Macau MOP 35 Hong Kong HK$ 40 Mainland China RMB 35
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42 Economy & Finance 26 Secret attraction Macau is an attractive place for international companies to do business, says HSBC Macau’s executive
Politics 32 Industrial evolution The trade unions want limits on severance pay to be scrapped
Greater China 36 Prime slot CCTV Africa is part of China’s bid to beef up its “soft power” strategy
Survey 39 A city at ease Most people in Macau sleep well, says the latest Macau Business Quality of Life survey
Property 42 Land locked Details of what will be built on Macau’s new reclaimed areas are still being discussed 46 Up for a brawl Chinese Estates intends to fight the government’s decision on La Scala
SEPTEMBER 2012
MB Report 50 Degrees of success The new academic year welcomes a record number of tertiary education students
Gaming 56 Strip drag Sands China to open the second phase of its Cotai Central casino resort this month 62 Smart play Macau Golf Open gets a casino sponsor 66 A gambling problem Gambling addiction is becoming a serious issue in Vietnam 68 Fines roll in Singapore casinos have already been fined over US$1 million
Special 71 G2E Las Vegas All you need to know about the world’s premier gaming trade show and conference event
Tourism 86 A question of value The government is striving for more budget hotel rooms
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SEPTEMBER 2012
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Photo: António Mil-Homens
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Business 92 Glittering heritage Che Lee Yuen is one of the oldest gold jewellers in Macau 94 True love SJM’s Louis Ng buys a French vineyard
Human Resources 96 Going for the right change Hopping from one job to another can ruin a career
Technology 100 The ideas lab Start-up incubator Manetic has already helped dozens of fledging companies
Arts & Culture 104 Culture of expectancy Hong Kong’s West Kowloon Cultural District is making progress, says CEO 108 Agent provocateur The Cultural Centre presents a site-specific production 110 Much music The Macao International Music Festival kicks off next month
SEPTEMBER 2012
Entertainment 112 Bursts of light The annual International Fireworks Display Contest is back
Opinion 10 From the publisher’s desk Paulo A. Azevedo 12 Editorial Emanuel Graça 25 Getting away with it Bill Kwok-Ping Chou 31 Questions of trust José I. Duarte 38 Immensity in a pint pot Keith Morrison 95 Blinkered to the point of blindness Gustavo Cavaliere 102 Confusion in the cloud Amy Lee 117 Who are tomorrow’s consumers? Sanjeev Sanyal
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MPC Championship 2012
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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 Nº101
pazevedo@macaubusiness.com
Editor-in-Chief Emanuel Graça emanuel.graca@macaubusiness.com
Senior Analyst José I. Duarte jid@macaubusiness.com
Art Directors Connie Chong, Luis Almoster design@macaubusiness.com
Hong Kong Bureau Michael Hoare (Chief), Anil Stephen michael.hoare@macaubusiness.com
Special Correspondent Muhammad Cohen info@muhammadcohen.com
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, Yuci Tai 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
Beijing Correspondent Maria João Belchior
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maria_belchior@yahoo.com.br
Advertising Agents Bina Gupta
Manila Correspondent Max V. de Leon maxdeleon_080975@yahoo.com
Assistant to the Publisher Laurentina da Silva
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José Reis
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Media Relations
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Photography António Mil-Homens, António Leong, Carmo Correia, Greg Mansfield, Gonçalo Lobo Pinheiro,John Si, Manuel Cardoso, MSP Agency, Agencies
editor@macaubusiness.com
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 SEPTEMBER 2012
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SEPTEMBER 2012
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pazevedo@macaubusiness.com
PAULO A. AZEVEDO FOUNDER AND PUBLISHER
from the publisher’s
desk
PATIENCE IS A VICE
I
Francis Tam clearly knows that he should keep quiet about the gaming industry. He knows only too well that it pays the city’s bills, just as he knows that the sword of Damocles hangs over the sector
SEPTEMBER 2012
am hopeful that one day we will understand why two of our senior officials, Secretary for the Economy and Finance Francis Tam Pak Yuen and Secretary for Transport and Public Works Lau Si Io, apparently have a problem communicating. Mr Tam clearly knows that he should keep quiet about the gaming industry. He knows only too well that it pays the city’s bills, just as he knows that the sword of Damocles hangs over the sector. The peril gaming faces is due to compromises reached with Beijing. Macau agreed that the industry’s growth would be controlled, to prevent mainland Chinese from gambling too much. In return, Beijing partly opened the tap that controls the flow of mainland visitors. This agreement no longer makes sense. It is not by artificially preventing the growth of Macau’s casino industry that policymakers stop mainland punters from gambling. If they could not gamble here, they would do it in the Philippines, Singapore, South Korea, Vietnam, Cambodia, Laos – you name it. But what is done is done. Until all the caps on the number of gaming tables fade away and demonising the gambling industry becomes a thing of the past, Mr Tam needs to balance his actions carefully. On one hand, he needs to ensure that casino operators are provided, in good time, with enough resources that are up to their expectations – expectations that were first fuelled by the government. On the other hand, Mr Tam must keep a tight grip on the number of new casinos allowed and on the growth rate of gaming revenue. It is detrimental to Mr Tam’s juggling act to have a fellowsecretary that keeps on turning down whatever he feels like turning down. This tendency is most pronounced in sensitive areas such as casino development, where silence may not only be golden but also a sign of clairvoyance. We all know that sooner or later the casinos Mr Lau keeps on turning down will be allowed. So why pretend otherwise now? Mr Lau should not mind if, in due course, he comes to be regarded as an inconsequential bureaucrat.
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Photo 1
Photo 2
ALL-ROUND IDLENESS
I
n a small city like Macau, land is a pricey resource. Not imposing strict rules on developers might well mean trouble. Let us not mince words: many of the developers operating here – be they from Macau, Hong Kong or the mainland – could not care less how they go about getting what they want. Many have the resources, but not the ethical standards demanded by best business practice. Therefore it is the government’s duty to draw the line and impose regulations to be followed by all. But this is not happening. Some investors are penalised because they fail to deliver by the deadline agreed with the government for the development of a given piece of land. Others can delay projects again and again, yet escape reprimand. This may happen because there is a culture of opacity in the bureau that oversees the property sector. Or maybe it happens because Macau has a secretary that lacks the savvy and power to face up to the big boys. Either way, it lowers people’s opinion of Fernando Chui Sai On’s government. Mr Chui and his cabinet had promised to eradicate such unacceptable inequities, but their promises are fading fast. How decisions on land grants are made remains opaque. There appears to be disregard for public accountability. The government still has not decided what to do with more than 100 parcels of land it granted which remain idle, including almost 50 plots it said it was considering taking back. Meanwhile, after years of delay, developers such as Tin Wai Investment Co Ltd and Polytech Asset Holdings Ltd are finally starting to act on pieces of land they were granted. Nothing happened to them for failing to meet the original deadlines set by the land grants. Other developers can put off breaking ground even longer. This is true of the two pieces of land next to the Grand Emperor casino hotel that are sitting idle (photo 1) and, even more alarmingly, of the huge plot across the road from the Regency Hotel in Taipa (photo 2). In the latter case, there is talk that the land has changed hands and that the use it is intended for may have changed. But it still sits undeveloped. What is the Lands, Public Works and Transport Bureau doing about these cases? It seems that all it has done so far is wait. In a city where each square centimetre of land is valuable, we cannot afford the luxury of waiting for years for some projects to be completed. But some people in the government are just too patient, at least with some developers.
In a city where each square centimetre of land is valuable, we cannot afford the luxury of waiting for years for some projects to be completed
SEPTEMBER 2012
emanuel.graca@macaubusiness.com
EMANUEL GRAÇA EDITOR-IN-CHIEF
editorial A TALE FROM THE DESERT
O
Both Ordos and Macau urgently need to refocus their policies on private housing to give priority to what is most important – people
SEPTEMBER 2012
fficials often mention Macau’s lack of land as the main reason for its unbalanced real estate market. While this obviously plays a significant role in the overall equation, a recent visit to Ordos, in Inner Mongolia, has made me wonder if there is more to it. Ordos, although surrounded by sandy desert, is quite similar to Macau in several respects. Both cities have become rich in the blink of an eye and both have done so more because of serendipity than the vision and planning of their officials. Ordos, dubbed “China’s Dubai”, built its wealth on its abundance of natural resources and now boasts a large number of billionaires and a government flush with cash. But what has made Ordos notorious is its status as arguably the mainland’s biggest ghost town. Its newly-established Kangbashi district was projected to house more than a million people – almost twice as many as live in Macau – but remains mostly vacant. The problem has spread to the entire city, where it is easy to spot empty office towers and empty duplexes. Even so, construction of more commercial and residential buildings continues, albeit more slowly than before, while the mainland’s economic growth decelerates. Work has stopped at several sites, now occupied only by huge concrete skeletons. Although many buildings in Ordos remain empty, much of the floor space inside belongs to investors. The
typical buyers were Inner Mongolian ex-farmers who made a million by entering the coal mining business or selling their lands to mining companies. These newly minted millionaires bought apartments not to live in but as places to park their wealth.
Ladders and snakes The authorities in Ordos supported all this. They saw it as a way of bolstering the city’s stature and ensuring the region’s wealth remained in Ordos, instead of being invested in Beijing, Shanghai, Hong Kong – or even Macau. The government’s revenue from big land sales to developers was an extra sweetener. But the property bubble burst last year and real estate prices dropped sharply, in some cases by two-thirds. They have yet to recover fully. You may ask what this has to do with Macau. As I see it, Ordos and Macau have much in common. The authorities here, as in Ordos, have been informally sponsoring private real estate projects that cater mainly to the high end of the market and the interests of big developers. This has meant a profusion of upmarket residential buildings which are places for investors – from Macau and elsewhere – to park their cash rather than homes for residents. So far this free-wheeling policy has not done here the kind of damage seen in Ordos. This is mainly due to the wave of expatriates coming to Macau, who rent many of the homes bought by investors.
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Wheel clamping I don’t understand why we have to clamp cars. Can anyone explain? If a car is parked illegally, presumably it is causing a nuisance or obstruction. So, why is a clamped vehicle left for anything up to a week before it is removed? It only compounds the problem! We do not have enough spaces for all cars in Macau to park legally. So, why are vehicles which overstay on a parking meter also clamped and left for what seems to be the obligatory week before they are removed? It just deprives other road users from access to that space. If we don’t have the resources to manage the clamping efficiently, then why bother? If a deterrent for illegal parking is necessary, simply increase the fine to a clamping equivalent. Can anyone explain the rationale? I don’t understand. Roy Goss
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But for most residents here, the story is different. First, this policy has constrained their legitimate aspiration to climb the residential ladder – an aspiration fuelled by economic growth. Now, as real estate prices soar, it is pushing many down the ladder. To counter this, the government is undertaking an ambitious public housing programme. But the size and quality of the homes being built is raising eyebrows. And they do not solve the problem of several middle-class families that are too rich to qualify for public housing, even after the government recently reviewed the eligibility criteria, but are too poor to buy a home in the private market. As in Ordos, all these problems can be traced back to
the absence of proper government vision and planning that is in tune with people’s needs. While the lack of land is a constraint here, it does not by itself define the real estate market. The government is the main supplier of land to the private market and so has a big say in what gets built. Macau is unlikely to end up a ghost town like Ordos. But it risks becoming an uneven city, with homes in the private market available only to the very rich. The rest will have to stick to low quality public housing estates or move to Zhuhai. Ordos and Macau are exact opposites in some ways but strikingly alike in others. Both urgently need to refocus their policies on private housing to give priority to what is most important – people.
To submit a letter to the editor e-mail editor@macaubusiness.com with the subject “Letters to the Editor”. Letters may also be sent by regular mail to this address: Letters to the Editor, Macau Business, Block C, Floor 9, Flat H, Edf. Ind. Nam Fong, No 679 Av. Dr. Francisco Vieira Machado, Macau. Please include your full name, address and a telephone number for confirmation purposes. Letters should be 200 words or fewer and all are subject to editing.
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SEPTEMBER 2012
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Swinging for charity Good causes and sport will meet next month at the Annual Macau Business Charity Golf Tournament and Gala Dinner
he greens are cut and the clubs are polished. In its sixth edition, the Annual Macau Business Charity Golf Tournament and Gala Dinner will again assemble Macau’s business community for a memorable event that combines sport, entertainment and charity. Next month, senior executives and major businesspeople from around the region will get together for two rounds of golf. Not only will they be swinging the clubs for a good time, but most importantly, they will be gathering to help good causes. The Annual Macau Business Charity Golf Tournament has proven in past editions that corporate social responsibility is a thriving concept here. It hopes to continue doing so this year. Participating teams have hailed from every corner of the business community, from banking to construction and engineering, and from professional services to gaming. “As a socially responsible corporation, Macau Coca-Cola would like to express our spirit of love and care as well as our attention to the community by participating in various local charity events, which ultimately contributes to the society,” says Sonia Vong, marketing manager of Macau Coca-Cola Beverage Co. Ltd, one of the participating companies. Through the tournament, the most recognized charitable event of its kind in the Pearl River Delta, Macau and its corporate patrons show that the region not only stands for casinos and entertainment, but also puts a great focus on social responsibility. As in previous editions, this year’s HK$200,000 (US$25,785) prize money is to be split between the two teams that finish the tournament with the best net and gross scores respectively. Each winning team will have the right to name one or more charities to which they will forward their winnings.
T
SEPTEMBER 2012
Since the tournament’s debut in 2007, over HK$2.5 million has been raised and distributed among charities and social projects in Macau, Hong Kong and the mainland. After a record participation of 32 teams and 96 players in 2011, this year the organizers are aiming even higher.
Rules change This year, there are a few changes to the tournament. Unlike previous editions, the two rounds of play will be held over a three-day span to create a regular tournament feel for the event, instead of having a week separating both “turf challenges”. In addition, the prize ceremony and the charity gala will take place less than one week after the end of the tournament. The organisers have also decided to only allow professional players to join in, if they team up with a Special Olympics athlete, who has to be counted into the score with nine shots. Furthermore, an entire Special Olympics team will compete in this year’s tournament – sponsorships are welcome. This year’s tournament will include the “mulligan rule”. In golf, a mulligan is an extra stroke that is replayed from the spot of the previous stroke after an errant shot, and not counted on the scorecard. The result, as the hole is played and scored, is as if the errant shot had never been made. For instance, if a ball is played into some bushes, the player can retake the shot from the previous position using a mulligan. Mulligans speed up play by reducing the time spent searching for lost balls, and reduce frustration, increasing enjoyment of the game, as a player can “shake off” a bad shot more easily.
15 15
AN EXPANDING FIELD YEAR
NUMBER OF TEAMS
2007 2008 2009 2010 2011
11 11 19 28 32
Each team is allowed to use three mulligans, which are available for sale, with proceeds going to charity. The mulligans start at HK$1,000 for the first, HK$1,500 for the second, and HK$2,000 for the third mulligan. The first round of the tournament will be held at Caesars Golf Macau, on October 26. The second round will be played at the Macau Golf & Country Club two days later, on October 28. Threesome Texas Scramble has proven to be an efficient playing format throughout past tournaments. It will again be applied together with a double Peoria scoring system, which enables game veterans and newcomers to compete on a more even ground. The friendly competitive spirit of the tournament will be emphasized with special challenges and side events in a relaxed atmosphere, highlighting the charitable character of the competition. The Macau Business Gala Dinner, on November 2, will close the charity outing in the splendid ambience of the Westin Resort’s Pool Loggia, staging the prize ceremony of the golf tournament. With an extraordinary assortment of culinary specialities, and the finest wines and cigars, this is an evening you don’t want to miss. One of the highlights will be the special charity auction of exceptional memorabilia from the world of sports, entertainment and music, including rare collectables of sport heroes such as Muhammad Ali, and music legends like The Beatles, among others. Join us in celebrating corporate social responsibility. To find out more please email golf@macaubusiness.com. Additional information is available at www.macau-event.com.
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SEPTEMBER 2012
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GDP POSTS SHARP GROWTH SLOWDOWN Macau’s gross domestic product expanded by 7.3 percent in real terms in the second quarter
Macau’s economy posted a significant growth slowdown in the second quarter, figures released last month by the Statistics and Census Service show. The city’s gross domestic product for the second quarter expanded by 7.3 percent year-on-year in real terms, affected by decelerating growth in gaming revenues, total visitor
spending and investment. That compares poorly with the growth rate for the first three months of the year. Macau’s economy expanded by 18.6 percent year-on-year in real terms in the first quarter. It was also the slowest growth rate in almost three years. In the first half of 2012, GDP expanded by 12.6 percent in real terms.
REVAMP FOR FISHERMAN’S WHARF
LONG HOURS AT THE OFFICE
MINIMUM WAGE STUDY BEGINS
Macau Legend Development Ltd announced a HK5$billion (US$645 million) redevelopment plan for its seven-year-old Macau Fisherman’s Wharf theme park. According to chief executive David Chow Kam Fai, the first phase of the expansion will refurbish the theme park and add two hotels, a yacht club and a dinosaur museum. To help finance the redevelopment plan, Macau Legend sold 4 percent of its stock to a subsidiary of SJM Holdings Ltd for HK$480 million.
SEPTEMBER 2012
Do you feel you are working more? It is likely that it is not just a feeling. According to the latest data unveiled last month by the Satistics and Census Service, the median time per week actually worked by employees here is going up. In the second quarter, the overall median stood at 46.5 hours, up by 0.2 hours over just three months before. By sector, those working the longest were domestic workers, with an overall median of 49.3 hours, the figures show.
The study on a statutory minimum wage for all cleaning and security staff started last month. This comes almost one and a half years after the Standing Committee for the Coordination of Social Affairs agreed to commission the research to University of Macau as part of its on-going discussions on the establishment of a statutory minimum wage for Macau. At present the city only has a minimum wage for employees of cleaning and security companies contracted by the government.
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SEPTEMBER 2012
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PERSONAL DATA CASES ON THE RISE
The Office for Personal Data Protection investigated a total of 135 cases last year, according to the body’s annual report, released last month. Of those, 76 cases were concluded. There were 86 new cases investigated in 2011 – a 36.5-percent rise year-on-year – plus 49 transferred from 2010. The office’s annual report said that in 30.3 percent of the cases concluded, it was found the complainant was correct.
SMES RUSH FOR LOANS
Macau’s small and medium-sized enterprises received over MOP120 million (US$15 million) in interest-free loans from the government’s SME Aid Scheme in the first half of 2012, our sister publication Business Daily reported. According to the Economic Services Bureau, loans to SMEs through the Aid Scheme almost doubled from the MOP60.9 million approved one year before. In the first six months of 2012, a total of 380 companies were granted loans, up by over 95 percent in comparison with one year before.
GOV’T CONSIDERING TO DOUBLE SOCIAL SECURITY DUES The goal is to ensure the long-term sustainability of the system The vice-president of the Social Security Fund Chan Pou Wan said last month that the government is considering to double the monthly social security contributions both employees and employers have to pay. The move is to ensure the long-term sustainability of the system, Ms Chan said. She added that the government was also eyeing to modify the proportion of what employees and employers need to pay to the fund from a 1:2 proportion to a 50-50 proportion by 2015. The value of the monthly contributions to Macau’s
SEPTEMBER 2012
social security system currently stands at MOP15 for workers and MOP30 for employers. According to a 2010 report by Watson Wyatt Worldwide commissioned by the government, if no changes are made in the amounts each party contributes, the system’s assets will run out in less than 30 years. The fund offers beneficiaries elderly allowances, aside from other types of allowances related to disability, unemployment or sickness, for instance.
