUGUST 2012

The government and Nam Kwong Natural Gas Company Ltd signed a deal last month that will see Macau soon get a natural gas distribution network for residential and business usage. Supply is forecast to start next year. The natural gas distribution network is expected to cover the whole city within five years. The total investment is estimated at MOP1 billion (US$125 million).

CULTURAL INDUSTRIES GET FUND

A fund to support the city’s cultural industries is poised to be up and running by year-end. The fund was first announced in 2010. Leong Heng Teng, the vice chairman of the Cultural Industry Council, said the fund’s regulations are currently being drafted. Meanwhile, the head of the Cultural Affairs Bureau, Guilherme Ung Vai Meng, reassured that the government plans to transform the empty shopping mall in Tap Seac Square into a creative industry shopping mall by the end of next year.

Fees have yet to be announced but preliminary forecasts say one cubic metre may cost around MOP10. Natural gas in Macau is currently used only in electricity production. In 2009, Nam Kwong won the 25-year public concession tender for natural gas distribution, but technical issues and further negotiations with the government delayed the contract signing.

THRESHOLD FOR SOCIAL HOUSING INCREASED

The government has increased the income limit and the net wealth threshold households need to comply with to be eligible for a social housing unit. The average increase for both the maximum income and net wealth limits was 3.7 percent. Now, a fourmember household is eligible for social housing if its total monthly income does not exceed MOP16,510 (US$2,064) and its net wealth does not exceed MOP356,620. The government’s public housing policy includes social housing for rent, and economic housing for sale.

AUGUST 2012

HENGQIN TUNNEL PARTIALLY COLLAPSES No people were injured; however it is not clear if the accident will impact the construction deadline The underwater tunnel connecting Macau to the future campus of the University of Macau in Hengqin Island, still under construction, partially collapsed last month. No one was injured in the accident. The collapse took place on the pavement around the Hengqin exit of the tunnel, according to a statement from the Infrastructure Development Office. The tunnel’s supporting infrastructure was however damaged. It is not clear if the accident will delay the tunnel’s construction progress. The budget for the underwater tunnel was revised last year to MOP2 billion (US$250 million) from the original MOP500 million, allegedly due to design changes, since the structure project was revamped, with increases both in width and depth to allow for 3,000 tone vessels to cross the water channel above.

SLAP ON THE WRIST

The Environmental Protection Bureau has fined Macau’s only refuse incinerator MOP87,500 (US$10,938) after the bureau detected an abnormal level of gas emissions incident during a periodic inspection last year. The bureau said the gas emissions during the incident were only slightly higher than the official standards allowed, and had been unlikely to harm the environment or public health. The incinerator operator said it would appeal the fine.

TAIPA TERMINAL ONLY READY BY 2014

The completed Taipa Ferry terminal should only be ready in early 2014, the Maritime Administration announced last month. The terminal was first intended to be up and running by 2007. A temporary ferry terminal, located just beside the final Taipa ferry terminal’s construction site, has serviced Taipa since 2007.

FOOD-DEPENDENT ON THE MAINLAND

It is no news that most of Macau’s food supplies come from the mainland. But official figures for 2011 disclosed last month show just how dependent the city is on its big brother. Farm products from the mainland accounted for 100 percent of Macau’s live pig, live cattle and live chicken imports. Also sourced from the mainland was around 67 percent of live fish imports, 67 percent of flour, 88 percent of eggs, 81 percent of vegetables, and 19 percent of fruit and nuts, the data shows.

AUGUST 2012

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GOV’T FREEZES PUBLIC BUS OPERATORS’ PAY RISE The move comes after the increase was widely criticized by legislators and civic groups

The government announced last month it will temporarily freeze a previouslyannounced 23-percent pay increase to public bus operators. The move came after the rise was widely criticized by legislators and civic groups. The Transport Bureau announced that bus companies will have to first improve their service quality ahead of

being granted the pay increase. The government had first announced the rise in June. This revision would have no effect on bus fares. The government directly pays bus operators a fee based on a per mile service charge. The money collected from bus fares is not part of each public bus operator’s revenue. Instead, it is handed to the government. Bus operator TCM said that since the new bus system was introduced, on August 1, 2011 and until the end of last year, it lost MOP15.6 million (US$2 million) due to higher staff costs and soaring fuel prices.

ELECTRICITY FARES INCREASE FOR BIG CONSUMERS

Companhia de Electricidade de Macau – CEM, SA announced last month that it will keep the electricity fare for tariff A customers unchanged for the third quarter of 2012. To ensure this, CEM will increase the subsidy it offers tariff A customers – which covers residential and small and medium enterprises customers – by MOP0.01 per kWh to MOP0.14 per kWh. For tariffs B, C and D, which include big corporate consumers, the electricity fare will go up by MOP0.01 per kWh.

AUGUST 2012

MACAO WATER WANTS GOV’T TO PAY IT MORE

Macao Water Supply Company Ltd has requested the government to increase the money it pays the company for each cubic metre of water it supplies due to inflationary pressures. The government currently pays the company MOP4.39 (US$0.55) per cubic metre. Macau Water is asking for a 26.2 percent increase. The government says there is no schedule about when a decision will be made. The hike would not have any impact on water tariffs.

PYRAMID SELLING CASE BUSTED

The Public Prosecutions Office announced last month that it completed the preliminary investigation into a pyramid selling case. The case involves nine people and was first detected in June. The business had been operating for half a year, involving at least MOP456,000 (US$57,000). The suspects sold a “magic juice”, which was claimed to be an anti-cancer drink. People who bought MOP4,800 worth of the juice in total would automatically become members of the pyramid scheme. They could then recruit other members, and receive a commission.

FRANCHISE EXPO’S NUMBERS UP

The Macao Franchise Expo 2012, which took place last month at the Venetian Macao, posted an increase in businessmatching sessions, according to the organisers. A total of 1,346 on-site business-matching sessions were held, up nearly 13 percent year-on-year. The Macao Franchise Expo 2013 is tentatively scheduled for July 12 to 14 next year.

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AUGUST JULY 2012

CABLE TV INKS MOP1 BILLION LOAN The funds are to be used on infrastructure and equipment investment

RAW SEWAGE DUMPED IN PEARL RIVER DELTA

ELDERLY GET SUBSIDY BOOST

Guangdong province discharged billions of tons of raw sewage last year into the Pearl River Delta. About 9.5 billion tons of raw sewage flowed untreated into local rivers, according to findings published by the province’s Department of Water Resources. More than half of that amount went into the Pearl River Delta, where Macau is located.

The annual subsidy the government pays to the elderly was raised last month to MOP6,000 (US$750) from MOP5,000. People eligible to receive subsidy must be permanent residents and be older than 64 years of age. The increase was first announced in November last year by Chief Executive Fernando Chui Sai On, during the policy address for 2012.

AUGUST 2012

Macau Cable TV Ltd inked last month an agreement for a syndicated loan facility worth MOP1 billion (US$125 million). The banks behind the loan are the Macau branch of Bank of China and Tai Fung Bank Ltd. The money will be funnelled for investment in infrastructure and equipment, even though it is uncertain whether Macau Cable TV’s exclusive concession will be renewed after the present contract expires in 2014. Meanwhile, Macau Cable TV’s chief executive Angela Lam In Nie announced that the company has appealed against the Court of First Instance’s decision to deny Macau Cable TV’s request for MOP59.5 million from 12 unlicensed local public antenna companies as compensation for losses due to the illegal broadcasting of Premier League football matches. Ms Lam also said that Macau Cable TV is demanding MOP500 million from the government through an arbitration process, for failing to act against the public antenna companies. Macau Cable TV posted a net profit of MOP5.8 million for last year. This was the second year in a row in which the company was able to make a profit, after years of losses.

CENTRAL EXCLUSION

Over 96,000 permanent residents were excluded from the list of those eligible to receive the MOP6,000 (US$750) cash injection the government is going to deposit in the central savings system’s accounts. Around 308,000 permanent residents are so far eligible to receive the support. Those excluded can still appeal the decision. Eligible applicants must be aged 22 or above and have lived in Macau for at least half of the previous year.

23 2 3

AUGUST AUG GUST US ST T2 20 2012 012 12

Stock rush

The 2011 Coordinated Portfolio Investment Survey, which tracks investment in securities outside of the territory by Macau residents, was released last month. The figures show appetite for equities is ramping up. For the purposes of the survey, Macau residents are defined as individuals, the government and other legal entities, not including the city’s foreign exchange reserves.

PASSENGERS UP AT AIRPORT

Passenger traffic volume and aircraft movements at the airport increased in the first half of 2012. Passenger volume surpassed 2 million, and aircraft movements reached 19,376, registering increases of 6.7 percent and 1.3 percent respectively over the same period last year, according to the Macau International Airport Company Ltd – CAM.

CONSUMERS LESS CONFIDENT

MOP168.7 billion

The amount, at current market value, invested by residents in securities outside of the territory by 2011-end. The figure was up 32.3 percent year-on-year and is a new record

49.9%

The year-on-year growth rate in investment in equity securities, including mutual funds, reaching MOP107.1 billion by 2011-end

MOP53.9 billion

Macau’s consumer confidence index dropped by almost four points in the second quarter to 84.9 points out of the highest score of 200. Housing prices were one of the main triggers pushing consumer confidence down. The survey is run by the Macau University of Science and Technology. Researchers say the high inflation rate was another factor negatively impacting on consumer confidence.

The market value of long-term debt securities held by residents by 2011-end. The figure rose by 4.2 percent, as global interest rates stayed at historical low levels

76.1%

The year-on-year jump in investment in short-term debt securities, to MOP7.8 billion. Banking institutions held the majority

37.9%

The share of Hong Kong securities in the total value of Macau residents’ portfolio. The neighbouring SAR resumed its leading position after losing it to the mainland in 2010

16.8%

The share of European securities in the total value of Macau residents’ portfolio. It fell from 25.7 percent at end-2010, impacted by the sovereign debt crisis in Europe SOURCE: COORDINATED PORTFOLIO INVESTMENT SURVEY 2011, MONETARY AUTHORITY OF MACAU AND STATISTICS AND CENSUS SERVICE AUGUST 2012

TEN DIED IN WORK ACCIDENTS

A total of 10 people died in Macau last year due to work-related accidents, according to the Labour Affairs Bureau. In 2010, 13 people loss their lives due to occupational accidents. Macau recorded a total of 5,900 work-related accident victims last year, slightly up by 0.4 percent year on year. Of those, four were left permanently unable to work.

25 BILL KWOK-PING CHOU ASSOCIATE PROFESSOR OF POLITICAL SCIENCE, UNIVERSITY OF MACAU

Disinformation bureau THE GOVERNMENT INFORMATION BUREAU IS FAILING TO CREATE A HEALTHY ENVIRONMENT FOR THE NEWS MEDIA he 2011 Human Rights Report, released in May by the United States Department of State, hints that freedom of news media is being restricted in Macau. It says there is rising concern about self-censorship in some news organisations, and that some outspoken journalists publishing unfavourable reports about the government complain about being deprived of opportunities for promotion, or being purposely given assignments to cover trivial matters. Although the report does not mention TDM by name, the government-owned broadcaster is among the news organisations accused of such practices. But the report does say that a news editor at TDM received several threatening letters warning him not to publicise concerns about the way the broadcaster is managed. Matters of this kind had already been mentioned in an open letter issued by the Macau Media Workers Association to mark World Press Freedom Day. Since Victor Chan Chi Ping, who heads the Government Information Bureau, is responsible for carrying out the government’s information policy, a few weeks ago I wrote to him urging him to address properly the issues concerning Macau’s news media and TDM. As expected, his reply was bland. Mr Chan said that the Government Information Bureau sought to “provide technical assistance in connecting the government with the mass media, and to assist the mass media and media workers in performing their jobs.” He ignored complaints about journalists being prevented from directly covering a great deal of government activities, which go on without advance notice and behind closed doors. In the end, the news media are left only with official press releases. Journalists also say they faced restrictions in news reporting during the public consultation sessions on political reforms. I asked Mr Chan whether his bureau provided proper assistance to journalists prevented from doing their jobs and told him that if it did not, then it was neglecting its duty. He did not answer. Neither did he respond to a suggestion that an independent committee be set up to investigate complaints about media freedom. In response to the concerns about the management of TDM, Mr Chan beat around the bush. He replied that “the

The Government Information Bureau lacks the will to create a healthy environment for the news media in Macau

Government Information Bureau does not have the authority” to deal with such concerns, as TDM was run independently of the bureau. Even if his bureau does not directly supervise TDM, Mr Chan himself does, because he is a director of TDM. TDM’s daily newscasts are its most important programmes, attracting its largest audiences. If Mr Chan, as a board member, is shirking his duty to supervise these programmes, he should resign.

On the offensive To counter internal and external criticism, TDM’s management recently went on the offensive. The head of news for TDM’s Chinese-language service, Lo Song Man, and some of her subordinates wrote to the president of the Legislative Assembly, Lau Cheok Va, saying netizens identified as members of the New Macau Association had been protesting about TDM since April, trying to interfere with the independence of its news coverage and making “Cultural Revolution-style criticisms” of the broadcaster under the pretext of defending media freedom. Her letter raises some questions. First, I was among those complaining about TDM, and I wrote it a letter of protest. But I am not a member of the New Macau Association. If TDM’s managers cannot get this fact right, how can we trust its news reporting? Second, even the U.S. Department of State has voiced concerns about freedom of the news media here. So the issue is not just something made up by protesters. Third, the protesters have no authority over TDM’s Chineselanguage news. They were merely criticising it, not interfering with its independence. The wording of the letter from Ms Lo and her colleagues is therefore misleading. Fourth, TDM is supported financially by the government. It is obliged to respond to the criticism of citizens. It should never behave as a free-rider, shamefully using its claim to editorial independence as a veil to hide behind. Fifth, what are “Cultural Revolution-style criticisms”? Did the protesters vandalise TDM’s property or beat any of its staff? Inflammatory vocabulary should be taboo for journalists. Sixth, it beats me why Ms Lo and her colleagues wrote to Mr Lau to complain, as the Legislative Assembly has oversight over neither TDM, nor the protesters for that matter. It makes no sense. Finally, the letter says TDM’s reporting is guided by its internal 2011 News Editor’s Manual. But does the manual conform to the highest standards of freedom of the news media, or does it restrict media freedom? I urge TDM to publish the manual as soon as possible to dispel public suspicion. All this serves to show that the Government Information Bureau lacks the will to create a healthy environment for the news media here. Mr Chan even refuses to acknowledge problems highlighted by the U.S. Department of State. How long will he continue ignoring them? AUGUST 2012

Economy & Finance

START THE AUXILIARY ENGINE WITH GAMING REVENUE GROWTH DECELERATING, THE MONETARY AUTHORITY SAYS DOMESTIC DEMAND IS CRUCIAL TO ECONOMIC GROWTH

27 he Monetary Authority of Macau says impetus from domestic demand will be “crucial” to economic growth this year. Its assessment comes on the heels of a slowdown in gaming revenue. In its latest “Monetary and Financial Stability Review”, published last month, the Monetary Authority maintains its estimate that the city’s economy will grow this year at a “high-single-digit” rate, assuming the external environment does not further deteriorate. Gross domestic product in the first quarter of this year was 18.4 percent higher in real terms than a year before. The figure for the second quarter is due to be disclosed at the end of this month. Secretary for Economy and Finance Francis Tam Pak Yuen said last month that annual growth was likely to drop to a single-digit rate in the second half. Mr Tam said that in the first half, growth should have stayed at a low-double-digit rate. “For the whole year we are expecting a single-digit growth rate. This is a reflection of the global economic situation,” Mr Tam said. He added the slowdown might increase unemployment and curb pay increases. One of the main reasons for the slowing of growth is the deceleration of the gaming revenue boom. The Monetary Authority says the casino sector is being hampered by slowdowns in other economies in this part of the world, especially the mainland. It also notes that the huge amount of gaming revenue recorded a year ago makes current growth look slower. In the first half of 2012, casino gross gaming revenue was MOP148.7 billion (US$18.6 billion), 19.8 percent more than a year before. The rate of growth was less than half what it was a year before. The performance of the gaming industry this year has been below the expectations of analysts. A string of investment banks and research houses recently revised their forecasts for this year and cut their price targets for the stocks of gaming companies with business in Macau.

Photo: Luís Almoster

History of under-spending Last month, Fitch Ratings revised its forecast of casino gross gaming revenue for this year. It now forecasts annual growth in revenue of 10 to 12 percent, having previously forecast 15 percent. Fitch said it is now taking a “more cautious view with respect to the near-term impact of the slowdown in China”. Its new forecast implies that gaming revenue will grow at a “low-to-mid single-digit” rate for the rest of the year. Investment bank Wells Fargo also cut AUGUST 2012

Economy & Finance

its forecasts for the gaming industry last month. In a note to investors by analyst Cameron McKnight, Wells Fargo said it now expected annual growth in gross gaming revenue of 4 to 10 percent in the second half. The Monetary Authority says in these circumstances impetus from domestic demand, comprising consumption and investment, will be “crucial” for economic growth. The authority expects investment to pick up in view of the number of public-sector projects at the construction stage, including public housing projects, the development of Hengqin Island, the Light Rail Transit system and the Hong Kong-ZhuhaiMacau Bridge. The government’s investment spending in the first half was more than 500 percent greater than a year before, at MOP3 billion. Even so, by the end of June, it had still invested just 15 percent of what it plans to invest this year. The government has a history of investing less than the amount its budgets call for. The Monetary Authority says construction of gaming-related facilities in Cotai should continue to be the main driver of expansion of private-sector investment. The government has already approved the construction of the second phase of the Galaxy Macau, Wynn Cotai, the development on Sands China Ltd’s Parcel Three and Melco Crown Entertainment Ltd’s Studio City.

SLIPPING BEHIND M

acau’s competitiveness among other Chinese cities has slipped in the past year, the results of an annual survey indicate. The city is 16th in this year’s competitiveness rankings compiled by the Advanced Institute for Contemporary China Studies of the Hong Kong Baptist University and the China Institute of City Competitiveness. Last year it was 15th. However, Macau’s competitiveness score rose by nearly one point to 81.53 points out of a possible 100. The government here is no longer one of the top ten most trustworthy governments, the survey results indicate. Last year it was second only to Hong Kong’s. The drop was due to damage to the government’s reputation caused by revelations in the third corruption trial of former government secretary Ao Man Long.

YEAR-ON-YEAR GDP GROWTH IN REAL TERMS (%)

35 30

Same coin, two sides

The authority forecasts that domestic consumption will continue to be buoyed by the favourable prospects for employment and rising household incomes. But it acknowledges that while higher domestic consumption may push up the economic growth rate, it is also pushing up consumer prices. “Inflation is likely to remain elevated in 2012,” the body says. It forecasts an inflation rate around 6.0 percent for this year. The Monetary Authority states it is largely domestic pressures that are driving up consumer prices. “Local inflation has become a domestic phenomenon in nature,” it says. “Labour and rental cost pressures in a full-capacity economy have progressively fed through to exert upward pressures on consumer prices, especially when rising household income allows for the passing-on of higher domestic production costs to consumers.” The authority says non-tradable

AUGUST 2012

15 10 5 0 Q1

2010

Q1 2012

2011

CONSUMER PRICE INDEX YEAR-ON-YEAR VARIATION (%)

8 7 6 5 4 3 2 1 0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

2010

2011

2012

UNEMPLOYMENT RATE (%)

3.5 3 2.5 2 1.5 1 0.5 0

2010

items in the basket of goods and services used in computing the consumer price index “contributed about four percentage points to the inflation rate” in the first five months of this year. The annual rate of inflation in the first five months was 6.5 percent. Inflation here is now diverging from inflation in the mainland and Hong Kong, Macau’s main trading partners. The annual inflation rate in the mainland fell to 3.0 percent in May from a peak of 6.5 percent in July last year. The

Q3 2011

Q2 2012

The Monetary Authority forecasts that unemployment will remain low as demand for labour in the services and construction sectors remains strong

food price inflation rate there decelerated to 6.4 percent from 14.8 percent. The Monetary Authority forecasts that unemployment will remain low as demand for labour in the services and construction sectors remains strong. It expects the jobless rate to edge down to about 2.0 percent this year from 2.6 percent last year. But it warns: “In order to further expand the local economy and promote economic diversification, it is crucial to enlarge the pool of available human resources.” The authority says the number of unemployed residents has reached a “very low level” and that the labour market is “unprecedentedly tight”. The unemployment rate has been below 3.0 percent for 10 consecutive quarters. It calls for more imported labour, which already makes up about 30 percent of the workforce. The Monetary Authority expects little movement in interest rates in the months to come, given that the pataca is pegged to the U.S. dollar. The U.S. Federal Reserve has reiterated that it will keep its benchmark interest rate at exceptionally low levels at least until late 2014 to help the United States economy recover.

AUGUST 2012

Economy & Finance

Broken promises CEPA was meant to improve access to mainland markets but in reality it hasn’t been used much by Macau businesses he Macau government and the mainland’s Ministry of Commerce last month signed a new supplement to the Closer Economic Partnership Arrangement, or CEPA, to increase economic and trade exchanges. The new document adds two new areas to the framework: education and training, and rail transport. The partners also agreed to further relax market access in about 20 service sectors. Good intentions aside, the benefits accrued to Macau from the free-trade-like agreement seem to be few. Analysts contacted by Macau Business agree CEPA’s positive impact could be greater. The CEPA framework was established to improve the level of economic and trade cooperation between Macau and the mainland. The arrangement has led to relaxed entry requirements for 46 different service industries for Macau businesspeople. Since 2006, the mainland has also permitted Macau exports that comply with the ‘origin criteria’ to enter its domestic market without a tariff being charged. University of Macau associate professor of business economics Ricardo Siu Chi Sen says CEPA “provides certain opportunities to firms in Macau, both for production, trade and investment in the mainland”. From January 2004, when the arrangement came into force, to last March, the Economic Services Bureau has issued

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1,990 certificates of origin. Of these, close to 90 percent were used by Macau-based firms to export goods to the mainland under the arrangement.

Risky business In the first half of the year, Macau’s exports of CEPA goods reached MOP48.4 million (US$6.1 million). From January 2004 to March 31, accumulated exports have reached MOP277.5 million, with estimated tariff savings of more than MOP22 million. In regards to trade in services, the Economic Services Bureau had approved 424 “Macau Service Supplier” certificates up to June. But as of last November, just 50 companies had actually used these certificates, according to officials from the Economic Services Bureau. Fewer than half had actually used them set up companies in the mainland. Carlos Simões is a partner at DSL Lawyers, a Macau law office specialising in business-related matters. He is sceptical about CEPA’s benefits to the economy. “Even though it is a fantastic tool and it opens up a world of opportunities, CEPA has not been used so much by Macau,” he says. Mr Simões adds that the number of service supplier certification requests is still low and many of those issued are not actually used to develop business in the mainland.

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31 Merchandise exports to the mainland actually dropped by more than 60 percent between 2003 and last year. That was partially related to the continuing decline of the city’s manufacturing industry and an increasing focus on the service sector. But the value of exports to the mainland of CEPA goods has increased, reaching MOP87 million last year. That is still less than 8 percent of the total sales Macau made to the mainland in 2011. Mr Martins also points out that the arrangement itself could be better structured, since it has been growing on a supplement basis, which complicates businesspeople’s understanding. Since 2003, when CEPA was first signed, nine more supplements were inked, further liberalising several service sectors to Macau companies. The latest supplement, signed last month, comes into effect next January. The focus is aiding the establishment of branches of Macau-based companies on Hengqin Island, which is being developed by the government here and in Guangdong. The level of minimum assets Macau banks are required to have to set up on Hengqin was lowered to US$4 billion from US$6 billion. According to the government, three local banks are in a position to fulfil such a requirement. Media reports say the Macau branch of the Industrial and Commercial Bank of China Ltd is one of the eligible institutions. It reportedly already applied to Guangdong officials to set up an office on Hengqin. The previous supplement came into force last April.

Double faults

Good intentions aside, the benefits accrued to Macau from the free-trade-like agreement seem to be few These lacklustre results are mostly due to the lack of initiative from Macau businessmen, who, he says, “are hesitant and fear the difficulties” of entering the mainland market. Mr Simões applauds the CEPA framework, which he says is well designed to improve business. But he admits that, since the agreement is so broad, the government should be investing in a sector-by-sector promotion of CEPA that would help businesspeople better understand how it could be an advantage to their business. Mr Simões also warns of the extreme amounts of complex bureaucracy required to navigate in order to do business in the mainland, which is unavoidable even with the arrangement. His advice to businesspeople eager to take advantage of CEPA’s benefits: “You need people there”. He says doing business remotely in the mainland is hard, largely because the market is not as sophisticated as in other locations in Asia.

Flexibility required Economist Albano Martins says CEPA has a bigger impact in the service sector than in trade.

Looking at the broader picture, Mr Martins says CEPA’s ultimate goal is to boost the political integration of Hong Kong and Macau with the mainland, using economic integration as the first step. He adds Beijing should have already completely opened up its domestic market to Macau and Hong Kongbased companies. “There is no reason why the mainland is not doing that faster,” Mr Martins says. “It seems that the mainland is trying to protect itself from Macau and Hong Kong in a series of areas.” Macau Association of Building Contractors and Developers president Tommy Lau Veng Seng says CEPA is not used by companies engaged in real estate, development and construction – one of the city’s most important sectors. “Up to now, I haven’t heard of any of our members using this agreement to initiate businesses in the mainland,” says Mr Lau, who is also the president of the Macau Management Association and a government-appointed legislator. Considering the existing requirements for Macau construction and real estate companies to establish in the mainland, even taking into account CEPA’s benefits, Mr Lau says businesspeople are focusing on their own patch. “Maybe they will continue to explore [potential opportunities], looking for some kind of partnership to open up business in the mainland taking advantage of CEPA,” Mr Lau says.

AUGUST 2012

Economic Trends by José I. Duarte Workforce

GRAPH 1 - Labour force participation rate Total

(%)

Male

Female

The resident labour supply seems to have reached its limits. The government has apparently acknowledged this by letting more imported workers in. GRAPH 1

The mounting demand for workers due to economic growth resulted in a rising workforce participation rate during most of the past decade. From 2009 until last year, the participation rate was usually stuck between 72 and 72.5 percent. It appears to have touched its ceiling. Since the beginning of this year the workforce participation rate has declined quickly. This may be a sign of the ageing of the population. The downward trend is seen among male and female workers alike, although the decline is faster in the case of men.

65 2009

2010

2011

Nov 2011/ Jan 2012

Dec 2011/ Feb 2012

Jan 2012/ Mar 2012

Feb 2012/ Apr 2012

Mar 2012/ May 2012

May 2012/ Jun 2012

GRAPH 2 - Unemployment and underemployment rates Unemployment

(%)

Underemployment

GRAPH 2

The unemployment and underemployment rates have both hit bottom. They have been almost frozen since January, at their lowest levels in history, having increased only slightly in June. It is hard to imagine them going any lower. Structural unemployment is difficult to eliminate completely, even in a small economy such as Macau’s. GRAPH 3

The tight resident labour supply means more workers must be imported, and soon. The restrictions on importing workers that the government’s labour policy entails are still in force, officially. But the figures tell us otherwise. There has been a de facto change in policy. Just look at the facts: the number of non-resident workers increased by over 18,000 last year and has increased by another 8,500 so far this year.

3.5 3 2.5 2 1.5 1 0.5 2009

2010

2011

Nov 2011/ Jan 2012

Dec 2011/ Feb 2012

Jan 2012/ Mar 2012

Feb 2012/ Apr 2012

Mar 2012/ May 2012

May 2012/ Jun 2012

Mar 2012

Apr 2012

May 2012

Jun 2012

GRAPH 3 - Number of non-resident workers

105,000 100,000 95,000 90,000 85,000 80,000 75,000 70,000 2009

2010

2011

AUGUST 2012

Jan 2012

Feb 2012

Food prices

GRAPH 4 - Average price of selected group of vegetables per trading stage (MOP)

Import

Wholesale

Retail

Rising prices of food are a persistent concern for the government and the public. The most frequent argument is that food prices here depend on prices in the mainland, where most of our food comes from. If we compare the import and retail prices of some basic kinds of food, the argument seems much weaker. GRAPH 4

2 2009

2010

2011

Jan 2012

Feb 2012

Mar 2012

Apr 2012

May 2012

There is little correlation among the changes in the average import, wholesale and retail prices of selected kinds of vegetables monitored by the Statistics and Census Service. Even when import prices are mostly stable, wholesale and retail prices tend to keep rising. We can also draw some surprising conclusions from these data regarding the significant internal margins implicit between the different commercialisation stages. GRAPH 5

GRAPH 5 - Average price of selected group of meat products per trading stage Import

(MOP)

Wholesale

Retail

70 65 60

The changes in the average import, wholesale and retail prices of selected kinds of meat monitored by the Statistics and Census Service seem similar to the changes in vegetable prices. In the case of meat, however, competition seems to restrain wholesalers from marking up prices more than it restrains retailers. But, again, the relative stability of import prices makes us wonder about the increases in wholesale and retail prices. GRAPH 6

55 50 45 40 35 30 25 2009

2010

2011

Jan 2012

Feb 2012

Mar 2012

Apr 2012

May 2012

GRAPH 6 - Price variation by trading phase of selected groups of vegetables and meat products for the period 2009-May 2012

This last chart indicates that the rises in the import prices of food were significantly smaller than the rises in the wholesale and retail prices. The import prices of the selected vegetables rose by about 10 percent between 2009 and May this year. But the wholesale prices rose by almost 70 percent and the retail prices by over 40 percent. So much for the commonly held assumption that food prices here rise because of inflation in the mainland and the appreciation of the renminbi. The data suggests that the causes of most food price inflation are domestic. What happens outside our borders has some influence but the figures say this influence is minor.