INVESTMENT IN HENGQIN REACHES MOP80 BILLION
A total of six projects totalling RMB64 billion (MOP80 billion) of investment from Hong Kong and Macau are being implemented in Hengqin Island or negotiated, according to Niu Jing, director of the administrative committee of the area. These projects include HengqinMacau industrial district and the RMB20-billion Hengqin Chime-Long International Ocean Resort. Last year, 11 enterprises from Macau were registered in Hengqin.
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SEPTEMBER 2012
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CHUI SAI ON SHOWERS MORE CASH The government announces raises in several subsidies and cash allowances
The government will increase a series of subsidies to help people tackle inflation, Chief Executive Fernando Chui Sai On said last month. He was speaking at the Legislative Assembly where he answered questions raised by legislators on his governance and social issues. The government will increase the monthly electricity subsidy it gives all households from MOP180 (US$22.5) to MOP200. On housing policies, Mr Chui plans to raise the income ceiling to be eligible to acquire a government-subsidised residential unit. The ceiling will be raised to MOP19,355 for onemember households, up from MOP17,000, and to MOP38,710 for two-member families, up from MOP34,018. Mr Chui said the new adjustment would cover 80
MICE CONTINUES DROPPING
The number of meeting, incentive, convention and exhibition (MICE) events held in Macau continued to drop in the second quarter. Information from the Statistics and Census Service shows that a total of 234 MICE events were held from April to June, a year-on-year 10-percent decrease. The total number of participants and attendees went up by 8 percent to 130,000.
percent of households in Macau. The government will also increase by 8 percent the temporary cash allowance it pays to households waiting for public housing units, Mr Chui said. He announced the government will continue the cash hand-out policy in 2013.
CROSS-BORDER PARK GETS DUTY-FREE AREA
BNU INCREASES SHARE CAPITAL
Banco Nacional Ultramarino (BNU) announced last month that its parent company has increased the share capital of BNU from MOP400 million (US$50 million) to MOP2 billion, effective from August 29. The goal is “to support the business expansion of BNU,” the bank said in a press release. BNU is owned by Caixa Geral de Depósitos SA, a banking group controlled by the Portuguese government.
The Zhuhai authorities opened last month a duty-free shopping area for imported products in the Zhuhai part of the struggling Zhuhai-Macau Cross-border Industrial Park. The precinct has over 5,000 square metres. Zhuhai authorities say that if this new venture is successful, duty-free shopping might be allowed elsewhere in the park.
SEPTEMBER 2012
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VINCENT PIKET TO HEAD E.U.’S MACAU OFFICE
Vincent Piket is going to be the new head of the Office of the European Union to Hong Kong and Macau, Portuguese news agency Lusa reported. The Dutch national replaces Maria Castillo Fernandez, who returned last month to the E.U. headquarters in Brussels. Mr Piket is expected to arrive in Hong Kong by mid-this month. He is currently the head of the delegation of the European Union to Malaysia.
BRANDED PRODUCTS FAIR ENDS ON HIGH NOTE The Guangdong & Macao Branded Products Fair, which took place last month, attracted over 136,000 people. The event recorded around MOP40.5 million (US$5.1 million) in sales, a 5-percent increase over last year’s event. The Macao Trade and Investment Promotion Institute and the Department of Foreign Trade and Economic Cooperation of Guangdong Province jointly organized the event. The next edition is scheduled for early August 2013.
NEW ALL-TIME HIGH FOR IMPORTED WORKERS The imported workforce reached a new peak in July, at close to 105,000
The number of imported workers in Macau reached a new all-time high in July. According to official data from the police, Macau had a total of 104,938 imported workers by July-end, 60 percent of whom came from the mainland. That is above the previous peak, recorded in September 2008, when Macau’s imported labour workforce reached a total of 104,281 people. Hotels and restaurants are the number one employer for imported workers, giving work to 30 percent of the total. Domestic work comes in a distant second place, employing 16 percent of the city’s imported workforce.
SEPTEMBER 2012
NEW HANGAR FOR PRIVATE JETS
The Macau International Airport Co Ltd is calling for bids to design a new hangar for private jets. The purpose of the hangar is to “cope with the expansion of the general aviation facilities”, the tender document says. The facility will be located in the northern part of the airport, next to an existing hangar.
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SEPTEMBER 2012
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Plastic money aficionados Macau people just love plastic money. The latest trend is renminbi-denominated credit cards, whose numbers continue to soar, especially since the introduction of MOP/RMB dual currency credit cards, in 2009
RETAIL SALES UP BY 30 PERCENT
The value of retail sales for the second quarter of 2012 totalled MOP12.74 billion (US$1.6 billion), up by 30 percent year-on-year, data from the Statistics and Census Service shows. Retail sales of watches, clocks and jewellery led the pack, amounting to almost one third of the total volume of sales. The value of retail sales for the second quarter decreased 3 percent over the previous three months.
MORE COMPANIES INCORPORATED
598,000
The number of personal credit cards in Macau by June-end, up by 4 percent from three months before. MOP/RMB dual currency credit cards are simultaneously regarded as MOP and RMB cards, being officially counted as two cards
81.7%
The year-on-year increase in the number of reminbi-denominated personal credit cards. By June-end, the figure stood at over 90,000
MOP2.8 billion
The credit card turnover in the second quarter of 2012, up by 17.8 percent year-on-year
MOP151.2 million
The cash advance turnover for the second quarter of 2012, accounting for 5.5 percent of the total credit card turnover
MOP9.9 billion
The total credit card limit granted by banks in Macau, as at end-June. The figure was up 5.0 percent from end-March
0.72%
The delinquency ratio, (i.e. the ratio of delinquent amounts overdue for more than three months to credit card receivables) as at end-June SOURCE: MONETARY AUTHORITY OF MACAU SEPTEMBER AUGUST 20122012
A total of 949 new companies were incorporated in the second quarter of 2012, up by 4.2 percent year-on-year. The majority were operating in wholesale and retail (346), business services (190) and construction (125), official data shows. From April to June, the number of companies in dissolution totalled 131, up by 17.0 percent. Over 50 were engaged in wholesale and retail.
WAGES DOWN FOR CONSTRUCTION STAFF
The average daily wage of construction workers decreased 1.9 percent quarter-to-quarter to MOP552 (US$69) in the second quarter of 2012, according to data from the Statistics and Census Service. The biggest salary drop was among unskilled workers, which saw their average daily wage go down by 5.5 percent, to MOP352.
25 BILL KWOK-PING CHOU ASSOCIATE PROFESSOR OF POLITICAL SCIENCE, UNIVERSITY OF MACAU
Getting away with it THE GOVERNMENT MUST SUPERVISE THE USE OF PUBLIC MONEY GIVEN TO ASSOCIATIONS MORE CLOSELY ne of Macau’s peculiarities is how easy it is to get all kinds of freebies, ranging from banquets to trips abroad. Most of these free lunches are provided by the myriad associations, which are heavily sponsored by the government, mainly through the Macao Foundation. The Commission of Audit, an autonomous body, recently criticised the foundation for the looseness in how it monitors the way its grants are spent. It is not the first time the commission has questioned the government’s control over granting public funds to associations. It made similar criticisms in 2004. The commission’s latest scolding shows that the government paid little, if any, attention. In the eight years since, the Macao Foundation has failed to take adequate steps to change the way it works. The result is that public money has continued to be squandered on ostentatious food-and-drink events and entertainment. Not all associations are equal in the eyes of the foundation. The foundation and the government hand out the biggest subsidies to associations regarded as pro-government. These include the Macau Federation of Trade Unions, the General Union of Neighbourhood Associations of Macau and the Macau Women’s General Association. Also on the list are the General Association of Chinese Students of Macau, the Macau New Chinese Youth Association and the Macau General Volunteers Association, founded by Legislative Assembly member Lee Chong Cheng, who was directly elected to the assembly to represent the Federation of Trade Unions.
O
School for scandal The hefty government subsidisation of these associations raises two questions. First, do these associations have a proper set of checks and balances to ensure the money they get is used correctly? Second, why are they so generously backed in the first place? Is it because of the social services they provide or are there other, less obvious motives? One of the latest news stories questioning the use of subsidies by associations is about the research centre established by Mr Lee’s General Volunteers Association. The Macao Foundation gave the centre a grant of MOP5 million (US$625,000) which was spent on the lavish refurbishment of its headquarters in the Macao Daily News building. The story raised another question. Since the terms of the newspaper’s lease of the land occupied by its headquarters prohibits it from subletting space in the building, why is it subletting space to the General Volunteers Association? Government officials say they have no problem with the association “borrowing” space there. The Federation of Trade Unions and the Women’s General Association have used public funds to set up scholarship programmes for members or their children. Is this not just a
crafty way of using public money to attract new members to strengthen their hand before next year’s Legislative Assembly elections? The New Chinese Youth Association used mainly public funds to put on its “Cross-Strait, Three Regions Graduation Ball”. This event is reminiscent of those eating and drinking bashes that mainland Chinese officials put on, using public funds, for their own exclusive enjoyment. And what more is there to be said about the MOP1 million given to the Macao Daily News, owned by a private company, to subsidise its coverage of last year’s Summer Universiade in Shenzhen?
Wrinkly wangle For the sake of argument, let us assume that these examples are a worthwhile use of public money. But even then it is hard to see how these grants promote or develop cultural, social, economic, educational, scientific, academic or philanthropic activities – the criteria that should apply when the Macao Foundation or the government decides on grants. There are other questionable practices. A copy of what purported to be a letter of complaint to the Commission Against Corruption was posted online recently. The letter alleged that a home for the elderly run by one of the city’s most influential associations failed to admit as many residents as it was required to, and that the resulting surplus of food went to feed staff of the association. The letter alleged that some of the computers in the home had been supplied, without a public tender, by a company connected with the leader of the association that ran the home. It alleged that staff had been asked to help misspend government subsidies. And it alleged that employees whose salaries were subsidised by the government had been given work unrelated to the tasks they were paid to do. The allegations in the letter are unproven. But one thing is sure: there is insufficient supervision of how associations spend the money the government gives them. No leader of an association has ever been investigated for misusing a subsidy, let alone punished. In the apparent absence of action to deter misuse, the scope for misuse has widened. To put a stop to the misspending of government subsidies, the Commission of Audit and the Commission against Corruption must investigate publicly funded associations – especially the big pro-government associations – to see if they are putting the money they get to good use. If any wrongdoing is detected, the wrongdoers must suffer the consequences. If the government and the pro-government associations try to protect those that misuse public funds, the people might well punish them heavily. Popular trust in government officials and the popular vote for pro-government associations in the Legislative Assembly elections would both probably plunge. SEPTEMBER 2012
26
Economy & Finance city’s potential at HSBC branches in Hong Kong and the mainland. Mr So says there are signs that more companies are finding out about the attractions of Macau as a place to do business. “Awareness has increased over the last few years,” he says. Examples include mainland companies going offshore to save on tax or that are establishing procurement and support offices abroad. Mr So says HSBC Macau has helped companies with these profiles on several occasions. Despite the advantages Macau has on paper, improvements in the economy are needed to make the city more attractive. Several of HSBC Macau’s international customers complain about difficulty in finding and keeping qualified manpower.
Island of opportunity
Secret attraction
HSBC Macau’s head of corporate banking says Macau is an attractive base for international business but it remains off the radar BY EMANUEL GRAÇA
ompetitive tax rates: check. Business-friendly government: check. International companies with a foothold here: work in progress. The head of corporate banking at the Macau branch of HSBC, Francis So, says Macau is an attractive place for international companies to set up shop but it remains undiscovered. Mr So says Macau compares well to Hong Kong. “We have got a much more attractive tax rate and rents are very reasonable here,” he says. Hong Kong has a flat corporate tax rate of 16.5 percent on assessable profits. In the mainland, the standard rate is 25 percent, although it is lower for qualified enterprises in industries encouraged by the central government. Macau is much more appealing. The threshold for liability for corporate tax is MOP200,000 (US$25,000). Profit between MOP200,000 and MOP300,000
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SEPTEMBER 2012
is taxed at 9 percent and anything more than MOP300,000 is taxed at a rate of 12 percent. Profits made by approved offshore financial and non-financial institutions from selected activities offshore are exempt from all forms of tax. The government also offers incentives for trade and for businesses that want to set up here.
Improvement needed The problem, Mr So says, is the lack of awareness of these advantages among bankers and companies. “Macau has a lot of unique propositions. We should probably market that a lot more,” he says. “The perception has always been Macau is a gaming centre. I think it is really about raising awareness of the attractiveness of Macau’s operating environment for business.” HSBC Macau recently put on a roadshow to impart knowledge of the
“We have had some customers who decided to reduce their presence here, and the primary driving motivation for that was really talent. They were not being able to attract and retain talent,” Mr So says. “It has been a difficult experience for managers to address the issue.” The bank’s international customers frequently complain about the cumbersome and lengthy procedure that companies from outside the city must follow to set up shop in Macau. Once here, they grouse about getting to and from the office. “Taxis are extremely hard to obtain,” says Mr So. Even so, he says investment in Hengqin Island, being co-developed by Macau and Guangdong with Beijing’s support, means more international companies are due to establish a presence on this side of the Pearl River Delta. “It is an exciting opportunity,” Mr So says. “Obviously, there is going to be a lot of companies that are going to be looking to develop business on Hengqin. We are definitely exploring some of those opportunities.” Mr So is guarded about whether HSBC will open a branch on Hengqin, saying it is something that is being explored.
Deep history HSBC Macau celebrates four decades in operation this year. “It is something we are very proud of,” says Mr So. “We have been through all the ups and downs of the Macau economy over the past 40 years.” He says his bank’s main strengths
27
Photo: Manuel Cardoso
are trade and international connections. “We have a deep history in this. We are very experienced and very strong. We have an experienced talent pool in this arena,” he says. Hongkong and Shanghai Banking Corp Ltd, the forerunner of the HSBC Group, was established in 1865 to finance trade between South China, Europe and North America. The group’s global network now offers the gamut of trade services. The group is the leader in global trade finance, with a 9 percent share of the market, according to the results of independent research quoted by Reuters. Last year the group facilitated trade worth US$500 billion and in doing so made revenue of US$2.5 billion – a sum it hopes to double in four or five years. The group has its headquarters in London and about 6,900 offices in 84 countries. Mr So says trade accounts for more than 50 percent of HSBC Macau’s business. Most of its corporate customers are international companies that use the HSBC group in other parts of the world too.
Growing together The bank’s business here is growing, despite the slowing of economic growth, Mr So says. “Some of our customers have experienced slowdowns over the last few quarters, given the problems in the U.S. and Europe, but the majority are actually experiencing growth,” he says. The HSBC group has a network of global relationship managers. Mr So says these managers ensure that the bank gives international customers service that is coordinated worldwide. Not many Macau companies need such service, but Mr So says it is useful for global companies that do business here. Mr So says the banking business
“We have had some customers who decided to reduce their presence here, and the primary driving motivation for that was talent,” says the head of corporate banking at HSBC Macau, Francis So in Macau continues to expand at a double-digit rate. Monetary Authority of Macau data shows that the banks here had combined operating profits of MOP2.76 billion in the first half of this year, 27.1 percent more than a year before. It was the industry’s best first half ever. Last year HSBC Macau made a pre-
tax profit of MOP246.8 million, 23 percent more than the year before. Mr So says HSBC Macau will keep growing this year. “As trade grows, we will grow,” he says. The value of Macau’s merchandise trade was MOP45.19 billion in the first seven months of this year, 21.5 percent more than a year before.
bizintelligenceonline.com SEPTEMBER 2012
28
Economic Trends by JosĂŠ I. Duarte Real estate reality
GRAPH 1 - Real estate sales Residential
Commercial
Office
NUMBER OF DEALS (LOG SCALE)
10,000
GRAPH 1
1,000
100
10 2004
2005
2006
2007
2008
2009
2010
2011
2012
GRAPH 2 - Growth index for real estate sales Residential
Commercial
Office
160
GROWTH INDEX (BASE: 2004=100)
140
The log scale used in the first graph flattens out the oscillations in the real estate market. However, if a linear scale was used it would be difficult to show the residential, office and commercial segments together. The residential segment is by far the largest. In the period represented here, it has two extremes. They were reached in the first quarter of 2009, when just 801 sales took place, and in the second quarter of last year, when the number of sales reached 8,255, in anticipation of the introduction of the new special stamp duty on the resale of new homes. Note, however, that the ensuing drop was not as prolonged as that in late 2008 and early 2009. The data for the second quarter of this year shows the housing market is again rising, although the number of homes sold, 5,555, is well below the peak of 8,200 a year before. The latest changes in the commercial property market are also notable. GRAPH 2
Despite the quarterly oscillations, the growth index in the second graph suggests a declining trend overall in the number of sales in each segment. Sales of office and commercial premises are below the 2004 figures. On the other hand, the average number of home sales in the first half of the period represented is above the average in the second half.
120 100 80 60 40
GRAPH 3
20 0 2004
2005
2006
2007
2008
2009
2010
2011
GRAPH 3 - Average transaction prices of real estate premises Residential - Macau
Residential - Coloane
Residential - Taipa
Office
80,000
60,000
MOP/M2
The real estate market is one of the most sensitive to changes in the economy and to the mood of buyers. Since the liberalisation of the gaming market, property has been among the most dynamic economic sectors here, with pronounced peaks and troughs.
40,000
20,000
0 2004
2005
2006
SEPTEMBER 2012
2007
2008
2009
2010
2011
The variations in the number of sales are not reflected in any sustainable drops in prices. Average prices in all major segments are generally climbing. The steepest rises began in 2009.
29
Demographic dynamics
GRAPH 4 - Total population
The effects of demographic changes are often understated. However, population dynamics in many ways determine what an economy can achieve.
600,000
GRAPH 4
575,000
The population has grown since 2004 at an average rate of about 2.8 percent per year. This pace would double the population in about 25 years. The rate is not any higher because in 2009 the population shrunk slightly. Nonetheless, at the end of June, 106,000 more people were living here than at the end of 2004, an increase in population of more than one-fifth.
NUMBER OF PEOPLE
550,000
525,000
500,000
GRAPH 5
475,000
450,000 2004
2005
2006
2007
2008
2009
2010
2011
2012H1
GRAPH 5 - Population, natural growth and Chinese immigration Chinese immigrants with one-way exit permits
Natural growth
10,000
The different types of flow of people into Macau or into this world that contribute to population growth here vary in the period represented. Natural growth has been quite low since 2004. Even so, there is an obvious upward trend. Except in two of these years, the number of mainland immigrants with one-way exit permits has always exceeded natural growth. From 2004 to last year, the cumulative number of immigrants with one-way exit permits exceeded the cumulative number of new-borns here by a margin of almost 60 percent. GRAPH 6
NUMBER OF PEOPLE
8,000
6,000
4,000
2,000
0 2004
2005
2006
2007
2008
2009
2010
2011
A more complex picture emerges when we look at the net flows of people directly associated with the labour market, which are more sensitive to policy changes and have been the main driver of population growth in recent years. We see considerable rises up to 2007, followed by a steep slowdown the next year. In 2009, the number of non-resident workers actually fell by more than 17,000. The unsustainability of the restrictions on imported labour that caused the drop in 2009 is demonstrated by the rebound last year, and the marked rise in the number of imported workers that continued in the first half of this year. Residence authorisations are clearly declining. The net balance in the first half was close to nil.
GRAPH 6 - Population growth, residence authorisations and non-resident workers Persons authorised to reside in Macau (net balance)
Non-resident workers (net balance)
30,000
NUMBER OF PEOPLE
20,000
10,000
0
-10,000
-20,000 2005
2006
2007
2008
2009
2010
2011
2012H2
SEPTEMBER 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
2.1% MOP 10,000
Employed population
339,800 72.9%
11.1 5.5 percentage 1.5 points
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%
External merchandise trade 2011
Year-on-year change (%)
27.7 22.7 43.2 percentage 2.5 points Year-on-year change (%)
Exports
MOP 7.0 billion
Imports
MOP 62.3 billion - MOP 55.3 billion
0.2 41.2 --
2011
Year-on-year change (%)
Trade balance
Public accounts MOP 112.7 billion
Total revenue - Direct tax revenue from gaming
MOP 99.7 billion
Total expenditure
MOP 49.0 billion
Balance
MOP 63.7 billion
Utility consumption 2011 Water Electricity Gasoline Liquefied Petroleum Gas Natural Gas
41.5 44.9 29.7 -Year-on-year change (%)
70.5 million m3 5.1 3,857 million kWh 5.5 81.7 million L 9.3 42,908 tons 5.3 73.6 million m3 -52.4
Q2 2012 Q2 2012 ---
Year-on-year change (%)
Latest
24.0
Money and prices
Inflation rate (full year)
---
2.0%
Notes
16.0 7.3 ---
MOP 72.0 billion
Year-on-year change (%)
Median monthly employment earnings
Unemployment rate
MOP 81.9 billion
29.1 20.7 26.2 18.0
-0.6 percentage points
Year-on-year change (%)
Latest
-0.7 percentage points
Notes May-Jul 2012 Apr-Jun 2012
341,000 72.2%
13.4 3.0 0.1
104,938
20.4
Jul 2012
Latest
May-Jul 2012 May-Jul 2012
Year-on-year change (%)
Notes
6.0%
13.6 18.6 -percentage 0.1 points
Latest
Year-on-year change (%)
MOP 172.1 billion MOP 314.4 billion MOP 134.5 billion
MOP 4.6 billion MOP 40.6 billion - MOP 36.0 billion
Latest
15.3 22.3 -Year-on-year change (%)
MOP 46.0 billion
18.6 20.3 41.1 --
Latest
Year-on-year change (%)
MOP 71.6 billion MOP 61.7 billion MOP 25.6 billion
35.4 million m3 6.1 1,959 million kWh 11.9 42.2 million L 8.8 22,766 tons -2.0 -- million m3 -100
Jun 2012 Jun 2012 Jun 2012 Jul 2012
Notes Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012
Notes Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012
Notes Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 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
211,904 98,786 113,118 1,481,329 219,938
Year-on-year change (%)
5.2 6.4 4.1 15.6 9.3
* A new fiscal reserve system was introduced in January 2012, impacting the way foreign exchange reserves are accounted for SEPTEMBER 2012
Notes Jul 2012 Jul 2012 Jul 2012 Jul 2012 Jul 2012
Source: Statistics and Census Service and Financial Services Bureau
30
31 JOSÉ I. DUARTE ECONOMIST, MACAU BUSINESS SENIOR ANALYST - jid@macaubusiness.com
Questions of trust THERE IS A CONCERNING DISPARITY BETWEEN WHAT THE GOVERNMENT SAYS AND WHAT IT REALLY MEANS ommunication requires some level of shared understanding about the meaning of words. Transparency requires that those that want and are entitled to know have access to relevant information. Trust grows when people mean what they say and do what they must. Ideally, words should be transparent. Information should trustworthy and trust should be deserved. We know in life things are not – and possibly cannot be – that spotless at all times. We accept as normal that not everything will always be told, that the occasional omission or white lie may fulfil a useful function. But if the disconnect between words said and their meaning grows, if people cannot rely on the stated aims to underpin decisions, if distrust of institutions becomes ingrained, public life decays. Public authorities have special responsibilities in these matters. They should, more than anyone else, be precise, transparent and trustworthy in their actions and intentions. They are less so here than is desirable. Public works, a sensitive area in any government anywhere in the world, provides an inexhaustible source of examples. Not long ago the budget for the underwater tunnel connecting Macau to Hengqin Island was radically increased. We were told this was due to three things. We were informed by the government that the ground through which the tunnel was being dug was more challenging than expected. Second, we were told that, in any case, the previous budget was just an estimate. But we were reassured that not a single pataca more would be spent from then on.
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Questions, questions Several questions come to mind. Should we conclude that work started without proper feasibility studies, that we were just jumping in and hoping for the best? Might we also conclude that budgets are in essence nearly meaningless documents that for some arcane reason are mentioned when a decision is announced? Also, who is in a position to ensure that there will not be any more cost overruns, and will take responsibility if, in the end, it does not turn out that way? Then came the cave-in at the construction site. We were told a few more things by the government. The ground was very complex, they said, again. We were told that this was just a minor incident that would not affect the safety and structural integrity of the tunnel. In particular, we were assured that Macau was in charge of the monitoring and quality control and therefore, presumably, they were in safe hands. I wonder what the guys across the border make of this kind of statement. Finally, we were told that the construction company would
have to take full responsibility for any additional costs and delays. Is that clear? I would like to know why are we still surprised by the complexity of the ground in which the tunnel sits. Also, if Macau is monitoring and controlling the work, how is it that so much uncertainty persisted for so long about whether there were any deaths in the cave-in, or that the contractor disregarded instructions to suspend work as the weather deteriorated just before the incident took place? Finally, if the contractor bears all the additional costs resulting from the incident, will the promise that there will be no further budget overruns be kept? He pays, not us, right?
And more questions Then, just as the issue of the tunnel started to fade from the collective memory, public works popped up again in the newspapers. The government had given a job worth millions to a company belonging to a legislator, without any public bidding. There is nothing outstandingly new in this. I suppose we can easily agree on that. But this is something that goes against the promise of greater transparency and open tenders as a general rule. The beneficiary, when asked about the issue, did not make life any easier for officials. He said it was normal that his company should get the job, because his company (and presumably he himself) had gained the government’s trust since the handover. He went on to say he had accepted the job as a political duty. He tried to assure us that he would gain nothing from it. Then he could not recall how many contracts his company had been granted directly since the handover – in all probability more than a couple, otherwise the figure would have come to him easily. The point here is not the individual case, no matter how many questions it raises. But this case should prompt the government to come forward with some clarifications. First, what are the circumstances in which the government feels it appropriate to assign contracts without open bidding or consultation? Second, what are the selection criteria in those cases? Third, can officials make public a list of the contracts granted directly, their beneficiaries, the amount and the method of selection? That would help to clear up some of the suspicions the public may hold against the government. It would reassure people that when the government commits itself to more transparency, the word means what we think it means and the government means what it says. There is no stronger basis for trusting our public institutions. SEPTEMBER 2012
32
Politics
Industrial evolution The trade unions want the ceiling on severance pay to be scrapped; the government says it is open to changes in the law BY ALEXANDRA LAGES
SEPTEMBER 2012
33 s Europe totters into a new era of austerity, governments there are pushing for cuts in severance pay, to make layoffs cheaper for struggling companies. As Macau basks in a spell of full employment, the trade unions are demanding the opposite: they want the limits on severance pay to be abolished. The limits were last raised in December 1997. The labour law was revised in 2008 but the government and the Legislative Assembly, disregarding the economic boom that had taken place in the interval, failed to agree on raising the limits any further. Four years on, there are signs of change. On the eve of Labour Day this year, Chief Executive Fernando Chui Sai On conceded that the severance pay limits needed to be reviewed to take into account changes in pay and society at large. He said as much again last month in answering questions from members of the Legislative Assembly. The government says the issue should first be discussed by the Standing Committee for the Coordination of Social Affairs. The committee comprises representatives of the unions, the employers and the government. At present the law entitles an employee whose contract is terminated without cause, to compensation calculated using a formula which takes into account the employee’s years of service and monthly pay. An employee is entitled to severance pay amounting to one-third of their current monthly pay for each year of service with their employer, if they have worked for the employer for between one and three years. An employee is entitled to severance pay amounting to two-thirds of their current monthly pay for each year of service with their employer if they have worked for the employer for more than 10 years.
A
Twin attack There are two limits. Any monthly pay above MOP14,000 (US$1,750) does not count, and severance pay cannot amount to more than 12 times the employee’s monthly pay. In effect, the maximum amount of severance pay is MOP168,000. That is how much a laid-off employee paid MOP14,000 or more a month would get if they had 18 or more years of service. The government has already started revising the 2008 labour law, so the trade unions are taking the opportunity to push officials to change what the law says about severance pay. The Macau Federation of Trade Unions, which represents 70,000 workers, is leading the way. Last month, the federation handed the government a petition containing close to 16,000 signatures which urges the abolition of the limits on severance pay. The federation wants to do away with the MOP14,000 cutoff, so the amount of compensation is always based on an employee’s actual monthly pay, however high it is. And it wants to get rid of the ceiling of 12-times monthly pay. The federation prefers any change in the law to be discussed first by the Standing Committee for the Coordination of Social Affairs. The New Macau Association is also proposing changes to the law on severance pay. It proposes doubling the cut-off to MOP28,000 and the complete removal of the ceiling of 12 times of monthly pay. The association wants the Legislative Assembly, where it holds three directly elected seats, to take the lead in amending the law, and submitted a bill containing its proposals in July. The Macau Federation of Trade Unions and the New Macau Association both consider the present limits unreasonable and inappropriate for today’s labour market. They think the limits are especially unfair to long-serving employees. “When the MOP14,000 monthly salary cap was stipulated SEPTEMBER 2012
Politics
in 1997, the median wage in Macau was MOP5,221,” says Kwan Tsui Hang, a senior member of the Federation of Trade Unions and a directly elected member of the Legislative Assembly. “At that time less than 10 percent of employees earned more than MOP15,000 monthly income.” In the second quarter of this year median monthly pay was MOP11,000, double the figure in 1997. “Nowadays, nearly 35 percent of the workforce earns more than MOP15,000 per month,” Ms Kwan says.
MONTHLY EARNINGS FROM EMPLOYMENT, 1997 (MOP)
Age-old problem
24.0%
25% 20%
17.4%
15%
8.4%
10% 5%
8.5%
5.2%
3.0%
4.4% 1.7%
0%
2,000
2,001 to 3,500
3,501 to 5,000
5,001 to 8,000
8,001 to 10,000
10,001 to 15,000
15,001 to 20,000
≥ 20,000
Unpaid/ unknown
MONTHLY EARNINGS FROM EMPLOYMENT, SECOND QUARTER OF 2012 (MOP) 30% Percentage of employed population
“Therefore the MOP14,000 monthly salary cap causes over 100,000 employees not to be able to get enough compensation in case they are dismissed, which is impossible to accept.” Ms Kwan says the limits were imposed in 1984, when severance pay was first mandated by law, to protect employers. She says there were fears that many companies would be unable to comply with the law if there were no limits. The limits were subsequently raised three times in the pre-handover period, but not once have they been raised by the SAR government, she says. Ms Kwan says the issue is especially important for older workers who, having been laid off, have difficulty finding new jobs because they are considered too old. She says that in many cases their severance pay is the only money they have for their retirement because they have no private pension fund. “For these employees, if they are dismissed, no matter that they have served their companies for decades, they can only receive a maximum MOP168,000 compensation,” she says. “Can this provision be good enough to protect employees? How contradictory is this provision to the current remarkable economic development of Macau?”
27.4%
25.1%
25%
22.6%
20%
15.3%
15% 10%
8.2%
15.6%
8.4%
5%
2.0% 0%
3,999
4,000 to 5,999
6,000 to 9,999
10,000 to 14,999
15,000 to 19,999
20,000 to 39,999
40,000 to 59,000
1.0%
1.8%
≥ 60,000
Unpaid/ unknown
Strange silence Monetary Authority of Macau data shows that only about 90,000 workers were covered by private pension schemes at the end of last year, of which 10,000 were non-residents. Just 30.6 percent of the private-sector workforce were covered. Ms Kwan says severance pay is of concern to senior managers as much as their subordinates. After all, senior managers are paid more, but the same limits apply to their severance pay. SEPTEMBER 2012
Source: Labour Affairs Bureau
Percentage of employed population
30%
“The monthly salary cap causes over 100,000 employees not to be able to get enough compensation,” says Kwan Tsui Hang
Ng Kuok Cheong says he often hears from employees that have had their severance pay capped
Source: Statistics and Census Service
34
35
Gabriel Tong Io Cheng says people find it hard to understand the maximum payout of MOP168,000
Businessman cum legislator Chan Chak Mo sees no need for changes
A member of the New Macau Association, Ng Kuok Cheong, says he often hears from employees that have worked for the same employer for over two decades, yet have their severance pay capped. “They can do nothing,” he says. The Labour Affairs Bureau says that, on average, one in five disputes it deals with is related to severance pay. A spokesperson for the bureau told Macau
Business that in the first seven months of this year it had received around 1,250 reports about disputes related to severance pay in 15 different industries. The spokesperson said the bureau was still looking into 180 of these reports. In the other cases, most were based on complaints that the bureau considered unfounded, or the employers and employees agreed on a settlement. The
spokesperson gave no precise figures. A government-appointed member of the Legislative Assembly, Gabriel Tong Io Cheng, says people find it hard to understand the maximum payout of MOP168,000, considering how much the economy has grown. He says the proposals made by the Federation of Trade Unions and the New Macau Association are all reasonable. “We must see now what to do to make sure the business sector can afford the change,” says Mr Tong, who is also a University of Macau law scholar. The employers have yet to make any counter-proposal. Of the three representatives of employers contacted by Macau Business for this article, only Chan Chak Mo, the chairman of the United Association of Food and Beverage Merchants of Macau, was willing to talk. Mr Chan, who is also an indirectly elected member of the Legislative Assembly, says he is satisfied with the law as it stands. Mr Chan sees no need for changes, but he is open to discussion. “The world is changing every day,” he says. “As long it is reasonable and the business sector can bear the extra expenses, I think it’s okay.”
SEPTEMBER 2012
Greater China
Photo: AFP/Simon Maina
36
Prime slot
CCTV: Africa’s true image or China’s strategic vehicle? BY AUDE GENET* IN NAIROBI
he countdown starts and the Kenyan newsreader runs through the top headlines for the evening bulletin. In a few minutes he will go on air in Nairobi, broadcasting live for China state television. It’s 8:00pm in the Kenyan capital and 1:00am in Beijing, when China Central Television (CCTV) hands over to its Nairobi team for “Africa Live”, an hour-long flagship programme billed as a “new voice” for African news and Sino-African relations. On a recent night, the spotlight was on Rwanda’s economic expansion and the Somali athletes taking part in the Olympics in London. “We want to keep a balance,” Pang Xinhua, CCTV’s managing editor who runs a network of correspondents in a dozen African countries, told AFP. “We are not only talking about war, diseases or poverty, we also focus on economic development.” “Africa Live” is put together by a
T
SEPTEMBER 2012
team of 60 or so people in Nairobi – about 50 of them Kenyans. It holds a prime time slot in East Africa but is also televised worldwide. “We opened this bureau in order to be able to tell the real Africa story, the real story of China and the real story of Sino-African relations,” CCTV Africa chief Song Jianing says, echoing remarks by China’s ambassador to Kenya when the switchover started in January. Nairobi was CCTV’s first regional bureau to produce and broadcast its own hour-long news programme. Its cousin CCTV America soon followed suit.
‘Soft power’ strategy For its inauguration, CCTV Africa managed to get Kenyan Vice President Kalonzo Musyoka to make a speech. He urged the channel to “present a new image of the continent” to break with the trend in which Africa is often shown in the international media as “the continent of endless calamities”.
Chris Alden of the London School of Economics says CCTV Africa is “part of a wider strategy to combat what can be seen as a negative relationship” between China and Africa. “Chinese officials start from a diagnosis that too many Africans rely on Western-based news services,” says Mr Alden, who is certain CCTV “will have an impact.” “Where there is deep unhappiness among local African businesses experiencing displacement due to competition from Chinese companies, it won’t eliminate that, but it could lessen a negative effect,” he says. “It’s also... for Chinese people to get a better understanding of Africa,” he adds, saying events like last year’s Libyan conflict in which 30,000 Chinese had to be evacuated by Beijing “have an impact on Chinese investments in Africa.” For David Bandurski of the China Media Project at Hong Kong University, CCTV Africa is part of China’s bid to beef up its “soft power” strategy, a no-
37 tion that first emerged with President Hu Jintao in 2007 and aims to win influence abroad by appeal and exchanges rather than threats or force. Other pundits point to the media’s role in this. “China has sent its state media on a global mission to advance its influence in the world,” says Yu-Shan Wu from the South African Institute of International Affairs, in a recent paper noting that Beijing’s efforts “previously focused on trade, investment and diplomatic activities.” And this mission is not limited to CCTV and its Africa broadcasts. The Chinese TV giant also has programmes in French, Spanish, Arabic and Russian, while the state news agency Xinhua is also expanding worldwide. CCTV Africa, meanwhile, insists that it wants to present the world through an African prism. “The thing I like is that we are telling the story from our perspective,” says Beatrice Marshall, a star newsreader at the Kenyan station KTN who was wooed over to CCTV Africa.
Nairobi was CCTV’s first regional bureau to produce its own hour-long newscast “When you go to rural Kenya now, you see that everyone can watch TV, listen to radio, people are more educated and we want to talk about that,” she told AFP. On the delicate issue of whether Beijing censors content, Douglas Okwatch, editor on the Saturday “Talk Africa” programme presented by Ms Marshall, says staff have a free hand on their stories “as long as they are objective, balanced and not dragging in unnecessary controversies.” “One thing they [CCTV] are doing right,” analyst Ms Wu told AFP, “is to provide a platform for Africans to speak their point of view. “On other channels, I don’t find
such platforms to speak on Africa by Africans,” she says, but questioning how CCTV Africa will fare if it emphasises only the upside of Sino-African relations. “Credibility is not covering only the positive stories,” says Ms Wu. Hong Kong University’s Mr Bandurski, meanwhile, says CCTV news products “must be subjected to political controls, even if these controls are not necessarily as rigid as those imposed on domestic Chinese media.” But he agrees it will be “very difficult to build a credible international media when you do not have sufficient leeway to produce truly professional coverage.” CCTV Africa chief Ms Song, whom the staff all call “Madame Song”, insists that Beijing has not rejected any content so far, and hopes soon to add a second hour of programming out of Nairobi. And at a time when many Western media houses are struggling to survive, the Chinese TV giant has the means to finance its expansion projects. CCTV aims to rank among “the biggest media groups in the world”, says Ms Song.