(%)

Import

Wholesale

Retail

70 60 50 40 30 20 10 0 Vegetables

Meat products

AUGUST 2012

Statistical Digest

Economic output

Year-on-year change (%)

2011 GDP at current prices

MOP 292.1 billion

GDP in chained prices

MOP 273.1 billion

GDP per capita at current prices

MOP 531,723

GDP per capita in chained prices

MOP 497,219

Employment Oct - Dec 2011

29.1 20.7 26.2 18.0

2.1%

Median monthly employment earnings

MOP 10,000

Employed population

339,800 72.9%

11.1 5.5 percentage 1.5 points

Unemployment rate

Labour force participation Non-resident workers (end-balance)

94,028

---

MOP 11,000

2011-end Domestic loans to private sector

MOP 161.9 billion

Resident deposits

MOP 291.6 billion

Foreign exchange reserves*

MOP 272.4 billion

5.8%

Year-on-year change (%)

External merchandise trade 2011 Imports

MOP 62.3 billion - MOP 55.3 billion

0.2 41.2 --

2011

Year-on-year change (%)

Public accounts MOP 112.7 billion

Balance

MOP 63.7 billion

2011

Year-on-year change (%)

MOP 99.7 billion

Utility consumption Water Electricity Gasoline Liquefied Petroleum Gas Natural Gas

70.5 million m3 3,857 million kWh 81.7 million L 42,908 tons 73.6 million m3

Jun 2012

Apr-Jun 2012 Apr-Jun 2012

Year-on-year change (%)

6.2% Latest

Year-on-year change (%)

Latest

16.0 25.4 -Year-on-year change (%)

MOP 39.9 billion

19.8 21.8 42.3 --

Latest

Year-on-year change (%)

MOP 56.5 billion MOP 21.7 billion

35.4 million m3 6.1 1,559 million kWh 13.9 34.7 million L 8.8 19,668 tons -3.6 -- million m3 -100

5.1 5.5 9.3 5.3 -52.4

Notes

15.3 18.7 -percentage 0.5 points

MOP 61.6 billion

MOP 49.0 billion

- Tax revenue from gaming

Apr-Jun 2012

20.3

MOP 34.8 billion - MOP 30.8 billion

Total expenditure

Notes

102,557

MOP 3.9 billion

41.5 44.9 29.7 --

Total revenue

338,600 71.9%

MOP 131.2 billion

MOP 7.0 billion

Jan-Mar 2012

MOP 313.6 billion

Year-on-year change (%)

Q1 2012

14.6 4.8 0.1

MOP 167.4 billion

Exports Trade balance

-0.6 percentage points

Latest

27.7 22.7 43.2 percentage 2.5 points

Q1 2012

Year-on-year change (%)

Latest

24.0

Money and prices

Inflation rate (full year)

MOP 70.5 billion

2.1%

Notes

27.5 18.4 ---

MOP 78.9 billion

Year-on-year change (%)

-0.6 percentage points

Year-on-year change (%)

Latest

May 2012 May 2012 May 2012 Jun 2012

Notes Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012

Notes Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012

Notes Jan-Jun 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012

Transport and communications 2011-end Licensed vehicles - Automobiles - Motorcycles Mobile telephone users Internet services subscribers

206,349 95,151 111,198 1,353,194 209,223

Year-on-year change (%)

4.9 5.5 4.5 20.6 22.7

Latest

210,580 97,936 112,644 1,466,672 218,171

Year-on-year change (%)

5.2 6.5 4.1 16.2 17.5

* A new fiscal reserve system was introduced in January 2012, impacting the way foreign exchange reserves are accounted for AUGUST 2012

Notes Jun 2012 Jun 2012 Jun 2012 Jun 2012 Jun 2012

Source: Statistics and Census Service and Financial Services Bureau

Politics

Mission accomplished Maria Castillo Fernandez has a positive assessment of her time as head of the Office of the European Union to Macau he European Union’s trade with Macau has surged, its presence here has expanded and cooperation has become closer. This is Maria Castillo Fernandez’s assessment of her four years in charge of the Office of the European Union to Hong Kong and Macau. She says she acted “to make Europe more visible in Macau, working together with the government, local institutions, universities and civil society”. Ms Fernandez, a Spaniard, returns this month to the EU headquarters in Brussels. Her successor had not been announced by the time we went to press. Ms Fernandez took the helm of the Office of the European Union in September 2008, succeeding British diplomat Thomas Roe. Before that Ms Fernandez was a member of the EU delegation in Seoul. Ms Fernandez says Macau and the European Union have been developing a more holistic approach to cooperation, “built upon the European heritage and common values” they share. She highlights as one of her main achievements the opening of new avenues for cooperation in the fields of culture and the environment. But foremost among her achievements, she feels, is

progress on academic matters. In June, Ms Fernandez and the University of Macau signed an agreement to hold the European Union’s first academic programme here. The purpose of the four-year agreement is to build a hub of academic excellence in European studies in Macau, covering areas such as public administration, social science and the humanities. The programme is meant to weave a web of student ex-

changes with universities in Europe. Ms Fernandez says she is “very proud” of this achievement. She says the academic programme is set to be a powerful instrument for deepening relations between Macau and Europe in a wide range of fields, from law to culture to social science. “It has added value because it brings a more human dimension, more related to civil society,” she says.

AUGUST 2012

Politics

MACAU’S SOURCES OF MERCHANDISE IMPORTS IN 2011 Others

18% Japan

MACAU’S MERCHANDISE TRADE WITH EUROPEAN UNION (MOP million)

European Union

25%

Imports

Exports

18,000 16,000

14,000 12,000

Taiwan United States

Hong Kong

10,000 8,000 6,000

12%

4,000 Mainland China

2,000

31%

0 2002

2003

2004

Source: Statistics and Census Service

The programme will begin in January. It has a budget of MOP10 million (US$1.25 million). Two-thirds of the money will come from the European Union. Macau and the European Union are also cooperating in increasing the number of qualified interpreters available to authorities here. Their cooperation includes having Macau interpreters trained in the European Union, which has 23 official and working languages.

Deficit to surplus Ms Fernandez also has a positive assessment of economic relations. “Macau’s economy has had a good performance. That has benefited European businesses, because we are now exporting a lot more than five years ago,” she says. “That has to do with Macau’s growth and with its different needs, triggered by the casino boom, but also by the growth of entertainment and leisure.” The European Union now has annual surpluses in merchandise trade with Macau, having had deficits until 2005, when the situation was inverted, Statistics and Census Service data show. This is because Macau’s manufacturing base has shrunk while its demand for imported goods has been robust. The value of EU exports to Macau surged by 56 percent to MOP15.5 billion

AUGUST 2012

last year, while the value of EU imports from Macau was less than MOP400 million. Most EU exports were consumer goods, close to 24 percent being food and beverages. The European Union is Macau’s second-largest source of imports after the mainland. EU goods made up a quarter of Macau’s imports last year. “We have several European products being exported to Macau,” Ms Fernandez says. “Overall trade has gone up and we have worked closely with the Macao Trade and Investment Promotion Institute and with the business chambers.”

Taxing question Ms Fernandez says European businessmen are now more active here, as shown by the number of business associations they have established in recent years. These include the British Business Association, set up in 2006, and the France Macau Business Association, which was established in 2009. “As Macau continues developing, that paves way for more European businesses to come here. We see that happening in entertainment, in retail, in the hospitality sector,” Ms Fernandez says. Her office says 54 EU companies were doing business here in 2010. More than half were in the wholesaling or re-

2005

2006

2007 2008

2009

2010

2011

Source: Statistics and Census Service

tailing businesses, and the rest were engaged either in finance, transport, communications or industrial activities. Ms Fernandez says cooperation in the fiscal field could be closer. She acknowledges that Macau has been improving its legal framework on double taxation and tax evasion to meet international standards, and that the government has signed several agreements on the exchange of tax information with other governments. But she says the European Union would like to see Macau “going a bit further and being willing to accept an automatic mechanism for information exchange regarding double taxation.” Ms Fernandez says that although the European presence here is growing, the European Union has no plans to have a representative office in Macau separate from its Hong Kong office. “It is a bit hard to open new offices and missions around the world against a backdrop of crisis,” she says. “I don’t see that happening but it doesn’t mean we don’t have a presence in Macau.” Ms Fernandez says she came to Macau at least four times a month during her time in charge. “What is needed is for us to have a regular presence in Macau. We don’t need an office for LUSA NEWS AGENCY that.”

G A M I N G PA R T N ER R S I N T E R NAT T IO ONAL TH E A M ERI CAS 路 EU RO PE 路 ASIA | g p i g a m i n g.co m

AUGUST 2012

38 JOSÉ I. DUARTE ECONOMIST, MACAU BUSINESS SENIOR ANALYST - jid@macaubusiness.com

Diversification fairy tale MOST ARE SEARCHING FOR ECONOMIC DIVERSIFICATION OUTSIDE MACAU; IT IS MORE COMFORTABLE THAN CONTEMPLATING WHAT WENT WRONG AT HOME conomic diversification is endlessly debated in Macau. The government swears by it. There is hardly a statement on the development of the economy that omits to mention it. The central government also recommends it, as Beijing appears to be concerned by the growing over-dependence on gambling. Representatives of economic interest groups of all kinds also appeal for the government to push ahead with economic diversification. Most of the time, they just plead for direct support for their industries. Other people wonder about the consequences for society of economic diversification, and how to deal with them. The public worries that the gaming golden goose may not live forever and that an abrupt change may come sooner than they would like. Economic diversification is seen as an insurance policy for when that time comes. This is a subject that has been debated in the political arena for 20 years. Yet the economy keeps on revolving around a single industry. Gaming and associated activities account for an evergreater share of gross domestic product. The industry continues to absorb increasing numbers of an already scarce workforce, pricing other, less well-endowed industries out of the labour market.

Herald of change Gaming is also the driving force that other sectors of the economy – such as the hotel, restaurant and other industries catering to tourists – are structured to exploit. Gaming attracts an apparently never-ending flow of visitors and money. While (almost) everybody clamours for a more diversified economy, the city concentrates more and more on just one industry. This mismatch between what people say and what they do does not seem to bother many. Occasionally, this or that new policy is presented as being the harbinger of a new era, the one which will make the economy diversify and thrive. For instance, that was the case for the Closer Economic Partnership Arrangement (CEPA) between Macau and the mainland. It was one of the arguments put forward for signing it. In round after round of talks, at signing ceremony after signing ceremony, we were told that CEPA would present many opportunities for Macau companies, especially smaller ones throttled by rising wages and rising rents. Many rounds later, it is difficult to gauge exactly what the agreement has done for the economy, or whether it has helped it to diversify. Today, some say the development of Hengqin Island will lead to economic diversification. They say the economy will diversify beyond the city’s borders, for the benefit of all. The whole idea sounds rather peculiar. It has yet to AUGUST 2012

become clear how the development of Hengqin will benefit Macau or how it will bring about economic diversification. From what is known about the project so far, it is easier to discern the benefits for Zhuhai than those that will accrue to Macau. Looking for economic knights in shining armour has always been an effective way of avoiding looking at ourselves and admitting that we are responsible for our predicament. Is Macau willing to look at itself in the mirror? If so, what might it see? The government has maintained a painfully misconceived labour policy – not yet abandoned in principle, but increasingly so in practice – for too long. It created scarcities that meant higher pay for some – without commensurately higher productivity – and headaches for many. The consequences of this policy have yet to be fully assessed. It may entail the destruction of livelihoods and social relationships of the kind that would make society and the economy more resilient in bad times.

Official pixie dust Invoking the principle that market forces should be allowed free rein – mistakenly, for this is a city with limited land belonging to a single owner – the government made no plan for housing and otherwise supporting those who, permanently or temporarily, come to live and work here. Priority was given de facto to building expensive homes for those wealthy enough to buy them. They bought so they could get residence permits; so they could park their money in assets untouchable by the financial authorities where they came from; so they could make big, quick bucks by betting on a property bubble. The outcome is this: most of the younger generation have been priced out of the housing market, whether they wish to buy or rent. Then inflation started to bite – and how lucky we were that the global financial crisis cooled things down for a while. But how did the government deal with the market distortions that provided some with economic rents and that lumber all consumers with higher prices? It dealt with them by sprinkling money here and there, against all good economic sense. This may well have fostered a culture of dependence. At best, it offers temporary respite and creates an illusion of social harmony. It is treating the symptoms, not the disease. Who really wants to look in the mirror, anyway? It is less troublesome just to wait for a white knight to carry us to the magical land of economic diversification which so many yearn for. Yesterday it was CEPA, today it is Hengqin. Tomorrow, who knows?

Greater China

Split definitive Hong Kong’s new chief executive could not have had a more trying first month in office, fracturing relationships and stirring public discontent BY MARY ANN BENITEZ* IN HONG KONG

Demonstration against the introduction of national education in Hong Kong schools

summer of discontent has been getting a lot hotter for Hong Kong’s new chief executive, Leung Chun-ying. Just 12 days into his term, Mr Leung lost his secretary for development, a suspect in a corruption case. Filibustering in the Legislative Council and a lastminute change of heart by one member have delayed consideration of his proposals for government reform at least until October. Protests big and small have greeted Mr Leung on countless fronts since he was sworn in on July 1 as Hong Kong’s third chief executive. Unusually, CY, as he is called, has suffered from a credibility deficit from the outset, and has been allowed no honeymoon period since taking office. His low credibility ratings are due to allegations of interference in his election by the Liaison Office of the Central People’s Government in Hong Kong, and to deep suspicions among the pan-democrats that he is a card-carrying member of the Chinese Communist Party. His position was weakened by questions raised about illegal structures added to his home on the Peak. The public protests that have most increased in volume are against the gov-

ernment’s push for “national education”, meaning education about the mainland. The government of Mr Leung’s predecessor, Donald Tsang Yam-kuen, proposed national education as a subject in schools, without public consultation, and opposition to its introduction has since intensified. Opponents have been urging Mr Leung’s government to shelve the introduction of national education as an optional subject in primary schools next month. It is due to be introduced in secondary schools – again, as an optional subject – next year. The government intends to make it compulsory in primary schools in 2015 and in secondary schools in 2016.

Young minds Parents, teachers and children have been taking part in a series of demonstrations and meetings against the introduction of national education in schools, and have placed advertisements in Chinese-language newspapers to express their opposition. The Catholic Church, which runs about 180 subsidised primary and secondary schools, said it would not offer the subject this year. It has demanded that the government consult the public about it. Cardinal John Tong Hon told

Protests big and small have greeted Leung Chun-ying on countless fronts since he was sworn in on July 1 as Hong Kong’s third chief executive AUGUST 2012

Greater China

The public protests that have most increased in volume are against the government’s push for “national education”, meaning education about the mainland Catholic school principals and supervisors in a letter that national education should be introduced step by step. Cardinal Joseph Zen Ze-kiun, bishop emeritus of Hong Kong, told an education forum last year that national education was brainwashing. “What do they expect? That we approve the actions of the Communist Party?” Antony Ip Sing-piu, an assistant to the episcopal delegate for education, said Catholic schools would not introduce national education until a clear set of objectives had been drawn up by a committee set up by the Catholic diocese to look into the subject. Hong Kong’s Anglican Church and the Evangelical Lutheran Church of Hong Kong, which between them run about 157 primary schools, have also declined to teach the subject this year. Opponents have said the teaching manual for the subject, already distributed to schools, is biased. The pro-Beijing National Education Services Centre compiled the manual, entitled “The China Model”. Critics say 33 of the handbook’s 34 pages praise China and only one page covers sensitive topics. “Children’s knowledge of China AUGUST 2012

should go beyond the narrowly construed nationalism,” says the National Education Parents’ Concern Group, which is based in Hong Kong. It says that students should “instead receive civic education, which teaches the role of civilians at the local, national and international levels, in line with global standards.”

Clandestine meetings Secretary for Education Eddie Ng Hakkim has admitted that he is worried that national education might mean brainwashing but has offered a crumb of comfort. “Principals and teachers can decide when to introduce the subject within the next three years,” he said. And the government is offering HK$530,000 (US$68,320) to each school that introduces the subject. Adding to the discontent with Mr Leung and suspicions about him is the disclosure that Wang Guangya, director of the Hong Kong and Macau Affairs Office of the State Council, and leaders of Hong Kong’s pro-Beijing parties had a meeting last month just across the Hong Kong border in Shenzhen. New People’s Party chairwoman Regina Ip Lau Suk-

yee, a former secretary for security, has acknowledged that she attended. Democratic Party chairman Albert Ho Chun-yan called for Beijing to stop interfering. The Standard newspaper quoted National People’s Congress deputy Maria Tam Wai-chu as denying that the meeting constituted central government interference in Hong Kong. Mr Wang reportedly made it clear in the meeting that Beijing will not give up on Mr Leung despite recent controversies. Beijing shifted its support to Mr Leung during the election of the chief executive, after scandals over marital infidelities and an illegal structure beset the early frontrunner, a former chief secretary for administration, Henry Tang Ying-yen. Mr Wang also reportedly warned against trying to score points in the Legislative Council elections next month by criticising Mr Leung.

Violent debate A member of the Legislative Council up until late last month, when he resigned, Paul Chan Mo-po, was meanwhile appointed secretary for development, succeeding Mak Chai-kwong. Mr Mak resigned last month after

“Children’s knowledge of China should go beyond the narrowly construed nationalism,” says the National Education Parents’ Concern Group the Independent Commission Against Corruption arrested him and his wife, along with Highways Department assistant director Tsang King-man and his wife, on suspicion of violating the Prevention of Bribery Ordinance with regard to a civil service housing allowance. Mr Mak, a retired civil servant, resigned after just 12 days in office, so becoming the shortest-serving secretary in any Hong Kong government since 1997. But Mr Chan had stirred up a controversy of his own a couple of weeks before being appointed secretary for development. He said on public broadcaster RTHK’s “Letter to Hong Kong” programme that the rules of the Legislative Council should be reviewed because of the “torturous” filibustering tactics adopted by radical pan-democrats to delay Mr Leung’s proposals for government reform. “The council chamber has been turned into a place of verbal violence and vulgarity, and it’s time for a change,’’ said Mr Chan, who represented the accountancy functional constituency. “There must be a balance between the rights of the minority and the proper conduct of

the Legislative Council business.” All these events highlight the political challenges facing Hong Kong. Just 15 years after the city’s handover from British to Chinese rule, dissatisfaction is growing at the grass roots. The biggest demonstrations have been about the killing of students calling for democracy in Beijing’s Tiananmen Square on June 4, 1989. A candlelight vigil in Victoria Park to mark this year’s anniversary attracted many more people than had been seen at such events for a long time.

Leaving for good Hong Kong celebrated the anniversary of the 1997 handover on July 1 – the same day Mr Tsang handed over to Mr Leung, in the presence of President Hu Jintao. The celebrations drew huge numbers of people, including many illdisposed toward Mr Leung. Mr Leung’s public visits to some places around town have attracted vocal protesters, forcing him on occasions to forgo the chief executive’s customary walkabout. A HK$7-billion package of sweeteners which he announced in the Legislative Council last month was

greeted with scepticism. Some who witnessed the 1997 handover told Macau Business that they were sceptical about the future. Journalist Jenny Wong Chun-wong said that during the 1997 handover she had acted as a translator for the U.N. secretarygeneral at the time, Kofi Annan. She witnessed the handover ceremony on June 30 that year. “I was honoured and thrilled,” she says. This year, Ms Wong did not wish to witness the inauguration of Mr Leung and went instead to the United States for a vacation. Disappointed by political changes in Hong Kong, she intends to move to the United States for good in a few months from now. “I think the Chinese government does not need to spend 32 years to turn Hong Kong into a true Chinese city. Within 10 years Hong Kong will be a true Chinese city,” she says. In the streets of Hong Kong, other people are more sanguine, highlighting improvements in the city’s fabric and amenities since the handover, and pointing to the resilience of the city. * COPY EDITOR OF THE STANDARD (HONG KONG) NEWSPAPER AUGUST 2012

Greater China

Dissent not allowed U.S. slams deteriorating human rights in the mainland BY JO BIDDLE*

.S. officials and lawmakers took aim at the mainland last month, saying human rights are deteriorating there as Chinese leaders move to quash even the slightest sign of dissent. “The overall situation of human rights in China continues to deteriorate,” said Michael Posner, assistant secretary of state for human rights, after two days of talks with Chinese officials in Washington. While he praised the mainland’s rapid growth which has lifted “hundreds of millions... out of poverty,” Mr Posner also stressed “that political reforms in China have not kept pace with economic advances.” Chinese people needed to be able to voice legitimate grievances and play a “meaningful role in the political development of their own society,” he said. During the talks with the Chinese side, led by Chen Xu, a director general from the Ministry of Foreign Affairs, the U.S. raised the issue of Beijing’s crackdown on the Uighurs, as well as the self-immolations by about 40 Tibetans. The U.S. delegation also raised concerns about freedom of expression, including Internet freedom, labour rights and legal reforms. “Lawyers, bloggers, NGO activists, journalists, religious leaders and others are asserting universal rights and calling for peaceful reform in China,” Mr Posner told reporters. U.S. officials voiced concern about the lack of access to legal counsel for detained activists, and again called for the release of lawyers and democracy activists languishing in jail, including Nobel peace laureate Liu Xiaobo. They also raised the cases of prominent Chinese rights lawyer Gao Zhisheng, who has been held virtually incommunicado since 2009, and wheelchair-bound Ni Yulan, who was jailed after working with her husband to protect alleged victims of government-backed land grabs.

Pressure up on Beijing Mr Posner dismissed suggestions that the regular U.S.-China human rights dialogue was of little use since conditions AUGUST 2012

U.S. officials have voiced concern about the lack of access to legal counsel for detained activists were not improving on the ground. “I think over time we’re responding to a very heartfelt desire by people living in China... that their cases, their issues not be forgotten. We’re amplifying their voices, in effect,” he said. U.S. lawmakers also took Beijing to task for its “deplorable” human rights record at a hearing last month in Congress. Four human rights defenders, including Chinese Uighur rights defender Rebiya Kadeer, testified to the House Foreign Affairs Committee about the deteriorating conditions in the mainland. “Chinese authorities remain hypervigilant about tamping down anything that smacks of political or social dissent, including criticism of the government and exposure of official wrongdoing,” Howard Berman, the committee’s ranking Democrat, told the hearing. Dissident Chen Guangcheng, who arrived in the United States in mid-May, had been due to testify, but later declined apparently out of fear of reprisal against

relatives back in the mainland. The 40-year-old activist, jailed for four years for exposing abuses under the mainland’s one-child policy, escaped from house arrest in April just as Secretary of State Hillary Clinton was visiting Beijing, sparking a major diplomatic incident. While some of the advocates said such forums as the U.S.-China dialogue on human rights were vital to keep pressure up on Beijing, they all called for the White House to do more. “At the highest levels it has not been a priority,” Jared Genser, founder of U.S.-based non-profit group Freedom Now, said. “President Obama and Secretary Clinton must personally engage on Chinese human rights cases and make full use of the bully pulpit, something they have only done to date on rare occasions,” he added. “China’s backsliding on rights should have long since merited a change in tactics and a more proactive and public approach.” * AFP NEWS AGENCY

43 KEITH MORRISON AUTHOR AND EDUCATIONIST - kmorrison.iium@gmail.com

Democracy genie stays bottled up TALK OF DEMOCRATIC DEVELOPMENT IS JUST SO MUCH WAFFLE espite all the talk of greater democracy through electoral changes, I am not at all sanguine about these changes delivering any more democracy. How will a bit of tinkering at the edges of the electoral system wrest power from the greedy, feral elite which runs Macau? How will such token changes give substance to the idea of democracy: government of the people, by the people, for the people? I say this because democracy, as Gandhi remarked, stems from within each person. It cannot be imposed from without, and it requires each person to think for herself or himself. Yet what we see in Macau is dull conformity. Conformity is foisted on us at school and many live their lives without shaking it off. People think what they are told to think, or they are taught not to think at all. To quote Bertrand Russell’s famous comment: “Many people would rather die than think; in fact, most do”. This applies nicely to many people here. Whether you call such conformity “social harmony” or “a stable society”, in effect it means “don’t speak out”, “don’t rock the boat”, “don’t challenge the ruling order”. This stultifies democratic development. Autonomy, critical thinking, argument and real debate, willingness to challenge, imagination, creativity, consideration of alternative futures and pursuit of the greater good of all society’s members are in their infancy here. Economic development has left democracy or even talk of democracy on the starting blocks.

Art of progress In her well-received book of 2010, “Not for Profit: Why Democracy Needs the Humanities”, the philosopher Martha Nussbaum makes a compelling case for regarding the humanities as essential for democracy.

What we see in Macau is dull conformity. Conformity is foisted on us at school and many live their lives without shaking it off

She argues that the very qualities and competencies that the humanities and liberal arts promote – namely autonomy, critical thinking, creativity and the rest – are not only crucial features of democracy but are essential for economic and business development. Yet creative ways of looking at the world, and promoting divergent and critical thinking, which are important for both democratic and economic development, are in short supply here. Humanities and the arts are central to democracy and business. Yet what do we see in Macau? The latest figures available show that fewer than 10 percent of students in higher education are studying the humanities or arts, while over half are studying business, gaming, tourism and entertainment. This speaks for itself. Where are the school and university students learning to think critically, to imagine alternative societies, to address the big issues of today’s world? How are they being prepared to be active, challenging, caring, democratic citizens rather than obedient servants of economic profiteering? Economic and social equality, central features of democracy, are left behind in the rush for profit and economic growth. The poor have gained little from the economic explosion.

Confederacy of legumes “Impact”, Ms Nussbaum comments, is reinterpreted as economic gain and market share. These substitute for government attention to what world leaders from Martin Luther King to Gustavo Gutiérrez have called the “preferential option for the poor”. The government seems to be largely deaf and blind to the suffering of the poor and have-nots. Macau can erect casinos and upmarket facilities in the twinkling of an eye but its government takes a decade or more to shamble towards building a new hospital, a public health system that reduces waiting lists to less than six months, or social services that are either social or a service. At the same time, the young cannot afford “affordable housing”, the poor live on a few dollars a day, and the elderly book beds in dormitories. Is economic development reducing inequality? Not that you would notice. And democracy is not even on the agenda. As long as we have decision makers whose priorities are so largely confined to making money, with limited vision, a conformist mentality, narrow agendas, the inability to think outside of the box or even to challenge present priorities and practices, and with all the creativity of a vegetable, it is a vain hope that democratic thinking and practice will develop. Whether economic growth requires or produces democracy is a moot point, and the mainland’s spectacular economic rise testifies to this. Simply hoping that democracy will happen will not make it happen. I wonder if Macau actually wants democracy. After all, its big brother does not seem to be interested in it. AUGUST 2012

Property

High tide

Photo: LuĂs Almoster

Limited supply and strong demand will ensure property prices will continue upward trajectory

rices for homes are already at an all-time high but it is all oneway traffic for the foreseeable future: up. In June, the average transaction price per square metre for residential units reached MOP58,976 (US$7,372), a new record, surpassing the previous all-time high of MOP57,662 per square metre from November 2010. The Financial Services Bureau data shows Juneâ&#x20AC;&#x2122;s result represented an 11.1-percent month-on-month jump, a full 50-percent leap from the same time last year. This quite remarkable result was based on strong sales of high-end

AUGUST 2012

flats and short supply. In the first six months of this year, there were slightly more than 7,000 deals done on residential properties. It was a significant drop of about 40 percent from the same time last year. This was largely due to sellers staying out of the market for having to pay the additional stamp duty that, ironically, the government imposed on the real estate market last year to cool an overheated market. There is a 20-percent duty on residential properties resold within a year of their purchase. The levy is reduced to 10 percent if the sale takes place between

one and two years after the original purchase. Ricacorp (Macau) Properties Ltd managing director Jane Liu predicts a further 3 percent to 6 percent growth in residential property values in the second half. Cumulative annual growth in property values could reach 18 percent, she says. Her forecast is backed by the influx of expatriate workers, whose numbers rose by 9 percent in the first half of this year to a headcount of more than 102,000. It is pushing up demand for housing. Coupled with existing favourable factors such as low interest rates for

AVERAGE TRANSACTION PRICE OF RESIDENTIAL UNITS PER SQUARE METRE (MOP)

Source: Financial Services Bureau

70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

Jan

Feb Mar

Apr May Jun

Jul

Aug Sep

Oct Nov

Dec Jan

2011

Feb Mar

Apr May Jun

2012

NUMBER OF RESIDENTIAL UNITS TRANSACTED 4,000 Source: Financial Services Bureau

3,500 3,000 2,500 2,000 1,500 1,000 500 0

Jan

Feb Mar

Apr May Jun

Jul

Aug Sep

Oct Nov

Dec Jan

2011

Feb Mar

Apr May Jun

2012

In June, the average transaction price per square metre for residential units reached MOP58,976, a new record, surpassing the previous all-time high of MOP57,662 per square metre from November 2010 bank deposits, linked to low mortgage rates, many are being driven to invest in property, she says. Ms Liu says the government’s goal to build 19,000 new public housing flats between 2007 and the end of this year is having little impact on prices in the private market. A significant share of the flats for sale at subsidised prices are one-bedroom units, something she says is “very different” from the needs of most buyers. Plus, the 16-year lock-up period before the property can be resold is a turnoff. New rules governing pre-sales of

unfinished flats also threaten to interrupt supply for a period of up to eight months, Ms Liu says. The rules are currently before the Legislative Assembly.

Supply slide The combined effects of legislation and tighter supply could mean a fall in the number of residential transactions by up to 15 percent in the second half of the year, she forecasts. The current quarter is also traditionally the weakest for the market. The chief of the Association of Property Agents and Realty Developers of Macau, Ung Choi Kun, says home

prices will continue to increase, with supply not enough to meet demand. Three big residential projects have hit the market so far this year. Tower 10 at Coloane’s One Oasis Cotai South added more than 340 units at prices between HK$4,500 (US$580) and HK$5,500 per square foot. A further 200 flats at Windsor Arch in Taipa were launched at prices up to HK$10,000 a square foot. And there were 100 Nova Park units from Shun Tak Holdings Ltd, with all units sold for an average price of HK$5,500 a square foot. Jones Lang LaSalle predicts prices AUGUST 2012

Property

for flats and rentals will increase by another 5 percent in the second half. In last monthâ&#x20AC;&#x2122;s â&#x20AC;&#x153;Macau Mid-Year Property Reviewâ&#x20AC;?, the property brokerage said capital values for high-end residential properties rose by an average of 10.5 percent year-on-year in the first half. In the mid-market and mass residential sectors, capital values grew 19.8 percent year-on-year, driven almost exclusively by internal demand. Rents were also up according to Jones Lang LaSalle. The average rent for high-end flats grew by 15.5 percent over the same period last year. For the mass and medium market, the average rental value rose by 15.1 percent year-on-year. â&#x20AC;&#x153;We expect to see more expatriates entering Macau, with the opening of new entertainment facilities and the ongoing construction works of the cityâ&#x20AC;&#x2122;s infrastructure projects in the coming years, underpinning Macauâ&#x20AC;&#x2122;s residential leasing demand,â&#x20AC;? says Jeff Wong, Jones Lang LaSalleâ&#x20AC;&#x2122;s head of Residential for Macau. The limited stock available in the residential market has led investorsâ&#x20AC;&#x2122; to shift their focus to shops and offices,

Three whole-floor office transactions have been recorded in the NAPE area so far this year says Jones Lang LaSalle. That trend is further fuelled by the special stamp duty on residential real estate. Earlier this year, a centrally located shop in Rua de S. Domingos was sold en block to a Hong Kong investor for HK$168 million.

Three whole-floor office transactions have been recorded in the NAPE area so far this year. Two sales worth about HK$160 million were recorded in Dynasty Plaza and the third was about HK$80 million for a floor in China Civil Plaza.

You talking to me? Itâ&#x20AC;&#x2122;s amazing how you can survive in this region, being understood and understanding just a small part of the communication. Thatâ&#x20AC;&#x2122;s ok for you but not for your business. At goldfish we know how to adjust your message for each audience or product and make it effective. Yes. We are talking to you.

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AUGUST 2012

www.goldfishmacau.com

Property | Market Watch Notable residential property transactions - 16/06 to 15/07, 2012 District

Property

Unit

Taipa Macau Macau Taipa Taipa Taipa Taipa Macau Macau Macau Taipa Macau Taipa Macau Taipa Taipa Macau Macau Macau Macau Taipa Macau Macau Taipa Taipa Macau Macau Taipa Macau Macau Macau Macau Macau Macau Macau

One Grantai One Central Edf. Vista Magnifica One Grantai One Grantai One Grantai One Grantai The Residencia The Residencia The Residencia One Oasis The Residencia Pearl On The Lough The Residencia One Oasis One Oasis Pearl Horizon The Praia Pearl Horizon Pearl Horizon Jardins do Oceano Pearl Horizon Pearl Horizon Prince Flower City Nova City Pearl Horizon Pearl Horizon One Oasis Green Island Green Island Pearl Horizon Pearl Horizon Pearl Horizon La Cité Green Island

Block 3, H/F, unit N Block , H/F, unit A M/F, unit R Block 3, L/F, unit I Block 3, L/F, unit I Block 4, L/F, unit R Block 3, L/F, unit J Block 4, H/F, unit A Block 4, H/F, unit B Block 4, H/F, unit A Block 1, L/F, unit D Block 5, M/F, unit B Block 1, L/F, unit D (with car park) Block 1, L/F, unit B Block 2, M/F, unit A Block 2, M/F, unit C Block 6, M/F, unit A Block 1, H/F, unit C Block 5, L/F, unit A Block 5, L/F, unit D Bauhina Court, L/F, unit H Block 6, M/F, unit H Block 5, M/F, unit E Block 2, M/F, unit H Block 6, M/F, unit F Block 5, H/F, unit E Block 6, H/F, unit E Block 9, L/F, unit A Block 2, M/F, unit G Block 2, M/F, unit G Block 1, M/F, unit E Block 6, M/F, unit G Block 6, L/F, unit D Block 2, H/F, unit A Block 1, H/F, unit B

Centaline and Ricacorp

Floor area (sq. ft) 2,167 2,241 4,642 2,300 2,206 2,203 2,019 1,819 1,814 1,693 2,398 1,696 2,055 1,642 1,936 1,781 1,281 1,588 1,281 1,198 1,880 1,281 1,198 1,522 1,340 1,198 1,198 1,326 1,512 1,512 1,204 1,099 1,184 1,187 1,334

Sale price (HK$)

Price per sq.ft. (HK$)

19,000,000 18,600,000 18,580,000 13,570,000 12,574,200 11,896,000 11,609,000 11,004,580 10,862,640 10,090,000 10,000,000 9,858,980 9,800,000 9,228,000 9,208,000 7,918,000 7,747,000 7,300,000 7,231,000 6,675,000 6,600,000 6,520,000 6,490,000 6,480,000 6,300,000 6,160,000 6,110,000 5,900,000 5,620,000 5,450,000 5,250,000 5,242,000 5,020,000 5,000,000 4,980,000

8,768 8,300 4,003 5,900 5,700 5,399 5,749 6,049 5,988 5,959 4,170 5,813 4,768 5,619 4,756 4,445 6,047 4,597 5,644 5,571 3,511 5,089 5,417 4,258 4,701 5,141 5,100 4,449 3,717 3,604 4,360 4,769 4,240 4,212 3,733

Note: L/F - Low floor; M/F - Middle floor; H/F - High floor

Notable residential property rentals - 16/06 to 15/07, 2012 Type

Property

Unit

Macau Taipa Taipa Taipa Taipa Taipa Taipa Macau Taipa Taipa Macau Macau Macau Taipa Macau Taipa Macau Macau Macau Taipa Macau Taipa Macau Taipa

The Residencia The Pacifica Garden Nova City Prince Flower City Prince Flower City Nova Taipa Nova City The Bayview Nova City Nova City The Bayview The Bayview (with car park) La Cité Nova City La Cité Nova City The Residencia La Cité The Praia Edf. Jardim Wa Bao The Praia Edf. Kinglight Garden The Verde Edf. Kinglight Garden

Block 1, H/F, unit A Block 1, L/F, unit A Block 6, L/F, unit E Block 2, H/F, unit J Block 1, M/F, unit B Block 27, L/F, unit H Block 10, L/F, unit F Block 5, H/F, unit C Block 16, L/F, unit E Block 15, L/F, unit C Block 5, M/F, unit D Block 4, H/F, unit B Block 5, M/F, unit D Block 14, M/F, unit E Block 1, L/F, unit E Block 12, L/F, unit A Block 5, M/F, unit D Block 3, L/F, unit B Block 4, M/F, unit Z Block 4, L/F, unit T Block 3, H/F, unit R Block 4, L/F, unit AE Block 2, L/F, unit A Block 2, L/F, unit I

Centaline and Ricacorp

Floor area (sq. ft) 2,188 1,657 1,318 1,645 1,665 1,880 1,340 1,582 1,285 1,343 1,582 1,603 1,709 1,314 1,735 1,088 1,222 1,494 1,046 1,071 1,259 958 747 1,238

Rent price (HK$)

Price per sq.ft. (HK$)

22,800 18,000 15,000 15,000 15,000 15,000 14,000 14,000 13,800 13,500 13,000 13,000 13,000 12,000 12,000 11,000 11,000 11,000 9,000 8,500 8,500 7,500 6,500 6,000

10.42 10.86 11.38 9.12 9.01 7.98 10.45 8.85 10.74 10.05 8.22 8.11 7.61 9.13 6.92 10.11 9.00 7.36 8.60 7.94 6.75 7.83 8.70 4.85

Note: L/F - Low floor; M/F - Middle floor; H/F - High floor

AUGUST 2012

Property Statistics

Construction - private sector

Year-on-year change (%)

2011

1,387 1,099 231 38 19 2,159 2,053 86 3 17

Building units completed - Residential - Commercial and offices - Industrial - Others Building units started - Residential - Commercial and offices - Industrial - Others

-69.4 -73.0 -45.9 --44.1 148.2 162.9 8.9 200 88.9

Transactions (1)

- Residential - New building - Old building Resident buyers (as percentage of total buyers)

4.6 144.5 -3.1

2,196 269 1,927

- Commercial - New building - Old building Resident buyers (as percentage of total buyers)

42.9 10,200.0 27.3

932 103 829

- Offices - New building - Old building Resident buyers (as percentage of total buyers)

-6.7 -17.8

194 7,126

- Industrial - Others Total value of total units transacted (2) - Residential

Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012

-45.6 -87.7 -37.7 9.0 percentage points

93.9

-38.1 -73.2 -25.6 1.9 percentage points

84.2 68 1,657

Notes Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012

-38.2 -64.9

Jan-May 2012 Jan-May 2012

28.1 41.0 5.4 84.0 88.0 83.6 128.8 --115.7 -0.7

MOP24.3 billion

-40.1 -50.0 -2.3 -0.1 --15.9 -----

Jan-May 2012

MOP0.9 billion

- Old building

MOP8.7 billion MOP3.0 billion

--MOP0.9 billion MOP3.8 billion

MOP16.1 billion MOP8.2 billion MOP4.7 billion

--MOP1.0 billion --MOP0.4 billion MOP1.7 billion

Average transaction price of residential units (3) Year-on-year change (%)

2011 MOP45,027 /m

Macau

Jan-May 2012

MOP58.9 billion

- New building

- Others

Jan-May 2012

MOP9.7 billion

- Industrial

Jan-May 2012

-34.1

MOP17.5 billion

- Old building

Jan-May 2012

MOP32.1 billion

- Old building

- New building

Jan-May 2012

34.4

MOP41.4 billion

- Offices

Jan-May 2012

MOP76.3 billion

- New building - Commercial

5.1 percentage points

90.4

227 26 201

-11.6 percentage points

80.0

-47.8 -40.8 -55.3 -23.1

737 26 711

-2.3 percentage points

86.9

Notes

Year-on-year change (%)

8,867 6,178 2,567 3,611

-1.7 percentage points

87.8

-89.2 -88.1 -91.3 --44.4 408.6 487.1 5.0 -400.0

Latest

-6.7 -4.5 26.8 -20.7

27,624 17,176 7,783 9,393

Total units transacted

67 45 17 -5 712 681 21 -10

Year-on-year change (%)

2011

Year-on-year change (%)

Latest

- Macau Peninsula

MOP43,569 /m2

- Taipa

MOP41,501 /m2

- Coloane

MOP68,208 /m2

21.6 32.9 1.4 6.4

Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012

Month-on-month change (%)

Latest MOP58,976 /m

MOP53,780 /m2 MOP65,682 /m2 MOP76,831 /m2

11.1 5.5 20.8 7.9

Notes Jun 2012 Jun 2012 Jun 2012 Jun 2012

(1) The data covers transactions with stamp duty paid during the reporting period, including transactions exempted from stamp duty (2) Figures are rounded, therefore they may not add up exactly (3) The data covers transactions with stamp duty bill issued during the reporting period, including transactions exempted from stamp duty AUGUST 2012

Source: Statistics and Census Service and Financial Services Bureau

MINXIN PEI PROFESSOR OF GOVERNMENT, CLAREMONT MCKENNA COLLEGE

Why China can’t adjust EXPORT DEPENDENCE PARTLY REFLECTS THE HIGH DEGREE OF DIFFICULTY OF DOING BUSINESS IN CHINA hina’s current economic slowdown has no shortage of causes: Europe’s financial turmoil, sputtering recovery in the United States and weak domestic investment growth, to name the most commonly cited factors. Since exports and investment account, respectively, for 30 percent and 40 percent of China’s gross domestic product growth, its economy is particularly vulnerable to weakening external demand and accumulation of non-performing loans caused by excessive and wasteful spending on fixed assets. But China’s vulnerability to these factors, as serious as they are, is symptomatic of deeper institutional problems. Until these underlying constraints are addressed, talk of a new consumption-based growth model for China, reflected in the government’s recently approved 12th Five-Year Plan, can be no more than lip service. After all, China’s major trading partners, international financial institutions such as the World Bank and the International Monetary Fund, and senior Chinese officials themselves have long recognised the structural vulnerabilities caused by excessive investment and low household consumption. And, for nearly a decade, China has been urged to undertake reforms to redress these economic patterns, which have undermined the welfare of ordinary Chinese and strained the global trading system. The best-known feature of China’s macroeconomic imbalances is heavy dependence on exports for growth, which is typically attributed to weak domestic demand: as a middleincome country, China lacks the purchasing power to consume the goods that it produces. With nearly unlimited access to advanced-country markets, China can tap into global external demand and raise its GDP growth potential, as it has done for the past two decades.

Hard to do business If this view is right, the solution is straightforward: China can correct its imbalances by increasing its citizens’ incomes (by cutting taxes, raising wages or increasing social spending), so that they can consume more, thereby reducing the economy’s dependence on exports. Indeed, nearly all mainstream economists prescribe this approach for China. But there is another explanation for China’s excessive export dependence, one that has more to do with the country’s poor political and economic institutions. Specifically, export dependence partly reflects the high degree of difficulty of doing business in China. Official corruption, insecure property rights, stifling regulatory restraints, weak payment discipline, poor logistics and distribution, widespread counterfeiting and vulnerability to other forms of intellectual-property theft: all of these obstacles increase transaction costs and make it difficult for entrepreneurs to thrive in domestic markets. By contrast, if China’s private fi rms sell to Western multinationals, such as Wal-Mart, Target or Home Depot, they do not have to worry about getting paid. They can avoid all of the headaches that they would have encountered at home, because well-established economic institutions and business practices in their export markets protect their

interests and greatly reduce transaction costs. The Chinese economy’s institutional weakness is reflected in international survey data. The World Bank publishes an annual review of “the ease of doing business” for 183 countries and sub-national units. In its June 2011 survey, China was ranked 91st, behind Mongolia, Albania and Belarus. It is particularly difficult to start a business in China (151st), pay taxes (122nd), obtain construction permits (179th) and get electricity (115th). Faced with such a hostile environment, Chinese private entrepreneurs have been forced to engage in “institutional arbitrage” – taking advantage of efficient Western economic institutions to expand their business (most export-oriented businesses are owned by private entrepreneurs and foreign firms).

The need for rule of law Unfortunately, as China has already claimed a large share of the world’s merchandise exports (10.4 percent in 2010) and economic stagnation in the West is constraining external demand, this strategy can no longer work. But reorienting their businesses toward the Chinese domestic market requires far more than government policies that put more money in consumers’ pockets. In order to enjoy the same low transaction costs that they have in exporting, China’s entrepreneurs need a much better business environment: an effective legal system, a sound regulatory framework, a government that protects their brands by fighting intellectual-property theft, dependable logistics and distribution networks, and a graft-resistant bureaucracy. China cannot create such an environment quickly. In essence, the Chinese government must transform a predatory state into a nurturing one, and treat private entrepreneurs as creators of wealth rather than targets of extraction. In nearly all other countries, such a transformation was accomplished by establishing the rule of law and/or moving from autocracy to democracy. The impossibility of sustaining growth in the absence of the rule of law and political accountability presents the Chinese Communist Party with an existential dilemma. Ever since it crushed the pro-democracy movement in Tiananmen Square in 1989, the party has vowed not to surrender its political monopoly. The investment boom and the globalisation dividend of the last two decades allowed the Chinese Communist Party to have its cake and eat it – maintaining its rule on the basis of economic prosperity, while failing to establish the institutions critical to sustaining such prosperity. Today, this is no longer possible. So in a sense, the Chinese bubble – as much an intellectual and political bubble as an economic one – has burst. As China’s economic deceleration exposes its structural vulnerabilities and flawed policies, the much-hyped notion of “Chinese exceptionalism” – that China can continue to grow without the rule of law and the other essential institutions that a modern market economy presupposes – is proving to be nothing but a delusion. AUGUST 2012

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Photo: Ant贸nio Leong

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mbspecial THE TOP-100

MB#100 AUGUST 2012

PHOTOS BY: LUÍS ALMOSTER

MB#055 NOVEMBER 2008

MB#056 DECEMBER 2008

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THE WATCH LIST

For the first time, Macau Business selects the city’s 100 leading companies to watch BY LUCIANA LEITÃO AND EMANUEL GRAÇA

hat does gaming operator Sands China Ltd have in common with designer-brand company Macau Creations Ltd? Both are included in Macau Business’s maiden list of the city’s 100 leading companies to watch. The list highlights what our newsroom has selected as Macau’s most significant corporations, both private and public. It departs from lopsided rankings based on a single economic metric, like sales. Instead, we used a weighting of financial and non-financial criteria, covering revenue, performance, relevance and contribution to the city’s development. We threw in a deliberate bias in favour of Macau-based companies that albeit small in size, nevertheless play a significant role here. The list – organised by sector and in alphabetic order – spans almost 20 industries, with banking and finance, and casino and junket operators dominating, with 12 entries each.

3 BCM Serving both commercial and retail banking customers in Macau, Banco Comercial de Macau SA (BCM) operates a total of 14 branches. BCM bank is a sister company of Macau Insurance Company Ltd and Macau Life Insurance Company Ltd – they are part of Hong Kong-listed Dah Sing Financial Group. 5 Delta Asia Bank Delta Asia Bank Ltd is a Macau-based bank owned by Delta Asia Financial Group and headed by Stanley Au Chong Kit. Delta Asia was brought to the world’s attention in 2005 when the Macau authorities took control of the bank after the U.S. claimed it was being used to launder money from North Korea. Nothing was proven and control of the bank was returned to Delta Asia Financial Group two years later.

Banking & Finance 1 AIA Life insurer American International Assurance Co Ltd (AIA) is the insurance sector’s market leader. It had 28.5 percent of combined gross premium income last year. 2 Bank of China The Bank of China (Macau Branch) Ltd is the city’s largest financial institution. With close to 30 subbranches and over 1,000 employees, its mainstream banking services boast one third of the market share. It is a subsidiary of state-owned Bank of China, playing a significant role in the economic integration of Macau with the mainland.

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4 BNU Both a commercial and issuing bank, Banco Nacional Ultramarino SA started its operations in Macau in 1902. It is a wholly owned subsidiary of Caixa Geral de Depósitos SA, a banking group controlled by the Portuguese government. Last year, BNU laid down a strategic plan to boost competitiveness, having identified 15 growth areas. The transformation project is to be finalized by 2014. As of the end of last year, BNU had around 180,000 clients. It currently has 14 branches.

6 Geocapital Macau-based Geocapital Holdings Ltd was created in 2006 to take advantage of the investment potential created by the Forum for Economic and Trade Cooperation between China and Portuguese-Speaking Countries. Its key investors are Portuguese businessman Jorge Ferro Ribeiro, Stanley Ho Hung Sun and Ambrose So Shu Fai. The company already has a presence in the banking and financial sectors of several Portuguese-speaking countries. Geocapital is also engaged in bio-fuel production projects in Africa. 7 HMV & Associates HMV & Associates – Certified Public Accountants is a leading Macaubased accounting and auditing firm, rubbing shoulders with the world’s four main accounting and auditing firms – Deloitte, KPMG, Ernst & Young and PricewaterhouseCoopers – each of them with a branch here.

Car dealers

8 HSBC The Hong Kong and Shanghai Banking Corporation Ltd (Macau Branch) was first established in 1972. It offers a comprehensive range of banking services to retail and corporate customers. It is a member of the HSBC Group, which has operations in 85 countries and territories. It has a deep-rooted history in Macau in corporate banking.

13 BMW BMW Concessionaires (Macau) Ltd is the exclusive distributor and retailer for BMW and Mini brands. It is part of the Sime Darby Bhd group, a Malaysiabased conglomerate. Sime Darby also controls Harper Engineering (Macau) Ltd, which has the exclusive distributorship for Ford, Peugeot, Mitsubishi, Suzuki and Land Rover. Rolls-Royce’s authorised dealer in Macau, Goodwood Motors Ltd, is also under the Sime Darby group.

11 Tai Fung Bank Tai Fung Bank Ltd is the third-largest bank in Macau with a deposit market share of 10 percent at end-2011, according to rating agency Fitch. As of the end of the last year, it had total deposits of MOP43.1 billion and a loan portfolio of MOP29.6 billion. It has 22 local branches and his controlled by Bank of China, which has a 50.3-percent stake in it.

9 ICBC The Industrial and Commercial Bank of China (Macau) Ltd is a group member of state-owned Industrial and Commercial Bank of China Ltd. It was formally established in July 2009, upon ICBC’s injection of all assets of its Macau branch into Seng Heng Bank, previously owned by STDM. It is one of the fastest growing banks in the city, with an aggressive strategy to boost its market share. It is eyeing to become the city’s first lender to open an office on Hengqin Island. 10 Macau Pass Macau Pass SA is the operator of the Macau Pass e-payment system. The Macau Pass is a contactless smartcard that can be used to pay for bus fares, and in some of the city’s car parks, vending machines, supermarkets and convenience shops. The company has been rapidly increasing its footprint – last year alone, the usage of Macau Pass increased by over 20 percent. Macau Pass has already made progress in the mainland by collaborating with UnionPay, China’s largest payment network.

14 Vang Iek Group The company has been operating in Macau for almost 80 years. It has a wide business portfolio, much of it related to motor vehicles. It is the Macau distributor of several popular mass-market car brands, including Mazda and Hyundai, and the luxury brand Jaguar. It also owns Vang Iek Radio-Taxi Company Ltd, which operates the yellow taxi service. 15 Xin Kang Heng Xin Kang Heng Holdings Ltd is one of the largest car dealers in Macau. It is the distributor for Honda, Nissan, Audi, Bentley, Saab, Opel, Renault and Isuzu.

Grant Govertsen

12 Union Gaming Research Las Vegas-based Union Gaming Group opened its Union Gaming Research Macau Ltd subsidiary last year. It is the first and so far only equity and research firm to have set up shop here, focused exclusively on gaming. Led by analyst Grant Govertsen, the company aims to have better and more accurate access to information by being based in Macau.

16 Yat Fung Motors Yat Fung Motors Ltd is the authorized dealer of four Japanese auto brands in Macau – Toyota, Lexus, Hino and Daihatsu. It is a wholly owned subsidiary of Hong Kong-based Crown Motors Ltd. 17 Zung Fu Motors Zung Fu (Macau) Ltd is the exclusive retailer of Mercedes-Benz automobiles in Macau. It is a subsidiary of the Jardine Motors Group, which is a member of the Jardine Matheson Group. Its sales volume has benefited from the increasing demand for luxury rides in Macau. AUGUST 2012

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Casino and junket operators 18 AERL Asia Entertainment & Resources Ltd operates three VIP gaming rooms at StarWorld, the Venetian Macao and Galaxy Macau. While it may not be one of the largest players in the VIP segment, the company is the only junket operator listed on the Nasdaq, in the United States, which provides it with extra visibility. In May, it announced that it was engaging an investment bank and a Hong Kong law firm for a pre-IPO enquiry in relation to seeking a dual listing of its securities in Hong Kong.

21 Melco Crown Casino operator Melco Crown Entertainment Ltd is listed both on the Nasdaq and in Hong Kong. Australia’s Crown Ltd holds a 33.65 percent stake in the company, similar to that of Lawrence Ho Yau Lung’s Hong Kong-based Melco International Development Ltd. Melco Crown is preparing to restart construction works at its Macau Studio City project in Cotai, in which it acquired a majority stake last year. The company is also expanding abroad – it recently clinched a deal to enter the Filipino gaming market. Melco Crown controls Mocha Clubs, which runs the largest slot parlour network in Macau.

23 Neptune Group Hong Kong-listed Neptune Group Ltd is engaged in VIP gaming, with a reported portfolio of over 10 VIP rooms. The group is probably best known to the general public as the operator of a casino cruise based in Hong Kong, but the ship was sold last year. The company is looking to expand its VIP room portfolio.

24 New Macau Landmark Led by outspoken businessman David Chow Kam Fai, New Macau Landmark Development Ltd operates the Landmark Macau Hotel and its Pharaoh’s Palace Casino. It also controls the lacklustre theme park Macau Fisherman’s Wharf and its Babylon casino. Last month, Mr Chow announced a revamp programme for the theme park, with further details to be disclosed soon. 19 Galaxy Entertainment Group Hong Kong-listed Galaxy Entertainment Group Ltd owns StarWorld hotel-casino, four third-party promoted CityClub casinos, and Galaxy Macau, whose second phase is currently under construction – it is expected to open by mid-2015. Hong Kong’s Lui family controls the casino operator. Last year’s Galaxy Macau opening was a game changer for the company, helping it to triple its profits. 20 Jimei Group According to its website, Jimei Group runs 10 gaming facilities in Macau, including Jimei casino, located at Grand Lapa hotel and operated under an SJM gaming licence. It is one of the largest junket operators in Macau. It is also present in other regional markets, including Hong Kong, where it is engaged in casino cruises.

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22 MGM China Hong Kong-listed MGM China Holdings Ltd is the smallest casino operator in Macau by gross gaming revenue market share. It has only one hotel casino, MGM Macau, and has yet to ensure a foothold in Cotai. U.S.-based MGM Resorts International Inc owns a 51 percent stake in the company, while businesswoman Pansy Ho Chiu King owns 20 percent of MGM China.

25 Paradise Entertainment Hong Kong-listed Paradise Entertainment Ltd runs Casino Kam Pek Paradise, one of SJM’s thirdparty operated casinos. It also owns equipment supplier LT Game, the largest supplier of live table game machines in Macau, with reportedly over 1,000 live table multi-game seats installed. Prospects for LT Game are bright, as analysts expect a sharp rise in the number of electronic table game seats in Macau, due to the existing cap on the number of live gaming tables. 26 Sands China Hong Kong-listed Sands China Ltd opened the first U.S.-owned casino in Macau, the Sands Macao, back in 2004. It now has four properties here. Its Sands Cotai Central casino resort will roll out its second phase next month. The casino operator already has a new Cotai project in the pipeline, just next to its Four Seasons hotel. It is a subsidiary of Las Vegas Sands Corp, the largest listed gaming company in the world.

Communications and marketing

27 SJM Holdings SJM Holdings Ltd is the largest casino operator in Macau, but has yet to be allowed to expand to Cotai. It is the successor of the holder of the former casino monopoly, STDM. The Hong Kong-listed company controls over half of the city’s 32 functioning casinos, although 14 are run by third party operators. STDM controls the company. 28 SunCity Group Established in 2007, Suncity Group is now one of the largest junket operators in Macau, with 14 VIP rooms, according to its website. Its portfolio also includes Poker King Club, at StarWorld, Sky 21 bar and restaurant, and Club Lotus nightclub. It runs a high-roller operation at Paradise Walkerhill casino in South Korea, among other overseas business interests. Alvin Chau Cheok Wa heads the group.

30 Conde Group The Conde Group specializes in advertising, branding, design, event management, marketing communications and marketing strategy. Established almost 20 years ago in Macau, it has expanded to the U.K. and Hong Kong. It has a wide Macau-based client portfolio. 31 JC Decaux JCDecaux (Macau) Ltd is a joint venture between France’s JCDecaux SA and Macau-based HN Group. It was granted a 20-year street furniture advertising concession in 2001 by the government. In 2003, JCDecaux (Macau) Ltd was officially granted the airport advertising concession. Recently the company has added bus body spots to its portfolio.

Conglomerates 29 Wynn Macau Controlled by U.S.-based Wynn Resorts Ltd, Hong Kong-listed Wynn Macau Ltd is one of the city’s six casino operators. It owns and manages Wynn Macau hotel-casino, including adjacent sister property Encore. The company received in May authorisation from the government to build a casino resort in Cotai. It is expected to cost up to US$4 billion and to open doors in 2016.

33 Golden Dragon Group The Macau-based Golden Dragon Group, whose president is legislator Chan Meng Kam, is involved in retail, gaming, hospitality, tourism and real estate investment. It owns Jin Long Electrical Supermarket Ltd, one of the largest retailers for household appliances and digital products in Macau, as well as Golden Dragon and Taipa Square hotel-casinos. It has also investments in the mainland.

32 Meridian Concepts Meridian Concepts Ltd was one of the first Macau-based companies tapping into the increasing demand for corporate communication services by local firms, fuelled by the city’s economic boom. Its scope runs from marketing consultancy to advertising. Meridian Concepts’ portfolio includes both government bodies and Macaubased companies.

34 HN Group Founded in 1920, the HN Group Ltd operates in a wide range of businesses. It has interests in retail and distribution, tourism and services, healthcare, construction, facility management and environmental protection. It has several partnerships with internationally established partners focusing on the Macau market. Amber Li, the niece of former Legislative Assembly president Susana Chou, who previously headed the conglomerate, now controls HN Group.

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Construction & planning

35 Nam Kwong Group Nam Kwong (Group) Co Ltd is a state-owned company with several business interests in Macau, from trade to hospitality to property and logistics. The company is a major economic actor here and has close ties to the central government. Established in 1949, it holds monopolies or ‘quasi-monopolies’ in the distribution and trade of key products, including oil and meat imports from the mainland. Nam Kwong has over a dozen of subsidiaries. Last month, its Nam Kwong Natural Gas Co Ltd subsidiary signed a 25-year natural gas distribution agreement with the government. In 2011, Nam Kwong acquired public bus operator TCM.

36 Shun Tak Established in 1972, Shun Tak Holdings Ltd is a leading Hong Kong-based conglomerate with a strong presence in Macau. The Hong Kong-listed company operates TurboJet ferries, has a stake in the One Central complex and is the developer of the New Park residential project in Taipa, among several interests here. It holds an 11.5-percent effective stake in STDM. Pansy Ho Chiu King controls Shun Tak, in partnership with her sisters Daisy Ho Chiu Fung and Maisy Ho Chiu Ha. 37 STDM Controlled by Stanley Ho Hung Sun’s family, Sociedade de Turismo e Diversões de Macau, SA (STDM) held a casino gaming monopoly in Macau from 1962 to 2002. It is the biggest shareholder in gaming operator SJM Holdings Ltd, with a 60-percent stake. In addition to casino and non-casino gaming, STDM is a large player in hospitality, property and infrastructure. AUGUST 2012

38 CAA CAA City Planning and Engineering Consultants Ltd offers a wide range of urban planning, architecture and engineering services. Legislator Chui Sai Peng established it. It has been engaged in public ventures, and hotelcasino and residential projects. 39 China State Construction Engineering Corp China State Construction Engineering (Macau) Corp is the local subsidiary of state-owned builder China State Construction Engineering Corporation. It has been involved in several largescale projects like Macau Tower, City of Dreams and Wynn Macau. 40 Hsin Chong Engineering Macau Ltd It is the local subsidiary of Hong Kong-listed Hsin Chong Construction Group. It has been engaged in the construction of several casino resorts in Cotai. It is currently involved in the second phase of Galaxy Macau and in Sands Cotai Central.

43 PAL Asiaconsult PAL Asiaconsult Ltd is an architecture and engineering consultancy company established in Macau since 1978. It has been involved in several major infrastructure projects like the airport, the Macau Dome and, more recently, the permanent Taipa ferry terminal.

41 Macau Cement Macau Cement Manufacturing Co Ltd is a Macau-based cement producer with an annual output of 600,000 tons. Its plant is located in Coloane. Beijing-based Citic Group controls the company.

44 Top Builders Top Builders Group Ltd is one of the largest privately owned construction companies in Macau. It has participated in several large-scale projects including the Sands Macao, the Macau Cultural Centre and the Venetian Macao.

42 Marreiros Architects Marreiros Architects, Engineers and Town Planners Ltd specialises in providing architectural, engineering and planning services. Founded by local architect Carlos Marreiros, the company has been involved in several high-profile projects, like Tap Seac Square’s revamping. It has also been engaged in casino-related projects.

Environment 45 CESL – Asia Operating in Macau since 1987, CESL – Asia, Investments and Services Ltd provides environmental infrastructure and facilities management as well consultancy services to the public and private sector. It manages several government-owned environmental facilities.

48 Great Time Great Time Ltd was established in 1985 and specialises in food and beverage distribution in Macau, carrying several premium brands. It is one of the largest Macau-based beverage importers.

46 CSR CSR – Macau Residue System Company Ltd is a joint venture between a subsidiary of Suez Environment and HN Group. It provides waste management services to the city. 49 Koi Kei Bakery With its first shop inaugurated in 1997, Koi Kei Bakery currently sells over 300 varieties of food souvenirs for tourists, including Chinese almond cakes, peanut sweets and egg rolls. Koi Kei has 14 branches in Macau, plus six in Hong Kong, according to its website. It has its own factory and employs around 400 people. It is arguably the most successful player in the “food souvenir” market in Macau.

Food & beverage 47 Future Bright Future Bright Holdings Ltd is a Macaubased group mainly engaged in the food and beverage business. By end-2011, the group operated a total of 24 restaurants and 10 food court counters with a gross floor area of 10,533 square metres and an average annual revenue of about HK$50,542 per square metre. Future Bright also owns the Future Bright Amusement Park, near Camões Garden. Legislator Chan Chak Mo controls the group. The company has continued to expand in recent years: last month, it won the bid for the operation of three restaurants and a coffee shop at the new campus of the University of Macau on Hengqin Island.

50 Lord Stow’s Lord Stow’s Bakery is one of Macau’s leading tourist attractions. From the small Coloane shop that began selling its signature egg tarts two decades ago, the company has grown to five venues across the city. It also has an exclusive licensing deal with the Excelsior Hotel Hong Kong and franchises in South Korea, Japan and the Philippines. It sells an average of about 10,000 egg tarts a day.