*AFP NEWS AGENCY
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38 KEITH MORRISON AUTHOR AND EDUCATIONIST - kmorrison.iium@gmail.com
Immensity in a pint pot MACAU IS OBSESSED WITH IMMENSITY BUT IS PLAIN GROSS IN EVERY SENSE int-size Macau is besotted by immensity and this infatuation does immense damage to the city. This used to be a place of ground-level sights with an elegance and tranquillity that enchanted the eye. Now though, these qualities have been all but swallowed up by monstrous skyscrapers, kitsch of an almost unimaginable order, unspeakable ugliness and the overwhelming subjugation of quality by quantity. The Venetian Macao is the biggest hotel structure in Asia and in the top-10 of the world’s largest buildings by floor area. It is a monument to tawdriness. The Grand Lisboa, which is among the world’s tallest 200 buildings, also ranks highly among the world’s most immensely ugly skyscrapers. It has been variously described as iconic, flashy, gaudy, hideous and a horrendous lump of architecture. And that is just the city’s visible immensity. Vast tracts of the global economy are in turmoil, even meltdown, but Macau seems strangely immune to the bogeyman of the international markets. Its gaming revenue is immense, gross in every sense: the casinos raked in more than MOP148 billion (US$18.5 billion) in gross gaming revenue in the first half of this year. Deserts of unemployment, lacklustre business development or economic overstretch are not to be found here. Nor will you find the rich complaining about the market that has brought them wealth beyond the dreams of avarice. If numbers are anything to go by, Macau is a front-runner in the immensity stakes. Take the number of tourists piling into the city: more than
P
28 million last year. Add that to the population and it works out at nearly 1 million people per square kilometre, or roughly one person per square metre of land.
Cacophony of ringtones No wonder the city has to build skywards. Close to 1.2 million square metres of floor space were completed last year and more than 360,000 square metres of gross floor area were under construction by December-end. Take the number of motor vehicles on the 395 kilometres of roads: more than 91,000 cars, 112,000 motorcycles and 6,600 heavy vehicles by the middle of this year. That is about 530 motor vehicles per kilometre of road, or one vehicle every 1.9 metres. Take the number of mobile phone subscribers: some 1.5 million in June. Or take gaming: the city had almost 5,500 live gaming tables and more than 17,000 slot machines in the middle of this year. Oh yes, featherweight Macau can punch well above its weight in the immensity arena. But there is another side to immensity. The inflation rate here is immense: more than double Britain’s, three times France’s and more than four times South Korea’s. Property prices here are immense, and the discourses of derision from the repellent, hegemonic, real estate fat cats to their critics do little to make life tolerable for those seeking simply to own a flat. The city has immense environmental problems. On nearly 20 percent of days last year the air quality in the Northern District was officially below “good”. More than 300 tonnes of untreated waste was dumped in landfills last year. The number of migratory and resident bird species to be seen here fell from 174 in 2009 to 96 last year – an immense drop.
Nasty disease
With a burgeoning economy, it escapes me why there is so little investment in the development of real quality of life
SEPTEMBER 2012
The divide between rich and poor is immense and widening. Many citizens live in great poverty, particularly the elderly and the infirm. Half of the employed population earned less than MOP11,000 a month in the second quarter of this year, and heaven only knows how much less the elderly, unemployed, sick and disabled have by way of income. Poor health is rife. The number of primary healthcare consultations, more than 2.5 million last year, is enormous. Social inequality and social exclusion are egregious, social solidarity is corroded by the search for profit at any cost, and development is spurred on by the vision of immense wealth for a few and to hell with the rest. Macau is an incubator of immensity. Immensity is an infection which contaminates the minds of the rich, and which allows economic Darwinism to stunt the development of a caring, humane society. With a burgeoning economy, it escapes me why there is so little investment in the development of real quality of life, and so much investment in immensity. Pint-size Macau has bucketfuls of immensity problems.
Survey
39
acau never sleeps but its inhabitants are not losing any sleep over the round-the-clock buzz. The latest Macau Business Quality of Life Report says that most people here sleep very well, thank you. This quarter’s report special topic is about whether people here feel they have healthy sleeping patterns. A team of researchers from the University of St. Joseph conducted a survey of sleeping habits commissioned by Macau Business and its Chinese-language sister– publication, Business Intelligence. They
questioned more than 1,000 people this summer. The survey found that sleeping badly is not a problem for most people here. The researchers used the Chinese version of the Pittsburgh Sleep Quality Index, a gauge of how well people sleep developed by U.S. experts. The results of their survey show that almost 90 percent of respondents felt that they slept soundly. The survey also found that 85.4 percent of respondents admitted having disturbed sleep once a week, on average – for instance, difficulty in getting
to sleep or interrupted sleep. But this figure is comparable to the figures for people living in other metropolitan areas, the report says. “This does not imply, however, the prevalence of insomnia, as it is a more specific type of sleep disorder,” the researchers say. Four out five respondents had high sleep efficiency, meaning that their time asleep made up 85 percent or more of their time in bed. This may explain why most had taken no medicine to induce sleep in the preceding month. In spite of all this, the report says the possibility that social, economic and cultural changes here may affect sleeping patterns should be taken into consideration, because the amount of nighttime activity has greatly increased in the past 10 years. “Certain occupations facilitate the appearance of ‘chronic disorders of sleep-wake schedule’, e.g., nurses, policemen, casino dealers,” the report says. “This type of disorder constitutes a collection of syndromes when behaviours of sleep and of wake become desynchronised, which may result in impairments, either cognitive and/or physical.” Researchers say sleep plays a critical role in mental and physical health. Sleeping badly is associated with depression, anxiety and increased susceptibility to accidents. Insufficient sleep increases the risk of developing serious ailments. Conversely, sleeping well may mean better health and so increase productivity. The report says it would be pertinent to do a study of employees of the gaming industry, especially those that work shifts and deal direct with gamblers, to find out about the relationship between how well people feel they sleep and how satisfied they are with their jobs.
SLEEP DISTURBANCES
HABITUAL SLEEP EFFICIENCY
USE OF SLEEP-INDUCING MEDICINE
A city at ease
The latest Macau Business Quality of Life Report finds sleeping well is no problem for most
M
85.4%
90%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
2.8% Never
79.7%
Once a week
More than once a week
92.1%
90% 80% 70% 60% 50% 40%
20.3%
20%
11.8%
10% 0%
100%
90%
80%
30% 20%
10%
10%
0%
0%
≥ 85%
< 85%
6.9%
0.9%
0.1%
Not during the Less than once Once or twice More than twice past month a week a week a week
SEPTEMBER 2012
40 40
Survey
The disenfranchised masses People’s dissatisfaction with their lives has never been greater, the latest Macau Business Quality of Life Report shows eople’s satisfaction with their own lives and with living in Macau is dropping, according to the latest Macau Business Quality of Life Report. In the third quarter, the personal wellbeing index, which measures personal satisfaction, was at its lowest level since the quarterly surveys that the report is based on began in 2007. The index was at 62.5 percent, 2.6 percentage points lower than in the previous quarter. The drop “is large for the personal wellbeing index, which is normally very stable”, the report says. Researchers from the University of St. Joseph conduct quarterly surveys on behalf of Macau Business and our Chinese-language sister-publication, Business Intelligence, and use the results in compiling the Macau Business Quality of Life Report.
P
SEPTEMBER 2012
All the sub-indexes of the personal wellbeing index were lower in the latest report. The most notable drops were in the standard of living sub-index, which fell by 4.4 percentage points from the previous quarter, and the health subindex, which fell to 61.7 percent from 65.6 percent. The University of St. Joseph researchers say the personal wellbeing index hovers around 65 percent, on average, in non-Western countries. “Its current value is still within a range considered normal but should be monitored closely, particularly for groups of the population that may be considered to be most at risk of depression,” their report says. It says that although the survey did not go into the reasons for people’s dissatisfaction, “the deterioration of the
economic situation may be the major cause behind these results”. Surveys done during other periods of economic uncertainty also registered greater personal dissatisfaction. Other possible reasons are persistently high prices for housing, crime and income inequality.
Economic depression The researchers suggest a follow-up study to find out which groups are least satisfied with their quality of life and the reasons for their dissatisfaction. “This study would help policymakers devise policies that target directly the concerns and needs of the groups most at risk,” the report says. The national wellbeing index, which measures people’s satisfaction with life in Macau, was at 61.9 percent in the third quarter report, 2.5 percentage
41
PERCEPTIONS PERCEIVED T
his is the fourth and final in the third series of Macau Business Quality of Life Reports, an undertaking of De Ficção – Multimedia Projects, the publisher of Macau Business. The reports began in 2007. They focus on subjective indicators, or how people perceive life here. Every quarter, the University of St. Joseph surveys a sample of 1,000 respondents for the report. The Quality of Life Reports use the international wellbeing indexes, universal gauges of how people feel about the quality of their lives. These indexes are the personal wellbeing index and the national wellbeing index. The personal wellbeing index gauges people’s satisfaction with the quality of their own lives, by measuring how they feel about their standard of living, health, achievements in life, personal relationships, safety, community connectedness and future security. The national wellbeing index gauges people’s satisfaction with the conditions in their country by measuring how they feel about its economic situation, the state of its environment, its social conditions, territorial security, business and government. Every quarter the Quality of Life Report also looks at a special topic. Previous topics have included people’s appreciation of the housing market, people’s civic participation and people’s satisfaction with the development of the gaming industry. This quarter’s report focuses on how well people feel they sleep. The Macao Foundation and Wynn Macau Ltd sponsor the Macau Business Quality of Life Report.
points lower than in April. The fall was due to drops in all the sub-indexes of the national wellbeing index. The biggest drop was in the satisfaction with the economic situation sub-index, which fell by 5.0 percentage points. “Concern with the economic situation is impinging on people’s life satisfaction, explaining at least partly the sharp decrease in satisfaction levels,” the report says. The fall in the national wellbeing reverses a steady climb in the preceding two quarters to its highest level yet. But the index remains relatively high. The levels of the personal wellbeing index and the national wellbeing index remain similar for the second quarter in a row. This similarity is uncommon. Typically, citywide satisfaction has lagged behind personal satisfaction.
CHANGE
PERSONAL WELLBEING INDEX
3Q2012
2Q2012
(Percentage points)
PERSONAL RELATIONSHIPS
63.7%
67.4%
-3.7
SAFETY
64.6%
65.7%
-1.1
HEALTH
61.7%
65.6%
-3.9
STANDARD OF LIVING
59.6%
64.0%
-4.4
COMMUNITY CONNECTEDNESS
64.9%
66.0%
-1.1
FUTURE SECURITY
63.1%
64.3%
-1.2
ACHIEVEMENTS IN LIFE
60.0%
63.0%
-3.0
OVERALL
62.5%
65.1%
-2.6
PERSONAL WELLBEING INDEX 68% 66.7%
67% 66%
65.1%
65% 64%
65.7%
65.5% 64.4% 63.9%
63.8%
63.8%
63.4%
63.3%
63%
63.0% 62.5%
62% 61% 60% 1Q2007
2Q2007
3Q2007
4Q2007
4Q2008
1Q2009
2Q2009
3Q2009
4Q2011
1Q2012
2Q2012
3Q2012
CHANGE
NATIONAL WELLBEING INDEX
3Q2012
2Q2012
(Percentage points)
TERRITORIAL SECURITY
67.5%
69.2%
-1.7
ECONOMIC SITUATION
59.5%
64.5%
-5.0
BUSINESS
63.6%
65.4%
-1.8
SOCIAL CONDITIONS
61.5%
64.3%
-2.8
STATE OF THE ENVIRONMENT
58.1%
61.0%
-2.9
GOVERNMENT
60.9%
61.9%
-1.0
OVERALL
61.9%
64.4%
-2.5
NATIONAL WELLBEING INDEX 66% 64.4%
63.7%
64% 62% 59.6%
60%
59.9%
58%
59.1% 57.9%
57.6%
61.9%
61.2%
61.0%
60.2%
57.4%
56% 54% 52% 1Q2007
2Q2007
3Q2007
4Q2007
4Q2008
1Q2009
2Q2009
3Q2009
4Q2011
1Q2012
SEPTEMBER 2012
2Q2012
3Q2012
42
Property
Land locked
The programme of land reclamation announced in 2008 has barely made it off the drawing board BY SARA FARR
here is much ado about urban planning here, or the lack thereof. Worry persists about how the government plans to develop the 3.5 square km of reclaimed land it is adding to the 29-odd square km that the city now occupies. Four years after the government announced the reclamation programme, details of what will be built on the new land are still being discussed. And little of the reclamation work has been done. Of the five areas of sea off the peninsula and Taipa that are meant to be reclaimed, only one is now dry land. Yet another round of public consultation about the programme – the third since 2010 – is scheduled for later
T
SEPTEMBER 2012
this year before the government gets on with drafting a proper master plan. Officials say they expect to have the plan ready by next year. The reclamation programme was announced in 2008. The central government approved it in November 2009. Beijing said at the time that developing new urban areas was “an important policy ... to ease Macau’s serious land shortage and to improve the quality of life of the population”. The five new tracts of land – imaginatively named Zone A, Zone B and so on – are expected to accommodate up to 120,000 people. Officials say they want the development to do as little harm as possible to the environment.
They envisage it having means of transport that cause little pollution and several public parks. The programme will include a fourth crossing from Macau to Taipa, to the east of the Friendship Bridge. The government has hinted that it prefers a tunnel to another bridge.
Boundaries of eras There was debate about whether the programme should include moving the Outer Harbour ferry terminal but officials dropped this idea after it caused a public outcry. The government has asked the Architects Association of Macau for ideas about how to develop the new land and
43
Artificial island for the Hong KongZhuhaiMacau bridge
ZONE A
ZONE B
ZONE D ZONE C
ZONE E1
ZONE E2
THE RECLAMATION AREAS
fit it in with the rest of the city. The association is working on a three-part study. Macau Business has seen the second part of the study. It is the work of architects Rui Leão, Adalberto Tenreiro, Francisco Ricarte, Chu Chan Kam, Victor Ao Ieong Iong and Tiago José Pinto. The study shows that there have been successive waves of reclamation over the years in Macau, and that each time the new land was developed in accordance with the standards of the era. But “old urban patterns no longer cope with contemporary standards of living,” Mr Leão says. Even so, the study recommends avoidance of abrupt changes in the appearance of the city where the new land
ZONE A
Zone A will be to the east of the peninsula, beside the artificial island where the Hong Kong-Zhuhai-Macau bridge will land. It will be the biggest zone, covering 138 hectares. It is meant to have roads, public buildings, cultural and tourism facilities, commercial premises, housing and a waterfront promenade. It is expected to house 54,000 people.
SEPTEMBER 2012
44
Property
abuts existing land. For example, certain characteristics of the NAPE district could be used as a model for the development of the adjoining Zone B, Mr Leão says. Zone A will be one of the most crucial, the study suggests. “This is going to be an important area. This is going to be the first thing visitors driving across the [Hong Kong-Zhuhai-Macau] bridge will see. And, also, for residents living in this area it will be important to have greenery,” Mr Leão says.
Paradise ahead – no parking The study proposes the cultivation of rooftop gardens on large public buildings to serve as parks. It proposes elevated walkways to allow scenic, unobstructed passage for pedestrians between Zone A and the Areia Preta district. It proposes pedestrian and vehicular crossings over the water reservoir on the peninsula to improve access to and from the east of the city. “All the spaces and facilities need to be accessible,” Mr Leão says. The study also recommends the erection of a landmark skyscraper in Zone B. Other architects, who are not involved in the study, dispute assertions that the city does not need any more land. “It does. Macau is too small and you can’t constantly build up. You have to expand sideways, too,” architect Carlos Marreiros says. Architects are unanimous in saying that the city needs natural ventilation and light. “There needs to be a balance between open spaces and buildings,” Mr Marreiros says. He contends that roads six or eight lanes wide will be needed to serve the areas developed on the new land. “Parking is also essential,” he says. Unlike in the past, demand for parking should be considered at the planning stage, Mr Marreiros says. “Instead of excavating after the land is reclaimed, it should first be thoroughly thought out.” One option could be the use of automated car parking systems like those in Japan, which allow space to be used more efficiently. Such systems are available here but are rare. Mr Marreiros says the waterfront in Zone B could be used for open-air coffee shops and restaurants. None of the new land should have gaming facilities, offices or too much housing, he says. SEPTEMBER 2012
ZONE B
Zone B is to the south of the peninsula and covers 47 hectares. It is the only zone where the land has already been reclaimed, the work having been done even before the reclamation programme was approved. It is divided by the Governador Nobre de Carvalho Bridge. The new complex of courts of law and associated public buildings will be built on it. It already has the Science Centre, inaugurated in 2009. Up to 6,000 people are expected to live there.
ZONES C, D AND E
These zones will lie to the north or northeast of Taipa. Zone C will cover 33 hectares and Zone D 59 hectares. Zone E, near the airport and the Pac On ferry terminal, will cover 73 hectares. These zones are meant principally for commercial and residential use. They are expected to house 60,000 people. Zone E is also meant to have facilities for the city’s security forces.
45
NEW CURBS ON PROPERTY MAY BE ON THE WAY
PUBLIC HOUSING BOOM By 2014, one in every four apartments in Macau could be public housing flats. On top of the 19,000 public housing units first announced in 2007 and due to be completed this year, the government has plans to roll out an additional 6,000 public housing flats from next year. And there are another 3,850 public housing flats in the pipeline. Adding these to the existing supply, the government expects to reach the 52,700 public flats goal.
A government task force says home prices continue to be “overheated”
Photo: Luís Almoster
The government announced last month that it is considering introducing a new round of measures to curb property speculation. The announcement came after a task force concluded that the residential market is “overheated”. According to a press release, the task force, established by the government in 2010, is now considering new measures on mortgage, tax, regulation and construction approval. A first set of cooling measures was announced roughly two years ago. In June last year, a new special stamp duty on re-sale of residential properties was introduced, levying a 20-percent duty on homes resold within a year of their purchase; the duty is reduced to 10 percent if the sale takes place between one and two years after the original purchase. The measures, especially the stamp duty, have pushed down the number of deals, but not prices. Even so, the task force says the stamp duty policy should be continued, since it has brought “positive results”. The policy is due to be reviewed by mid-2013.
RE/MAX CLOSER TO MACAU Real estate company RE/MAX has sold franchise rights for China including the mainland, Hong Kong and Macau, it announced. The new RE/MAX China ownership group is based in Hong Kong and has extensive experience in real estate, banking, financing and franchising, RE/MAX said, without disclosing the name of the franchise rights buyer. The U.S.based group plans to officially open the first RE/MAX offices in China in the first quarter of 2013.
STANDING IDLE
The developer of a high-rise building on Guia Hill says it is still waiting for the government to find a solution for the idle construction. The government ordered the developer to stop construction in 2008, after public outcry that the 126-metre high building would block the view of the Guia lighthouse. Both parties have since been in negotiations to find a solution for the building, but with no outcome yet.
SEPTEMBER 2012
Property
Photo: Manuel Cardoso
46
Up for a brawl Chinese Estates is fighting the government’s decision to revoke the La Scala land deal ong Kong-based developer Chinese Estates Holdings Ltd announced that its unit Moon Ocean Ltd has filed an objection to the Macau government regarding its decision to declare the La Scala land sale invalid. In a filing to the Hong Kong Stock Exchange late last month, the developer said it intends to further appeal to the Court of Second Instance against the decision if it doesn’t receive a favourable reply from the government on or before September 14, the last day for lodging such appeal. The developer had said previously that if the appeal were unsuccessful, it would seek compensation from the government for the losses the decision will carry to the group. The company claims it has already invested HK$2.8 billion (US$361 million) in the La Scala luxury residential project. Chinese Estates had sold 302 units in La Scala as of June-end, worth some HK$3.8 billion. In the case that the government decision becomes final, Chinese Estates says it may consider entering into cancellation agreements with purchasers.
H
SEPTEMBER 2012
The government says that if the developer returns the money to buyers, they will be also refunded their stamp duty money. Last month, the government announced its decision to declare invalid several 2006 acts by then-Chief Executive Edmund Ho Hau Wah confirming the sale approval of the land where La
Chinese Estates had sold 302 units in La Scala as of June-end, worth some HK$3.8 billion
Scala is now being built. The land, originally owned by a group of governmentcontrolled private companies, was sold in 2006 to Moon Ocean Ltd. The government’s move came after the Court of Final Appeal found earlier this year that then-Secretary for Transport and Public Works Ao Man Long received HK$20 million from Chinese Estates boss Joseph Lau Luen Hung and BMA Investment chairman Steven Lo Kit-sing in 2005 to ensure they would get the land. Mr Lau and Mr Lo will both go on trial in Macau starting September 17 on charges of bribery and money laundering related with the La Scala deal. Both men have denied any wrongdoing. Meanwhile, our sister publication Business Daily last month reported that China Star Entertainment Ltd has dropped out of a deal to develop a Nam Van Lake plot linked to the Ao Man Long corruption scandal. The company, which owns and operates hotel-casino Lan Kwai Fong, officially said the reason is the government still has no urban plan for the area.
Property | Market Watch AVERAGE TRANSACTION PRICE PER SQUARE METRE OF RESIDENTIAL UNITS BY DISTRICT AS PER STAMP DUTY RECORDS
47
Source: DSEC
(MOP) District
Macau
2010
2011
Q3
Q4
Q1
30,347
33,397
38,261
2012
Q2
Q3
Q4
Q1
Q2
44,269
36,345
41,519
45,453
55,427
Macau Peninsula
29,517
29,664
37,159
42,296
35,416
39,228
41,266
47,461
Ilha Verde
24,524
27,365
40,402
44,075
37,154
34,363
39,520
53,011
Tamagnini Barbosa
25,886
27,819
26,959
34,159
31,614
30,563
30,276
40,011
Areia Preta and Iao Hon
21,887
22,519
28,581
32,586
31,455
32,246
34,454
40,951
Areia Preta new reclamation zone (NATAP)
34,615
32,314
43,266
51,255
43,308
45,984
47,446
52,276
Mรณng Hรก and Reservoir
23,506
26,495
30,706
33,789
32,225
36,135
35,428
39,438
Fai Chi Kei
25,437
24,072
28,762
37,637
35,682
33,401
37,690
45,077
Lamau Docks
28,099
34,437
36,867
35,081
39,655
38,787
46,543
60,767
Horta e Costa and Ouvidor Arriaga
28,603
29,111
32,437
32,889
34,592
38,461
35,943
48,889
Barca
18,849
21,853
25,714
30,370
27,438
27,574
29,132
35,055
Patane and Sรฃo Paulo
20,990
21,387
23,271
27,901
28,945
29,676
28,885
31,064
Conselheiro Ferreira de Almeida
21,948
23,371
27,004
30,460
29,030
33,714
29,877
39,443
Guia
24,953
27,565
26,267
54,703
38,596
57,699
59,312
56,944
ZAPE
20,705
24,399
28,915
30,228
30,410
31,196
32,537
36,957
NAPE and Praia Grande Bay reclamation area
58,820
51,835
67,891
76,634
60,393
61,126
63,534
76,876
Downtown Macau
18,223
20,742
27,878
27,862
29,745
28,197
30,503
35,733
Barra / Manduco
23,058
27,491
30,973
36,663
30,180
32,085
30,292
39,231
Praia Grande and Penha
32,955
37,988
35,151
34,709
36,672
32,470
37,189
41,408 66,804
Taipa
29,583
39,876
33,402
42,457
38,162
45,057
48,107
Ocean Gardens and Taipa Pequena
31,888
28,837
35,102
45,435
36,629
36,115
41,319
42,510
Downtown Taipa
28,280
41,527
31,750
38,869
36,733
45,243
45,305
57,363
University and Pac On Bay
26,228
22,054
26,991
34,566
37,502
41,668
37,899
41,044
Pac On and Taipa Grande
57,185
56,702
82,688
73,898
68,090
66,910
83,346
103,267
City and Jockey Club
26,654
27,596
27,346
28,948
27,588
35,360
36,659
42,552
Coloane
64,087
64,398
67,484
70,098
61,893
64,063
83,173
78,197
Notes: 1. The above information covers building units with stamp duty paid in the reference quarter 2. Including residential units that were exempt from the payment of stamp duty ~ No figure provided/confidential data
AVERAGE TRANSACTION PRICE PER SQUARE METRE OF OFFICE UNITS BY MAIN DISTRICT AS PER STAMP DUTY RECORDS
Source: DSEC
(MOP) 2010 District
Q3
2011 Q4
Q1
Q2
2012 Q3
Q4
Q1
Q2
Macau
23,374
27,078
27,700
36,618
34,011
38,404
40,362
47,767
ZAPE
18,839
32,046
27,393
35,277
23,937
34,674
39,520
39,598
NAPE and Praia Grande Bay reclamation area
27,940
27,802
30,819
37,909
35,200
39,068
41,283
50,784
Downtown Macau
16,305
25,801
~
32,506
32,004
37,662
36,006
47,413
~
~
19,649
31,391
35,023
37,549
44,969
~
Praia Grande and Penha Notes: Only covers office buildings with ten storeys or higher ~ No figure provided/confidential data
SEPTEMBER 2012
48
Property | Market Watch
Notable residential property transactions - 16/07 to 12/08, 2012
Source: Centaline
District
Property
Unit
Taipa
One Grantai
Block 1, H/F, unit A
5,350
40,660,000
7,600
Taipa
One Grantai
Block 1, L/F, unit B
5,350
34,780,000
6,501
Floor area (sq. ft)
Sale price (HK$)
Price per sq.ft. (HK$)
Macau
One Central
Block 3, M/F, unit B
3,006
25,000,000
8,317
Taipa
One Grantai
Block 4, H/F, unit O
3,025
23,000,000
7,603
Taipa
One Grantai
Block 6, M/F, unit X
3,041
20,070,000
6,600
Taipa
One Grantai
Block 6, M/F, unit W
2,931
19,930,000
6,800
Taipa
One Grantai
Block 3, L/F, unit I
2,300
16,560,000
7,200
Macau
Lâ&#x20AC;&#x2122;Arc
H/F, unit J
2,803
15,000,000
5,351
Macau
One Central
Block 1, M/F, unit E
1,819
13,500,000
7,422
Taipa
One Grantai
Block 3, H/F, unit L
2,027
13,000,000
6,413
Taipa
One Grantai
Block 3, H/F, unit K
2,020
12,750,000
6,312
Taipa
One Grantai
Block 5, M/F, unit U
2,165
11,580,000
5,349
Taipa
Kingsville
Block 3, H/F, unit H
2,012
11,000,000
5,467
Taipa
Nova City
Block 7, M/F, unit D
2,500
10,780,000
4,312
Macau
The Residencia
Block 3, H/F, unit B
1,767
9,950,000
5,631
Taipa
Nova City
Block 7, L/F, unit D
2,505
9,800,000
3,912
Coloane
One Oasis Cotai South
Block 2, M/F, unit E
2,066
9,400,000
4,550
Macau
The Residencia
Block 1, M/F, unit B
1,693
9,300,000
5,493
Macau
The Residencia
Block 5, H/F, unit A
1,690
8,800,000
5,207
Macau
The Residencia
Block 4, M/F, unit A
1,693
8,580,000
5,068
Macau
Villa De Mer
Block 2, H/F, unit B
1,695
8,500,000
5,015
Taipa
Nova City
Block 13, M/F, unit A
1,731
8,500,000
4,910
Taipa
Prince Flower City
Block 1, H/F, unit C
1,665
8,280,000
4,973
Taipa
The Buckingham
M/F, unit E
1,873
8,100,000
4,325
Coloane
One Oasis Cotai South
Block 9, L/F, unit C
1,818
8,010,000
4,406
Taipa
Prince Flower City
Block 2, M/F, unit J
1,645
8,000,000
4,863
Taipa
Prince Flower City
Block 1, H/F, unit D
1,665
7,980,000
4,793
Macau
Villa De Mer
Block 4, H/F, unit A
1,475
7,480,000
5,071
Macau
The Bayview
Block 1, M/F, unit E
1,603
7,380,000
4,604
Macau
The Bayview
Block 2, M/F, unit E
1,603
7,280,000
4,541
Macau
The Bayview
Block 3, H/F, unit F
1,582
7,270,000
4,595
Taipa
Kingsville
Block 3, M/F, unit G
1,422
7,200,000
5,063
Macau
The Praia
Block 3, H/F, unit P
1,426
7,200,000
5,049
Macau
Lake View Tower
M/F, unit G
1,567
7,200,000
4,595
Macau
The Bayview
Block 4, H/F, unit A
1,582
7,180,000
4,539
Macau
The Praia
Block 1, H/F, unit C
1,558
7,000,000
4,493
Macau
The Bayview
Block 3, H/F, unit B
1,603
7,000,000
4,367
Note: L/F - Low floor; M/F - Middle floor; H/F - High floor
Notable residential property rentals - 16/07 to 12/08, 2012
Source: Centaline
Type
Property
Unit
Macau
One Central
Block 7, H/F, unit G
1,181
30,000
Taipa
Pearl On The Lough
Block 2, L/F, unit F
2,839
28,000
9.86
Macau
One Central
Block 1, H/F, unit B
1,359
25,000
18.40
Taipa
The Buckingham
M/F, unit E
1,873
20,000
10.68
Macau
Lake View Tower
Block 12, L/F, unit D
1,497
18,000
12.02
Taipa
Prince Flower City
Block 2, H/F, unit J
1,820
18,000
9.89
Taipa
Prince Flower City
Block 1, H/F, unit C
1,665
16,000
9.61
Taipa
Prince Flower City
Block 3, H/F, unit O
1,702
16,000
9.40
Macau
Edf. Jardim Nam Ngon
M/F, unit F
2,190
16,000
7.31
Taipa
The Buckingham
M/F, unit C
1,080
15,500
14.35
Taipa
The Buckingham
M/F, unit A
1,186
14,000
11.80
Taipa
Edf. Triumph Unit
M/F, unit E
1,100
13,500
12.27
Taipa
Kingsville
Block 1, M/F, unit C
1,422
13,000
9.14
Taipa
Nova City
Block 12, M/F, unit A
1,088
12,800
11.76
Macau
The Praia
Block 1, H/F, unit F
1,571
12,500
7.96
Taipa
Jardins do Oceano
Block 3, H/F, unit N
1,071
9,000
8.40
Taipa
Nova Taipa
Block 24, L/F, unit F
823
8,500
10.33
Floor area (sq. ft)
Rent price (HK$)
Price per sq.ft. (HK$) 25.40
Note: L/F - Low floor; M/F - Middle floor; H/F - High floor
SEPTEMBER 2012
PropertyS tatistics 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) - New building - Old building Resident buyers (as percentage of total buyers) - New building - Old building Resident buyers (as percentage of total buyers) - Others Total value of total units transacted (2) - Residential
42.9 10,300.0 27.3 -6.7 -17.8
194 7,126 MOP76.3 billion
34.4
MOP58.9 billion
28.1 41.0 5.4 84.0 88.0 83.6 128.8 --115.7 -0.7
- New building
MOP41.4 billion
- Old building
MOP17.5 billion
- Commercial
MOP9.7 billion
- New building
MOP0.9 billion
- Old building
MOP8.7 billion
- Offices - New building - Old building - Industrial - Others
MOP3.0 billion
--MOP0.9 billion MOP3.8 billion
4.2 percentage points
90.8
-38.0 -86.0 -30.0 7.7 percentage points
94.1
-33.6 -73.2 -21.3
273 26 247
-11.6 percentage points
80.0
-43.8 -38.3 -49.4 -27.2
995 32 963
-2.3 percentage points
86.9 932 103 829
- Offices
- Industrial
4.6 144.5 -3.1
2,196 269 1,927
- Commercial
3.2 percentage points
86.0
Year-on-year change (%)
Macau
MOP45,027 /m
2
- Macau Peninsula
MOP43,569 /m2
- Taipa
MOP41,501 /m2
- Coloane
MOP68,208 /m2
21.6 32.9 1.4 6.4
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
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
-31.5 -59.5
Jan-Jun 2012
MOP42.8 billion
-24.2
Jan-Jun 2012
MOP31.7 billion
-32.1 -40.8 -6.0 10.2 --33.3 -----
Jan-Jun 2012
89 2,181
MOP20.7 billion MOP11.0 billion MOP6.5 billion
--MOP1.2 billion --MOP0.5 billion MOP3.0 billion
Average transaction price of residential units (3) 2011
Notes
Year-on-year change (%)
11,437 7,899 3,250 4,649
-1.7 percentage points
87.8
-3.1 28.5 -91.3 --45.5 366.2 440.2 0.0 -233.3
Latest
-6.7 -4.5 26.8 -20.7
27,624 17,176 7,783 9,393
Total units transacted
926 902 18 -6 718 686 22 -10
Year-on-year change (%)
2011
Year-on-year change (%)
Latest
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
Month-on-month change (%)
Latest MOP62,137 /m
2
MOP55,077 /m2 MOP67,246 /m2 MOP83,240 /m2
5.4 2.4 2.4 8.3
Notes Jul 2012 Jul 2012 Jul 2012 Jul 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 SEPTEMBER 2012
Source: Statistics and Census Service and Financial Services Bureau
Construction - private sector
49
mbreport HIGHER EDUCATION
DEGREES OF SUCCESS The tertiary education system will have more students and more programmes in the new academic year BY LUCIANA LEITĂ&#x192;O
he new academic year begins this month, and a record number of students are expected to enrol in a range of tertiary education programmes that is wider than ever before. Considering what they have to gain, it is little wonder that every year applicants for degree programmes overwhelm the cityâ&#x20AC;&#x2122;s
T
SEPTEMBER 2012
top institutions of higher education. The Statistics and Census Service provides no data on the average earnings of employees with a degree. But what data available indicates is that a degree paves the way to better pay. Graduates hold two-thirds of the best-paying jobs here.
A survey conducted last year by the Institute for Tourism Studies showed that less than one year after graduating, the 2009/2010 bachelor degree programme graduates already had a monthly median salary 20 percent above average. The Institute for Tourism Studies, which turns out workers for the hospital-
51
INSTITUTIONS OF HIGHER EDUCATION IN MACAU PUBLIC INSTITUTIONS - University of Macau - Macao Polytechnic Institute - Institute for Tourism Studies - Academy of Public Security Forces
PRIVATE INSTITUTIONS - City University of Macau - University of St Joseph - Kiang Wu Nursing College - Macau University of Science and Technology - Macau Institute of Management - Macau Millennium College
TERTIARY EDUCATION STUDENTS ENROLLED NUMBER OF STUDENTS
30,000 25,000 20,000 15,000 10,000 5,000 0 1990/1991
1995/1996
2000/2001
2005/2006
2010/2011
Photo: Manuel Cardoso
ACADEMIC YEAR
ity industry, had an average of six applicants for each of the 425 places available for the new academic year. The University of Macau has admitted about 1,500 of the 8,000 applicants for places there. Mainlanders swell the number of applicants. More than one-quarter of students in tertiary education here are
from the mainland. If public institutions of higher education were not obliged to give priority to residents, the proportion would be higher. Macau attracts thousands of mainland students every year despite having no world-leading university. The University of Macau, the city’s oldest, is only 30 years old. The University of Macau’s vicerector for research, Rui Martins, says “it takes time to build a good higher education institution.” Mr Martins says economic growth here is so fast that it is difficult for universities to keep up. Investment per student is lower than in other parts of Asia. “In Macau, the cost per student is half of [what it is] in Hong Kong,” he says. Even so, the University of Macau is among the top 200 universities in Asia, he claims.
Emphasis on quality The university has more than 8,000 students, of which around 1,900 are doing master’s degree programmes and about 200 are doctoral students. “This saturates completely the campus we now have,” Mr Martins says. This is in spite of expansion since 1999, when the university had about 3,300 students. The university is now building a new campus on Hengqin Island which will
cover an area 20 times the size of its present campus. The university is due to begin moving there by year-end so the facilities can be up and running in time for the following academic year. There are however, questions as to whether the schedule can be met after a cave-in at the construction site of an underwater tunnel which will connect Macau to the new campus. Mr Martins says construction of the campus is on schedule. But the cave-in at the tunnel site may delay the official handover of the campus, scheduled for December 20, he admits. When the campus is handed over to the university, the mainland authorities will turn over jurisdiction to the Macau government. Mr Martins says the move to Hengqin will change the university’s ethos. “The emphasis will be on quality,” he says. The goal is for the university to be among the best in Asia, with a focus on research and development, Mr Martins explains. The new campus will have several residences for students from the mainland and further afield, whose numbers are expected to grow as the university builds its reputation. The new campus will also allow the university to offer new programmes. But one innovation already this year is a programme in international SEPTEMBER 2012
mbreport HIGHER EDUCATION 52
The Institute for Tourism Studies had an average of six applicants for each of the 425 places available for 2012/2013 integrated resort management leading to a master’s degree. Of the city’s tertiary education students, nearly 60 percent are studying for degrees in business administration, tourism, hotel management or gaming. The University of Macau is also offering for the first time this year, programmes leading to doctorates in philosophy and religious studies, and in international business law. The private Macau University of Science and Technology (MUST) will also have new programmes in the new
academic year. The standing vice-rector for academic affairs, Zhang Shuguang, says MUST is offering new programmes leading to a bachelor of arts in foreign language studies, with emphasis on Portuguese and Spanish; a bachelor of pharmacy in Chinese medicine; and a bachelor of hotel management.
Appreciative students He says the university has attracted students from Macau and further afield, notably the mainland. “We want to be competitive, creating new cours-
Macau Business now comes to your inbox with free daily updates from our newsroom SEPTEMBER 2012
The University of Macau has more than 8,000 students, of which around 1,900 are doing master’s degree programmes es to develop their skills,” he says. MUST is also launching this year, a programme leading to a master’s degree in charity and philanthropy management. The course will train students involved in community work or government. The university has 6,000 students. Mr Zhang says it turned away many applicants for places in the new academic year. He says the university intends to invest only not in expansion, but in research and development of Chinese traditional medicine and space technology.
Go now to macaubusiness.com and sign up for our e-newsletter
53
MUST intends to invest only not The Macao Polytechnic Institute had a in expansion, but in R&D of Chinese record 8,100 applicants for places for the traditional medicine and space technology new academic year It also aims to offer programmes in areas that the government considers important, including hospitality, creative industries, information technology and foreign languages.
Fit for purpose MUST was criticised two years ago for including in its bachelor of laws programme optional courses such as sketching and “Appreciation of World Movie Masterpieces”. Mr Zhang says the aim was to provide an interdisciplinary education.