51 Seapower Established in 1997, Seapower Trading Co Ltd is a major wine and spirits distributor in Macau. The company is a subsidiary of the Seasons Group. It represents some of the world’s top spirits companies including Pernod Ricard, Bacardi and Brown-Forman.

52 Servair Macau Macau Catering Services Company Ltd, better known as Servair Macau, is one of the biggest and oldest French ventures in the territory. It is a joint venture between ServairSATS Holdings and a group of local companies, including STDM, HN Group and Wu’s Group. Incorporated in Macau in 1995 initially as an airline catering company, Servair Macau has been expanding from its core business and now also offers tailor-made or specialised catering services for schools, staff canteens, events and even private parties.

Gaming suppliers

53 Aristocrat Aristocrat (Macau) Pty Ltd is one of the most successful slot machine suppliers in Macau, claiming a market share in the range of 60 percent. It is a subsidiary of Australia-based Aristocrat Leisure Ltd. Its biggest challenge is how to defend its market share and further grow it. Philippines and Singapore are other markets that Aristocrat is eyeing to explore from its Macau base. 54 Aspect Gaming Aspect Gaming Ltd is one of the first Macau-based slot-machine manufacturers, which earns it its spot on this list. The company has its headquarters in Macau, where marketing, sales support and market research is done. Its Shanghai office is where the primary development team is based. AUGUST 2012

mbspecial THE TOP-100 64 55 Bally Bally Macau Ltd is the local subsidiary of the Las Vegas-based Bally Technologies Inc. Established in 2006, the company’s offering in Macau covers both casino systems and slot machine games. Bally has recently included SJM on its systems client list, which also features Sands China and Galaxy Entertainment Group. Bally’s challenge here is how to further grow on the games side. 56 IGT Asia One of the biggest suppliers to the gaming industry worldwide, International Game Technology Inc is present in Macau through its subsidiary IGT Asia (Macau) Ltd. The Las Vegas-based company dominates the North American slots market with a 50 percent share of installed base, though its Macau share is below 10 percent. In order to boost sales here, IGT is placing its chips on new products specially tailor-made for the Chinese market.

57 Shuffle Master Shuffle Master Asia Ltd is the local subsidiary of U.S.-based Shuffle Master Inc, a leading supplier of shuffling machines, table games, slot machines and other casino products. Shuffle Master dominates the Macau market in the utility products segment and is trying to replicate this success in other segments. AUGUST 2012

Hospitality 58 Mandarin Oriental The Mandarin Oriental Hotel Group was one of the first international five-star hotel chains to enter Macau. It manages two five-star hotels here: STDM-owned Grand Lapa and the Mandarin Oriental, Macau, located in the One Central complex, a joint venture between Shun Tak and Hongkong Land Ltd. It also manages “The Residences & Apartments at Mandarin Oriental, Macau”, the first luxury hotel-branded apartments available for sale in Macau.

59 Westin Resort The Westin Resort Macau opened in Coloane in 1993. It is managed by Starwood Hotels and Resorts Worldwide, and owned by STDM. It has 208 rooms or suites and is one of the few five-star hotels without a casino on its premises. In Macau, Starwood also manages the Sheraton Macao Hotel, to open next month. When fully opened, it will be the biggest hotel in the Sheraton chain, and in Macau.

Industrial Production

60 SIM – Sociedade Industrial de Macau SIM - Sociedade Industrial de Macau Ltd is dedicated to coffee production. The company’s MOP200-million production site is located in the Zhuhai-Macau Cross Border Industrial Zone. SIM was established in 2005 to meet Asia’s fast growing demand for coffee. It is owned by Portuguese entrepreneur Vasco Pereira Coutinho (no relation to Macau legislator José Pereira Coutinho).

Media

61 Ho Tin Industries Over the last 50 years, Ho Tin Industries Ltd has been involved in the manufacture of an extensive range of consumer products, including household appliances and solar energyrelated products. The group is lead by Ho Iat Seng, a local high-profile political figure. It owns several factories in the mainland.

62 Hovione Hovione PharmaScience Ltd is the local subsidiary of pharmaceutical group Hovione, headquartered in Portugal. Its factory in Taipa is arguably the largest high-tech plant in Macau. Most of the company’s staff are highly skilled, with production-line workers accounting for less than 30 percent of the total. It produces generic and custom-made pharmaceutical products. The United States is its main market, followed by Europe, Australia and New Zealand. 63 Welfare Welfare Printing Ltd owns the largest printing plant in Macau. Its business volume has been growing, as the city’s editorial industry has also expanded in recent years.

64 Cable TV Macau Cable TV Ltd is the only legal pay-TV provider in Macau. Its exclusive concession expires in 2014. It has always faced tough competition from unlicensed service providers that charge low fees to retransmit TV channels from around the Asia-Pacific region to households, using unlicensed cable networks and without authorization from the copyright holders. The company posted a net profit of MOP5.8 million for last year, only the second time it has been able to make a profit. Cable TV has shown interest in offering triple play services (TV, phone and Internet), but has yet to receive government approval. 65 Ignite Media Group Ignite Media Group is a multi-platform media group, with a presence in online, outdoor and print media. The group has expanded rapidly since it was established in 2009. It recently sold its online property portal Vproperty to Iproperty Group Ltd, owner and operator of a network of property websites across Asia.

66 Macau Daily News Diário de Macau – Empresa Jornalística e Editorial Lda publishes the Chineselanguage newspaper Macau Daily News. Often known by its Chinese name “Ou Mun Iat Pou”, it is Macau’s largest and most influential daily. The paper is often linked to pro-Beijing interests.

67 Project Asia Corp Project Asia Corporation is a growing media conglomerate. It includes publishing company De Ficção – Multimedia Projects, the publisher of Macau Business magazine, which earlier this year launched English-language newspaper Business Daily. Project Asia Corp also has a stake in Global Asia Media, a joint venture that publishes the bimonthly glossy magazine Essential Macau. It is also engaged in strategic advertising through its Goldfish Creative Agency and in event management.

Non-casino gaming operators 68 Macau Canidrome Macau (Yat Yuen) Canidrome Co Ltd runs the city’s only greyhound racing operation. The company is controlled by STDM. After peaking in 2010, its gross gaming revenue has been dropping at a double-digit pace.

69 Macau Horse Racing Co The Macau Horse Racing Co Ltd has a monopoly on the Macau market for betting on horse races until August 2015. The company, part of Stanley Ho Hung Sun’s family business empire, has been losing money for several years. The last year that it was in the black was 2004, when its operating profit was MOP52.9 million. Last year, it posted a MOP17.8 million loss. 70 Macau Slot Macau Slot Co Ltd holds a ‘de facto’ monopoly on non-racing sports betting, namely for football and basketball. Its contract was renewed recently, now lasting until June 2015. Macau Slot is controlled by STDM.

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Real Estate 71 Centaline Centaline (Macau) Property Agency Ltd is a subsidiary of Centaline Property Agency Ltd. It was established in October 2004 and provides real estate services. It now has five branches in Macau and Taipa, plus its head office.

74 Midland Midland Macau Ltd opened its first real estate agency in 2004. Its network of seven branches covers both Macau and Taipa. Its parent company, Midland Holdings, is listed on the Hong Kong Stock Exchange.

72 Jones Lang LaSalle Jones Lang LaSalle is an international professional services firm specializing in real estate. Its local subsidiary provides property management services for Grade A office towers and highprofile residential buildings. Jones Lang LaSalle also acts as a sales and marketing consultant.

75 Ricacorp Founded in 1981, Hong Kong-based Ricacorp Properties Ltd focuses on providing real estate agency services. Its local subsidiary Ricacorp (Macau) Properties Ltd is one of the largest players in Macau, with a network of eight branches.

78 F. Rodrigues One of the oldest trading companies in operation in Macau, F. Rodrigues (Sucessores) Lda was founded in 1916 and mainly focuses on the import of Portuguese products. It is also engaged in the travel agency business.

79 Macau Creations The need to diversify the economy by nurturing creative and cultural industries has long been a staple of the governmentâ&#x20AC;&#x2122;s rhetoric but not much has been done so far. But one company stands out: Macau Creations Ltd, which probably has the largest privately owned portfolio of creative brands in town. Macau Creations designs custommade products using artworks by local artists as motifs. It opened its first shop in July 2010 and has been expanding ever since. It recently opened its third shop at Venetian Macao.

73 Macau Property Opportunities Fund Macau Property Opportunities Fund Ltd is a closed-end investment company listed on the London Stock Exchange. It focuses on investing in property primarily in Macau. It owns the Waterside, a collection of 59 luxury apartments for lease, located at One Central complex. It is developing a low-density niche development on Penha Hill and a retail project nearby Senado Square. The company says it continues to assess new investment opportunities here.

Retail & Wholesale 76 Chow Tai Fook Chow Tai Fook Jewellery and Watch Company (Macau) Ltd is Macauâ&#x20AC;&#x2122;s largest jewellery retailer. It is part of the Hong Kong-listed Chow Tai Fook Jewellery Group, which first started here, in 1938. Chow Tai Fook has been one of the net beneficiaries of the tourism boom, which has boosted luxury retail sales to new highs.

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77 Dora Tam Design Award-winning jewellery designer Dora Tam owns Dora Tam Design, with one store in Taipa, where her collections are available for sale. She is the most successful Macau-based jewellery designer. Dora Tam Design is the sole Macau distributor of several worldclass designer labels. The company is also engaged in designing premium corporate gifts.

80 Rainbow Group The Rainbow Group is the largest distributor of high-end brand products in Macau, holding exclusive dealerships for more than 10 international fashion brands. It also owns a wide network of stores in the mainland. Last year, there were reports that the group was considering an IPO on the Hong Kong Stock Exchange, but the listing has yet to take place.

Transport

81 Royal Supermarket Founded in 1997, Royal Supermarket Company Ltd is one of the largest supermarket chains in Macau, selling both Chinese merchandise and overseas goods. It has embarked on a rapid expansion since 2005, with close to 30 branches nowadays, according to its website.

82 San Miu Supermarket Established in 1990, San Miu Supermarket Ltd is one of Macau’s most conspicuous supermarket chains. It currently has 14 branches, over 400 employees and an annual turnover of MOP500 million. It has two trading subsidiaries and has also set up offices in the mainland to help the company with procurement.

Telecommunications 83 CTM Companhia de Telecomunicações de Macau SARL (CTM) is the city’s only full telecom service provider. It is the leading provider of mobile services and has a monopoly on fixed-line services – but that could soon change, since the government is currently assessing the only bid submitted in a tender to liberalise the fixed telecommunications market. Earlier this year, CTM was troubled by two service breakdowns, but the company has vowed to improve its services. In May, it announced plans to invest MOP1.2 billion in the coming three years in network and service upgrades. CTM is majority-owned by international telecommunications company Cable & Wireless Communications. 84 Hutchison A subsidiary of Hong Kong-listed Hutchison Telecommunications Hong Kong Holdings Ltd, Hutchison Telephone (Macau) Co Ltd provides mobile services under the “3” brand. It is the second largest mobile telecommunications operator in Macau in terms of subscriber numbers. It experienced a service meltdown earlier this year, with about 200 clients unable to access the Internet for as long as 20 hours.

85 SmarTone SmarTone – Comunicacões Móveis SA is a mobile phone operator in Macau. It is a subsidiary of SmarTone Telecommunications Holdings Ltd, which is itself a subsidiary of Sun Hung Kai Properties Ltd, both of which are listed on the Hong Kong Stock Exchange. Its revenues for the second half of last year rose by 35 percent year-on-year to HK$179 million, driven by higher revenue from both local and roaming services. 86 Vodatel Headquartered in Macau, Vodatel Networks Holdings Ltd is a communications solutions provider. It has subsidiaries in Hong Kong and the mainland. As of March-end, Vodatel had over HK$40 million worth of orders on hand. Its clients include all the six gaming operators and the government, among others.

87 Air Macau Air Macau Co Ltd has had its fair share of turbulence in recent years, the flag carrier having gone through financial troubles, problems with pilots, and untoward incidents in the air and on the ground. But things might be turning around. The company made a profit of MOP250.8 million last year. In 2011, the carrier launched a programme to improve the quality of its service, with better aircrafts, better ground facilities and more staff training. A five-year plan envisages Air Macau concentrating on the Asia-Pacific region. 88 CAM The Macau International Airport Company Ltd – CAM has a concession to manage the airport until 2039. The government controls the company, with a 55-percent stake. Earlier this year, CAM raised MOP1.95 billion through the issuance of redeemable preference shares. The money was used to fully repay the bank loans related to the airport’s construction. Meanwhile, there are plans to further expand the infrastructure under a new master plan unveiled last year. 89 Jet Asia Jet Asia is a private jet operator based in Macau. The company is controlled by STDM and has been operating since 1995. Its fleet comprises 11 private aircraft, including six Hawker mid-size jets, according to its website.

90 Macau Parking Company CPM – Macau Parking Company Ltd runs several public car parks in Macau and the city’s parking meters. Since 2010, the company, in partnership with CEM started to set up electric vehicle charging stations in some of its car parks. AUGUST 2012

mbspecial THE TOP-100 68 91 Menzies Menzies Macau Airport Services Ltd is the sole ground handler at Macau International Airport. The sub-concession the company has, good until next year, includes the provision of aircraft maintenance, cargo and mail handling as well as ground handling. Menzies Aviation Group, one of the world’s largest aviation support companies, is the majority shareholders of Menzies Macau, with a 29 percent stake. 92 Reolian Reolian Public Transport Co Ltd is the newest public bus company in Macau, operating more than 40 percent of the existing routes since the new bus system was enacted in August 2011. It is a joint venture between France’s Veolia Transport RATP and HN Group. The company posted a MOP58.5 million net loss for 2011 and has been plagued by accidents and complaints of poor service.

93 Transmac Founded in 1952, Companhia dos Transportes Urbanos de Macau SARL (Transmac) is one of the earliest public transportation companies in Macau. It is one of the current three bus operators here. Liu Hei Wan is its chairman. The company’s profitability has been hit since the new public bus system was introduced in August 2011, due to increasing fuel and staffing costs.

95 Macao Water Established in 1932, Macao Water Supply Co Ltd is the city’s sole provider of tap water. It is a subsidiary of Sino-French Holdings (Hong Kong) Ltd, a joint venture between Suez Environment and NWS Holdings Ltd. In February, the company announced the launch of a long-term water supply optimisation project. Macao Water recorded a profit of MOP56.6 million last year, down by 5.4 percent year-on-year. 96 Sinosky Energy Sinosky Energy (Holdings) Co Ltd, a joint venture between Macau Natural Gas Co Ltd and China Petroleum and Chemical Corp, runs a monopoly for importing and transporting natural gas to Macau. The company posted a loss of MOP43.5 million last year, due to the increasing renminbi exchange rate, which has meant that import prices have surpassed the selling prices agreed to in the contract signed with the government. The company is in talks with the government to revise the contract terms.

Others

Utilities 94 CEM Companhia de Electricidade de Macau – CEM, SA (CEM) is the city’s sole electric public utility company. Two main groups of shareholders together hold 84 percent of CEM’s shares: a Sino-French group (with 42 percent) consisting mainly of Suez Environment and NWS Holdings Ltd; and a SinoPortuguese group, also with 42 percent, in which the biggest shareholder is Portuguese electricity utility EDP – Energias de Portugal SA. AUGUST 2012

97 G4S G4S Security Services (Macau) Ltd is part of international security provider group G4S. It provides security services to the gaming, banking and retail sectors and to the government. It is arguably the largest security company in Macau.

98 MSS Recruitment Macau Search & Selection (MSS) Recruitment Ltd has fed on the city’s growing need for specialist recruitment services. Last year, it added a sister company, hello-jobs. com, a Macau-focused online job portal. 99 Prime Prime Marketing & Promotional Services Co Ltd was established in 1992. It is the largest Macau-based player in international conventions, exhibitions and event management. It has assisted the government in organising several high-profile events and set up a branch in Beijing in 2005. 100 Seng San Enterprises The group, led by businessman Lionel Leong Vai Tac, is one of the few Macau-based companies to have successfully followed the economic changes in the city, switching its business from garment manufacturing to the services industry. Its sister company Smartable Holding Ltd owns one of the world’s largest commercial linen laundries, while Seng San converted its garment-manufacturing factory to a uniform cleaning plant. Both projects cater to the fast-growing hospitality sector.

PHOTOS BY: LUÍS ALMOSTER

MB#058 FEBRUARY 2009

MB#098 JUNE 2012

mbspecial THE TOP-100 70 4 Florinda Chan Ms Chan was first appointed Secretary for Administration and Justice in 1999, after a career in the public sector. Ms Chan is the only woman among the city’s principal officials. 5 Cheong U Prior to becoming the Secretary for Social Affairs and Culture in 2009, Mr Cheong headed the Commission Against Corruption.

From gaming to politics to arts, Macau Business has chosen the 100 most influential people in Macau. Meet those who lead us, challenge us and change our city BY ALEXANDRA LAGES

The officials 1 Fernando Chui Sai On Three years have passed since he was first appointed Macau’s second chief executive, succeeding Edmund Ho Hau Wah. It is likely Mr Chui will be reappointed for a second five-year term in 2014. Previously, he was the Secretary for Social Affairs and Culture in Mr Ho’s cabinet. Mr Chui’s family is regarded as one of the four most influential in Macau. 2 Francis Tam Pak Yuen Mr Tam has been the Secretary for Economy and Finance since the handover. Previously, he was a businessman. The gaming industry, Macau’s bread-andbutter, falls under his portfolio. 3 Lau Si Io Mr Lau replaced disgraced former Secretary for Transport and Public Works Ao Man Long in 2007, after Mr Ao was arrested on charges of corruption. He joined the civil service in 1984 and previously headed the Civic and Municipal Affairs Bureau. AUGUST 2012

6 Lau Cheok Va Mr Lau was elected president of the Legislative Assembly in 2009. A trade unionist, he has been a legislator since 1984 and was engaged in several preparatory committees related with the pre-handover works. He is a member of the National People’s Congress. 7 Vasco Fong Man Chong Mr Fong has headed the Commission Against Corruption since 2009, after his predecessor Cheong U was appointed Secretary for Social Affairs and Culture. Prior to this, he served as president of the Court of First Instance. 8 Cheong Kuoc Va Arguably the most low profile member in Fernando Chui Sai On’s cabinet, Mr Cheong has been the Secretary for Security since the handover.

9 Ho Chio Meng Working as the Public ProsecutorGeneral since 1999, in 2009, Mr Ho’s name was insistently floated in the press as a possible successor to Edmund Ho Hau Wah as chief executive. 10 Sam Hou Fai Mr Sam is the president of the Court of Final Appeal. He is the third-highest ranking official in Macau.

The casino kings 11 Sheldon Adelson Mr Adelson is the chairman of both gaming operator Sands China Ltd and U.S.-based parent Las Vegas Sands Corp. He was the first to introduce the casino resort concept to Macau. He also drove the transformation of Cotai from a swamp into the city’s newest gaming centre. But Mr Adelson’s outspoken style has earned him some trouble in the past with local officials. 12 Francis Lui Yiu Tung The son of Lui Che-woo, founder of Galaxy Entertainment Group Ltd, Mr Lui is currently the vice-chairman of the gaming operator. His father has already announced that, according to his succession plans, Mr Francis Lui is to take over Galaxy Entertainment Group. 13 Lawrence Ho Yau Lung Mr Lawrence Ho, son of casino mogul Stanley Ho Hung Sun, is the cochairman and chief executive of casino operator Melco Crown Entertainment Ltd. After receiving initial support from his father, he threw himself into building his own business empire. 14 Steve Wynn The chairman, president and chief executive of Wynn Macau Ltd, Mr Wynn also heads its U.S.-based parent company, Wynn Resorts. The passionate American casino mogul is accredited for having played a pivotal role in the resurgence and expansion of the Las Vegas Strip during the 1990s. In Macau, Mr Wynn rapidly understood that the American way of doing business doesn’t work here; he says former U.S president George Bush senior gave him sound advice on how to negotiate with Chinese officials. 15 Pansy Ho Chiu King The daughter of casino tycoon Stanley Ho Hung Sun, Ms Ho has a 20-percent stake in gaming operator MGM China Holdings Ltd and heads Hong Kongbased conglomerate Shun Tak Holdings Ltd. After MGM’s IPO last year, she became the richest woman in Hong Kong.

16 Angela Leong On Kei Before entering the Legislative Assembly in 2005 and becoming a major shareholder in SJM Holdings Ltd, the mother of three sons and two daughters was known to the world mainly as the fourth wife of Stanley Ho Hung Sun. Nevertheless, Mr Leong’s years spent at the side of the casino mogul have sharpened her potential. Her personal ventures include L’Arc hotel-casino, real estate in Hong Kong and an ambitious plan to build a theme park in Cotai. 17 Jim Murren Mr Murren is the chairman and chief executive officer of MGM Resorts International Inc, which controls MGM China Holdings Ltd.

The gambling foremen 18 Ambrose So Shu Fai Mr So is the chief executive officer of SJM Holdings Ltd and a long-time business associate of Stanley Ho Hung Sun. He has a personal passion for Chinese calligraphy. 19 Edward Tracy Mr Tracy is Sands China Ltd’s president and chief executive officer. He has recently seen his appointment renewed until August 2013. His immediate tasks are many. He has to ensure the successful opening of the second phase of Sands Cotai Central casino resort, while preparing to break ground for the parcel three project, also in Cotai. 20 Linda Chen Ms Chen has been the chief operating officer of Wynn Macau Ltd since September 2009. She is a long-serving executive under casino mogul Steve Wynn. Mr Wynn has hinted she may well be his successor when he eventually retires. 21 Michael Mecca A veteran gaming executive, Mr Mecca is president and chief operating officer of Galaxy Entertainment Group Ltd and was one of the people behind Galaxy Macau’s staggering success. 22 Grant Bowie Mr Bowie is the chief executive officer of gaming operator MGM China Holdings Ltd. The kiwi first arrived in Macau in 2003, as Wynn Macau’s president and general manager. He left four years into the job. In 2008, he was hired to head MGM Macau hotel-casino. AUGUST 2012

mbspecial THE TOP-100 72 23 Ted Chan Ying Tat Formerly the co-chief operating officer for gaming of Melco Crown Entertainment Ltd, Mr Chan was appointed as the company’s sole chief operating officer in February, after the departure of Nicholas Naples. He is a long-standing and trusted associate of Lawrence Ho Yau Lung. He was the chief executive of Amax Entertainment Holdings Ltd from December 2007 until November 2008, at a time when the company was one of Macau’s largest junket operators, playing a key role in the supply of VIP players to Crown Macau (now Altira). 24 Constance Hsu Ching Hui Since December 2008, Ms Hsu has been the president of Mocha Clubs, a subsidiary of Melco Crown Entertainment Ltd that runs the city’s largest network of slot parlours. She first entered the company in 2003.

The junkets 25 Alvin Chau Cheok Wa Mr Chau is the founder and co-owner of SunCity Group, one of the largest junket operators in Macau.

26 Jack Lam Yin Lok Starting his career in the junket industry in the early 1980s, Mr Lam is now the chairman of major junket operator Jimei Group. 27 Nick Niglio Mr Niglio is the chief operating officer of Neptune Group Ltd, which ranks among the city’s biggest junket investors. The American executive has been working in the gaming industry for over 25 years.

The tycoons 28 Liu Chak Wan Liu Chak Wan holds several business interests in Macau. He is a member of the national committee of the Chinese People’s Political Consultative and a member of the Executive Council, an advisory body to the government.

AUGUST 2012

29 Ma Iao Lai Businessman Ma Iao Lai is the president of the powerful Macau Chamber of Commerce. He is also a member of the national committee of the Chinese People’s Political Consultative Conference and a member of the Executive Council. 30 Lao Ngai Leong Mr Lao is a high-profile businessman in Macau, mainly engaged in real estate. He is also a member of the National People’s Congress. 31 Terry Sio Yuen Yee Ms Sio is the group founder and chief executive of Macau-based luxury brand retailer Rainbow Group. She first started the company in 1979. 32 Stanley Au Chong Kit Mr Kit is chairman of the Delta Asia Financial Group, which owns Banco Delta Asia Ltd. He ran a losing campaign against Edmund Ho Hau Wah in the election for the first chief executive in 1999. Afterwards Mr Ho appointed Mr Au to the Legislative Assembly. Mr Au has been the chairman of the Small and Medium Enterprises Association of Macau since its inception in 1998. 33 David Chow Kam Fai A former legislator, Mr Chow is a Macau-based businessman engaged in tourism, entertainment and gaming. Despite efforts to turn around business at his lagging Macau Fisherman’s Wharf theme park, he has yet to achieve success. Mr Chow is also the honorary consul of Cape Verde in Macau. His wife Melinda Chan Mei Yi has filled his shoes as a legislator. 34 Ng Fok A veteran entrepreneur with a wide range of business interests, Mr Fok owns President casino and was the biggest shareholder of the now bankrupted ferry operator Macao Dragon Co Ltd. He is also a Chinese People’s Political Consultative Conference delegate.

The opposition leaders 35 Au Kam San A teacher and grassroots activist, Mr Au is a member of pro-democracy political group New Macau Association, one of the winners of the 2009 direct election for the Legislative Assembly. He is one of Macau’s most outspoken legislators. 36 José Pereira Coutinho Mr Coutinho is a directly elected legislator and heads Macau’s largest civil servants’ association. He often targets Secretary for Administration and Justice Florinda Chan in his speeches. 37 Ng Kuok Cheong Ng Kuok Cheong is a long-standing directly elected legislator. He is a member of New Macau Association and every year helps to organise a candlelight vigil to mark the anniversary of the Tiananmen Square crackdown.

The politicos 38 Ho Iat Seng Seen as one of the front-runners to succeed Edmund Ho Hau Wah as chief executive in 2009, Ho Iat Seng was the first one to announce he was not considering running for the job. The businessman is currently Macau’s sole representative on the Standing Committee of the National People’s Congress. Before him, only iconic figures such as Ho Yin, Ma Man Kei and Edmund Ho had successfully held down such a pivotal post. Mr Ho ran for the Legislative Assembly in 2009 to become one of the four indirectly elected legislators representing the business sector. Still in his first term, he surpassed several more experienced legislators to be selected as the Legislative Assembly’s vice-president. He heads Ho Tin Industries Ltd and the Industrial Association of Macau. 39 Kwan Tsui Hang Trade unionist Ms Kwan is a veteran directly elected legislator. She was the most voted for legislator in the 2009 election.

40 Chan Meng Kam Directly elected legislator Chan Meng Kam is also a member of the Executive Council. He was born in Fujian province and is considered the leader of the Fujian community here. He is a Chinese People’s Political Consultative Conference delegate, and is also a businessman, heading the Golden Dragon Group. 41 Chui Sai Cheong The older brother of Chief Executive Fernando Chui Sai On and an indirectly elected legislator for the professional services sector, Mr Chui is also a member of the Chinese People’s Political Consultative Conference. He is engaged in auditing and accounting, and heads Chui’s Investment Co Ltd, a player in real estate. 42 Leonel Alves Lawyer Leonel Alves is an indirectly elected legislator for the professional services sector. He is also a member of the Executive Council. He is a member of the Chinese People’s Political Consultative Conference and Sands China Ltd legal adviser. 43 Cheang Chi Keong Mr Cheang sits in one of the four indirectly elected seats for the business sector in the Legislative Assembly. He is also the deputy general manager of the Bank of China (Macau Branch) Ltd. 44 Kou Hoi In Mr Kou is a prominent businessman and heads the board of directors of the influential Macau Chamber of Commerce. He is also an indirectly elected legislator for the business sector and a member of the National People’s Congress. 45 Tommy Lau Veng Seng Developer Tommy Lau is an appointed legislator. He heads the Macau Association of Building Contractors and Developers, and the Macau Management Association. 46 Ho Ion Sang Mr Ho is a directly elected legislator. He is a member of the influential General Union of Neighbourhood Associations of Macau, commonly known by its Cantonese name Kai Fong. He works in Bank of China (Macau Branch) Ltd.

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The Beijing boys 47 Bai Zhijian Mr Bai has headed the Liaison Office of the Central People’s Government in Macau since 2002. He is one of the people who regularly briefs Beijing about what happens here. 48 Niu Jing Mr Niu is the director general of the Administrative Committee of Hengqin New Area, which oversees development there. There are hopes Hengqin may play a significant role in the economic diversification of Macau – Mr Niu is likely to have a say on that. 49 Hu Zhengyue Appointed last year as commissioner of the Ministry of Foreign Affairs in Macau, Mr Hu was born in Zhejiang Province and is a high official of the Ministry of Foreign Affairs. 50 Chang Hexi Mr Chang heads the Beijing-backed Forum for Economic and Trade Cooperation between China and Portuguese-Speaking Countries, widely known as Forum Macau, as it is based here.

The high-profile managers 51 Ye Yixin Mr Ye is the general manager of Bank of China (Macau Branch) Ltd. He is also the chairman of the Macau Association of Banks. 52 Xu Kaicheng Mr Xu is the chairman of state-owned Nam Kwong (Group) Co Ltd, one of the largest Macau-based conglomerates.

53 Franklin Willemyns A Belgian national, Mr Willemyns has held several senior executive positions around the world in affiliates of French group Suez Environment SA. After a stint in Macao Water Supply Co Ltd, in 2007 he was appointed as the chief executive of Companhia de Electricidade de Macau – CEM. He is fluent in six languages. AUGUST 2012

54 Felix Fan Xiaojun As the executive director of Macao Water Supply Co Ltd, Mr Fan is incharge of ensuring the city doesn’t suffer any new salinity crises in its tap water – the last was in 2006. 55 Vandy Poon Mr Poon became the chief executive of telecom operator CTM in September 2007. He is so far the first and only local to head a utility company in Macau. He has been working in CTM for over 20 years. 56 Zheng Yan Zheng Yan has been the chairman of flag carrier Air Macau Co Ltd since last year. He first arrived at Air Macau in 2008, when he was appointed president of the airline’s executive committee.

The bureaucrats 57 Anselmo Teng Lin Seng Low profile Anselmo Teng is the chairman of the Monetary Authority of Macau, overseeing the city’s financial sector. 58 Manuel Joaquim das Neves Mr Neves has headed the Gaming Inspection and Coordination Bureau since 1997. He first started working for the gaming regulator in 1985. Last year, non-profit organisation International Masters of Gaming Law honoured him as the “Gaming regulator of the year – evolving jurisdictions”. 59 Jackson Chang Cheong Chou Weng, alias Jackson Chang, has led the Macau Trade and Investment Promotion Institute since 2010. His job is to convince investors there is more to the city than just gaming – no easy task. He entered the public administration in 1989. 60 Jaime Roberto Carion Mr Carion heads the Lands, Public Works and Transport Affairs Bureau. Land grants for casino resorts in Cotai must pass through him. Although tainted by the mega-graft case involving former Secretary for Transport and Public Works Ao Man Long, Mr Carion was never charged with any wrongdoing.