“Any new programme proposal has to be interdisciplinary. It’s a good way to expand the knowledge base for our students,” he says. The public perception that MUST is a soft option is wrong, he says. The Macao Polytechnic Institute had a record 8,100 applicants for places for the new academic year, 7 percent more than a year before. The head of the school’s academic affairs department, Vivian Lei Ngan Lin, says the number of students from Hong Kong is rising.
The institute will also host a batch of students from Portuguese institutions of higher education in fields such as management, computer science and translation. The institute is not offering any new programmes this academic year. Ms Lei says the institution aims for quality, not quantity, in its programmes, and tries to tailor them to meet the city’s needs. Macao Polytechnic Institute president Lei Heong Iok is no longer driving for the institution to become a university. That change would have allowed the
SEPTEMBER 2012
mbreport HIGHER EDUCATION 54 institute to offer its own postgraduate programmes. It already runs programmes jointly with universities in the mainland, Hong Kong and elsewhere leading to master’s or doctoral degrees. Ms Lei says the abandonment of the campaign for university status has nothing to do with a report by the Commission Against Corruption last year that highlighted structural and operational problems at the institute. She says increases in the number of students at the institute and the number of graduates it turns out are more important than university status.
New broom The private City University of Macau, formerly the Asia International Open University, has lofty ambitions. The university was established in September 1992. It changed its name in February last year after businessman Chan Meng Kam acquired it in September 2010. Mr Chan is head of Golden Dragon Group Ltd, a member of the Executive Council and a directly elected member of the Legislative Assembly. The City University of Macau is now being restructured along lines envisaged by Mr Chan. He wants to expand it by putting it on a proper campus. At present the university is in a commercial building in ZAPE. The university’s website says it “plans to build itself, in the next decade, into a medium-sized, fully open and comprehensive university with a high degree of internationalisation”. At the University of St. Joseph, Peter Stilwell replaced Rúben de Freitas Cabral as rector in May. Mr Stilwell is now reassessing what the university offers with a view to improving quality. He has said several programmes may be scrapped. Some scholars are already being laid off. Mr Stilwell was previously vice-rector of the Catholic University of Portugal, one of that country’s most respected private universities. The University of St. Joseph is co-owned by the Catholic University of Portugal and the Catholic diocese of Macau. The University of St. Joseph awards its degrees jointly with the Catholic University of Portugal. The University of St. Joseph, currently with 1,800 students of which 280 are freshmen, is investing in a new campus in Ilha Verde. Construction started in 2009 and was due to have been finished by last year, but it has been plagued by delays. SEPTEMBER 2012
TOO MANY COOKS T
he Tertiary Education Services Office is considering applications for two new private institutions of higher education. If both schools are approved, Macau will boast 12 higher education institutions – a number that some in the education industry think is excessive for a city with a population of less than 600,000 people. “There are too many higher education institutions,” says University of Macau vice-rector for research Rui Martins. He says the provision of tertiary education should be re-thought carefully. The standing vice-rector for academic affairs at the Macau University of Science and Technology, Zhang Shuguang, says a strategy is needed for the tertiary education system. The city has four public institutions of higher education. Its six private institutions rely to a greater or lesser extent on government grants. The number of institutions of higher education means most high school leavers easily get a place. Some analysts say it means many students get a sub-standard education which does not meet the needs of the market. Of the city’s workforce, 27.1 percent have a degree. Political commentator Larry So Man Yum argues that the focus should be on ensuring the programmes offered are up to international standards rather than on increasing the number of universities. “We are wasting our resources,”
says Mr So, who is also an academic at the Macao Polytechnic Institute. He says ensuring programmes are up to international standards would assure employers of the quality of graduates. It would also make it easier for graduates here to further their studies abroad.
A world outside Mr So says the variety of programmes offered should be re-thought to promote the diversification of the economy into fields such as the meetings, incentives, conventions and exhibitions industry. He would also like to see more programmes in the field of social services so the city can cope with the pressures created by its rapid development. “We are really in need of social workers, psychologists, psychiatrists, therapists,” he says. Teresa Vong Sou Kuan, who heads University of Macau’s Educational Research Centre, says internationalisation is the key to the future for tertiary education. Ms Vong says any new university here should suit its programmes to the needs not just of Macau but of the world beyond its borders. Ms Vong says the Macau tertiary education system is a laggard in the field of medicine. The degrees it offers are for nursing or Chinese traditional medicine. But she doubts if the two would-be institutions of higher education would invest in costly programmes such as such as medical programmes. L.L.
Photo: Diamantino Santos
55
Academic freedom Universities eagerly await long-promised changes to the law on higher education BY LUCIANA LEITÃO
ore financial support and autonomy for institutions will be the two main results of amendments to the law on higher education, says the head of the Tertiary Education Services Office, Sou Chio Fai. The city’s tertiary education industry is eagerly awaiting the changes. The current law was enacted in 1991. The government has been preparing an amendment bill for several years, but the Legislative Assembly is still waiting for it. It is not on the government’s legislative agenda for this year, presented last November. Mr Sou says the amendments would give institutions of higher education more help with improving their teaching and research. He says changes would provide institutions more freedom to choose what to teach, and establish new systems of evaluation and accreditation. The University of Macau’s vicerector for research, Rui Martins, has high expectations. He says pay at the governmentowned University of Macau is linked to pay rates in the civil service, limiting the university’s appeal to top academics. “Salaries in Hong Kong are twice as high, as they have bigger flexibility,” Mr Martins says.
M
The University of Macau struggles to attract professors qualified to supervise doctoral programmes. The university is expected to struggle even more when it moves to its new campus on Hengqin Island as staffing needs will go up. Mr Martins predicts that in 10 years from now the university will need double the 500 or so academic staff it currently has. The standing vice-rector for academic affairs of the Macau University of Science and Technology, Zhang Shuguang, applauds the intention to give universities more autonomy. But he says the amendments should make it clear that the government supports public and private institutions of higher education alike, and should make it easier for students to go abroad in exchange programmes.
Full-time job The head of the academic affairs department of the Macao Polytechnic Institute, Vivian Lei Ngan Lin, also welcomes the drive to increase autonomy for institutions of higher education. Ms Lei says this would allow schools more flexibility to mould programmes. The head of the University of Macau’s Educational Research Cen-
tre, Teresa Vong Sou Kuan, says she hopes the amendments will strike a proper balance between university autonomy and government supervision. The amendments would entail regular auditing of institutions of higher education. The Tertiary Education Services Office said in a written reply to questions from Macau Business that after the amendments became law it would ask institutions “to appoint trustworthy and legitimate accreditation agencies to undertake institutional audits for them on a periodical basis”. Ms Vong is sceptical. The findings of last year’s audits by the government made no apparent difference and were not even released to the public, she says. José Pereira Coutinho, a directly elected member of the Legislative Assembly, says the lack of checks on quality by independent third parties is one of the main problems with the tertiary education system. In particular, he wants closer scrutiny of the qualifications of academics. Mr Coutinho also wants more full-time professors. “There are several part-time scholars. Teaching loses quality due to the lack of time of the professor,” he says. SEPTEMBER 2012
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Gaming
Strip drag Sands China is opening the second phase of Sands Cotai Central with fewer new gaming tables than initially expected BY LUCIANA LEITÃO
otai is due to get its sixth casino this month. Sands China Ltd is to open the second phase of its Sands Cotai Central casino resort on September 20. The big question is how many live gaming tables the casino will open with. At the end of June the city had 5,498 live gaming tables, two fewer than the limit of 5,500 imposed by the government. Sands China told Macau Business that the second phase of Sands Cotai Central would have about 200 gaming tables. But it did not say whether these would be new tables or old ones from its other casinos. The Gaming Inspection and Co-
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ordination Bureau said it had yet to receive any official application from Sands China for more tables. The bureau said it would “continue to strictly limit the number of gaming tables to 5,500”. The second phase of Sands Cotai Central contains the first of two hotel towers to be occupied by the Sheraton Macao, with 1,800 rooms. The second hotel tower, with 2,000 rooms, will open early next year. The second phase will also have 38 more shops, restaurants and bars. Once the Sheraton Macao is open, Sands China will have more than 9,000 rooms across five hotels, 120,000 square metres of meeting and exhibition space,
more than 600 shops and nearly 60 restaurants, bars and lounges in Cotai – and, of course, four casinos. Sands China says it has invested more than US$8 billion (MOP64 billion) in Macau so far, some of it in the Sands Macao casino hotel on the peninsula. It was earlier thought that Sands Cotai Central could benefit from a new way of counting poker and mahjong tables dreamed up by the government so the gaming industry could breach the limit on the number of gaming tables without appearing do so. A government source told our sisterpublication, Business Daily, that if a casino had up to 20 poker tables in the same
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area, the regulator would count them as only one table. The source added that the same applied to mahjong tables.
Political storm Union Gaming Research Macau estimated that the new way of counting poker tables alone could give the casinos about 100 extra tables. It said the scheme was likely to benefit Sands China most, perhaps giving it about 50 extra tables. But as soon as the new way of counting tables made the news, the government made a U-turn. The Gaming Inspection and Coordination Bureau told the Chinese-language press that the plan had never existed – an assertion flatly contradicted by Business Daily’s sources in the gaming industry. One source said public disclosure of the new way of counting tables had stirred up a political storm as the government here had promised the central government that the number of tables would not exceed 5,500 until next year. This was yet another setback for Las Vegas Sands Corp, Sands China’s parent company. It followed a report in the
Wall Street Journal that regulators in the United States are investigating whether Las Vegas Sands broke U.S. bribery laws in its dealings in the mainland. The newspaper said these dealings included a US$50 million payment for land for the Adelson Center for US-China Enterprise in Beijing, a business development operation that never opened. Also being investigated was sponsorship by Las Vegas Sands of a Chinese basketball team, and the company’s partnership with Chu Kong Shipping Enterprises (Group) Co Ltd which operates Sands China’s CotaiJet ferry service, the report said.
Crowded buses A couple of weeks before the April opening of Sands Cotai Central, Sands China said the government was allowing it 200 new tables for the first phase. Those 200 tables would have been the last of the gaming industry’s quota of 5,500. So Sands China executives faced pointed questions about where they would get the tables for the second
phase. Chief operating officer David Sisk told Macau Business in March: “Our understanding is that we have another 200 new tables that we were essentially promised.” By July, company chairman Sheldon Adelson was not so sure. He admitted that there would be some difficulty in getting all 200 new tables by the time the second phase of Sands Cotai Central opened. “On September 20, we will not have all of those, but we will be getting them throughout the rest of the year,” Mr Adelson said in conference call. He said Sands China would have to shift tables around among its casinos. Wherever the second phase of Sands Cotai Central gets its tables, its opening will reinforce Sands China’s dominance in Cotai, especially in massmarket gaming. Union Gaming Research’s latest mass-market tracker report indicates that from mid-July to mid-August, Sands China’s establishments in Cotai had 69 percent of walk-in visitors, 2 percentage points more than in the preceding SEPTEMBER 2012
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Gaming
period. These establishments had about 55 percent of Cotai’s mass-market tables. Union Gaming Research gauges overall mass-market customer share throughout the city by counting the number of passengers on casino shuttle buses. By this measure Sands China’s casinos in Cotai had 27.5 percent of the city’s mass-market clientele from mid-July to mid-August, 0.3 percentage points more than in the preceding period.
Tower power Sands China is the only casino operator with more than one property in Cotai. It has three, and one more is on the way. Sands China expects to soon begin developing its Parcel 3 site next to the Four Seasons hotel. Sources told Business Daily last month that the company is proposing to build a replica of the Eiffel Tower there. Mr Adelson said in July that the company wanted to start construction work on Parcel 3 in November. The gaming operator also expects to build a fourth tower in Sands Cotai Central, part of which will be occupied by a SEPTEMBER 2012
hotel run by the St Regis chain. No date has been set for breaking ground for the US$450 million project. Company earnings reports for the first half of this year indicate that Cotai is leading growth in the gaming industry. Growth in first-half revenue was faster for casino operators with a presence in Cotai than for those restricted to the peninsula or Taipa. Star performer Galaxy Entertainment Group Ltd’s first-half revenue was HK$28.3 billion, double what it was a year before, and its net profit increased ninefold to HK$3.4 billion, beating market estimates. Its Galaxy Macau casino resort, opened in May last year, was a notable contributor to the company’s performance. Melco Crown Entertainment Ltd’s net revenue rose by 11.3 percent and its net profit increased by 177 percent to US$204.4 million. Melco Crown operates the City of Dreams casino resort in Cotai. It also owns and operates the Altira casino hotel on Taipa. Sands China’s net revenue increased by 23.7 percent to HK$22.7 billion, but
its net profit dropped, partly because of a non-cash impairment loss of US$100.8 million on Parcel 7 and Parcel 8 in Cotai. Sands China had already begun site preparations on these parcels when the government decided not to let the company have them after all.
Expensive gift The first-half results of gaming companies without casinos in Cotai were not so rosy. MGM China Holdings Ltd was the best performer. Its revenue grew by 11.1 percent to HK$10.8 billion and its net profit leapt by 37.7 percent. Wynn Macau Ltd’s revenue rose by 0.6 percent to HK$14.4 billion. Its net profit jumped, but only because a year before it had booked a HK$831.1 million charge for a donation to the University of Macau Development Foundation. Market leader SJM Holdings Ltd’s revenue increased by 3.9 percent to HK$39.3 billion and its net profit rose by 28.0 percent to HK$3.4 billion as the company incurred lower charges than a year before. Altogether, the industry raked in 19.8
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Melco Crown says it expects to start work on another hotel tower at City of Dreams as soon as next year percent more gross gaming revenue in the first half of this year than a year before. Investment bank Citigroup forecasts casino gross gaming revenue in Cotai will grow by 24 percent year-on-year in the second half of 2012. In the opposite direction, gaming revenue on the peninsula is expected to drop by 2 percent. It seems just a matter of time until all casino operators have a toehold in Cotai. Wynn Macau leads the race to be next, as the government has given it permission for a US$4 billion casino resort in Cotai, which will take four years to build. SJM and MGM China have been waiting since 2007 to hear if their applications for land there have been successful. Jim Murren, the chief executive of MGM China’s parent company, MGM Resorts International Inc, expects the government to approve soon MGM China’s request for land in Cotai. “I would expect we will be on the ground starting this year, and keeping to our timetable to open this resort in late 2015,” Mr Murren told Reuters last month. Sterne Agee & Leach Equity Research also expects the government to give MGM China the nod this year. MGM China has said its HK$20 billion development in Cotai will have around 500 live gaming tables, 2,500 slot machines and 1,600 hotel rooms.
share will increase,” MGM China vicepresident of finance Hubert Wang Zhiqi told reporters last month. “You have to invest the money you make, so that your market share can be maintained or increased.” The new VIP area will be on level two of the MGM Macau casino hotel and will have over 40 VIP tables taken from the company’s inventory of 427. It is expected to open at the end of this month. The casino operators that are already present in Cotai are preparing for the day when all gaming concessionaires have a presence there. Sands China is not the only operator expanding. Galaxy Entertainment is building
the second phase of the Galaxy Macau, which will double the size of the casino resort. It is expected to be ready in the middle of 2015. Melco Crown is forecast to re-start soon construction of Macao Studio City. The company acquired the controlling stake in the stalled project last year. The government approved in July changes in the contract that grants the developer the land for the project. The contract still fails to mention any casino, but analysts think that gaming will somehow find its way into Macao Studio City. Melco Crown says it expects to start work on another hotel tower in the City of Dreams as soon as next year.
Defensive measure SJM chief executive Ambrose So Shu Fai said this year that the MOP15 billion first phase of his company’s development in Cotai could be open within two years. Mr So told reporters it would have gaming and non-gaming areas. With expansion into Cotai on hold, MGM China and SJM have been focusing on making their casinos elsewhere more efficient. MGM China is investing US$50 million in a new VIP area to maintain its share of the market. “It is one of our defensive measures because while the others open new casinos, their market SEPTEMBER 2012
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Gaming
WADDELL & REED INCREASES MACAU EXPOSURE The U.S. investor has bought the lion’s share of the 7-percent stake in Galaxy Entertainment sold by Permira
U.S. investor Waddell & Reed Inc has increased its exposure to Macau’s gaming industry by buying a significant stake in Galaxy Entertainment Group Ltd. The Kansas-based mutual fund company bought two-thirds of the nearly 7-percent stake in the gaming operator sold last month by U.K. private equity firm Permira, our sister publication Business Daily reported. Waddell & Reid is already the biggest shareholder in Wynn Resorts Ltd, the parent company of Wynn Macau Ltd, with a 16.4 percent stake. It also owns a 4.6 percent stake in Sands China Ltd. Galaxy Entertainment confirmed that Permira agreed to the sale of about 278.8 million shares, representing 6.65 percent in Galaxy Entertainment, through private placement to a small selective group of investors. After the sale, Permira’s stake in Galaxy Entertainment was reduced to 5.95 percent.
BANK OF AMERICA CUTS FORECAST NO MORE LEAKS Casinoleaks-Macau.com announced last month that it has shut FOR CASINO SECTOR down, providing no reasons for the decision. “Casinoleaks-Macau. Bank of America Merrill Lynch has revised downward its full-year forecast for Macau’s gaming industry. The investment bank now expects the city’s casinos to post a gross gaming revenue growth of 11 percent for the whole of 2012, down from the previous estimate of 14.5 percent, it said in an investors note. The downward revision is related to the slower high-stake gambling growth and slower economic recovery in the mainland.
CAPITAL RESEARCH RAISES STAKE IN WYNN MACAU
U.S.-based Capital Research & Management Co has just boosted its stake in Wynn Macau Ltd to 5.02 percent from 4.99 percent. The privately owned investment manager bought last month 1.14 million shares in Wynn Macau, at an average price of HK$17.13 apiece, according to a disclosure filing to the Hong Kong Stock Exchange quoted by Bloomberg. Capital Research and Management was founded in 1931 and is based in Los Angeles, California.
SEPTEMBER 2012
com is shutting down. Thank you for your interest”, its webpage reads. The website that promised to gradually release information on organised crime in Macau’s gaming industry had not been updated since mid-June. Casinoleaks-Macau.com was financed and authorised by a major U.S. trade union, the Washingtonheadquartered International Union of Operating Engineers.
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ON SALE AT SELECTED NEWSSTANDS AND 7-ELEVEN STORES To subscribe, call (853) 28331258 or email sub@macaubusinessdaily.com www.macaubusinessdaily.com
SEPTEMBER JULY 2012
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Gaming
Smart play
And sports sponsorship also helps moderate the community’s perception of the industry, which the scholar says is still seen in a “bad light”.