75 61 João Costa Antunes Previously a civil engineer, Mr Costa Antunes, eventually found his way into tourism. He was first appointed director of the Macau Government Tourist Office, which he still heads, in 1988. Mr Costa Antunes also oversees the Macau Grand Prix organising committee. 62 Lei Chan Tong Mr Lei is the director of the Transportation Infrastructure Office, the bureau in-charge of the light rail transit system project. 63 Raymond Tam Vai Man Raymond Tam has been the president of the Civic and Municipal Affairs Bureau since 2007. He replaced Lau Si Io after Mr Lau was appointed Secretary for Transport and Public Works. 64 Cheong Sio Kei Mr Cheong is the maiden director of the Environmental Protection Bureau, set up in 2009, but so far he has had a lacklustre performance. Previously he headed the Cartography and Cadastre Bureau. 65 Wong Wan Often criticised for failing to improve traffic conditions in Macau, Mr Wong is the maiden director of the Transport Bureau, established in 2008. He oversaw the introduction of the new bus system in August 2011. 66 Wu Zhiliang Mr Wu was appointed as the president of Macau Foundation in 2010. However, he is no newcomer to the foundation. He has been part of its administrative council for around 20 years. 67 Ho Veng On Mr Ho has led the Commission of Audit since 2009. Prior to that, he served for 10 years as chief-of-cabinet for former Chief Executive Edmund Ho Hau Wah. 68 André Cheong Weng Chon Mr Cheong is the director of the Legal Affairs Bureau. Despite his low profile, he is regarded as a front-runner for Secretary for Administration and Justice once Florinda Chan steps down.

69 Chu Lam Lam Ms Chu was put in charge of the Law Reform and International Law Bureau, created last year with the merging of the International Law Office and the Legal Reform Office. She is someone to watch in the future. 70 Lau Pun Lap Economist Lau Pun Lap heads a government think-tank established last year to carry out research on political, economic, legal and social issues. He is a former legislator. 71 Guilherme Ung Vai Meng Local artist Guilherme Ung Vai Meng has been president of the Cultural Affairs Bureau since 2010. He headed the Macau Art Museum from 1999 to 2008.

The grassroots leaders 72 Ben Chiang Chong Sek Mr Chiang is the president of the Federation of Trade Unions, one of the most influential associations in Macau. The 70,000-strong workers’ platform has been historically regarded as a government ally. 73 Ng Sio Lai Since December, Ms Ng has been the president of the influential General Union of Neighbourhood Associations of Macau, commonly known by its Cantonese name Kai Fong. 74 Paul Pun Chi Meng Mr Pun is the Macau head of Catholic charity Caritas. A respected social worker, he has unsuccessfully run for the Legislative Assembly three times. 75 João Bosco Cheang Hong Lok Mr Cheang is the president of the Macau Gaming Industry Employees Association. He worked in the gaming industry for over 30 years and subsequently became president of the employees association, a trade union established in 2002 with the government’s assistance. Between 2001 and 2005, he was a directly elected legislator.

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The artists 76 Carlos Marreiros Mr Marreiros is an award-winning architect, urban planner, designer and artist. Born in Macau, he headed the Cultural Affairs Bureau during the Portuguese administration. He designed the rabbit lantern-shaped Macau pavilion for the 2010 Shanghai Expo. 77 Konstantin Bessmertny Mr Bessmertny is one of the city’s most prolific artists and one of the few with international exposure. In 1993 he moved to Macau where he continues to live and work. 78 James Chu Cheok Son James Chu Cheok Son is a local artist. He heads the Art For All Society, a nonprofit art organization promoting local talent. Established in 2007, the group already has a branch in Beijing.

The veterans 79 Stanley Ho Hung Sun A larger-than-life character, Stanley Ho Hung Sun has suffered from ill health since mid-2009. Mr Ho – previously a keen ballroom dancer who has fathered at least 17 children from four wives – held the monopoly on Macau’s casinos until 2002. Even after the sector’s liberalisation, his flagship SJM Holdings Ltd continued to lead the market. Last year was marked by a family feud over control of his business empire, which spreads well beyond gaming. After a very public argument, all parties eventually settled, with Mr Ho apparently opting to parcel out his assets instead of nominating one clear successor. 80 Edmund Ho Hau Wah Mr Ho was the first Chief Executive of the Macau SAR, from 1999 to 2009. Prior to that, he was a highprofile businessman and a member of the Legislative Assembly during the Portuguese administration. He is now vice-chairman of the Chinese People’s Political Consultative Conference. Mr Ho is the son of late community leader Ho Yin – his family is dubbed as one of the ruling clans of Macau. He is still very much a force to be reckoned with.

AUGUST 2012

81 Ma Man Kei Born in 1919, veteran businessman Ma Man Kei first arrived in Macau in the 1940s. He later became chairman of the Macau Chamber of Commerce. He played a pivotal role during the Portuguese administration as one of the Chinese community leaders. He is still a vice-chairman of the Chinese People’s Political Consultative Conference, although his health has deteriorated in recent years. His family is one of the most prominent in Macau. 82 Susana Chou Businesswoman Susana Chou was the first president of the Legislative Assembly after the handover. Since stepping down in 2009, Ms Chou has been dedicating herself to her charitable association. She continues to be a member of the Chinese People’s Political Consultative Conference. She comments on current affairs on her blog. 83 Leong Heng Teng A former leader of the influential General Union of Neighbourhood Associations, Mr Leong is the spokesperson of the Executive Council, of which he has been a member since 1999. He is a former legislator. 84 Vitor Ng Businessman Vitor Ng was the president of the Macau Foundation from 2001 until 2010. A former legislator, he was also involved in the Science Centre project, for which he is now a honourable curator and consultant.

To keep an eye on 85 Jason Chao Teng Hei The 25-year-old is the president of the outspoken New Macau Association. He is part of the group’s new generation of activists, which has been very active in recent months. Mr Chao stood for direct election to the Legislative Assembly in 2009, as number two to legislator Au Kam San, but failed to win a seat. He is likely to run again in 2013. 86 Alexis Tam Won Cheng Mr Tam is widely regarded as Chief Executive Fernando Chui Sai On’s righthand man. Besides being Mr Chui’s chief-of-cabinet, he has accumulated a string of other positions in the government.

77 87 Lionel Leong Vai Tac Businessman Lionel Leong Vai Tac is a member of the Executive Council and the National People’s Congress. He has been pinpointed as a potential frontrunner to succeed Fernando Chui Sai On as chief executive.

93 Eddie Wong Yue Kai Mr Wong is an architect and member of the Executive Council. He is also a Chinese People’s Political Consultative Conference member and the president of the Macau Red Cross.

88 Agnes Lam Iok Fong Ms Lam is a political columnist and a media scholar at the University of Macau. She is the chairwoman of Macau Civic Power, a group that ran for the Legislative Assembly in 2009. It received over 5,300 votes but failed to win a seat.

94 Bishop José Lai Not as outspoken as his Hong Kong counterparts when it comes to Beijing, Bishop José Lai has headed the Catholic Church in Macau since 2003. He is the first Macau-born bishop.

89 Hoffman Ma Ho Man Mr Ma is deputy chairman of Hong Kong-listed Success Universe Group, which owns a 49-percent stake of Ponte 16, a joint venture with SJM Holdings Ltd. He is deputy chief executive of Ponte 16.

Others 90 Jorge Neto Valente The outspoken Mr Neto Valente is the president of the Macau Lawyers Association. He is also the managing director of Galaxy Casino, SA, the wholly owned subsidiary of Galaxy Entertainment Group Ltd that holds a Macau gaming concession. Previously, he held a similar position at Sands China Ltd’s subsidiary Venetian Macau Ltd.

95 Henry Brockman The chairman of the British Business Association of Macau, which he cofounded, and a banker by profession, Mr Brockman now has his own Macaubased consulting company, Trate Capital Ltd. He is also a director for Travelex Macau Ltd. 96 Angela Lam In Nie Ms Lam is the chief executive of Macau Cable TV Ltd. She has plans to enter the broadband market.

97 Wan Kuok Koi A former triad leader, Mr Wan Kuok Koi, or “Broken Tooth Koi”, was jailed in 1999 on charges of organised crime, money laundering and loan-sharking. He is due to be released in December, which is raising security concerns.

91 Ao Man Long More than five years on, the Ao Man Long scandal still tarnishes Macau. The HK$20-billion luxury residential complex La Scala was recently put on hold after new charges arose pertaining to the sale of the plots where the project is being built. Mr Ao is serving a jail sentence of 29 years over a multimillion-dollar corruption scandal involving the biggest graft investigation in Macau’s history. Mr Ao, who was Secretary for Transport and Public Works between 1999 and 2006, was first arrested in December 2006.

98 Wei Zhao Professor Wei Zhao has been the rector of the University of Macau since 2008. He is in-charge of the university’s relocation to the new and larger Hengqin Island campus, currently under construction.

92 Miguel Senna Fernandes A lawyer by profession, Mr Senna Fernandes leads the efforts to keep Macanese culture alive. Macanese is the name given to Macau’s Eurasian population who share a distinct social and cultural identity.

100 Andy Wu Keng Kuong Mr Wu is the head of the Macau Travel Industry Council and a leading representative of the tourism sector.

99 Lok Po The editor-in-chief of Chinese-language newspaper Macau Daily News, Mr Lok is also a member of the National People’s Congress. Previously he was a member of the Chinese People’s Political Consultative Conference.

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mbspecial THE TOP-100

MB#072 APRIL 2010

MB#093 FEBRUARY 2012

MB#091 NOVEMBER 2011

PHOTOS BY: LUÍS ALMOSTER

MB#070 FEBRUARY 2010

MB#085 MAY 2011

mbspecial THE TOP-100 80

FIRSTS, HIGHS AND LOWS Did you know Macau boasts the world’s highest-resolution 3D planetarium? Or that it was here that the first hijacking of a commercial airliner took place? Here is a list of 100 interesting and sometimes amusing facts you should know about the city. BY SARA FARR

Where are we? 1 Macau’s geographical coordinates are: 113 degrees, 33 minutes east; 22 degrees, 10 minutes north.

8 Most of the city’s population comes from somewhere else. Fewer than 41 percen t were born here. More than 46 percent come from the mainland. 9 Economic growth since the liberalisation of the gaming sector has brought with it a baby boom. The annual number of births here has been increasing every year since 2003.

Say that again In 1984, Macau covered 15.5 square kilometres. Its area has since almost doubled to 29.9 square kilometres, owing to land reclamation. 6 The Pearl River Delta, on which Macau sits, is highly polluted. The province of Guangdong discharges vast amounts of raw sewage into it.

3 Much of the land reclamation effort went into creating Cotai. What is now Cotai was no more than an isthmus between Taipa and Coloane 25 years ago. Today, some of the biggest casino resorts in the world are here. 4 The city’s highest hill rises 170.6 metres above sea level and is in Coloane. 5 Typhoons are a regular occurrence. Most pass without causing too much disruption. The last time Macau hoisted Typhoon Signal No 10 – the highest alert – was in 1999. AUGUST 2012

10 Life expectancy in Macau is among the highest in the world. If you were born today, you could expect to live 82.4 years.

7 Macau has a population of 563,000 people. It has grown by an average of 2.4 percent per year in the past 10 years, largely because of the import of labour.

11 The Areia Preta and Iao Hon districts, together covering less than 0.5 square km, are the most densely populated area in the world. Almost 67,000 people live there. 12 Big families are becoming less common. The average size of households has decreased continuously in the past 10 years. Two-person households are now the most common family unit.

81 21 In the 16th century, the Portuguese reached Ou Mun. The inhabitants also called it A Ma Gao, meaning “place of A-Ma”, in honour of the goddess of seafarers. A temple dedicated to A-Ma stands at the entrance to the Inner Harbour. The Portuguese adopted the name A Ma Gao, and Macau is the modern contraction of that name. 22 Macau was the first and last European colony in China. The Portuguese established their first permanent settlement here in 1553. They left only in 1999. Macau is considered one of the top 10 most “liveable” cities for expatriates in Asia, according to surveys by consulting firm ECA International. 14 There is a second Macau, in Brazil, another former Portuguese colony. Brazil’s Macau was named after the Asian colony because it also sits on a river estuary. 15 The official languages here are Chinese and Portuguese. However, English is more widely spoken than Portuguese. Less than 3 percent of the population speaks Portuguese.

23 During Portuguese rule 110 people held the post of governor – some up to three times.

18 The literacy rate is 95.6 percent. Most of those unable to write or read are 65 or older. 19 The University of Macau is building a new campus on Hengqin island. Since Hengqin is part of Guangdong, Macau will lease the 1.1 square kilometres of land where the campus is being built. The land will be under Macau’s jurisdiction.

16 Four out five people usually speak Cantonese, although more than 40 percent say they can speak Putonghua. 17 Not everyone is a fluent speaker of Putonghua. When President Hu Jintao swore in Fernando Chui Sai On as Macau’s chief executive, even CNN commented on Mr Chui’s poor Putonghua.

Vasco Rocha Vieira

Trading places 20 Fishermen from Fujian and farmers from Guangdong were the first known settlers in Macau, when it was known as Ou Mun or “trading gate” because of its position at the mouth of the Pearl River. Guangdong Province

Hong Kong Zhuhai

Macau

The first governor of Macau was D. Francisco Mascarenhas, appointed in 1623. The last was General Vasco Rocha Vieira, who stepped down on December 19, 1999, when Beijing resumed exercising sovereignty. 25 For the most part, the Portuguese and Chinese lived peacefully in Macau for more than four centuries. There were some exceptions, the most notable being the killing and beheading of governor Ferreira do Amaral by Chinese insurgents. The governor’s authoritarian ways and his attempts to strengthen Portuguese control upset the Chinese elite. AUGUST 2012

mbspecial THE TOP-100 82 34 Hong Kong dollars are widely used here. For instance, prices and rents for real estate are denominated in Hong Kong dollars, and Hong Kong dollars are used for gambling in casinos.

35 With an unemployment rate below 3 percent, the city has enjoyed full employment for close to two years, according to the Monetary Authority of Macau. The Ruins of St Paul’s are the city’s most famous historical landmark. The ruins are the facade of what was originally the Church of Mater Dei, which was built between 1602 and 1640 and destroyed by fire in 1835, and the ruins of St Paul’s College, which was adjacent to the church. The college was the first Western-style university in East Asia. 27 Sun Yat Sen, leader of the 1911 revolution that overthrew the Qing Dynasty, and the father of the Republic of China, lived in Macau. After qualifying as a doctor in 1892, Dr Sun practised medicine here for two years.

Do you take reales? 30 Macau is one of the wealthiest cities in the world. Last year, it had a gross domestic product of MOP531,723 (US$66,465) per capita.

36 Macau has more than 100,000 non-resident workers; most are in the hospitality and restaurant industries. 37 The city has no across-the-board minimum wage, but it has a minimum wage for employees of cleaning and security companies contracted by the government.

28 There have been two chief executives of the SAR: Edmund Ho Hau Wah from 1999 to 2009 and Fernando Chui Sai On since 2010.

31 The government has no debt. Moody’s Investors Service says it is the only government in the world without debt.

38 Every year since 2008 the government has handed out cash to residents. The amount increased from the initial MOP5,000 to MOP7,000 this year for permanent residents. Non-permanent residents received MOP4,200 this year.

32 Macau is one of the top 20 freest economies in the world, according to the Heritage Foundation, a United States think-tank.

Edmund Ho

29 Only three countries have consulates in Macau: Portugal, Angola and the Philippines. Ten others have honorary consuls. More than 50 countries have assigned their consulates-general in Hong Kong to handle consular affairs here. AUGUST 2012

33 The pataca has been the currency of Macau for more than a century. The name is derived from that of the Mexican eight reales, a silver coin commonly used in Asia, which was known in Portuguese as the Pataca Mexicana.

39 In 2009, the government began giving each permanent resident a yearly subsidy of MOP500 in the form of vouchers for private health care.

Going to the dogs 40 Macau’s gaming industry can be traced back to the 16th century. Unregulated gambling was common among labourers and domestic servants.

41 The gaming capital of the world, the city’s gross gaming revenue from casinos surpassed Las Vegas in 2006. Revenue here is now almost six times more than in Las Vegas.

The amount of sand used in the reclamation of the land that the Venetian sits on would be enough to build one of Egypt’s pyramids. 47 The biggest casino jackpot won here was HK$21 million. It was paid out in February at the Sands Macao. The lucky winner was a slot machine player from Heilongjiang.

52 The hotel price index published by the hotels.com website claims that hotels here are among the most expensive in the world. Last year’s average room rate was HK$1,601.

48 Only permanent residents can work as croupiers on the gaming floors. The job pays. At the end of last year, a croupier earned on average more than a bank teller.

53 Macau is home to the biggest Holiday Inn and Conrad hotels in the world. The world’s biggest Sheraton hotel is due to open here next month. All three hotels are part of the Sands Cotai Central casino resort.

42 Macau’s best month for casino gross gaming revenue was last October, when it reached MOP26.85 billion. 43 The city has 35 casinos, although three are not operating. It has, on average, more than one functioning casino per square kilometre of land area.

54 Many food lovers say Portuguese cuisine is what makes Macau the city fun. The city has just one restaurant with three Michelin stars and it is French: the Robuchon au Dôme, in the Grand Lisboa. No Portuguese restaurant here has ever earned a Michelin star. 49 Asia’s only greyhound racing stadium is here. Dog racing at the Canidrome has been under the spotlight recently because hundreds of healthy dogs are put down every year after they can no longer race.

Go ahead, jump 50 The Border Gate is the busiest border crossing in the world. 44 The Sands Macao was the first Las Vegas-style casino here. It opened in 2004. 45 The world’s tallest casino is in Las Vegas but Macau has the world’s largest casino, the Venetian Macao.

51 There are more than 24,000 hotel and guesthouse rooms in Macau. Almost two-thirds are in five-star hotels.

55 Portuguese egg tarts are a famous treat. They were made famous by Englishman Andrew Stow, who first made his own version of the delicacy in 1990. 56 The city’s historical centre was listed as a UNESCO World Heritage site in 2005. AUGUST 2012

mbspecial THE TOP-100 84

Red lights and happiness 60 The Peninsula was the only place in Macau with traffic lights up until 2009.

66 The world’s first hijacking of a commercial airliner took place here in 1948. Pirates attempted to gain control of a Cathay Pacific Airways flying boat en route from Macau to Hong Kong. They ultimately caused it to crash into the sea. Only one person survived. 67 Macau has one the shortest cable car rides in the world. It connects the Flora Garden Gate in Avenida Sidónio Pais to the top of the Guia Hill. The price? Just MOP3.

61 Macau has more coaches and casino shuttles than buses. 57 The Guia Lighthouse is the oldest lighthouse in East Asia. It has been in operation since 1865.

68 Streets are marked with blue and white porcelain signs bearing the name in Chinese and Portuguese. In many cases the Chinese and Portuguese names have completely different meanings.

62 The city has more motorcycles than cars, although the gap is narrowing fast. 63 While it is easy to spot Ferraris and the like on the streets, the maximum speed allowed on the roads is 80 kilometres per hour – and even then only on a few roads. Some of the old street names are reminders of the sex industry of yore. Rua da Felicidade means “happiness street” in Portuguese. In the second half of the 19th century and most of the first half of the 20th, it was the city’s red light district.

64 The number of traffic accidents has increased considerably in the past decade, but the number of people killed on the roads has decreased. Macau Tower was the 10th-highest free-standing tower in the world when it was completed in 2001. It has dropped down in the ranks as new skyscrapers and observation towers have mushroomed around the world. 59 At 233 metres, the tower still offers the highest commercial bungee jump in the world. AUGUST 2012

65 The Transport Bureau occasionally auctions car registration plates with combinations of numbers considered lucky. Those include combinations of the number eight, because the word for eight in Cantonese sounds like the word for wealth, and the number nine, because it sounds like the word for long life. For licence plates ending with 8888 or 9999, the minimum bid is MOP100,000. A personalised car plate costs MOP1 million.

85 83 Macanese food is considered the world’s first fusion cuisine. It mixes Portuguese, Indian, Malay and Chinese influences. Dishes include Galinha à Africana, whole chicken baked with chillies and garlic in coconut milk, and Porco Balichão Tamarino, pork cooked in tamarind paste and shrimp paste with chillies, topped off with a sprinkling of sugar.

Read all about it 70 Unlike most cities in the world, Macau has no postcodes.

71 The Post Office is highly regarded among stamp collectors worldwide for its special issues of postage stamps. Many have won international awards. 72 There are more mobile phone subscriptions per head here than anywhere else in the world – about 2.5 per resident. The number is inflated by the millions of tourists that buy a prepaid subscription for the duration of their stay. 73 An estimated 90 percent or more of the population receives their television signal from unlicensed public antenna companies that relay channels without permission from the copyright holders. The government tacitly allows this. 74 The last time the government confronted the antenna companies about their operations was in 2008. They suspended their services in protest, angering thousands of viewers who were unable to watch their evening soap operas.

The city has nine Chinese-language daily newspapers, three Portugueselanguage dailies and three Englishlanguage dailies. Several are published only on weekdays. 78 The first newspaper in China was published in Macau. It was called Abelha da China, meaning “The China Bee”. The first issue was printed in 1822. 79 Macau has a free wireless broadband system called WiFi Go. It was established in 2010 and its 110 hotspots cover several public areas.

84 Macanese women are often praised for their exotic beauty. The four Pedruco sisters showed that the praise is merited: all four won the Miss Macau beauty pageant (though in different years).

African chicken, Macanese style 80 Macau has its own ethnic group, the Macanese. They are of mixed Chinese and Portuguese descent and have a distinct culture. 81 The Macanese have their own creole, based on Portuguese, called Patuá. UNESCO has classified it as critically endangered because only a few people still speak it.

75 Hong Kong TV channels are the most popular here, much more so than the government-owned broadcaster TDM.

76 Macau has two radio stations: Radio Vila-Verde and Radio Macau, a subsidiary of TDM which has Portuguese-language and Chineselanguage services.

82 In an effort to preserve Patuá, the drama group Dóci Papiaçám di Macau performs an original play in Patuá every year during the Arts Festival. The play satirises contemporary Macau. Chinese, Portuguese and English translations are provided.

The Miss Macau pageant was first held in 1972, and after a hiatus was held again from 1985 to 1998. It was revived in 2008 and held once more the following year but has not been held since.

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mbspecial THE TOP-100 86

95 Every year for the past 59 years the city has held the Macau Grand Prix. Some of the world’s best drivers have raced here on their way to stardom, including Formula One drivers Ayrton Senna, Michael Schumacher and Sebastian Vettel.

An international fireworks display competition is held annually in Macau, which attracts contestants from around the world. It takes place in September and ends on October 1, China National Day. 87 The largest dancing lion in the world was made by MGM Macau for the Lunar New Year celebrations in 2010. Called the Grand Lion, it was 6.2 metres long, 4.36 metres high and 2.1 metres wide. It weighed 113.3 kg. It danced for 15 minutes, operated by four performers. 88 Macau has 21 museums. They include the Macau Museum and some less well-known ones such as the Museum of Vintage Sound Machines.

Play on 90 If you noted the absence of Macau’s flag from the opening ceremony of the Olympic Games in London, it is because Macau’s Olympic committee, unlike Hong Kong’s, is not recognised by the International Olympic Committee. Any Macau athlete competes as a member of the Chinese team.

AUGUST 2012

97 The Venetian was the venue in 2007 for pre-season games for two NBA teams, the Orlando Magic and the Cleveland Cavaliers. In 2008, it put on warm-up games for the U.S., Turkish and Lithuanian men’s basketball teams before the Beijing Olympic Games.

91 But Macau competes independently in the Paralympic Games. 92 The city is not a sports powerhouse but ranks highly in Asia in three sports: wushu, a Chinese martial art; roller hockey, an inheritance from Portugal; and artistic cycling.

The Science Centre has the highestresolution 3D planetarium in the world. It uses 12 projectors to give an equivalent resolution of 8,000 x 8,000 pixels in 3D.

96 Macau’s football championship is amateur but the city welcomed European giants Barcelona in 2005, Manchester United in 2007 and Chelsea in 2008 for pre-season matches with mainland teams.

93 Triathlete Hoi Long has won several competitions abroad, including last year’s Hong Kong National Triathlon Championships. Although her hearing has been impaired almost since birth, she lip-reads English and Cantonese and takes part in mainstream competitions. 94 The Macau marathon was first run in 1981. The record is 2 hours 12 minutes and 49 seconds, set last year by Kenyan athlete Stephen Chemlany.

98 The largest playing card structure in the world was created at the Venetian Macao in March 2010. The creator was American Bryan Berg, who used 218,792 cards to build a replica of the casino resort. It took him 44 days to complete. 99 Macau has its own version of the board game Monopoly. If you fancy yourself as a real estate mogul and owner of some of Macau’s poshest property, just roll the dice. There is a board game called Macau. It is a game of strategy set in the 17th century and revolves around the city’s status then as a trading port. SOURCES: CHINA DAILY, GAMING INSPECTION AND COORDINATION BUREAU, GOVERNMENT INFORMATION BUREAU, GUINNESS WORLD RECORDS, MONETARY AUTHORITY OF MACAU, PUBLIC SECURITY POLICE, SANDS CHINA LTD, STATISTICS AND CENSUS SERVICE

PHOTOS BY: LUÍS ALMOSTER

MB#082 FEBRUARY 2012

MB#056 DECEMBER 2008

MB#097 MAY 2012

Gaming

SANDS STORMS Typhoon season is upon us but Sands China finds itself buffeted by more than just strong winds

ands China Ltd will be glad July is over. In the course of just one month the casino operator found itself tangled up in no fewer than four separate controversies – and it has yet to extricate itself from at least two of them. The controversy with the most potential to tarnish Sands China’s reputation was stirred up by the publication of several emails that purported to have been exchanged by lawyer and Sands China legal adviser, Leonel Alves, and Sands China’s chief executive at the time, Steve Jacobs. The Wall Street Journal carried the story first, in June, but the United States-based website ProPublica.org posted copies of the emails online only last month. They include an email that Mr Alves allegedly sent Mr Jacobs in September 2009, saying an unnamed intermediary, “someone high-ranking in Beijing”, had offered to help Sands

AUGUST 2012

China get permission from the Macau government to sell flats in its Four Seasons apartment hotel in Cotai. In another email Mr Jacobs identifies this someone as Macau developer Ng Lap Seng, who is a member of the Chinese People’s Political Consultative Conference. The emails say the intermediary asked for a fee of US$300 million (MOP2.4 billion) for his services. The emails go on to say that the deal offered by the intermediary was to include the settlement of litigation between Sands China and Taiwan businessman Marshall Hao’s Asian American Entertainment Corp Ltd. Mr Hao alleges he helped Sands China’s parent company Las Vegas Sands to get a Macau gaming licence back in 2002, but was not compensated as agreed. Speaking on Radio Macau, Mr Alves confirmed that the intermediary had asked for US$300 million; but he didn’t say

who the intermediary was. He said Mr Jacobs had ordered him to continue negotiating a deal that would allow the sale of the Four Seasons flats. Mr Alves said Mr Jacobs had been willing to pay the intermediary up to US$500,000 for “consultancy services”. He said these services included assistance in publicly clarifying the concepts of integrated resorts and apartment hotels. But the intermediary had refused the offer and the negotiations ended, Mr Alves said.

Transient affair Sands China internal emails and company documents posted on the ProPublica.org website say Sands China chairman Sheldon Adelson instructed Mr Jacobs to pay Mr Alves about US$700,000 in legal fees. But the company’s general counsel

l Al

ve s

The controversy with the most potential to tarnish Sands China’s reputation was stirred up by the publication of emails that purported to have been exchanged by Sands legal adviser, Leonel Alves, and Sands’ CEO at the time, Steve Jacobs

ac o b s

and an outside law firm opposed this payment, warning that it might violate the U.S. Foreign Corrupt Practices Act. This was because Mr Alves was, and still is a member of Macau’s Legislative Assembly and its Executive Council, which advises the government, and is a member of the Chinese People’s Political Consultative Conference. The Foreign Corrupt Practices Act prohibits U.S. companies from bribing foreign officials. Mr Alves said the legal fees were in line with what Sands China and his law firm had previously agreed. He also denied having used his political positions to benefit Sands China, and said all his dealings on Sands China’s behalf were legal. The head of the Gaming Inspection and Coordination Bureau, Manuel Joaquim das Neves, played down the controversy. The Portuguese-language newspaper Hoje Macau quoted him as saying it was a “transient affair” and that it “will not tarnish Macau’s reputation in the long run”. Sands China dismissed Mr Jacobs in July 2010. Mr Jacobs is now suing his former employer in the U.S. courts for wrongful dismissal. The Macau Office for Personal Data Protection stirred up the second controversy by beginning an investigation of Sands China subsidiary Venetian Macau Ltd on suspicion that it allowed the transfer of personal data without permission. The ProPublica.org website says Sands China and its parent company, Las Vegas Sands Corp, moved documents from Macau to the United States in 2010 without obtaining permission from the government here. The website says the documents were stored in computers in Mr Jacobs’s office in Macau and were moved to Las Vegas a few days after he was dismissed.

Tempest in a tea-break A suspicious cardboard box left outside Sands China’s Venetian Macao was the cause of the third controversy. Suspecting it might be a bomb, the casino resort staff called the police. The police evacuated and sealed off part of the west wing lobby and car park, although the casino remained operational. AUGUST 2012

Gaming

The box was later found to contain an unidentified gadget installed by a contractor hired by the Venetian Macao. Sands China said “internal miscommunication” had led to the bomb scare. But the police have passed the case to the Public Prosecutions Office for further investigation to determine whether anybody should be charged with raising a false alarm. Typhoon Vicente whipped up the fourth controversy. About 200 workers at Sands China’s Sands Cotai Central engaged in a dispute with the management of the casino resort regarding overtime payments while storm warning Signal No 8 was hoisted. The staff were initially asked to work overtime from 11 pm Monday to 5 am Tuesday. But as the typhoon warning Signal No 8 was still hoisted, they wanted to stay on the job so they would get a special payment for working continuously for 16 hours. The company allegedly denied the request, although providing them a rest area while waiting for the lowering of the warning Signal No 8 prior to returning home. The argument was settled only after representatives of the Labour Affairs Bureau arrived on site. Sands China reported last month that its net revenue in the second quarter of this year was US$1.48 billion, 22.3 percent more than a year before. But its net profit dropped by 40 percent from a year earlier to US$160.5 million. The fall was due in part to a non-cash impairment loss of US$100.8 million on Parcels Seven and Eight in Cotai. Sands China started site preparation work on these lots before the government had decided whether to grant the

MOMENTUM MOUNTS

fter a shaky start that disappointed analysts, the performance of Sands China Ltd’s Sands Cotai Central is improving. But Sheldon Adelson, the chairman of Sands China, has said the casino resort “won’t truly begin its ramp until early next year”. Mr Adelson said in a conference call last month that he expected Sands Cotai Central to widen its margins in the coming months as it became more efficient and the remaining phases of the development opened. The improvement in Sands Cotai Central’s performance helped Sands China to rake in the second-biggest share of gross gaming revenue last month, according to data gathered by the English-language newspaper Business Daily. The company’s share rose to 22 percent from 18 percent the month before, surpassing that of Galaxy Entertainment Group Ltd. Sands Cotai Central is building up its share of the mass market, Union Gaming Research Macau says. The casino resort had 5.4 percent of the mass market between the middle of June and the middle of July, 1.5 percentage points more than when it opened in April. Union Gaming Research measures mass-market share by counting casino shuttle bus passengers. Michael Leven, the president and chief operating officer of Las Vegas Sands Corp, Sands China’s parent company, says the two hotels in Sands Cotai Central, Conrad and Holiday Inn, increased their occupancy rate to 85 percent in June from 61 percent in April. These rates are lower than those of hotels in other Sands China resorts, except for the Four Seasons Hotel Macao. But Mr Leven says many indicators of the Sands Cotai Central’s performance are better than those of Sands China’s

AUGUST 2012

The Macau Office for Personal Data Protection stirred up a new controversy by beginning an investigation of Sands China subsidiary Venetian Macau Ltd on suspicion that it allowed the transfer of personal data without permission

company the land. But the government eventually decided against granting the gaming operator the parcels. If Sands China was feeling gloomy last month, it will have been cheered by the government’s postponement of the deadline for the development of the company’s Parcel Three lot in Cotai, beside the Four Seasons hotel-casino. The deadline was put back to April 2016 from April 2013. But the company will have to pay a MOP900,000 penalty. Mr Adelson said Sands China aimed to start construction work on Parcel Three in November. He said the company had sought approval of its plans for the development, and would soon unveil an artist’s impressions of what it will look like. Venetian Macao or Las Vegas Sands’s Marina Bay Sands in Singapore when they first opened. “We are pleased with the early performance of Cotai Central. The positives are many,” Mr Leven said in last month’s conference call. The positives allowed the annual rate of growth in Sands China’s business in the second quarter of this year to exceed the growth of the market here in general. The company’s growth exceeded the market’s in every category of gaming: VIP tables, mass-market tables and slot machines. The Sands group admits to having made some mistakes. Robert Goldstein, Las Vegas Sands’ president for global gaming operations, says Sands China did not put enough electronic gaming machines on the casino floor at Sands Cotai Central. The second phase of Sands Cotai Central will open on September 20. It is due to add a second casino with capacity for 200 mass-market tables and 1,300 slots. The company’s problem is where to get the tables. The number of live gaming tables here had reached 5,498 by the end of June. The cap on the number of tables imposed by the government is 5,500. “Our indication from the government has always been that we would get 400 new tables for Cotai Central. On September 20 we will not have all of those 400, but we will be getting them throughout the rest of the year,” Mr Adelson said last month. He said Sands China would have to shuffle tables around among its casinos. The first phase of Sands Cotai Central opened in April. In its first 81 days it generated net revenue of US$265.6 million (MOP2.2 billion). It has about 190 mass-market tables, 150 VIP tables and over 900 slots, including 250 electronic table games seats. About 200 of the gaming tables were new and the others came from Sands China’s other casinos here.

Congratulations on the 100th issue of Macau Business

AUGUST 2012

Gaming

PATHOLOGICAL GAMBLING DOWN A study shows the pathologic gambling rate dropped to 2 percent last year from 6 percent in 2007

GOV’T CONFIRMS CAP IS NOT RIGID

The 3-percent yearly growth rate cap to be introduced next year for live gaming tables will be liberally applied to ensure it doesn’t impact the development of the gaming industry. This was already the understanding among industry insiders, but the Secretary for Economy and Finance has now confirmed it to Portuguese-language daily Ponto Final. This means that the incremental cap is set to be liberally applied such that new tables will be allotted from the total number that will accrue by 2023 rather than be squeezed into the market through marginal annual increases.

AUGUST 2012

A new study conducted by a scholar at the Polytechnic Institute, has found approximately 2 percent of Macau’s adult population had problem or pathological gaming issues as of last year. The figure was significantly down from 2007, when the prevalence rate stood at 6 percent. The study was commissioned by the government and carried out by a team led by Samuel Huang Guihai. A total of 2,000 people were interviewed. Based on the study results, Mr Huang estimates there are around 10,000 problem or pathological gamblers in Macau.

REVENUE DOWN AT WYNN MACAU

Wynn Macau Ltd reported a 7.1 percent drop in second quarter revenue, to US$907.6 million (MOP7.26 billion). The company’s profits were however up by 83 percent, at US$220 million. But the 2011 result included a US$107 million charge for the company’s donation to the University of Macau Development Foundation. Wynn Macau’s parent company, Wynn Resorts Ltd, saw its revenue fall 8.3 percent to US$1.25 billion. Net income rose 13 percent to US$138.1 million from US$122 million a year earlier.

GRAND LISBOA WANTS STAFF SMILING

SJM Holdings Ltd’s Casino Grand Lisboa is launching this month a campaign that aims to get frontline customer service staff smiling more. All frontline staff from casino and non-casino operations will participate in the campaign, in which visitors are welcome to vote for their favourite staff. Casino Grand Lisboa will also invite some mystery customers and department managers to evaluate the staff’s performance. The campaign will hold three award presentations a year and 50 winners will be awarded each time.

No safe bet

There are fresh worries that security in the city’s casinos is not all it’s cracked up to be series of violent events over the past two months has people worried about security in the gaming industry, but the head of the Judiciary Police downplays such concerns. Director Wong Sio Chak has admitted however the force lacks teeth to fight crime inside the casinos. Steve Vickers, a Hong Kong-based corporate intelligence and security consultant, told Reuters “there seems to be a disturbance ... amongst the lower end of the junket community.” “Macau is going through a period of instability,” said Mr Vickers, who is a former head of the Hong Kong police Criminal Intelligence Bureau. Wynn Macau Ltd executives said last month that repayment of credit issued by junkets to VIP players was now

taking longer due to the economic slowdown in the mainland. Other insiders say competition among junkets is getting fiercer. They see the end result as a potential spike in violent crime. Last month, there were three murders. One involved a Chinese woman found dead inside a Taipa apartment. That came just days after two mainlanders were murdered at the five-star Grand Lapa Hotel. In the 12-months up until the end of May, there had been five murders reported. So far, the police have found no link between the cases. It has also not connected them to gaming. Another high-profile incident involved veteran junket operator Ng Man Sun, better known as Ng Wai or “Street

Judiciary Police director Wong Sio Chak says there is no evidence that triads or organised crime is on the rise

New Century Hotel

Market Wai”. Six unidentified people attacked Mr Ng in June in a restaurant inside the New Century hotel-casino, beating him with hammers and sticks, in what security experts say reassembles a triad-style assault. The police are still investigating the case. Mr Ng himself is offering a HK$10 million (US$1.3 million) reward to anyone with information that leads to the arrest of the people behind the attack.

One-off case Mr Ng is currently involved in a corporate battle for the control of Hong Konglisted junket operator Amax Holdings Ltd, which has a stake in the company operating the Greek Mythology casino, Greek Mythology (Macau) Entertainment Group Corp Ltd. He is also involved in a messy row with his former lover Chen Meihuan over the ownership of New Century hotel. The dispute led to the hotel being temporarily closed to guests last month, although its Greek Mythology casino, run under SJM Holdings Ltd’s gaming licence, remained open the whole time. An alleged representative from Mr Ng accused Ms Chen of sending “some gangsters” to occupy the hotel. That led Mr Ng to order the hotel’s suspension, which lasted for some hours, the representative said. Judiciary Police director Mr Wong said last month there is no evidence that triads or organised crime is on the rise. Mr Wong said the attack against Mr Ng “was just a one-off case” and labelled the New Century incident as an internal dispute. However, he admitted that the Judiciary Police “faces difficulties in ensuring an effective and active intervention in the sphere of gambling-related crimes.” He said the force would boost efforts to turn the tables around, including putting more manpower into it. The recent events have raised fears that violent crime is spreading again, after dropping sharply since the prehandover period, rocked by assassinations, car bombings and knifings as triads were battling for control over the lucrative VIP gaming sector. Those fears are further fuelled by the scheduled release of former 14K triad leader Wan Kuok Koi in December. Mr Wan, or “Broken Tooth Koi”, was jailed in 1999 on sentences of organised crime, money laundering and loan-sharking. AUGUST 2012

Gaming

A long gestation Melco Crown will eventually be the proud parent of a Studio City casino – perhaps he revised contract granting a subsidiary of Melco Crown Entertainment Ltd the land for Studio City mentions no casino. But analysts still expect the development to eventually have gaming facilities. The revised contract, published last month in the Official Gazette, says the plot of 130,789 square metres is for the development of a five-star hotel, facilities associated with the film industry and “tourism and entertainment supplementary facilities”. The contract grants the land to Studio City Developments Ltd, in which Melco Crown has a 60 percent stake. Melco Crown’s co-chairman and chief executive, Lawrence Ho Yau Lung, accepted the terms of the contract in writing on June 13. Under this new land contract, it is not immediately clear where Melco

AUGUST 2012

Crown’s plan to include a casino in Studio City fits. Mr Ho had said previously that the company intended to include gaming facilities in Studio City, including up to 400 tables and 1,200 slot machines. He had also said Melco Crown would never have acquired the majority stake in the project if it had not had the government’s blessing. There is a way to include a casino in the project without it being directly mentioned on the land contract, namely by using a service provider agreement – although it would still need government approval. This method has allowed for gambling facilities in new hotel-casinos that are not fully owned by a gaming operator. Because the land is granted to companies that don’t have a casino licence (or are not fully-owned subsidiaries of a

concessionaire), the inclusion of gaming facilities in the land contract could raise legal issues. In those cases, the request to include a casino is therefore done separately from the land concession request, and by a licenced gaming operator. It requests government approval to operate gambling facilities as a service provider in those properties. This is the kind of arrangement that allowed the Ponte 16 and L’Arc casinohotels to accommodate gaming facilities. The contract granting Pier 16 Property Development Ltd the land for Ponte 16 mentions no casino. The company is a joint venture between casino operator SJM Holdings Ltd, which owns 51 percent, and Success Universe Group Ltd, which owns the rest. SJM runs the casino in Ponte 16 under a service provider agreement. Similarly, the contract granting Arc

95 of Triumph Development Co Ltd the land for L’Arc mentions no casino. But SJM runs a casino there also under a service provider agreement. Melco Crown could simply run a casino in Studio City as a service provider, following SJM’s example.

Premium parallels Macquarie Equities Research expects Studio City to have a casino eventually, under the umbrella of the “tourism and entertainment supplementary facilities” mentioned in the land contract. A note to investors written by analysts Gary Pinge and Elaine Lai says this is because the premium the government is charging for the land is similar to the premium it is charging for the land in Cotai that it has granted Wynn Macau Ltd for a resort that will include a casino. The note also argues that without a casino Studio City would have trouble getting financing for build-out. It says that to allow the project to struggle would not be in the government’s best interests – especially a project so conspicuously situated near the Lotus Bridge border crossing. Macquarie Equities Research expects construction of Studio City to

Melco Crown’s co-chairman and CEO, Lawrence Ho, has said previously the gaming operator would never have acquired the majority stake in the Studio City project if it had not had the government’s blessing

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Gaming

resume in the next six to nine months. It forecasts that the work will be finished well before Wynn Macau’s competing project in Cotai. Melco Crown bought the majority stake in the stalled Studio City project last year. It paid Hong Kong’s eSun Holdings Ltd and Singapore’s CapitaLand Ltd US$360 million (MOP2.9 billion) for 60 percent. The other shareholder in the project is New Cotai Hold-

ings LLC, which is controlled by funds managed by United States investment firms Silver Point Capital LP and Oaktree Capital Management LP.

Impatient partners Melco Crown’s takeover of the project ended a long and bitter dispute among the original partners, which had been played out in the courts in Hong Kong. The original partners began squabbling

MANILA, HERE WE COME M

elco Crown Entertainment Ltd and Philippine leisure company Belle Corp have agreed to develop a casino resort in Manila, to be called the Belle Grande. It will be Melco Crown’s first venture outside Macau. Melco Crown announced the partners had signed a memorandum of agreement last month and that a definitive agreement would be ready early next month. Melco Crown said it expected to put no more than US$580 million (MOP4.6 billion) into the US$1 billion project. It said a credit facility of approximately US$320 million might be available. Belle vice-chairman Willy Ocier stated the Belle Grande would open in 2013. Construction of the property started in 2010. Mr Ocier said Melco Crown would be able to make changes to the existing project. “Melco Crown will improve on our design and concepts,” he said. The wealthiest man in the Philippines, Henry Sy, controls Belle. Belle holds one of four licences to operate casino resorts in the new Manila Entertainment City. The other licensees are Genting Hong Kong Ltd, Philippine port magnate Enrique Razon and Japanese businessman Kazuo Okada, who was until recently Wynn Resorts Ltd’s biggest shareholder. AUGUST 2012

in 2008 after they failed to raise the money needed for the project. The Macau government intervened in 2010, demanding to know why the project had stalled. Officials threatened to take back the land if there was no progress. The original land contract, signed in 2001, said the development would have film production facilities, offices, restaurants and even housing, but mentioned no gaming facilities. In 2007, the original partnership asked for the land contract to be revised to allow a casino, and invited Melco Crown to run the gaming floors, but nothing came of this. The original partnership also envisaged a Playboy Mansion and a huge shopping mall managed by the U.S. Taubman retailing group. The delays eventually scared off Playboy Enterprises Inc and Taubman. After Melco Crown took over the Studio City, Mr Ho said his firm envisaged about 2,000 hotel rooms, 18,500 square metres of shop space and entertainment facilities. During Melco Crown’s first-quarter earnings call this year, Mr Ho said the project would cost US$1.9 billion and take 36 months to complete.

MACAU SLOT CONTRACT EXTENDED

CASINOS GO ELECTRONIC

Macau Slot – Sociedade de Lotarias e Apostas Mútuas de Macau Lda has officially had its non-racing sports betting contract renewed for three more years, until June 2015. The contract was published last month in the Official Gazette. The previous contract ended on June 5, although the company continued to operate normally in the meantime. Macau Slot holds a de facto monopoly on non-racing sports betting in the territory, including football and basketball.

Union Gaming says around 2,000 more electronic table game seats could be added in the next five years Macau’s casino industry may add around 2,000 more electronic table game seats in the next five years. The estimate was made by Union Gaming Research Macau, in a report quoted by English-language newspaper Business Daily. The research house refers to ‘seats’ and not electronic table games, has these tables can vary significantly in terms of seat capacity.

Union Gaming estimates there are currently around 3,500 electronic table game seats in Macau. The sharp increase estimated for the next five years is related to the existing cap on the number of live gaming tables. In Macau, a fully automated electronic table is counted as part of the slot inventory. There is no cap in place for the number of slots.

MACAU GETS GAMING MANAGEMENT ASSOCIATION

The Macau Gaming Management Association was officially inaugurated last month. The organisation has over 200 members. Davis Fong Ka Chio, president of the association and a gaming scholar at the University of Macau, said that the non-profit group clings to the idea of promoting the professionalising of gaming management.

GET NICE SELLING GRAND WALDO

Hong Kong-listed Get Nice Holdings Ltd announced it is selling its controlling stake in casino resort Grand Waldo in Cotai. The company has already signed a letter of intent with an “international group engaged in the operation of a number of hotels, casinos and other entertainment facilities”. If the deal goes ahead, Get Nice will receive US$500 million (MOP4 billion) for its stake in Grand Waldo. Get Nice indirectly owns 65 percent of the Grand Waldo.

bizintelligenceonline.com AUGUST 2012

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Taiwan may be one step closer to opening its first casino but Matsu’s geography and lack of infrastructure will prevent it from being a serious competitor

Speck in the ocean aiwan has taken an important step towards the opening of its first legal casino after a referendum in Matsu last month approved the establishment of gambling facilities. But any casino on the tiny archipelago will be so restricted by geography and lack of transport infrastructure that it is unlikely to deprive Macau’s casinos of much business, experts say. Residents of Matsu, an island group in the Taiwan Strait controlled by Taipei, voted 57 percent to 43 percent in favour of casino gambling. In 2009, Taiwan’s legislature passed a law allowing casinos on islands in the Strait, if residents approved them in referendums. The aim was for gaming to spark development. But later that year the residents of Penghu, another island group, voted against having a casino. Their verdict is binding for three years, after which another referendum may be held. The three years comes up next month. While Penghu has good infrastructure and a healthy tourism industry, Matsu, with a population of about 10,000, is being hit much harder by the gradual drawdown of troops in the Taiwan Strait. The garrison there numbered 50,000 in the Cold War but it is now down to just 3,000 troops – reflecting, in part, better relations between Taipei and Beijing. Matsu’s government says a casino would attract investors and tourists, bringing in funds much needed to improve the economy and infrastructure. Any casino there is expected to cater mainly to mainland Chinese, like Macau’s casinos. Matsu is only half an hour by ferry from Fujian province. “People that are looking to build casinos anywhere in Taiwan are eyeing Chinese tourists,” says Anita Chen, the managing director in Taipei of United States

AUGUST 2012

lobbying firm Park Strategies, and an expert on the gaming industry. Macquarie Equities Research wrote in a note to investors by analysts Gary Pinge and Elaine Lai: “Matsu is an example of regional competition as jurisdictions with Macau-style proximity to the mainland try to compete for Chinese gamblers. “This may bring a risk to long-term returns on future Cotai projects.”

Best defence But most analysts say the opening of a casino in Matsu would do Macau’s gaming industry little harm. Union Gaming Research forecasts it would be unlikely to have much effect here. “Macau’s exposure might be no more than a few gross gaming revenue basis points,” it says in a research note by analysts Grant Govertsen and Felicity Chiang. Union Gaming Research explains that Beijing holds the key to the success of any casino in Matsu. It says success depends on how easy it is for residents of Fujian to get there. The consulting firm expects one or perhaps two casino resorts in Matsu. “Without a concentration of casinos, which give customers numerous gaming options, we would think this will limit some appeal.” Investment house Nomura also believes that gaming in Matsu will have little effect on Macau, given the poor accessibility of the island and Beijing’s restrictions on the number of mainland visitors it allows to Taiwan. Goldman Sachs has a similar view. In a note by analysts Simon Cheung and Janet Lu, Goldman Sachs says, in the long run, the legalisation of casinos in Taiwan may even mean op-

99 The head of the Macau Travel Industry Council, Andy Wu Keng Kuong, says casinos in Taiwan are unlikely to poach business from Macau. The critical mass of the gaming industry here is an important advantage, he notes. Before Taiwan can have any casinos, its government must legislate for them. Even the proponents of gaming concede that a thriving casino industry is years away.

Slow boat to Matsu Yang Sui-sheng, head of Lienchiang County, says it will take at least until 2015 before a casino opens. “We don’t know when the government will start issuing gambling licences,” he admits. “We hope it’ll be as soon as possible, so the entire process can be completed within a period of three to five years.” Ms Chen of Park Strategies thinks this schedule is about right. She says Taiwan’s cabinet is still considering a gambling bill, but that it could be passed within 2013. After that, it could take another year for the government to invite bids to run a casino and award a contract, and another three years after that to build and open the property. Weidner Resorts president and chief executive William Weidner – a former Las Vegas Sands Corp executive – said the Taiwan government should speed up the licensing process. His company is considering investing in a casino in Matsu, having lobbied in favour of one during the referendum campaign. For now, the Taiwan government has given the Ministry of Transportation and Communications the authority to regulate casinos.

portunities for Macau operators to expand. Union Gaming Research expects Beijing to have its say about that. “While we think the answer would ultimately be an ‘okay’, we would think any Macau operator is likely to seek Beijing’s approval,” it says. Several Macau gaming companies have shown vague interest in investing in Taiwan if it were to legalise casinos. But none has openly expressed enthusiasm for Matsu since the referendum was held there.

Too big to care SJM Holdings Ltd chief executive Ambrose So Shu Fai said Matsu’s position and its lack of supporting infrastructure meant it would need time to build up a gaming industry. Mr So indicated that SJM is interested in expanding in this part of the world but said it was still collecting information about Matsu and had yet to make any decision. MGM China Holdings Ltd chief executive Grant Bowie said his company was following up recent developments in Taiwan. He said it would wait for more details before making any decision. Secretary for the Economy and Finance Francis Tam Pak Yuen has said the government here is not worried by the prospect of casinos opening elsewhere in East Asia. He told reporters last month that Macau could maintain its level of gross gaming revenue and sustain further development of its casino industry even with more competition. He recalled the government had even acted to cool the growth of the industry here by capping the number of live gaming tables.

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Gaming

International Airport

Vladivostok

Rush for Russia Melco Crown has shown interest in investing in a new gaming centre near Vladivostok

BY LUCIANA LEITÃO

aming operator Melco Crown Entertainment Ltd may be gearing up to invest in Russia. The company, led by Lawrence Ho Yau Lung, has shown interest in investing in a new gaming and entertainment zone near Vladivostok. Marina Lomakina, the general director of Nash Dom Primorye, a state-owned company that will manage the Vladivostok entertainment zone, confirmed Melco Crown’s interest to Macau Business. Melco Crown clinched a deal last month to enter the Philippine gaming market (see the report in this issue) – its first venture outside of Macau. Malaysia’s Genting Group has also shown interest in the development, says Ms Lomakina. Genting operates casinos in Malaysia and Singapore and recently bought a stake in Australian casino operator Echo Entertainment Group Ltd. Nash Dom Primorye issued a request for concepts last month, which invites gaming companies to submit ideas for

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101 Group analyst Bill Lerner says in a research report. Macau taxes casino gross gaming revenue at a rate of 39 percent. Singapore taxes VIP revenue at a rate of 5 percent and mass-market revenue at a rate of 15 percent, and levies a goods and services tax on both at a rate of 7 percent. Nash Dom Primorye will set no limit on the maximum area of a casino or arcade devoted to gaming but will set a minimum area. “Gaming premises in casinos shall be not less than 800 square metres. Gaming premises in amusement arcades shall be not less than 100 square metres,” the request for concepts says. Ms Lomakina says there will be no limit on capital expenditure by investors. Casino operators will be allowed to compete in offering credit to gamblers. Nash Dom Primorye is asking prospective investors to suggest how junket operators should be regulated. Russia has no law on junkets. The company envisages up to 12 casinos in the entertainment zone. It will give gaming companies control of the land at least until 2025, and the grant can be extended. Nash Dom Primorye wants the zone developed in three stages. It wants the first phase, entailing investment of about US$2 billion, completed by 2016, when the first casino should open. It wants the second phase completed by 2019 and the third by 2022. A report by Gaming Market Advisors, a casino market research firm, says the entertainment zone could rake in annual revenue of between US$2 billion and US$7 billion once fully developed.

Leading centre

the first phase of the development of the zone. The deadline for submission of proposals is September 21. Discussions with interested parties should start one month later. No proposals had been submitted by the middle of last month, according to Ms Lomakina. But she says prospective investors from Macau, Russia, Hong Kong and Singapore have shown interest in getting a foothold. Nash Dom Primorye has appointed Las Vegas’s Galaviz & Co as lead strategic adviser for the project. One of the attractions of the project for gaming companies is that, unlike in Macau and Singapore, in the Vladivostok entertainment zone no tax will be levied on gross gaming revenue. Ms Lomakina says casino operators “will pay the usual taxes, as any other business in Russia”. They must also pay a fixed monthly tax of US$3,500 (MOP28,000) per gaming table and US$225 per gaming machine. “Even when you combine these tax requirements, the integrated entertainment zone is still a favourable market to invest in,” Ms Lomakina says.

No limits Consulting firm Union Gaming Group says the authorities in Vladivostok are offering casino operators a good proposition. “The region seems to be gaming-friendly from a development standpoint, and we expect operators to give it a look, given the low tax rate and proximity to [sic] Asia,” Union Gaming

Nash Dom Primorye suggests that prospective investors include non-gaming recreational amenities in their plans. “While casino gaming is legal in the zone, we are looking for concepts that focus on tourism development,” says Ms Lomakina. The aim is to have non-gaming revenue make up a large slice of the pie. Corruption and political instability in Russia may make prospective investors think twice. “Every effort is being made to ensure that global investors are confident in the business environment,” Ms Lomakina says. The entertainment zone, first announced in 2010, will be 50 kilometres north of Vladivostok and about 20 kilometres from the city’s new international airport. It is a mountainous region bordering the mainland and North Korea. Nash Dom Primorye is aiming to attract tourists from the mainland, South Korea, Japan and the United States. Vladivostok is about two hours flying time from Seoul and Tokyo. The goal is to make the Vladivostok development a leading centre for gaming in East Asia. “Taking into account the distance and population of the region, the integrated entertainment zone will create a compelling experience for Asian tourists seeking a destination that is near, but culturally different,” says Ms Lomakina. Russians should also contribute to gaming revenue. Unlike some other countries in Asia that ban their citizens from gambling on their own soil, Russia allows its people to gamble at home. The Vladivostok entertainment zone is one of only four places in Russia where casino gaming is legal. It will be the only development that is easily accessible from East Asia. AUGUST 2012

102

Gaming Statistics

Casino gaming 2011 MOP 267.9 billion

Gross gaming revenue

5,302 16,056 34 casinos

Gaming tables Slot machines Number of casinos

Market share per casino operator* 2011 SJM Holdings Ltd Galaxy Entertainment Group Ltd Sands China Ltd Wynn Macau Ltd Melco Crown Entertainment Ltd MGM China Holdings Ltd

29% 16% 16% 14% 15% 10%

Year-on-year change (%)

MOP 24.6 billion

42.2 10.7 14.3 1 casino

5,498 17,035 35 casinos

Year-on-year change (%)

-3 7 -2 -1 --1

Year-on-year change (%)

Latest

percentage points percentage points percentage points percentage point

Month-on-month change (%)

26% 19% 22% 11% 13% 9%

percentage point

1.5 5.0 12.8 1 casino

--4 4 -1 ---

percentage points percentage points percentage point percentage point percentage point percentage points

Notes Jun 2012 Jun 2012 Jun 2012 Jun 2012

Notes Jul 2012 Jul 2012 Jul 2012 Jul 2012 Jul 2012 Jul 2012

Gross revenue from casino games MOP783 million

Roulette

MOP2,712 million

Blackjack

MOP196,126 million

VIP Baccarat

MOP48,669 million

Baccarat Fantan

MOP211 million

Cussec

MOP4,774 million

Paikao

MOP114 million MOP70 million

Mahjong

MOP11,425 million

Slot machines

MOP190 million

3-Card Poker

MOP51 million

Fish-Prawn-Crab 3-Card Baccarat Game

MOP281 million

Craps

MOP151 million

Texas Holdem Poker

MOP277 million MOP35 million

Lucky Wheel

MOP311 million

Live Multi Game Stud Poker

MOP1,309 million

Casino War

MOP225 million

Fortune 3 Card Poker

MOP141 million

Year-on-year change (%)

16.5 18.4 44.6 39.4 15.3 34.3 32.6 105.9 32.6 45.0 -45.2 28.3 -7.4 28.2 9.4 103.3 23.5 43.3 29.4

Latest MOP318 million MOP735 million MOP52,175 million MOP15,553 million MOP56 million MOP1,328 million MOP22 million MOP57 million MOP3,285 billion MOP52 million MOP4 million MOP82 million MOP39 million MOP69 million MOP8 million MOP182 million MOP348 million MOP54 million MOP44 million

Year-on-year change (%)

109.2 14.3 7.5 35.1 5.7 16.8 -24.1 256.3 16.2 8.3 -71.4 9.3 8.3 -2.8 -225.0 16.0 3.8 33.3

Notes Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012

Gross revenue from other gaming activities 2011 Greyhound Racing

MOP297 million

Horse Racing

MOP440 million

Chinese Lottery

MOP6 million

Instant Lottery

MOP0.0036 million

Sports Betting - Football Sports Betting - Basketball

MOP362 million MOP86 million

Year-on-year change (%)

-12.6 0.2 -56.5 -4.7 8.9

Latest MOP46 million MOP82 million MOP1 million MOP0.0005 million MOP102 million

* Figures are rounded to the nearest unit, therefore they may not add exactly to 100 percent AUGUST 2012

MOP24 million

Year-on-year change (%)

-43.2 -23.4 -50.0 -58.3 17.2 33.3

Notes Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012

Source: Gaming Inspection and Coordination Bureau and industry sources

2011

103

Andrew Macaulay

Electric energy Macau’s live table cap is creating new opportunities for slots, says local manufacturer Aspect Gaming BY MICHAEL GRIMES

nder 5 percent of Macau’s gross gaming revenue last year came from slot machines, but that is still a huge amount of money – equivalent to MOP11.4 billion (US$1.4 billion). That means there are a lot of slot and electronic game manufacturers clamouring to get onto the casino floors in Macau. And with the city very close to its capped limit of 5,500 live tables imposed until next year, there are likely to be many more opportunities for electronic games to build their share of gaming revenue in real terms and possibly as a proportion of the cash wagered. “Slots are an enormous part of casino managements’ thinking in Macau,” says Andrew Macaulay, a gaming in-

dustry strategist and managing director of Aspect Gaming. The firm is a Macau-based slot developer and maker with development and manufacturing facilities in the mainland. “The table cap is obviously impacting the casinos’ business and they are looking at ways of maximising their income from electronic gaming,” states Mr Macaulay. “There is no question whatsoever that this market is going to have an increasing level of electronic gaming in it. The table cap alone does that. With ever more visitors coming across the border from the mainland, the casinos can raise the minimum bet levels on the live tables and price some people out of live table gaming,” he adds.

“Some customers are going to find in that situation that they gravitate toward electronic gaming, where the minimum bets will be lower,” states Mr Macaulay.

Electronic future The Gaming Inspection and Coordination Bureau classifies semi-automated electronic table games, combining live dealers with electronic stations – the nearest alternative to live table games – as tables not as slots, albeit at a generous ratio of around 60:1 according to a recent report from Union Gaming Research Macau. That means 60 electronic table games seats are being counted as equivalent to one live table. Nonetheless, what lay people would AUGUST 2012

104

Gaming think of as traditional slots – i.e. upright or slant top gaming cabinets designed to seat one player but clustered in rows on the floor and featuring random number generation technology inside – are also benefitting from the radical product mix rethink by casino managements in the face of the table cap. Mr Macaulay describes Aspect Gaming as a truly Chinese slot game developer and manufacturer nimble enough and sufficiently plugged into the players’ needs to deliver products that will give casinos the revenue they need and the players the entertainment they crave. “There are Taiwanese game development companies but as far as I’m aware we are the only China-based supplier with games approved for Macau,” he says. “We’re a small company. It’s got a start-up mentality and everything is can-do. There’s an excitement to that. The team wants to try things and create a better product. We don’t have the multiple processes to sign off that are found in large corporations,” he explains. Aspect Gaming has its game development base in Shanghai, where talented programmers are in good supply. It says 60 of the 65 staff there are hands-on developers. That has enabled Aspect Gaming to produce 12 games with individual maths models and graphics in the past calendar year, it says. It has also allowed the company to dramatically reduce the time it takes to make adjustments to

Aspect Gaming recently launched a play-for-fun online casino on Facebook, featuring proven slot games, including “Eric Tsang’s Five Ghosts”

AUGUST 2012

games if requested by casinos. “One of the casinos in Macau took one of our new games and one of the very experienced gaming guys looked at the game and said ‘I really like that but I think it would be even better if we added certain features’. They were good ideas but my first thought was it would take nine months,” states Mr Macaulay. “So I went back to the development team in Shanghai and literally in 11 days they made the changes. It wasn’t a substantial change in terms of software and graphics, but it was a substantial change in terms of player experience,” he adds.