Sands China is the latest casino operator to bet on sports sponsorship, partnering with the Macau Golf Open
Million dollar baby
BY ALEXANDRA LAGES
hat do the four biggest annual sports events in Macau have in common? All now have a casino operator as their main sponsor. The latest company to get into sponsorship of big sporting events here is Sands China Ltd. The gaming company, through the Venetian Macao, is this year’s title sponsor of the Macau Golf Open. SJM Holdings Ltd is the sole official sponsor of the Macau Grand Prix for the second year in a row this year and is again the title sponsor of two of the races. Galaxy Entertainment Group Ltd has sponsored the Macau International Marathon since 2004 and the Macau stage of the FIVB Volleyball World Grand Prix since 2005. Desmond Lam Chee Shiong, associate professor of Marketing at the University of Macau, applauds the increasing engagement of casino operators in sports sponsorship. “It helps
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build the brand,” he says. But Mr Lam says it is unclear whether it increases custom for the sponsors. “Such sponsorships raise awareness of the corporate brand but do not necessary lead to greater visitation to the properties,” he says. He adds that any effective marketing strategy must be backed up by good products and resorts. Whatever the return on investment, sports sponsorship is advantageous for casino operators, in particular, and the city, in general. “While some see it as purely a branding or promotion exercise, others think it is really a corporate social responsibility initiative,” Mr Lam says. “Either reason is good for all stakeholders. The event organisers get their sponsorship, the sponsoring companies get some exposure, the community gets to enjoy the events and Macau gets its name out to the world.”
Having a title sponsor is a game-changer for the Macau Golf Open. The tournament was first played in 1998. But the 2010 edition was scrapped because it could not attract private-sector support. The tournament has been renamed the Venetian Macau Open this year. It will be played from October 11 to 14 at the Macau Golf and Country Club on Coloane. The tournament offers US$750,000 (MOP6 million) in prize money and is part of the Asian Tour. It is organised by the Macau Sports Development Board and the Macau Golf Association. Sands China is investing US$1 million in the event. The company is footing half of the total bill and the sports development board will cover the rest. Sands China’s president and chief executive Edward Tracy tells Macau Business that his company intends to continue sponsoring the tournament. “We are hoping for a good response for this event this year, so we can do it again next year,” he says. This is not the first time Sands China has associated itself with important sports events. It has helped bring to Macau NBA teams, the United States
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The 2011 champion, Chan Yih-shin
men’s basketball team and top tennis players, such as Roger Federer. It is the first time it has been a title sponsor of the city’s big annual sporting competitions. Mr Tracy says sponsoring this kind of event is important if his company is to play its part as a socially responsible corporation. But he acknowledges that it is also a good marketing tool, helping put the Venetian on the map and improving its competitiveness as a leisure destination. “Raising the visibility of Macau and of the Venetian is good for business,” he says.
What’s on? Mr Tracy says the city’s gaming companies are on the same page with their sponsorships. He predicts more prominent sports events will be sponsored by the casinos. “If we are going to become a world centre for tourism and leisure travel, we have to present events that raise the standards, by which we are judged against other tourism destinations,” he says. “When people are thinking about if they should book a meeting in Hong Kong or book a meeting in Macau, one of the reasons they might come here is because of the big events happening around their meeting.” SJM and Galaxy Entertainment do not disclose how much they put into
Sands China’s president and chief executive Edward Tracy says his company intends to continue sponsoring the tournament
sports sponsorship. But SJM chief executive Ambrose So Shu Fai emphasises the “great benefits” to the economy of hosting big sports events. He highlights the role the events play in “enhancing the image of Macau globally and diversifying its tourism offerings”. Galaxy Entertainment’s vicepresident of public relations, Buddy Lam Chi Seng, says large international sports contests help attract specific kinds of tourists. Mr Lam says tournaments are a good draw for families and young middle-class visitors, which in turn benefits the gaming and hospitality industries. Sports Development Board vicepresident José Tavares says having a big sponsor is a turning point for the Macau Golf Open. “The Macau Open has been lacking a title sponsor for a long time now. Before that, we were the sole sponsor, and that’s not right,” he says. Mr Tavares is confident that the partnership between the Macau Open and Sands China will last, allowing the tournament to grow. This could mean more prize money and bigger names among the world’s golfers. “I don’t think they will back off. Golf is a good product for them,” he says. Mr Tracy says Sands China chose to sponsor the Macau Open because golf is a fast-growing sport in the mainland and across Asia. As part of the Asian Tour, the Macau Open will reach as many as 650 million homes in more than 200 countries. “Sponsorship is the life blood of all professional sports. To have such a very strong brand as the Venetian behind the Macau Open re-sets the event to a certain extent. We look forward to greater heights, better players coming in and a better field,” says the chief executive of the Asian Tour, Mike Kerr. “Sports sponsorship and, in particular, golf sponsorship can offer so much to a brand. It’s about brand profiling. It’s about hospitality. It’s about the aspiration, because golf is probably the most aspirational sport in the world,” Mr Kerr says. “Golf in Asia is growing at very, very significant levels, much more so than in traditional golf markets such as the U.S. and Western Europe. That’s set to continue. The foundations of the Asia Tour are very strong. Certainly over the next five or 10 years, there is going to be a very strong growth.” SEPTEMBER 2012
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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 26.1 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
Latest
percentage points percentage points percentage points percentage point
Month-on-month change (%)
26% 21% 19% 12% 13% 10%
percentage point
5.5 5.0 12.8 1 casino
-2 -3 1 -1
percentage points percentage points percentage point percentage point percentage point percentage points
Notes Aug 2012 Jun 2012 Jun 2012 Jun 2012
Notes Aug 2012 Aug 2012 Aug 2012 Aug 2012 Aug 2012 Aug 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
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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
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NEPTUNE TO ENLARGE FOOTPRINT
The junket investor has announced agreements with three junket operators
CASINOS SPENDING MORE ELECTRICITY
Macau’s gaming industry saw its electricity consumption levels rise by 18.5 percent year-on-year in the second quarter of 2012. According to official data, the city’s casinos spent 439 million kWh from April to June, roughly double the amount used by Macau’s households during the same period. The gaming industry was responsible for roughly half of the electricity consumption by the city’s business sector during the second quarter.
Neptune Group Ltd announced last month that it has entered into several memorandums of understanding to enlarge its footprint in Macau, by investing in new junket operations. The agreements involve the junket promoter of the Guangdong 31 Sky Club at Grand Lisboa, the junket representative of the Guangdong VIP Club at MGM Macau, and the junket promoter of Wynn Guangdong VIP Club at Wynn Macau. Hong Kong-listed Neptune Group is one of the largest players in the VIP gaming business here, with a reported portfolio of over 10 VIP rooms.
The Guangdong 31 Sky Club generates an average rolling turnover of HK$4.8 billion (US$619 million) per month and has at least 11 gaming tables, according to a Neptune filing to the Hong Kong Stock Exchange. The Guangdong VIP Club at MGM Macau has at least 24 gaming tables, the filing states, generating a rolling turnover averaging at approximately HK$15.1 billion per month. The Wynn Guangdong VIP Club at Wynn includes at least 29 gaming tables, posting an average monthly rolling turnover of HK$9.3 billion, according to the same filing.
JOCKEY CLUB EXPECTS MOP64 MILLION PROFIT DROP IN BETTING VOLUME FOR MACAU SLOT IN 2010 The Macau Jockey Club is expecting to record a drop of at least 10 percent in the amount of bets for the horseracing season that ended last month. The decrease is attributed to an overall trend of falling bets in the global horseracing market. In the first half of 2012, the club’s betting amount reached MOP869 million (US$109 million), down by 24 percent year-on-year, according to data from the Gaming Inspection and Coordination Bureau.
Macau Slot – Sociedade de Lotarias e Apostas Mútuas de Macau Lda has reported a MOP64.4 million (US$8.1 million) profit for 2010. The company’s results for 2010 were only published in the Official Gazette last month, around one year after the other casino and non-casino gaming concessionaires did so. Macau Slot holds a de facto monopoly on non-racing sports betting in the territory, including football and basketball.
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Gaming
Photo: AFP/Hoang Dinh Nam
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A lottery vendor in Hanoi prepares to handle a “lo-de” ticket
A gambling problem Vietnam gambling addicts driven to extremes BY LE THANG LONG* IN HANOI
rowning in debt and hunted by his bookmaker, a Vietnamese man dug a cave beneath his kitchen and hid there for two months, showing the desperate lengths illegal gambling addicts will go to in the communist nation. Apart from a state-run lottery and a few foreigner-only casinos, betting is banned in Vietnam, but the law is widely flouted and every football World Cup or European Championship prompts a surge in illegal gambling rings, police say. Creative minds have also devised a way of using the official lottery as the basis for an illegal game known as “lo-de”, where punters predict the last two lotto numbers of the standard daily draw. It was playing lo-de that Nguyen Van Thinh lost 1.3 billion dong (MOP498,000) – a fortune for the 41-year-old construction worker, who eventually had to sell his Hanoi house in order to pay his creditors. “It was really a guerrilla life,” he told AFP of his subterranean months, when he survived on food and water brought by his wife. Mr Thinh’s tale of addiction is far from unique in Vietnam, a country of about 86 million people. Each of its 63 provinces
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has an official lottery – and with it an unofficial lo-de game. “Lo-de has ruined hundreds of thousands of families and is tearing apart the fabric of our society,” says Vo Quang Hung of the Hanoi police’s anti-crime squad, adding that it has resulted in cases of suicide and divorce. Despite the scale of the problem, there are no support groups such as Gamblers Anonymous for addicts to turn to for help. Since the government moved to limit access to credit at the start of 2011 to rein in double-digit inflation, gamblers have found it harder to borrow from the banks to repay their bookmakers. As a result, punters turn to unofficial lenders, who often hire thugs to collect valuables or even seize houses from gamblers who have fled when they cannot meet their payments.
Driven to the brink of suicide Other indebted gamblers voluntarily turn themselves in to the police, preferring to risk fines or even prison terms for illegal betting rather than violence at the hands of their loan sharks or bookmakers.
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The rare winners at lo-de can get as much as 70 times what they originally bet. Punters can bet from 1,000 dong to thousands of U.S. dollars. Usually bets are placed with street-side bookmakers who earn commission “A dozen of my neighbours have fled this summer. Some have gone overseas after declaring themselves bankrupt. They can’t come back until all their debts have been settled,” cafe owner Nguyen Thi Thu told AFP. The 36-year-old, who recognises she is a gambling addict, has run into her own betting-related financial difficulties. “I was driven to it by my creditors, my back was against the wall – I was going to kill myself to save my family. But thankfully, God had pity on me,” says Ms Thu, whose in-laws lent her more than MOP960,000 to repay her debts. Even though high-stakes gambling is not new, the recent economic slowdown, which has pushed tens of thousands of businesses into bankruptcy this year, has not helped matters. “Gambling has for a long time been embedded in our society and it has broken many families,” says Nguyen Thi Kim, a sociologist at the University of Social Sciences in Hanoi. “It is growing as life gets more difficult. More and more people are tempted by the idea of easy, quick money.” The rare winners at lo-de can get as much as 70 times what they originally bet. Punters can bet from 1,000 dong to thousands of U.S. dollars. Usually bets are placed with streetside bookmakers who earn commission.
An unstoppable ‘social evil’ In dealing with this “social evil” which affects everyone from schoolchildren to retirees, Vietnamese authorities – known for locking drug addicts into forced rehabilitation centres – have taken a firm line. The problem is treated exclusively as a law and order issue and thousands of lo-de addicted problem gamblers are arrested each year. Police focus their crackdowns primarily on the masterminds behind big lo-de rings not individual punters, but say the scale of the problem means this approach is not going to bear fruit any time soon. “You can see this kind of gambling going on across Vietnam, in every village and every province in the north and south of the country,” says Tran Thanh Lam, a police officer in Hanoi. In the absence of official statistics, Mr Lam says he believes the illegal gambling market is worth hundreds of millions of dollars every year. “Unfortunately, we can’t stop it all,” Hanoi anti-crime squad policeman Mr Hung says. “Lo-de is like a giant casino which covers the whole country, and the results of our battle against this vice are very limited because it is based on the official lottery which earns a lot of money for the state.” *AFP NEWS AGENCY
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SEPTEMBER 2012
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Gaming
Fines roll in
Singapore casinos fined more than US$1 million since opening
ingapore’s two casinos have been fined more than US$1 million (MOP8 million) since they opened in 2010, mostly for violating laws aimed at deterring locals from gambling, official data shows. The mark was passed after the Marina Bay Sands and Resorts World Sentosa casinos were last month fined Sg$357,500 (MOP2.3 million) and Sg$140,000 respectively by Singapore’s Casino Regulatory Authority (CRA). The casinos were punished for “breaching social safeguard requirements during the period May 1, 2011 to October 31, 2011”, the regulator said in a press release posted on its website. The violations included allowing Singapore
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citizens and permanent residents entry into the casinos without paying compulsory Sg$100 entry levies and permitting them to remain in the premises beyond the 24-hour time limit. Foreigners are exempt from the entry fee, which was introduced as part of government efforts to address public concern over gaming-related social ills. The two casinos had previously been punished for similar breaches, with Marina Bay Sands and Resorts World Sentosa in February slapped with fines totalling Sg$385,000. Resorts World Sentosa was also fined Sg$530,000 last year for reimbursing the entry levies of media representatives covering an event, as well as for lapses in its camera surveillance system.
With the latest fines, the two casinos have had to pay a total of US$1.1 million in fines since their opening in 2010. But the fines are unlikely to trouble the two properties, with Marina Bay Sands, owned by Las Vegas Sands Corp, the parent company of Sands China Ltd, racking up US$550.2 million in revenue in the three months ended June 30. Resorts World Sentosa, owned by Malaysia’s Genting group, reported gaming revenues of around US$450 million in the same quarter. Singapore welcomed a record 13 million visitors last year, thanks in part to the two casino resort complexes, which also offer hotel, restaurant and convention facilities. AFP NEWS AGENCY
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MANPOWER WARNING
Macau’s casinos don’t have enough manpower and the situation will only get worse next year, as the government increases the cap on the number of live gaming tables, warned last month the head of the Macau Gaming Industry Employees Association, João Bosco Cheang Hong Lok. Mr Cheang also noted that starting November 1, all those below 21 years of age would be banned from working inside the city’s casinos.
TRIADS “UNDER CONTROL”, SAYS GOVERNMENT
SALARY GROWTH BEATS INFLATION
The Secretary for Security, Cheong Kuoc Va, said last month that triad criminal activity in Macau is “under control”. Mr Cheong’s comments came after a series of recent violent events has people worried about security in the gaming industry. In July, the director of the Judiciary Police, Wong Sio Chak, admitted the force lacks teeth to fight crime inside the casinos.
Wages in casinos are above average and also growing faster than prices Working in the gaming industry pays off – not only does the sector pays above average, but salaries are rising faster than inflation, the latest data from the Statistics and Census Service shows. In June, average earnings of full-time employees in the gaming industry stood at MOP17,740 (US$2,218), up by 7.8 percent yearon-year. That clearly beat infl ation – for the 12 months ended June, Macau’s composite consumer price index increased by 6.44 percent. The composite consumer price index is the city’s gauge for inflation. Salaries in the gaming industry
were also above the average in Macau. For the second quarter, the city’s median salary stood at MOP11,000 – the Statistics and Census Service doesn’t provide overall average figures. As of June, a croupier earned MOP15,810, up by 8.6 percent yearon-year. At the end of the first half of 2012, the gaming sector had 52,800 workers, up by 11.6 percent year-on-year. The figure doesn’t include junket promoters and junket associates. Of those, 23,100 were croupiers, a jump of 11.2 percent in comparison with one year before.
RULES FOR SMOKING AREAS IN CASINOS “ALMOST” READY The regulations on the requirements casinos will have to comply with for establishing smoking areas are “almost” ready, according to the regulator. A smoking ban was implemented in Macau earlier this year, however casinos were exempt until the beginning of next year. When the grace period ends, casinos will be entitled to set up dedicated smoking areas for up to half of the casino floor area.
SEPTEMBER 2012
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Highlights from the worldâ&#x20AC;&#x2122;s biggest gaming event
SEPTEMBER 2012
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Game changer G2E 2012 reaches its highest exhibit hall sales level since 2009
T
he lacklustre performance of gaming in several international markets has not hindered Global Gaming Expo (G2E). The premier trade show and conference event for the global gaming entertainment industry is as strong as ever, recording soaring exhibit hall space sales. This year, G2E is scheduled for October 1 to 4. The event, organised by the American Gaming Association and Reed Exhibitions, again takes place at the Sands Expo and Convention Centre, in Las Vegas. Over 410 companies have already registered for more than 24,000 square metres of exhibit hall space – an increase of more than 4 percent compared with last year’s event. These 2012 sales figures include over 65 international exhibitors with more than 3,900 square metres of exhibit space, according to the organisers. “This is the first time we’ve seen significant growth yearover-year since 2007, and we are extremely encouraged by the sales numbers and what they mean for SEPTEMBER 2012
the casino gaming industry,” says Courtney Muller, senior vice president at Reed Exhibitions. “Additionally, G2E’s attendance numbers are tracking ahead of last year’s event, indicating a strong interest by industry buyers to discover new products and services that will contribute to the success of their businesses.” G2E is annually attended by nearly 26,000 industry professionals from around the world. It is divided into two parts: the conference, spanning four days and covering all aspects of the gaming industry, and the threeday exhibition, where all the latest casino and gambling products are on display.
Design Awards back One of this year’s highlights is the return of G2E’s Casino Design Awards, after a three-year hiatus. Global Gaming Business magazine, publishers of the annual Casino Design magazine, is responsible for organizing the awards programme, which aims to honour the best architects, designers and
builders in the casino gaming industry. G2E 2012 will also feature expanded table game content that includes strategically designated space on the show floor and educational programming designed to meet the specific needs of table games operators. “We recognize that table games are increasingly important contributors to casinos’ revenue streams and therefore we have tailored G2E 2012 to meet the needs of this sector,” says Frank J. Fahrenkopf Jr, president and chief executive of the American Gaming Association. Matt Wilson, Aristocrat’s vice president of marketing for the Americas, says “G2E is incredibly important for suppliers and operators.” Mr Wilson, who was previously deployed in Macau, explains the event is “a time when we come together to discuss and validate the company’s strategic direction with our business partners.” He highlights however that the Macau market, where G2E’s sister event G2E Asia is held, is very different from the U.S. landscape. “Asian players want a very different experience than those in the North America. This means as a supplier, the only successful strategy is to invest in generating market-driven insights, through working closely with operators and players in each region.”