Online casino Aspect Gaming recently launched a play-for-fun online casino on Facebook, featuring proven slot games, including “Eric Tsang’s Five Ghosts”. “Eric Tsang is huge in Hong Kong,” says Mr Macaulay. “He’s like a comedic version of Jackie Chan. He does action movies but also comedy, and he’s also a director. He collaborated with us in developing the game.” The online games are the same as the Aspect Gaming games available in casinos, with the same return to player percentages, as even online players doing it for fun get bored if they win too often, says the company. The difference is there’s no cash betting involved. “The online games give you a certain amount of free-play, but players can then buy credits for various extra play features. It’s not expensive. We already had 20,000 people paying to play just two weeks after launch, so that quickly covered the full cost of the Facebook casino deployment,” states Mr Macaulay. It’s also legal in most major markets because the users are paying to play the game, not to gamble, he explains. “The online play gives you the ability to see if you like the games before you come to play in the casino. It’s just a platform for our content, and content is what the company’s all about,” states Mr Macaulay.

105

UFC HITS VENETIAN

Venetian Macao will host an Ultimate Fighting Championship, or UFC, event on November 10, it was announced last month. This is UFC’s first-ever event in China and its second event in Asia this year. Las Vegas-based UFC is arguably the world’s premier mixed martial arts organisation. The fight will be broadcast in the U.S. market and around the world.

MACAU NEEDS TO GO BEYOND GAMING: PANSY HO MGM China Holdings Ltd’s chairwoman says “Macau intends to cater for tourists by re-inventing itself” MGM China Holdings Ltd’s chairwoman Pansy Ho Chiu King says Macau’s needs to evolve from being China’s only gambling enclave to the nation’s leisure and tourism hub. “It’s not because we can’t grow the gaming industry,” Ms Ho told official newspaper China Daily. “But we know, with far-sighted

ROCK OPERA ON THE WAY

American comic book writer Stan Lee is preparing a rock opera for Macau. Mr Lee, 89, is a legend among comic books’ lovers, having created characters like Spiderman and the Hulk. He told the South China Morning Post he is planning to stage a “rock opera” at an undisclosed casino in Macau next year. Details are said to still be sketchy.

vision, that we want Macau to become more than that. If we don’t want Macau’s growth to eventually find itself at a stalemate, we need to start thinking quickly on how Macau can continue its impetus.” Ms Ho added “Macau intends to cater for tourists by re-inventing itself.”

TWO NEW EVENTS FOR POKERSTARS

PokerStars Macau announced that it has added two more special events to the ‘2012 Asia Player of the Year’ season. The Macau Poker Cup Championship will take place from September 7 to September 16, while the inaugural APPT: Asia Championship of Poker is scheduled for October 26 to November 11. Both events will be held at the Grand Waldo Entertainment Complex. The APPT: Asia Championship of Poker will feature a HK$100,000 (US$12,893) buy-in Main Event with a HK$$10 million guarantee.

It’s your daily business

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106

Gaming Statistics

A losing ticket The mainland’s record lottery prize triggers calls for reform BY MARTIN JOHN WILLIAMS*

idespread suspicion over the handling of record lottery winnings in the mainland has increased attention to public accountability of government agencies and spurred calls for structural reform. The latest calls for a reconfiguring of the lottery administration follow a new record for a single prize set on June 20, when a single customer in Beijing landed more than RMB570 million (MOP713 million) in the Welfare Lottery. The customer’s winning three tickets in the Union Lotto cost RMB220 and included 11 bets at 10 times the normal ticket unit on the same combination of numbers. The resulting payout amounted to 110 times the first prize. Images of the winning tickets were displayed in an official news release, but a number of perceived irregularities, including a two-second difference

AUGUST 2012

in the printing of two of the tickets and a reversed ticket number sequence, led to a strong response on the Internet over the fairness of the draw and whether the winnings even existed. “It’s apparent there’s still a long way to go for mainland lotteries when it comes to being equitable, fair and open,” said one editorial comment on July 10. The Sports Lottery, meanwhile, came under criticism by Internet users last month when a post on micro-blogging website Sina Weibo included screen captures of groups of lottery draw witnesses seated in a television studio. The post gleefully pointed out that the same audience members were present for five consecutive days, in many cases wearing exactly the same clothes. The images were circulated among thousands of users and drew wider media coverage, prompting the lottery au-

thorities to confirm that the audiences were real and that the draws were properly carried out.

Transparency boost needed Cheng Yang, a prominent lottery industry consultant and commentator, last month called such Internet speculation “baseless”. But the sullen response of the Beijing Welfare Lottery Centre – a municipality-level agency – to criticism from bloggers, online commentators in state media and general Internet scepticism only exacerbated the problem, according to industry observers. “The Beijing Welfare Lottery Centre really should have given a concrete explanation to lottery customers how these two tickets could have been produced within two seconds,” says Wang Xuehong, executive director of the China Centre for Lottery Studies at Peking University.

107 “This kind of technical information isn’t in the same category as details on lottery winners, but clearly it was even more important that this information be released,” she says. “You can’t just refuse to respond.” Industry observers see the actions of the Beijing Welfare Lottery Centre as part of a wider lack of transparency in the regional administration of the mainland’s lotteries. “The [central] government is trying to make some changes to make information more open to the media and to the public,” says Susan Liu, a lecturer at the Macau Polytechnic Institute’s Gaming Teaching and Research Centre. “The central government has developing expectations, but maybe because of the interests of the local governments, the departments that operate the lotteries may be yoked to the previous ways of running their business,” she says. “Maybe they just don’t know how to, or they don’t like, change.”

The Ministry of Finance last month announced that gross lottery revenue in June rose 23.8 percent year-on-year to RMB21.6 billion

announced that gross lottery revenue in June rose 23.8 percent year-on-year to RMB21.6 billion, of which Sports Lottery revenue grew by 29.8 percent to RMB9.08 billion to claim a 42 percent market share. However, the monthly haul was down 8.5 percent sequentially after three months of flat revenue, while open-type network sales was the only sales mode not to register year-on-year growth, dropping 4.9 percent year-on-year and 10.5 percent sequentially. * GAMBLINGCOMPLIANCE

Follow the money But with a series of lottery embezzlement scandals still fresh in the minds of experts and public alike, others see deficiencies in the central apparatus itself. Su Guojing, chairman of the Asian Responsible Gaming Alliance, says a “national lottery advancement bureau” should be created to integrate the two lotteries and break the hold of the sports and civil affairs ministries on the industry as well as regional governments on their share of revenue. Ms Wang agrees, arguing that the industry needs not only a national lottery agency but also a national regulatory commission that monitors compliance. She adds that the destination of that lottery’s welfare funds, which amount to 35 percent of revenue, is unclear. “China’s lotteries have been operating for nearly 30 years. Where is this funding going? How big is the contribution to social welfare activities? How efficient are they?” she asks. “An explanation should be given to everyone, including lottery customers, because only through this can more people be attracted to investing in lottery activities,” says Ms Wang. The harsh new tone of criticism comes amid preparations for a new online lottery regime, lowering of the 15 percent operating fee and, in particular, imminent changes in China’s top leadership. The Ministry of Finance last month AUGUST 2012

108

Tourism

Hospitality chain reaction Demand for vocational training is increasing in the hospitality industry but experts say training alone will not end the sector’s woes he quality of service in the hospitality industry remains in the spotlight and what is revealed has been unflattering. As the city builds some of the best hospitality hardware in the world, complaints about frontline staff continue to pour in. Two instructors at the Institute for Tourism Studies warn that vocational training alone will not improve service. Kurma Mac Seac Kuong, an instructor at the institute since 2002, says training helps, but that it is not enough. He says the high turnover rate among employees and the tightness of the labour market also make service worse. And the sheer number of patrons hotels and restaurants serve each day makes it hard to serve them well. “It is a chain reaction,” says Mr Mac. “The tourism industry is the head of the economy in Macau. We have to do it right.”

AUGUST 2012

At the end of March, the city’s hotels and restaurants had more than 5,800 job vacancies, meaning the vacancy rate was 9 percent, official data shows. The industry had an employee turnover rate of 7.5 percent and an employee recruitment rate of 11.2 percent. “If a restaurant doesn’t have enough manpower, how can it provide super service?” Mr Mac asks. “Their staff are overloaded. We can’t talk about service quality.” Edwyn Tam Chi Fai, the coordinator of the food and beverage courses at the Institute for Tourism Studies, says the hospitality industry is recruiting employees faster than it can show them the ropes. Mr Tam says new restaurants and hotels have mushroomed in recent years. “The number of new staff has also increased. When you have constantly new people coming in, it takes time.”

Mr Mac warns that weak supply and strong demand in the labour market may cause some workers here to make the mistake of overlooking their training. “People need to know they really need to upgrade themselves in order to cope with the development of the city,” he says. “Or else, they might be repelled eventually.”

Missing the mark Both experts acknowledge that the hospitality industry is attaching more and more importance to training. “The hotels are more active in providing training to their staff,” Mr Tam says. “Most of the international casino operators that entered the market in recent years have big training and development teams to look after this aspect.” The government, too, has been giving thought to improving vocational training. It subsidises several courses for

109

residents. Last year it introduced a threeyear training subsidy of MOP5,000 (US$625) for every resident aged 15 and over so they can improve their skills. Mr Mac points out that most frontline staff in the hospitality industry are imported. This means that for the most part they cannot take advantage of government efforts to improve skills. “These people also need to be trained,” he says. Mr Tam says the MOP5,000 training subsidy has increased the number of students taking Institute for Tourism Studies food and beverage courses. But he says some of these new students are taking courses only to indulge their private enthusiasm, because they work in industries other than the hospitality industry. This is often the case with entrylevel courses on subjects such as cooking or wine tasting. The number of people taking food and beverage courses at the institute reached almost 4,300 in the academic year that ended in 2011, 14 percent more than the year before.

Standard operation The institute is probably Macau’s biggest provider of training for the hospitality industry.

The number of people taking food and beverage courses at the Institute for Tourism Studies reached almost 4,300 in 2010/2011 Its Tourism College offers tourismrelated programmes leading to bachelor’s and master’s degrees. Its Tourism and Hotel School offers a wide range of vocational training for positions up to and including those at the managerial level. It also cooperates with the industry in offering in-house courses and bespoke training. In 2001, the Tourism and Hotel School launched the Macau Occupational Skills Recognition System, or MORS, a joint effort with the hospitality industry. It introduced a certification scheme for a number of occupations. There are now skills standards for 15 occupations, from room attendants to bartenders to retail sales officers. Supplemental train-

ing enables employees to reach the level required for certification. Since 2001, MORS has certified the skills of almost 5,300 people. “The hotels themselves recognise the reputation of MORS,” Mr Mac says. “Some companies actually increase the workers’ salaries if they get the MORS certificates.” Mr Tam and Mr Mac both expect vocational training to continue growing in the near future. “At the beginner level, we forecast an increase, because of the increase in the workforce,” says Mr Tam. “But at the same time, we try to do more refined, high-level training.” The Institute for Tourism Studies recently began offering a wine course that focuses only on Burgundy. It is now preparing to offer a similar course on Bordeaux wines, and to offer more high-level training for baristas. The school is also increasing the number of internationally-recognised certificates it awards. “If the service level still has room to improve, we have to look one step ahead,” Mr Tam says. “Then, when the human resources shortage crisis smoothens out, Macau will go in the direction of improving service quality.” AUGUST 2012

Tourism statistics

110

Visitor arrivals Year-on-year change (%)

2011 Total - Same-day visitors - Overnight visitors Average length of stay

28,002,279 15,077,119 12,925,160 0.9 days

Year-on-year change (%)

Latest

13,577,714 7,189,913 6,387,801 1.0 days

12.2 15.6 8.4 --

2.5 0.0 5.5 -0.1 days

Notes Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jun 2012

Visitors by place of residence Year-on-year change (%)

2011 Asia - Mainland - Guangdong - Fujian - Zhejiang - Hunan - Beijing - Shanghai - Tianjin - Chongqing Individual visit scheme - Hong Kong - Taiwan - Japan - South Korea - Others America Europe Oceania Others

27,287,076 16,162,747 8,196,139 932,316 575,595 533,495 314,696 471,366 100,585 172,140 6,588,722 7,582,923 1,215,162 396,023 398,807 1,531,414 310,608 251,748 127,983 24,864

Latest

Year-on-year change (%)

2.4 8.5 2.6

Jan-Jun 2012

131.1 164.2 140.1 191.9 185.6 159.0 151.2 166.8

11,166,468 6,890,366 3,359,193 346,866 242,535 231,064 140,483 202,797 50,860 80,957

Jan-Jun 2012

20.1 1.6 -6.0 -4.2 20.2 -0.6 4.5 3.0 0.3 8.8

2,849,276 2,915,451 414,366 171,519 184,993 589,773 128,014 107,772 57,398 11,366

-0.2 10.5 22.7 9.1 7.2 45.9 33.8 8.2 -6.6 -16.5 14.8 9.9 -3.2 2.6 6.5 6.2 21.3

12.4 22.2

Notes

Jan-Jun 2012 Jan-Jun 2012

Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012

Hotels Hotel and guest-house rooms Hotel guests Hotel average occupancy rate Average length of stay

11.3 22,356 11.0 8,612,127 4.3 84.1 1.53 nights -0.01

percentage points nights

Latest

Year-on-year change (%)

24,117 12.1 3,702,740 12.7 percentage 81.9 0.0 points 1.46 nights -0.07 nights

Notes May 2012 Jan-May 2012 Jan-May 2012 Jan-May 2012

Visitor expenditure Year-on-year change (%)

2011 Total spending (excluding gaming) MOP 45.3 billion - Non-shopping spending - Shopping spending Per-capita spending

AUGUST 2012

MOP 22.9 billion

22.4 MOP 1,619 MOP

billion

20 23 16 7

Latest MOP 13.1 billion MOP 6.4 billion MOP 6.7 billion MOP 1,891

Year-on-year change (%)

35 28 42 25

Notes Jan-Mar 2012 Jan-Mar 2012 Jan-Mar 2012 Jan-Mar 2012

Source: Statistics and Census Service

Year-on-year change (%)

2011

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TOURIST-RELATED ‘INFLATION’ SLOWS DOWN

The Tourist Price Index for the second quarter increased by 6.57 percent year-on-year, shows official data. This is a sharp drop from the 10.15 percent rise recorded in the first three months of the year. Even so, the average Tourist Price Index for the year ended in June is still quite high, having increased by 12.91 percent from the previous period. That is more than double the overall inflation rate recorded for the same period. The Tourism Price Index reflects the price changes of goods and services purchased by visitors.

TOURISM SATISFACTION STAYS PUT

GOV’T MULLS BUDGET HOTELS

According to the latest results of the Macao Tourism Satisfaction Index, visitor satisfaction stayed mostly put in the second quarter. The index for the three months ended June stood at 69.5 points out of a highest score of 100. This is slightly better than the 68.8 score recorded in the first quarter and not significantly different from satisfaction level recorded in the last three quarters of 2011. The Institute for Tourism Studies’ Tourism Research Centre conducts the Tourism Satisfaction Index. A total of 1,154 interviews were conducted for this edition.

Budget hotels may be allowed near the new Macau-Zhuhai checkpoint, says chief executive

Chief Executive Fernando Chui Sain On said last month the government would consider allowing local small and medium enterprises to build budget hotels near the new Macau-Zhuhai border crossing. “We need to have different types of hotels to satisfy different customers,” he said. Mr Chui added that the government would make full use of the land near the new checkpoint for the development of public housing and tourist facilities. The new checkpoint will be located where the Nam Yuen wholesale market now is, and will be for pedestrians only. The border is expected to work around-the-clock and handle up to 250,000 crossings per day. The government has yet to announce an estimated price tag for the project, which is still waiting for Beijing’s approval.

MORNING STAR SELLS MACAU TRAVEL AGENCY

Morning Star Resources Ltd agreed to sell Morning Star (Macau), a company principally engaged in the provision of travel and travel related services. The buyer is investment holding company Affl uent Trade Ltd, incorporated in the Cayman Islands. Affl uent Trade will also acquire Morning Star’s Star Travel, Morning Star (Hong Kong) and Morning Star Traveller. The overall operation costs HK$138 million (US$17.8 million).

AUGUST 2012

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113 GUSTAVO CAVALIERE HOSPITALITY INDUSTRY EXPERT - gustavo.cavaliere@gmail.com

Over the horizon

DURING RAPIDLY CHANGING TIMES, HOSPITALITY INDUSTRY LEADERS NEED THE CAPABILITY TO PREDICT THE FUTURE

his is an era when game-changing ideas, products and services keep popping up, obliging leaders to stay one step ahead. Managers fall roughly into two groups: those that live for the present and those that focus on the future. It is the ability to focus on the future that distinguishes leaders with great potential from ordinary supervisors in an organisation. In business, an ability to keep one eye on the future allows leaders to articulate possibilities for expanding a company’s portfolio and increasing its bottom line. Experts say this ability is one of the main features of an effective leader, along with integrity, resourcefulness and an open mind. Forward-thinking people are the true strategists behind a business. They can envisage the future and work out where the organisation must go to succeed, and how to allocate its resources accordingly. Just think about the leaders you most admire, either where you work or in the world at large. Most probably they are forward-looking people. Being focussed on the future is very different from being a fortune teller. It means being able to think critically, to analyse and to come up with scenarios based on current data and emerging trends in the search for new avenues to success. The need to be forward-looking increases as one rises through the ranks. While a front-line supervisor is expected to think ahead only one quarter, mid-level managers may need to handle more complex ventures that stretch three to five years into the future. Those at the top are often required to have the ability to think one business cycle ahead, which may mean 10 years or more.

The big picture To become forward-looking leaders, managers need to see past the end of their own noses, even if day-to-day tasks take up most of their time and energy. To achieve this, discipline is a must. While some people are naturally more apt than others to focus on the future, the ability can be trained, much like an athlete trains to make the most of natural talent. Coaching experts often recommend that managers take some time each week to exercise their capability to anticipate. This can be done by spending just 30 minutes learning about the current trends in their industry, exchanging ideas with customers or analysing their company’s prospects. Being a forward-looking leader means more than just looking ahead. It also means using what they see to paint a vision, and then communicating this vision to other people in the organisation. Effective leaders do not just press for the best performance now, they show employees a bigger picture of what they are trying to build and why it matters. As people concentrate on their day-to-day tasks, it is easy for them to lose sight of their company’s goals. A forward-

thinking leader can make a difference by helping workers to understand properly their place in the strategy, to motivate them better. A leader who focuses on the future must be an optimist by nature. Negative reactions to short-term obstacles only prevent people from seeing beyond the obstacles. By being optimists, leaders radiate the hope and energy needed for their subordinates to carry on, even in moments of uncertainty.

Rapid changes Optimism also helps managers to work constructively in stressful situations and under pressure, and to perform more effectively in ambiguous situations. It prompts them to view problems as opportunities, and mistakes as part of the process of making progress.

Hotels should prepare for an uncertain future by building on competencies that they envisage as necessary in the years to come, as well as the competencies needed currently Being an optimist does not mean being naive or ignoring hardship. On the contrary, it means being prepared to deal with complications and overcome adversity. Macau is in desperate need of forward-looking leaders, not least in the hospitality industry. Hotel managers here should focus not only on serving today’s guests better, but also on imagining what tomorrow’s clients will be like, as the mainland, the city’s main source of tourists, changes rapidly. Unfortunately, it seems hoteliers in Macau are either unable or unwilling to see the future any differently from the present. Hotel managers should be the first to acknowledge and track how the typical guest is evolving, and how they are demanding ever higher standards. This should prompt the hospitality industry to enable managers to plan and redesign hotels to stay ahead of the trends. Hotels should prepare for an uncertain future by building on competencies that they envisage as necessary in the years to come, as well as the competencies needed currently. This should lead to improved and more consistent performance. Any hospitality business here that can commit itself to this, and imagine and prepare for a future that is not simply a direct reflection of the present, is likely to be a winner in the intense years to come. AUGUST 2012

114

Technology

The boss unlikes you Businesses around the world are keeping tabs on what their employees do online and companies here are catching up with the trend BY SARA FARR

riends and tweeters beware: what you post online may put your job on the line. In days of yore, when social media was another way to stay in touch with friends and family, what you posted online was none of your employer’s business. These days, what you post online could blow your career to gigabits. Many companies have learned the hard way how a negative post on Facebook by an outsider can damage their bottom line. The damage can be even worse if the post is by an insider. Little wonder, then, that an increasing number of companies around the world are keeping an eye on what their staff post online. Businesses in Macau – where three out of four people are plugged into social media – are slowly adopting the practice. Macau Business understands that

AUGUST 2012

there are already companies here that regularly monitor what their staff post online. The Labour Affairs Bureau says it has not received any complaints. One of the greatest dangers for a company is that an employee might leak confidential information. A more common threat is that staff might inadvertently make remarks online that damage the company’s brand or reputation. Such remarks, even if made privately, can easily be broadcast as the recipients pass them on.

Faulty recruitment In the United States, the courts have already dealt with several cases of employees dismissed for commenting online. More firings are expected as automatic monitoring programmes make it easier for companies to track what employees are doing in the social media.

Zenon Udani, a human resources development specialist and trainer, and a teaching fellow at the Honours College of the University of Macau, argues against companies monitoring what their employees do in the social media. “Companies should focus on what they are for, as stated in their vision and mission,” he says. He acknowledges that social media such as Facebook and Twitter can become “bothersome”, but says it “reflects poor management, lack of leadership or faulty recruitment of staff”. Some companies here have issued guidelines to their employees on the use of social media. Casino operator Sands China Ltd is one. “The purpose of this guideline is to minimise the risks associated with user-generated content that may relate to reputation, confidential and proprietary information, compliance with business

115 rules and laws, and brand integrity,” says a spokesperson for the company. “Employees are obliged to avoid conduct which reflects poorly on themselves or which in any way harms, or has the tendency to harm, the company’s reputation or standing in the community.”

Complaints desk Mr Udani says guidelines of this kind, forming part of a well-crafted code of ethics for employees, are useful. Many companies here have no such guidelines. Experts say company policies on using social media should make it clear that while employees are free to have their own opinions, comments made online should not undermine the company or its brands. This is especially important where the success of a business depends on its reputation. Policies should make clear what company information is confidential, be it customer lists, patented processes or whatever. Companies should also give employees a way to voice their grievances internally, so they do not need to air them in social media. The policy of many companies here on the use of online social media

The coordinator of the Office for Personal Data Protection, Sonia Chan Hoi Fan, could not be categorical about whether it is an offence for an employer to reject an applicant because of what the applicant has posted online

JUST CHECKING? O

nline social media has become a source of information for employers vetting prospective employees, and more and more employers are using this source. Experts shrug. Raymond Lai Fei Loi of the University of Macau’s Department of Communication says information in social media is, after all, freely disclosed and self-reported by nature. Zenon Udani, a human resources development specialist and trainer, and a teaching fellow at the Honours College of the University of Macau, argues that social media is no different from any other source of information tapped for background checks. “Any sensible company will employ all honest means to find the right person for a given job,” Mr Udani says. But he says that what an employer finds on Facebook or Twitter should not be the sole basis for deciding whether or not to take on a job applicant. The Office for Personal Data Protection said last year that the practice was uncommon here. But it advised social media users to bear in mind that what they disclose online may be seen by employers. The coordinator of the Office for Personal Data Protection, Sonia Chan Hoi Fan, could not be categorical about whether it is an offence for an employer to reject an applicant because of what the applicant has posted online. “We have to see how information is gathered in order to determine if a crime was committed,” Ms Chan said. “It is a very complex situation.” There is conjecture that Facebook will introduce its own jobs board this summer. Reports in the news media have said Facebook will aggregate the help-wanted ads of third parties so Facebook users can search them.

AUGUST 2012

116

Technology

PRIVACY UPSETTINGS M

ost people –especially teenagers – fail to read the terms and conditions when opening Facebook, Twitter or other social media accounts. A survey of Macau by the Office for Personal Data Protection last year found that 58 percent of the 1,028 respondents that used social media admitted to never having read the fine print. However, 66 percent said they had changed their privacy settings and 23 percent said they had already had reason to regret disclosing personal information online. Over one-third had been upset to find someone else uploading their personal information or pictures onto social media websites. The survey found that 72.5 percent of the respondents used social networking websites. Of those, 68 percent checked their accounts every day and 9 percent had had their accounts hacked. Over 70 percent allowed only people they “knew well” to see their personal information.

is merely to limit access to them in the workplace. The Labour Affairs Bureau says this is a legitimate practice. “It is the employer’s right to decide whether to allow workers to access social media when they are at work,” the bureau says.

Dim prospects Some companies, mainly companies in the United States, discourage employees from “friending” each other in social media to preclude inappropriate talk about the company and its staff. Mr Udani says it is no problem for

AUGUST 2012

colleagues also to be Facebook friends or Twitter followers as long as they behave properly. “Some people may have no qualms in employing character assassination to criticise others,” he says, “but the prevalence of this habit does not mean it’s the right thing to do.” Human resources consultants abroad advise employees always to be careful about what they post online, even if the posts are private, because saying the wrong thing can be detrimental to one’s career. A seemingly harmless status update can be enough for an employee’s su-

periors or colleagues to take him or her less seriously, and so dim his or her prospects of promotion in future. The first rule of thumb is to limit the information shared with superiors, colleagues, customers and other occupational contacts. Privacy settings should be set accordingly and reviewed regularly. Experts say it is most important for employees to voice any grievances about their employer through the proper internal channels, rather than sounding off online. Once the genie is out the bottle, it is hard to get it back in again.

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Waiter! The iPad, please Entaste’s wine list app aims to give consumers more information about wine, and winemakers more information about consumers BY LUCIANA LEITÃO

lectronic wine lists have arrived in Macau. Entaste LLC’s wine list application for iPads is already being used in the teaching restaurant at the Institute for Tourism Studies, and the company intends to make the app more widespread here. Entaste founder David Garrett aims to have up to 40 restaurants in the city using the app. He says Entaste and the Grand Lisboa casino hotel, which has perhaps the most comprehensive wine list in town and already uses iPads to display it, are already in discussions. Other properties have also been approached, including Wynn Macau. The Entaste app allows customers to see all the important information about a particular wine with one touch. The details might include information about the grape, the region where it is grown, the vineyard and the winemaker. “We created an iPad application which has all the statistics about each wine. Then it has tools for the sommeliers to put it in a format that makes sense for their particular restaurant or wine bar,” Mr Garrett says. “It gives a lot of room to customise the wine list.” Mr Garrett is an American information technology entrepreneur who also produces wine in Mendoza in Argentina. He says any restaurateur can adapt the Entaste app to fit the restaurant’s wine list. “For a restaurant that gets online and wants to build its own wine list, it just needs to find the wines [it serves] in our database and add their price.” The app also allows the inclusion of tasting notes and pairing suggestions. The Entaste database has information about over 680,000 wines, and information about new ones is added every day. When the company finds a wine that is not yet in its database, it approaches the maker. The Entaste app was launched last year. It is now used in 220 restaurants around the world, from South America to Europe. It is available in several languages, including traditional and simplified Chinese.

The app is used by two of Hong Kong’s top restaurants: the Amber at the Landmark Mandarin Oriental, and Otto e Mezzo The app appeared in Asia only recently. “We’re now in Hong Kong, Macau and Singapore, but the target is Beijing, Shanghai, Seoul, Tokyo,” Mr Garrett says. The app is used by two of Hong Kong’s top restaurants: the Amber at the Landmark Mandarin Oriental, and Otto e Mezzo.

Good nose for money Mr Garrett’s next target is the mainland. Although people there are only just now starting to appreciate wine, he believes there is a lot of potential, considering the thirst for information. “Entaste is a way to make easy access to information more pronounced, showing the differences between grapes and types of wines,” he says. Restaurants can use Entaste’s service for nothing. The company’s revenue comes from winemakers. The company aggregates the data it collects about customers at restaurants and wine bars and sells it to wine producers. The Entaste app gives subscribers instant information on prices, sales and distribution. It not only gives detailed

information about particular wines and wineries, but also puts all the information together to show trends. “Wineries don’t really know what consumers are drinking. They don’t know what is happening on the demand side,” Mr Garret says. “We tell them things like the average price for a red wine, or for a Merlot. We can go deeper in the future: the average price for a Merlot from the New World that has been aged more than six months in French oak.” Wineries can also pay to have branding information and graphical elements displayed by the Entaste app, to increase the chances of their wines being chosen by customers at the restaurant table. Mr Garrett expects Entaste’s app to be used in nearly 500 establishments around the world by the end of this year. He expects the figure to increase fourfold by 2014. Entaste is now developing a smartphone application giving consumers access to the wine lists of restaurants and wine shops. AUGUST 2012

118

Luxury

Raring to grow The Porsche Carrera Cup Asia is part of Porsche’s strategy to make itself more conspicuous in the mainland BY EMANUEL GRAÇA

alk about the Macau Grand Prix and smiles light up the faces of those behind the Porsche Carrera Cup Asia. The competition, now in its 10th year, was part of the grand prix here until 2007. Porsche AG executives would love to come back. “We are still continuously talking to the organisers,” says Carsten Balmes, director of marketing for Porsche (China) Motors Ltd. “I was there last year and it is an amazing event. It is pure motorsports. The atmosphere is very special.” The Porsche Carrera Cup Asia is part of the effort by the German maker of sports cars to make itself more conspicuous in the mainland. The aim is to forge stronger bonds with owners and potential buyers. “Motorsport has always been the core of our identity. That is why we have continued investing and doing motorsport for many, many years,” says Mr Balmes. “Porsche Carrera Cup Asia is a series all over Asia, but now having a very strong focus on China because we feel that it is still very important that the people understand the position of motorsport and that this is the core of our brand value.” Five of the seven events in this year’s Porsche Carrera Cup Asia calendar take

AUGUST 2012

place in the mainland. Of the others, one is at Malaysia’s Sepang circuit and one in Singapore, serving as a warm-up for the Formula One grand prix there next month. A Porsche Carrera Cup Asia event was also a warm-up for this year’s Formula One grand prix in Shanghai. This year’s competition has reached its halfway point. The next event will take place at Sepang, from August 30 to September 2. Porsche’s figures show the competition attracts attention. Last season more than 380,000 spectators attended the races and there was 282 hours of television coverage, reaching a potential audience of more than 680 million households. Porsche says the value of the media coverage the competition received last year surpassed 30 million euros (MOP295 million).

Racing attitudes Does this attention mean more sales? “It is hard to judge,” Mr Balmes says. “Throughout our monitoring of our brand, we have very strong indications that we are seen as a motorsport brand, stronger than any other premium manufacturer in China, even stronger than

others that invest in Formula One.” The push to associate Porsche with motorsport is deliberate. Experts say Chinese strongly associate car racing with positive values. Other makers of high-performance cars such as Audi and Lamborghini have similar strategies. “The interest in Porsche Carrera Cup Asia is growing,” says Oliver Schwab, the motorsport manager for Porsche China. “In social media, for sure it is growing. But there are also an increasing number of spectators coming. TV coverage now, with more and more Chinese drivers [competing], is also getting bigger in China.” The Porsche Carrera Cup Asia is a series of motor races, with all drivers racing identical Porsche 911 GT3 Cup cars. The changes teams can make to their cars are limited. The competition is divided into two categories: the overall category and the Class B category for amateur racers, often called “gentlemen drivers”. This combination is “what makes the Carrera Cup so unique,” says Mr Schwab. The competition aims to attract private enthusiasts that either race themselves or put together a team to race on their behalf. To make it easier for private

119

“Motorsport has always been the core of our identity,” says Carsten Balmes, director of marketing for Porsche China entries, the competition organisers offer drivers ready-to-go cars at each event. Malaysia’s EKS Motorsports Ltd gives these drivers technical support.

Showy strategy Porsche also encourages its dealers and distributors to compete. The Jebsen Group, which runs Porsche’s dealerships in Macau and Hong Kong, and several others in the mainland, fields Macau driver Rodolfo Ávila, who was runnerup in last year’s competition. Mr Balmes says dealers invite Porsche owners or potential buyers to Porsche Carrera Cup Asia events to stimulate their fascination with sports cars. The Porsche Carrera Cup Asia is only one of the motor racing competitions run by Porsche. This year it is holding eight Porsche Carrera Cup competitions around the world and 10 GT3 Challenge competitions. Porsche China runs the competition here. The company began operating in 2001 to support Porsche dealers in Greater China. Porsche China itself owns only two dealerships, in Beijing and Shanghai. Greater China has about 45 appointed Porsche showrooms, including

one each in Hong Kong and Macau. The Macau showroom will soon move to larger premises. “Until the end of the year, we will grow up to 60 dealerships in China,” Mr Balmes says. The company’s strategy is to focus now on smaller cities. For instance, the northern region of Inner Mongolia has two Porsche showrooms and the southwestern city of Kunming has one. This strategy “will help us to reach out to cities where we haven’t been present and where there is less competition,” says Mr Balmes. “For the high-premium sector, we will still be the only dealership in those markets.” Other makers of sports cars are not a problem. The Chinese market is growing so fast that Porsche’s main problem is keeping up with demand, Mr Balmes says. Porsche sold nearly 25,000 cars in China last year and aims to sell 32,000 this year. “We have been growing very steadily,” he says. In Macau, 115 Porsches were sold last year, 8.5 percent more than the year before. Porsche China expects sales here to rise again this year as new models such as the Panamera GTS, the Cayenne GTS and the revamped Boxter become available.

“The interest in Porsche Carrera Cup Asia is growing,” says Oliver Schwab, the motorsport manager for Porsche China AUGUST 2012

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Luxury young engineers devoted to high-fidelity reproduction of sound, founded Bang & Olufsen in the Danish town of Struer in 1925. The company has since built on its experience with audio-visual equipment for the home and now wires commercial premises for sound and vision. Several casino-hotels in Macau, including the Grand Lisboa and MGM Macau, have Bang & Olufsen audio systems. It also makes stereo systems for upmarket car brands including Aston Martin, Audi, BMW and Mercedes-Benz.

Ferrari of hi-fi

Sound business

Bang & Olufsen has opened its first store here as part of a plan to expand in Greater China enmark’s Bang & Olufsen AS, the maker of high-end audiovisual equipment, has opened its first shop here, in the One Central shopping mall. The opening continues Bang & Olufsen’s push into the Greater China market, coming on the heels of the opening of the company’s first self-initiated shop in Hong Kong under its direct ownership. “Greater China is a strategic market for us,” says Bang & Olufsen’s managing director for Greater China and Korea, Lars Hardboe Galsgaard. “Like Hong Kong, Macau is gaining influence within the luxury market in Greater China. It has successfully evolved into a large entertainment resort, as well as a family and business travel destination. More importantly,

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customers in Macau nowadays enjoy a high capacity to appreciate high-end luxury goods.” Bang & Olufsen’s fiveyear plan to make the company “leaner, faster, stronger” treats Greater China as a pivotal market into which it should expand vigorously. The company opened a regional office in Shanghai this year, and took over the Hong Kong and South China operations. The opening of the Macau shop reinforces Bang & Olufsen’s commitment to Greater China, Mr Galsgaard says. “We believe that our presence in Macau can help raise the bar of sensory enjoyment here and resonate with the pursuit of pleasure of our customers.” Peter Bang and Svend Olufsen, two

Bang & Olufsen made a net profit of 17 million kroner (MOP22 million) in the three months ended February, 39 percent less than a year before. Its sales of audio-visual equipment fell by 3.3 percent, dragged down by weaker demand in Europe, where a recession looms. To reverse the decline, Bang & Olufsen has been focusing on expanding in Brazil, Russia, India and China, where sales grew by 5 percent in the three months ended February.

“Macau is gaining influence within the luxury market in Greater China,” says Lars Hardboe Galsgaard The company expects to reduce the number of shops it has in Europe and increase the number it has in growing markets in the next few years. In India, Shreyans Group became Bang & Olufsen’s main dealer in June. The group sells upmarket products in India, including Porsche and Ferrari automobiles, Ducati motorcycles and Fendi handbags and fashion accessories. Apart from products bearing its main brand, Bang & Olufsen’s Macau store carries equipment in the company’s new B&O Play line, which is not as pricey. B&O Play equipment includes the Beolit 12 portable wireless speaker, a winner of Germany’s Red Dot Design Award this year. The role of the B&O Play line in Bang & Olufsen’s five-year plan is to attract buyers that might baulk at paying the prices asked for its main line of products.

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If you know of an event that you believe should be listed with Macau Business, please drop us an e-mail: calendar@macaubusiness.com. In the subject bar, type in “List me as an event”. TBA : To be advised |

August Date: Event: Venue: Organiser: Tel: Fax: Website: E-mail: Date: Event:

17 – 19

Asia Adult Expo 2012

Venetian Macao-Resort-Hotel, Macau Vertical Expo Service Company Ltd (852) 2528 0227 (852) 2528 0072 www.asiaadultexpo.com info@asiaadultexpo.com 20 th – 22nd

Gaming, Racing and Wagering Australia

Venue: Sofitel Sydney Wentworth, Australia Organiser: Beacon Events Address: 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong Tel: (852) 2219 0111 Fax: (852) 2219 0112 Website: www.gamingdownunder.com E-mail: info@beaconevents.com September Date: Event:

3rd – 5th

Macau Hospitality Furniture Fair 2012

Venue: Venetian Macao-Resort-Hotel, Macau Organiser: Worldexh International Co Ltd Address: 5/F, Yinhai Building, No 1 Yixin Road, Daliang Shunde District, Foshan City, Guangdong Province, China Tel: (86) 757 2238 1859 Website: www.hf-expo.com E-mail: yu@worldexh.com Date: Event: Venue:

9 th – 11th

Global Tourism Economy Forum Macau 2012

Macau Tower Convention & Entertainment Centre, Macau Organiser: Secretariat for Social Affairs and Culture Address: Rua de São Lourenço, No. 28, Headquarters of the Macau SAR Government, 2nd floor, Macau Tel: (853) 2872 6886 Fax: (853) 2872 7594 Date: Event:

18th – 20 th

Corruption & Compliance, South and South East Asia Summit

Venue: Hilton Hotel, Singapore Organiser: Beacon Events Address: 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong Tel: (852) 2219 0111 Fax: (852) 2219 0112 Website: www.corruptionandcompliance.com E-mail: info@beaconevents.com

Date: Event: Venue: Organiser:

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: A Macau Business partner event

21st – 23rd

3rd China Catering Expo

Venetian Macao-Resort-Hotel, Macau Ministry of Commerce of the People’s Republic of China and the Secretariat for Economy and Finance of the Macau government Coordinator: Macau Convention and Exhibition Association Address: Avenida do Dr. Rodrigo Rodrigues, No. 223-225, Nam Kwong Building, 13/K, Macau Tel: (853) 2871 5616 Fax: (853) 2871 5606 Website: www.chinacateringexpo.org E-mail: cce@mcea.org.mo October Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

10 th – 12th

8th International Hotel Expo

Venetian Macao-Resort-Hotel, Macau Coastal International Exhibition Co Ltd Room 2106, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong (852) 2827 6766 (852) 2827 6870 www.hotel-exhibition.com general@coastal.com.hk

Date: Event:

18th – 21th

Venue: Organiser: Address:

Venetian Macao-Resort-Hotel, Macau Macao Trade and Investment Promotion Institute World Trade Centre Building, 1st & 4th floors, 918, Avenida da Amizade, Macau (853) 2871 0300 (853) 2859 0309 www.mif.com.mo ipim@ipim.gov.mo

Tel: Fax: Website: E-mail: Date: Event: Venue: Organiser: Address: Website: E-mail:

17th Macao International Trade & Investment Fair

23rd – 27th

Freight Summit 2012

Venetian Macao-Resort-Hotel, Macau Raueber & Walle Solutions Ltd 25th Floor, Tower One, Tern Centre, 237-251 Queen’s Road Central, Hong Kong www.thefreightsummit.com info@thefreightsummit.com

November Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

7th – 9 th

Wine & Gourmet Asia 2012

Venetian Macao-Resort-Hotel, Macau Koelnmesse Pte Ltd 152 Beach Road, #25-05 Gateway East, Singapore (65) 6500 6712 (65) 6294 8403 www.wineandgourmetasia.com l.how@koelnmesse.com.sg

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Human resources

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BY SARA SILVA MOREIRA ILLUSTRATION BY RUI RASQUINHO

WHITE-COLLAR WORKERS ARE FINDING IT INCREASINGLY DIFFICULT TO SWITCH OFF WHEN ON HOLIDAY

ummer is here and scores of white-collar workers await with excitement the “dolce fare niente” as they go on holiday. But for many, holidays no longer mean long, lazy afternoons on the beach or sleeping in late. Research by facilities management and business support services company Regus Plc found that almost half of all whitecollar workers around the world expect to spend up to three hours of each day of their holidays catching up with office work. Among those in Hong Kong, 56 percent give up three hours of their holidays each day and another 26 percent give up more. The Regus survey did not cover Macau but Regus experts suspect the behaviour of white-collar workers here is not much different.

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Human resources

“That goes back to the sort of work that is carried out in this part of Asia. We see offices with the lights on late at night in the centre of Hong Kong and no doubt also in Macau,” says Hans Leijten, Regus’s vice-president for East Asia. Mr Leijten notes employers all over the world expect the best from their employees. But the belief that doing your best means working long hours is a lot more common in Asia than elsewhere. “The concept of a worklife balance is still gaining traction here, and that is also reflected in employers expecting to be able to contact staff, and even assign work to them, while they are supposed to be on holiday, which would be anathema in other parts of the world,” Mr Leijten adds. It is widely acknowledged that the business of Asia is business, and that this means working long hours. “If anything, this makes it even more important to ring-fence personal time and work time,” Mr Leijten says. “Holidays provide an opportunity to recharge and, for some, to reconnect with their family, both of which are important to an employee’s overall well-being.” There are several reasons people must work while on holiday. One is the increasing workload.

Round the clock Regus’s Work-Life Balance Index, published in May, found that more than half of professionals around the world feel that they spend more time at work now than they did in 2010. In the mainland, more than 70 percent of white-collar workers have that perception. In Macau, it is more than just a feeling. Data from the Statistics and Census Service show that the median time per week actually worked by professionals and managers has increased by over one hour in the past year. This leads to many white-collar workers opting to dedicate a few hours of each day of their holidays to work so they can catch up and reduce their post-holiday workload. Kim Kuok Oi Mei, a lecturer in management at the University of Macau, believes cultural factors are at work. “Chinese people believe the harder one works, the more competitive one will be. They often sacrifice holidays and family time for the job, even if they are not the key decision makers,” she says. Many managerial-level staff in Macau, where the gaming and hospitality industries operate round the clock, find themselves not only working overtime but also on standby during their days off. When their annual leave comes round, many still need to keep in touch with the office. AUGUST 2012

“It is difficult to switch off during a vacation if one is responsible for ensuring that a 24/7 operation is running smoothly,” says Jennifer Liao, the founder and managing director of recruitment agency Evolution HR.

Showing initiative This applies typically to senior and middle management, who must make decisions and solve problems. They can receive dozens of emails and requests per day, most requiring a quick response. Any delay can harm operations. Pedro Leite is quite familiar with this. The Portuguese businessman usually devotes at least one hour a day while on holiday to checking work emails. Mr Leite is the operations manager for Asia, based in

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The shortage of labour means many white-collar workers must make themselves available while on holiday to keep up with office work

made the office accessible anytime from anywhere. “Even at remote and idyllic locations, I get worried and unable to relax unless I’m able to regularly check my email,” says Mr Leite. Ms Liao says people should strike their own balance between work and leisure and set their own limits, instead of expecting the government to do it for them. She adds it is also important for people to learn to take pleasure in activities other than work.

Lead by example Macau, for Portuguese wine producer and exporter Global Wines SGPS/Dão Sul–Sociedade Viticinícola SA. He also plays an important role in a partnership between his company and Macau conglomerate Nam Kwong (Group) Co Ltd, which distributes Portuguese wine in the mainland. Mr Leite is responsible for dealing with customers and all decision-making about shipments. He says that even on holiday he likes to make sure the paperwork is being duly processed and products are ready for shipping. “It’s essential to ensure everything runs smoothly. Always being available to address any problems that might arise is crucial in my line of work to maintain a good relationship with my clients,” Mr Leite says. Junior white-collar workers and blue-collar workers, who are not as essential to keeping things running smoothly, usually find it easier to switch off while on holiday. “I usually only check my work email once or twice a week, mainly to see if there is anything urgent that needs my attention,” says a junior manager for a casino operator here. “I do it on my own initiative and it usually doesn’t take me more than 20 minutes.”

For many, taking a complete break from work is not an option. But human resources experts suggest tricks to minimise the negative effects. Leaving detailed instructions to a colleague on how to deal with ordinary tasks or taking annual leave during less busy seasons can reduce the holiday hours spent emailing or calling the office. Bosses should take the initiative in limiting the amount of work they do on leave, so letting subordinates know they can do likewise. If working during vacations is absolutely necessary, it is then best to schedule a specific portion of each day for it. “What really helps is allowing staff to be more effective over the long term,” says Mr Leijten. “Flexible working is often noted as a key to reducing stress and increasing productivity,” he says. “Allowing people to work their way means they can get that extra time with their family, reduce their commute, increase productivity and protect their holiday as a time to recharge and refresh themselves.”

Pressure to succeed The shortage of labour means many white-collar workers must make themselves available while on holiday to keep up with office work. Their companies do not have enough manpower to cover for them while they are away. Ms Kuok of the University of Macau says: “Employers should provide proper training, work methods and equipment to avoid overworking their staff.” She adds this applies especially when staff are on holiday. Equally important is to educate management and staff about the importance of a work-life balance. Carl Hovey, a psychologist in the United States, says: “Society, as well as media, exert an enormous pressure on individuals to be successful, and beyond this, to be more successful than their peers.” Mr Hovey warns: “This amount of emphasis on one’s success pushes out other areas of intense psychological satisfaction, such as romantic relationships, child-rearing, and personal pursuits.” Mr Leite, who has not had a work-free holiday for four years, says: “I love my job but I do miss forgetting about professional obligations while on holiday.” Ms Liao of Evolution HR says that in round-the-clock industries “most of the middle and senior executives understand that this is the nature of the business and it is part of their role to be available”. This may explain why the Labour Affairs Bureau has yet to receive any complaints about people having to work during holidays. Modern technology makes working while on holiday more pervasive. The Internet, laptops, tablets and smartphones have

Congratulations on the 100th issue of Macau Business magazine

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Arts & Culture

THE OLD COURT BUILDING WELCOMES A PECULIAR PROJECT THAT BRINGS TOGETHER ARTISTS FROM AROUND GREATER CHINA

“Secret Garden” | Lai Sio Kit, 2012 | Oil on canvas

t is often hard to forge common ground between the cultures that make up Greater China but when it comes to the arts, cooperation thrives. A living example is the Cross-Strait Four-Regions Artistic Exchange Project, now into its fourth year, that brings together cultural institutions from Macau, Hong Kong, the mainland and Taiwan. The project opens its latest offering in Macau this month, the “It Takes Four Sorts” art exhibition. Four curators of contemporary art from Taipei, Shenzhen, Hong Kong and Macau were given the brief to select three to four young artists from another region and curate an exhibit that works within the overall exhibit. The four curators made their selections under the umbrella of the concept of “exchange”. “It Takes Four Sorts” is an intriguing blend of the curators’ understanding of their geography, experience and the young artists. James Chu Cheok Son, who heads the Art for All organisation, represents Macau as a curator. Under the theme “When, Who, Where”, he handpicked works from three Taiwanese artists – Lin Jun Liang, Niu Chun Chiang and Yu Cheng Ta. Chu’s exhibit within an exhibit used video art as the medium. The curator representing Shenzhen, Lin Fan, had the responsibility of selecting the Macau artists, under the inspiration of “Suspending Mirage”. The three artists chosen were Chan Ka Keong, Lai Sio Kit and Noah Ng Fong Chao. Chan was born in the mainland in 1978. His work spans graphic design, film and, more broadly, visual art. He was first exhibited in 1999. Lai was born in Macau in 1983 and studied at Beijing’s Central Academy of Fine Arts. His paintings have been exhibited in more than 20 solo and group exhibitions. The final member of the trio was born in Zhejiang in 1968 and has lived here since the 1980s. A performance artists, Ng studied painting, stone engraving and photography at the Macao Polytechnic Institute.

Ambiguity expo “The right is under the shadow of the left” | Chan Ka Keong, 2010 | Photography

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The exhibition loans its “four sorts” moniker from Père David’s Deer, a near-extinct animal that is claimed to have deer-like antlers, a horse-like head, donkey-like tail and

127 ox-like hooves. The animal’s Chinese name is “sibuxiang”, which translates as “like none of the four”. The title is an obvious metaphor for the exhibition, four sets of works, each with their own geographical and political influences, cultural and artistic flavours. Culture Express magazine in Taipei, where the exhibition first went on display, said the “understanding and friction that the exchange inevitably produces creates an opportunity for us to observe the ambiguities and differences that exist across the Strait and in the four regions”. The exhibition will be on display at the Old Court Building. Built in 1951, the venue originally served as the government’s offices and has more recently been used by the Cultural Affairs Bureau to host contemporary art shows. After Macau, “It Takes Four Sorts” heads to Hong Kong’s Osage Kwun Tong Gallery.

“The Prosperity Alarm (20120410)” | Noah Ng Fong Chao, 2009 | Photography

OUT OF THE BOX

Puppetry is a global art form. Arguably, there is no single culture that does not use puppets for props in telling stories. “From East to West – The Wonderful World of Puppets” exhibition shows more than 100 puppets from different countries, allowing visitors to gain a better understanding of the different traditional handcrafts involved in puppetry. The exhibition at the Tap Seac Gallery is organised by the Cultural Affairs Bureau in cooperation with the Casa de Portugal in Macau. The puppets on display are part of Elisa Vilaça’s private collection, a Portuguese educator with a passion for puppets who worked in Macau for more than two decades. The exhibition also aims to motivate children and students to create their own puppets, through several workshops. The exhibit opens to the public on August 18 and runs until October 14. Admission is free. AUGUST 2012

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Arts & Culture

SOUTH KOREAN PERFORMANCE BIBAP SPEAKS THE UNIVERSAL LANGUAGE OF FOOD, UNLEASHING AN ALL-SINGING, DANCING – YET NON-VERBAL – TREAT

SPEAKING IN TONGUES BY ANNIE CHAU

little bit of everything it seems goes into South Korea’s popular dish, bibimbap. It is an eclectic mix of rice, vegetables, egg, chilli and, sometimes, meat. South Korean performance Bibap, co-produced by CJ E&M and Persona, follows the blueprint, bringing a lot of everything, all the time in a frenetic stage show. The producers have earned a stellar reputation for their musicals mixed with fantastic harmonies, acting and music. Bibap has no dialogue, instead being performed by a team of eight enthusiastic chefs, each with their own speciality – beat boxing, martial arts, a-cappella singing – in a blend Scotland’s The Evening News described as “anarchic AUGUST 2012

comedy” and “pure visual delight”. Macau audiences will have their opportunity next month to take part in the cross-cultural culinary experience in Bibap’s kitchen at the Macau Cultural Centre. Bibap’s “eatertainment” brings the tastes and scents of a real kitchen to the performance. Its cinematic puppetry and acrobatic fight scenes are engaging and inventive. During the show, chefs make a variety of dishes as orders come in. Finally, when the kitchen receives an order of “the best bibimbap”, the two rival sous chefs compete in a bibimbap cook-off. Their dishes are judged by a randomly selected audience member, who then determines which chef stays in the kitchen to carry on the legacy of

making the best bibimbap. The making of bibimbap is recreated in atmospheric sounds. Rinsing, chopping and pan-frying with beatboxing and a-cappella; and rhythmic, repetitive motions from the kitchen, represented by hip-hop and martial arts.

Universal appeal While synchronising musical styles and harmonies, Bibap has also synthesised different global cultures into a single performance. It’s more than bibimbap cooking on the kitchen stage. The chefs will also cook different cuisines such as Chinese noodles, sushi and pizza. Without a complicated plot, the show lends itself to teenagers and their parents. The cast are exceptionally multital-

129 ented. Try beat-boxing your own pulse or seemingly never-ending spinning moves. The producers debuted the performance as a 30-minute show in 2009. It has been developed, grown and matured into today’s full-scale production. Bibap has been a regular feature at food expos in South Korea. The performance has been well-received on the global stage too, including shows at the Edinburgh Festival Fringe 2010, food conferences in Singapore earlier this year, Taiwan and Malaysia. A review in The Scotsman commented their “teens were utterly transfixed” by the show. Aside from music, it is undeniable that food is another fascinating, universal language which is a vehicle to communicate with audiences. Bibap taps into the truism that no matter which culture audiences identify with, the common denominator is linked to food and the culinary arts. The success of Bibap’s co-producers is not purely achieving the combination of two most influential, universal languages into one show, but most importantly transforming the show into an object of attraction for audiences, bringing waves of tourists to South Korea. It is an extraordinary “chemical reaction”, and Bibap very clearly plays a significant role in being a Korean cultural ambassador, keeping people’s interest and satisfying a curiosity in Korean culinary culture. Since 2010, Bibap has been featured in the annual “Inspiring Korea Night”, organised by the Korea Tourism Organisation. As much as Macau audiences might be different from the Korean ones, one thing that will surely be in common, is the passion for food and for a relaxing, laugh-fuelled interlude. In that sense, this performance may also be an appetiser before the Korean film cycle, an equally intense cultural dish about to be served the following month at the cultural centre.

BIBAP PRODUCERS: VENUE: DATE: LENGTH: TICKETS: INQUIRIES:

CJ E&M and Persona (South Korea) Grand Auditorium, Macau Cultural Centre 8pm, September 7 and 8; 3pm, September 9 80 minutes From MOP100 and up, available from www.macauticket.com +853 2870 0699 or email enquiry@ccm.gov.mo AUGUST 2012

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Corporate Social Responsibility

BY STEFAN KUEHN MACAU BUSINESS SK EVENTS*

THE FIRST SPECIAL OLYMPICS MACAU GOLF INTERNATIONAL WAS A GREAT SUCCESS

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hen we initially pitched the idea of hosting an international Special Olympics golf tournament for the first time in Asia, we quickly realised that many people didnâ&#x20AC;&#x2122;t understand the difference between Paralympics and Special Olympics. Both are dedicated to competitive sport for disabled or handicapped people, but there the similarities end. The Paralympics is far more commercialized than the Special Olympics.

131 PHOTOS BY LUSA/CARMO CORREIA, GONÇALO LOBO PINHEIRO, ORGANISERS

The Kennedy family, and Eunice Kennedy Shriver in particular, introduced the latter to the modern world community, propelled by their own personal encounter with a challenge met by millions around the world on a daily basis. Macau Business SK Events already hosts an annual charity golf tournament in Macau, which is the biggest and most successful of its kind in Asia – the Annual Macau Business Charity Golf Tournament. It was there

that we first came across the work done by the Macau Special Olympics. In the tournament’s first edition, in 2007, winners Aristocrat forwarded their prize money to the organisation. Even so, we were caught by surprise when we received a call from the Macau Special Olympics last year asking if we would consider supporting their newly founded golf programme. As passionate golfers and strong believers in corporate social responsibility, we felt that this was the

right moment to create our very own association – the Charity Association of Macau Business Readers. Through it, we could promote and organise fundraising events for Macau Special Olympics and other deserving organisations.

A new signature event With golf in Asia perched on top of the very prestigious sporting tree, plus the region’s reticence to fully integrate the mentally disabled into society,

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Total concentration

Guess who’s number one

A coaching moment

Getting ready to practice

Playing like a true champ

Snack break

Golfer in action

Good times at the green

Teamwork does it best

we decided, with the encouragement of partners and friends, to organize an international golf tournament for the Special Olympics. We had teed off! The bar was set high, as nobody had undertaken a similar project here before. We wanted to demonstrate how easy it is to make somebody happy. The task was clear: combine different nationalities, cultures, languages and level of play into one event while satisfying everybody’s needs at promoting the acceptance of mental disability. AUGUST 2012

Having met with internationalbody members of the Special Olympics in Seoul earlier in the year and taken into account Macau’s conditions, we invited eight teams from six countries and regions to compete, footing the cost of flights, accommodation, meals, entertainment and most importantly arranging the fun on the rolling greens of Caesar Golf Macau. Although the budget could have been trimmed, we didn’t want to scrimp. It finally came in at MOP1 million (US$125 million). It enabled us to

provide the finest hospitality for all of those participating in the tournament, and to make Macau’s new signature event a noteworthy occasion, and one which the community could be proud of.

Special moments Our partners, including the Sports Development Bureau and the Office of the Chief Executive, delivered big time with their support and sponsorship, and fielded guardian-players who clearly believed in the driving concept behind

Putting skills to work

Smile boys!

Rain made a brief visit

That’s a true driver

Practice makes perfect

the occasion (no pun intended!) As the organisers of the first Special Olympics Macau Golf International, we couldn’t be more proud of the athletes and their guardian-players. We witnessed special moments, experienced unique emotions and saw true corporate citizenship in action on the greens of Caesars Golf Macau. It was hard to gauge how the Special Olympics delegates, the sponsors, guardians and media would react to the event. It hadn’t been done before in Macau and the fear of the unknown can

be a game killer. But everyone rose to the occasion and we all learned a lot. Success exceeded all expectations. We don’t want to rest on our laurels. We can do much better, and in so doing put Macau on the world map as a leader in corporate social responsibility and in promoting sports for disabled or handicapped people. We are now preparing for next year’s event, and opening the invites to Special Olympics’ golfers from North America, Europe, Asia and Africa to participate in an individual stroke play

competition. But we will continue to offer invitations for golfers in Asia-Pacific who are at the first levels of Special Olympics’ golf. In this way, we hope to quickly become the biggest Special Olympics golf tournament in the world. Macau is ready, and it is the kind of diversification that the whole community can be proud of. * MACAU BUSINESS SK EVENTS WAS ONE OF THE CO-PRODUCERS OF THE FIRST SPECIAL OLYMPICS MACAU GOLF INTERNATIONAL. THE COMPANY IS PART OF PROJECT ASIA CORPORATION THAT OWNS DE FICÇÃO – MULTIMEDIA PROJECTS, THE PUBLISHER OF MACAU BUSINESS. AUGUST 2012

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Moments

TEMPERATURE RISING The summer party season is on, and several casino-resorts are pulling out all the stops to host the hottest events. Last month alone, Cotai welcomed the fifth intake of Hard Rock Hotel’s “Splash” poolside party series, followed by Galaxy Macau’s “Summer Breeze” Ladies Night party. If you missed them, no worries: Hard Rock will host a new “Splash” party on August 18. Beware: it will be the last of the 2012 series.

Lighting up the night at “Splash”

Another “Splash”, another full pool

“Summer Breeze”, hot attitude

Galaxy’s performers show how it is done

DJ Miss Nine works the crowd at Hard Rock AUGUST 2012

Galaxy Macau puts on a party, summer style

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HI, STRANGER, I’M HOME Frozen Spy cannot understand the fuss about the government’s decision to pair singletons to share flats in public housing. The Housing Bureau says that by the beginning of last month more than 260 people had accepted this kind of arrangement. The bureau says it is the fastest way to house those in urgent need of a home. The only condition is that the flatmates must be of the same sex. Sceptics say this tarnishes the image of welfare in Macau. They say it may be risky to put two strangers under one roof. Come on! Haven’t you heard the government’s oh-so-effective public service announcements calling for people to be nice to their neighbours? And, of course, Frozen Spy is sure that if anyone is hurt either physically or financially by this unorthodox public housing policy, officials will quickly accept responsibility. That is what we are used to in Macau, right?

BAD GIRLS BADLY TREATED It is well known that the occupancy rates of the city’s hotels are among the highest in this part of the world. It is less well known that the occupancy rate of some less desirable accommodation – the prison – is even higher. The prison’s director, Lee Kam Cheong, said recently that the women’s block has only a handful of unoccupied beds. It is likely that some female convicts will soon have to sleep on the floor. Frozen Spy is sure this is part of a well-thoughtout programme for rehabilitating offenders. By making them live in inhuman conditions, officials must be trying to instil in the prisoners so great a terror of being tossed back into the dungeons that they will never again commit a crime.

DRIVE WITH CARE: POLICY CHANGE AHEAD

SPIES IN THE SKY The candid camera shows on television are classics. How can you not laugh at the reactions of others when they are placed in confusing and embarrassing situations? Of course, it is only funny television if you are not the one caught on video. But, from now on, keep your wits about you the moment you step outside because Macau’s 1,353 surveillance cameras – yes, 1,353 – are poised to capture your every move, and those are only the ones controlled by the security forces. The city now has 45 approved surveillance cameras per square kilometre. Too much? Surely not, those supplying the cameras are bound to say. Smile, we are all film stars – like it or not.

The Transport Bureau last month gave a good demonstration of populism bundled with hypocrisy. The bureau made a U-turn on its decision to give the bus operators an increase of 23 percent in what they are paid to run the buses, after legislators and civic groups criticised the raise. The increase would have had no effect on bus fares. The government sets the ticket prices, but the bus operators turn over to the government the fares they collect in return for an agreed sum per kilometre of bus routes they serve. The Transport Bureau now says it will pay the bus operators more only once they improve their services. How can bus operators invest in improving their services if they are already in the red because of rising staff and fuel costs? And how can they improve their services if the government prevents them from importing experienced bus drivers, leaving them to scrape the bottom of the barrel for residents that have only just got their driving licences? The bus network in Macau needs improvement. But that is not going to happen through populist policies, made to flip-flop according to the wishes of whoever squeals the loudest.

JULY AUGUST 2012 2012

136

August 2012

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GPI Gaming

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Goldfish

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HSBC

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Zung Fu Motors – Mercedes

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