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SEPTEMBER S SE EP E PTEM TEM MBE BER B ER 20 E 2 2012 012 12 2
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Always-on message Online gaming executive Jim Ryan will give the exclusive conference keynote speech at next month’s G2E 2012 and success in Internet gambling are matched by few others.” Offline gaming is another prominent topic at this year’s G2E. In another not-to-be-missed session on October 3, “The State of the Industry” will involve some of the biggest movers and shakers in the casino world at the same table with renowned suppliers of gaming equipment. Among the confirmed participants are Michael Leven, president and chief operating officer of Las Vegas Sands Corp, the parent company of Sands China Ltd; Jim Murren, the chairman and chief executive of MGM Resorts International, the controlling shareholder of MGM China Holdings Ltd; and Gary Loveman, who heads Caesars Entertainment Corp, which owns Caesars Golf Macau, in Cotai. The debate will be enriched by the expertise of suppliers such as Patti Hart, the chief executive of International Game Technology; Richard Haddrill, the chief executive of Bally Technologies Inc; Walter Bugno, the president and chief executive of Spielo International; and Brian Gamache, who is at the helm of WMS Industries Inc. Jim Ryan
W
ith several jurisdictions in the United States pushing to regulate Internet gaming, it is timely that the topic is top of the bill at Global Gaming Expo (G2E) 2012. Jim Ryan, co-chief executive of Bwin.party Digital Entertainment Plc, is the exclusive conference keynote speaker at this year’s conference. He is highly regarded for his knowledge of the Internet gaming industry and his leadership of Bwin.party, the world’s biggest publicly traded online gaming business, headquartered in Gibraltar and listed on the London Stock Exchange. Mr Ryan will cover the global online gaming phenomenon, its growth and potential. The speech on October 3 will be open to G2E 2012 conference delegates only. “We are honoured that Mr Ryan will be serving as the conference keynote speaker,” says Frank Fahrenkopf, president and chief executive of the American Gaming Association, one of the organisers of G2E 2012. “As efforts to legalise and regulate Internet gambling in the United States advance and the global market continues to grow, he is the ideal person to provide a comprehensive overview of this developing sector of the industry. His expertise, experience SEPTEMBER 2012
All-star line-up Katty Kay, the presenter of BBC World News America, will speak on October 2 on the United States’ presidential race for the White House that culminates in November. Ms Kay will consider the increasing polarisation of the news media and the effect it has on public opinion and political discourse, from Washington to Main Street. She will also offer insights into the health of the global economy, and discuss how the public’s perception of the economy will play a pivotal role in the election’s outcome. Later Ms Kay will attend a luncheon sponsored by Global Gaming Women, an initiative by the American Gaming Association to increase the participation of women in the industry. There she will discuss her New York Times bestseller “Womenomics: Write Your Own Rules for Success”, in which Ms Kay and coauthor Claire Shipman deal in facts that give a fresh perspective on the mostly hidden power that women hold in the marketplace. On the last day of G2E 2012, the U.S. Department of the Interior’s acting assistant secretary for Indian affairs Donald “Del” Laverdure speaks on tribal gaming. Mr Laverdure’s department determines federal recognition, land-into-trust determination as well as other issues closely watched by the tribal gaming industry.
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The real trendsetter From tables to utilities to systems, the latest technology will be again on display at G2E
H
undreds of companies will be showcasing their latest products at this year’s Global Gaming Expo (G2E). The Las Vegas-based event is arguably the most successful annual global gaming trade show worldwide and several suppliers deliberately wait to launch their latest innovations during the three-day exhibition. At G2E 2012, Spielo International will present its new core games and also exhibit its full suite of cashless solutions. Among its new content-driven titles for the international casino market to be on display, “Egyptian Gold” is the company’s first progressive link using episodic gaming. As the player progresses through the game during one session, he or she can save and reactivate their achieved status during the next play session. Gaming Partners International
SEPTEMBER 2012
Corp (GPI), on the other hand, will be featuring its new B&G Premium Chips that combine advancements in chip manufacturing with a much broader range of design possibilities. Another new currency product GPI will be featuring at G2E is its new J2 jeton: a product that “combines the aesthetic and security features of European-style jetons with the easy handling of American-style chips,” according to the company. Featuring colour edge spots that allow easy identification when in racks or stacks, the J2 can include a wide range of decal and printing options not available on traditional jetons, including holograms, diffraction foils and more.
For TCS John Huxley, 2012 marks the return to G2E after a three-year break. “We are delighted to be back at G2E for 2012. We are focused on providing world class products that meet our customer requirements for a global market and this expo provides the perfect showcase for us,” says the group’s chief executive, Cath Burns. TCS John Huxley is currently streamlining and enhancing its core product range with an emphasis on innovation. Products such as the Supernova Table Bonus System and the Tablet Roulette all feature heavily in this and will be key products on show at G2E. G2E is already a regular feature in Crane Payment Solutions’ annual event calendar. Amongst the range of products and technologies it will display there this year, will be the Latin American favourite Ardac Elite by Money Controls, one of the companies under the Crane Payment Solutions business group. The Ardac Elite comes with full note scanning capabilities and unique last bill imaging technology. The bill validator is available with USB connectivity for rapid downloading of new software and all prominent gaming protocols. JCM is showcasing at G2E its award-winning iVizion bill validator. The company says “iVizion has ramped up faster than any of the four generations of gaming bill validators introduced by JCM over the past 22 years.”
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SEPTEMBER 2012
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A strong hand Aristocrat takes on G2E with a string of new products
A
ristocrat Leisure Ltd is bringing together for Global Gaming Expo (G2E) a mosaic of ways for casino operators to grow their business, from slot games to interactive play to mobile apps. The Australia-based gaming supplier is dedicating an entire section to its popular Mr Cashman, and celebrating with three new game series. Mr Cashman is back in “Cashman Live” debuting in the Viridian Hybrid with the titles “I Heart Diamonds” and “King 7” – new stepper games with traditional symbols like cherries, bars and 7s. Mr Cashman is also in the Viridian WS cabinet with games like “African Dusk”, “Jailbird”, “Jewel of Enchantress”, and “Magic Eyes”. Finally, “Cashman Fever” brings the excitement to a new level with two additional games: “African Safari” and “Red Crane”. Meanwhile, “Wonder 4” has expanded with a new collection called “Wonder 4 Special Edition”, including the popular games “Buffalo”, “Indian Dreaming”, “Wild Patagonia” and “Golden Zodiac”. Plus, the new “Wonder 4 Deluxe” brings a whole new set of games, including “50 Lions”, “Wicked Winnings II”,
“5 Dragons Deluxe” and “Timberwolf”. Aristocrat’s new Legends Series is also premiering in the Viridian WS cabinet. Aristocrat will show multiple titles at G2E, including “5 Dragons” and “5 Dragons Deluxe”; and “Queen of the Nile” and “Queen of the Nile Deluxe”. Tarzan is back in the new game and story line of “Tarzan & Jane Forbidden Temple”. And Superman brings his most famous friends to the game “Superman – The Movie”. Aristocrat is also displaying its Oasis 360 system at G2E, named “Best Player Tracking System” in the 2012 Goldman Sachs Survey. According to the gaming supplier, Oasis 360 is the most widely installed system in North America, monitoring devices at more than 285 casinos. Also to be featured by Aristocrat at G2E, nCompass is the com-
pany’s next generation hardware platform of the Oasis 360 Sentinel. Aristocrat says it “is a leap forward in direct customer communication with advanced media delivery.” It utilizes an interactive media window on the main screen of the slot machine, enabling the casino to target messages to specific players on individual machines. The experience continues beyond the casino walls with Aristocrat’s nLive play-for-fun virtual casino solution. This is a comprehensive solution that empowers casinos to take their brand to players online. nLive sites are branded to the casino, so the casino’s customers can extend their experience with the property brand they know. Aristocrat’s products will be on display in booth 1141.
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Driving innovation Get ready for some high-speed fun at Bally’s G2E booth
B
ally Technologies Inc is roaring into the 2012 Global Gaming Expo (G2E) packing a lot of power under the hood – new games, systems, and interactive solutions all designed to rev up casino operators’ revenue and operating efficiency. Kurt Gissane, Bally’s Asia-Pacific managing director, says the gaming supplier will be exhibiting four player-selectable language Chinese/English games at G2E – “China River”, “Crystal Fox”, “Heavenly Empress” and “Pharaoh’s Dream”. New this year, Bally will also unveil two more powerhouse brands: Nascar and Pawn Stars. The Nascar progressive video slot features a lineup of who’s who in racing royalty. It is delivered on Bally’s Alpha 2 Pro Series V22/32 cabinet available with both a wide-area progressive top jackpot award and stand-alone versions. Players select their favorite driver and the game screens change to reflect that driver’s team colors and branding. Players root for their driver in this high-octane experience featuring three bonuses: the
Pit Stop Bonus, Burnout Free Games and the Green Flag Bonus. Bally is also extending its Nascar lineup to Bally Systems with a new Virtual Racing Nascar application for the Elite Bonusing Suite. This floor-wide community-bonusing event for iView and iView Display Manager brings the sights, sounds and thrills of Nascar racing to casino floors as players select one of eight drivers. Players who select winning drivers win casino-configurable prizes. Bally will also be bringing one of the world’s top TV shows, History Channel’s “Pawn Stars”, to casino floors. Available on the Pro Upright V22/22 Wheel cabinet, “Pawn Stars” begins when a player chooses their favorite character from the show. Selling and negotiating adds excitement in this game highlighted by the Negotiation Bonus, where players choose one of five items to sell and then negotiate with the Pawn Stars for credit awards. Other premium games in Bally’s G2E lineup include a new double-wheel version of the “Hot Shot” brand, featuring a 42-inch vertical display and twin gigantic wheels, and “Cash Wizard Tiki Magic”, the next game in Bally’s Cash Wizard series. At G2E 2012, Bally will showcase its full suite of interactive solutions including the Bally Mobile platform for concierge casino apps and mobile websites; its open iGaming platform that enables casinos to deliver play-for-free and wager-based poker, table games, video slots and sports betting; and a library of interactive games based on proven casino-gaming content. The Bally display will be located at booth 1127. SEPTEMBER 2012
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World of fun
From its latest games to its new Synkros bonusing product, Konami is bringing it on at G2E
L
as Vegas-based Konami Gaming Inc, a leading provider of slot machines and casino management systems, has a lot to showcase at this year’s Global Gaming Expo (G2E). The company will be presenting an array of new titles with enhanced game features, plus its latest offering on the systems side. For starters, Konami’s KP3 video platform has extended its game library with proven performing titles and new features. With real time 3D graphics, “Pride of Egypt” and “Solstice Celebration” have been enhanced with new features to promote a more engaging play. Konami is also showcasing its “Rock Around the Clock” game on the KP3 video platform. The initial
SEPTEMBER 2012
release titles are “Rock Around the Clock: Tutti Lutti” and “Bebop a Loota”. This year at G2E, Konami will introduce a line of new progressive products – stand-alone progressives and four-level linked progressives. Among the stand-alone progressives to be featured, the highlight goes to the new “Rapid Hit Fever” and “Jackpot Streams”, both to be made available on the KP3 platform. “Rapid Hit Fever” is a clone of Konami’s “QuickStrike” stand-alone progressive. It is a two-level, major and mini, mystery progressive with a progressive payout meter, and also includes an option for operators to designate preferred range settings.
“Jackpot Streams” is a four-level mystery trigger progressive available on KP3. On the four-level linked progressive offering, the star will likely be “Dragon’s Victory”, to be available on KP3. It is a clone of Konami’s popular progressive game “Pirate’s Loot”. Also to be featured at the Las Vegas exhibition, the Konami Casino Management System includes a suite of marketing tools with customizable bonusing capabilities, floorwide community bonusing games and precision player tracking, plus the all-new Konetic Mobile Player Interface and Employee App. Still on the systems side, Konami will be unveiling at G2E its latest multi-themed, multi-level progressive floorwide bonusing product – Synkros. According to the gaming supplier, this new product is deployable on any manufacturers’ games and leverages the casino’s existing media management systems. Konami’s portfolio of games and system solutions will be available at booth 1154.
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Konami Australia Pty Ltd. 28 Lord St Botany NSW Australia 2019. Tel: +61 2 9666 3111 www.konamigaming.com SEPTEMBER 2012
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The future of marketing
FutureLogic is showing at G2E how casinos can use promotional couponing to boost business
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utureLogic Inc is presenting its ticket printing and couponing solutions to gaming technology providers and operators at Global Gaming Expo (G2E). As a premier supplier of superrobust thermal ticket printers to the global gaming industry, FutureLogic says it has shipped more than 1.5 million printers worldwide.
SEPTEMBER 2012
Headquartered in California and with offices across North and South America, Europe, Asia and Australia, FutureLogic is betting promotional couponing is the casino marketing technology of tomorrow. To back this claim, the company will be showcasing its PromoNet intelligent promotional couponing solution at G2E, which
allows casinos to create and run promotions that identify, track and reward customers, both carded and uncarded, in real-time. By using the data at the game (time of play, amount wagered, etcetera) or data gathered from the player tracking system database, promotions can be developed using PromoNet to attract uncarded players to join the player club, or to enhance the casino experience for existing members. The PromoNet solution gives operators the ability to analyse and modify promotions for optimum effectiveness and to conduct business analytics and reports. It can be integrated with “ticket in, ticket out” (TITO) gaming printers and devices such as FutureLogic’s GEN3 Evolution printer, GEN2 Universal printer and TableXchange printer/scanner. The GEN3 Evolution printer was actually developed specifically with promotional couponing in mind. This printer is the first to offer an optional on-board promotional system module to create separate and secure processing environments for both TITO and promotional couponing. An advanced temperature control technology makes precision grayscale printing a possibility, yielding a high-resolution output for printing eye-catching promotional coupons. The GEN3 Evolution printer is equipped with the industry’s largest standard paper capacity of 450 tickets, saving operators up to 30 refills, according to FutureLogic. In addition, a new low paper sensor helps eliminate paper waste by taking ticket stack down to the last ticket. Also to be on display at G2E, FutureLogic’s TableXchange device connects existing table games to a casino’s existing TITO network, enabling dealers to validate and issue TITO vouchers at table games. With the ability to buy-in or cash out at table games, the TableXchange printer/scanner provides a bridge between slots and tables, and helps casinos identify valuable crossover players. FutureLogic’s product range will be on display at booth 4041.
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SEPTEMBER 2012
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The largest ever Shuffle Master’s booth at this year’s G2E is the biggest ever from the gaming supplier
U
.S.-based Shuffle Master Inc is promising to unveil a handful of new innovations in each of its five product categories at this year’s Global Gaming Expo (G2E). In its specialty table games category, Shuffle Master is introducing its newest blackjack side bet, “HouseMoney”, “which is best described as an ordinary side bet with an extraordinary twist,” the company says. Play starts like a regular game of blackjack: a player places his standard blackjack bet and may opt to place a wager on the House Money side bet; then the player and dealer are each dealt two cards. The player wins the side bet if their first two cards are a straight, pair, straight flush, or Ace-King suited. Here comes the twist: the player may then choose to add all or some of their side bet winnings to their standard blackjack wager; then play continues like a traditional game of blackjack. The DeckMate 2 shuffler is Shuf-
SEPTEMBER 2012
fle Master’s latest addition to its utility product line. Technological advances have allowed the company to improve upon the performance and security of its predecessor, the DeckMate. These advances include shuffler times that are twice as fast as the original DeckMate, on-board optical card recognition to increase security and protect game integrity, and an enhanced shuffling method to reduce wear-and-tear on cards. Plus, the DeckMate 2 also includes an on-board timer allowing operators to call the “clock” and a remote touchscreen interface for card verification. Shuffle Master is also enlarging its e-Table offering, including a myriad of new features for the i-Table line. Mississippi Stud will expand the i-Table library. Three Card Poker, Ultimate Texas Hold’em, blackjack and roulette are currently offered. A 3-Card Bonus side bet will be included with Mississippi Stud, to add excitement.
i-Table Ultimate Texas Hold’em will see the addition of a progressive wager, which will allow connectivity to existing felt Ultimate Texas Hold’em and other table’s progressive jackpots. i-Table will also feature additional language options to make it a truly global product. Also on display will be a selection of titles from Shuffle Master’s slot range that is available for the Latin American market. The Chinese-themed link “Duo Fu Duo Cai” which was launched at G2E Asia in Macau and “The Flintstones” slot machine, which was unveiled at the Australasian Gaming Expo in Sydney in late August, will also feature prominently. Shuffle Master’s booth this year, at number 1241, will be the largest it is ever been, according to the gaming supplier.
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SEPTEMBER 2012 For more information visit www.macau-event.com or write to golf@macaubusiness.com
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Hospitality
A QUESTION OF VALUE The government is striving for more lower-priced hotel rooms as Macau’s idea of “cheap” is less than cheerful for travellers on a budget BY LUCIANA LEITÃO
oughly two out of three rooms in Macau are rated five star, great for high rollers but not so pleasing for tourists without that much money to spend. The government is hopeful of boosting accommodation for budget travellers, not necessarily to attract backpackers but to provide more choice and tempt mass-market day-trippers to stay the night. The government is licensing three new establishments that will offer cheaper accommodation with 300 rooms in total. Official data shows that 11 projects in the lodging business, which together are meant to provide 7,320 rooms, were under construction at the end of June. Eight were either small or medium-sized establishments located on the Peninsula, accounting for around 650 new rooms altogether. The three remaining projects were big scale hotels located in Cotai. “The fostering of the development of budget accommo-
R
SEPTEMBER 2012
dation is one of the key points that the Macau Government Tourist Office is working on so as to provide a wide range of accommodation options for visitors in different areas of the city,” the tourism bureau said in a written reply to questions from Macau Business. The bureau says it is consulting other government departments about creating opportunities for investing in and developing more cheap accommodation. This is part of a plan to increase the number of low-price hotels. Last year, officials gathered together some of the mainland’s biggest operators of cheap accommodation to tell them about opportunities here. Chief Executive Fernando Chui Sai On announced in July that the government would consider allowing small and medium enterprises to build low-price hotels near the projected
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NUMBER OF LODGING ESTABLISHMENTS 35
33
30
27
25 20
14
15
13
12
10 5 0
5-star hotels
4-star hotels
3-star hotels
2-star hotels
Guesthouses
On June 30 Source: Statistics and Census Service
CAPACITY, BY TYPE OF LODGING ESTABLISHMENT Rooms
Beds
45,000 40,000
39,184
35,000 30,000 25,000 20,000 15,000
14,830
13,608
10,000
5,557
5,109
5,000 0
2,410 5-star hotels
4-star hotels
3-star hotels
838 1,730
633 1,265
2-star hotels
Guesthouses
On June 30 Source: Statistics and Census Service
PLACE OF RESIDENCE OF GUESTS IN CHEAP ACCOMODATION new border crossing in the north of the peninsula. â&#x20AC;&#x153;We need to have different types of hotels to satisfy different customers,â&#x20AC;? Mr Chui said.
Macau Hong Kong
3%
Others
8%
Mainland China
83%
6%
Plenty of room Operators of low-price hotels trot out a list of problems holding them back. They highlight the competition from large casino-hotels that offer big discounts, tempting visitors to pay a bit more for a better room. They complain about rising operating costs and difficulties in finding staff, and about the time it takes to get a licence. But then, cheap accommodation here is not that cheap. During Lunar New Year the average room rate in a guesthouse was MOP558 (US$70) a night and staying in a two-star hotel cost, on average, MOP956 a night, the tourism bureau says. SEPTEMBER 2012
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Hospitality
The seedy reputation of cheap accommodation in Macau also scares off visitors. The very expression “cheap hotel” conjures up images of crime, prostitution and general crumminess, no matter how outdated that perception may be. The city had more than 24,000 guest rooms at the end of June. Fewer than 1,500 were in two-star hotels or guesthouses – although this number was 7.4 percent higher than a year before. The average occupancy rate of five-star hotels was 82.2 percent in the first half of this year. In contrast, the average occupancy rate of guesthouses was 60.9 percent and that of twostar hotels was 74.5 percent, the lowest in the hotel industry. More than 280,000 people stayed in guesthouses and two-star hotels in the first half of this year, about 8.5 percent more than a year before.
Try the mainland
Photos: Manuel Cardoso
The tourism bureau says lack of promotion is partly to blame for low occupancy in cheaper accommodation. Both it and the Macau Hoteliers and Innkeepers Association are this month opening a website to promote low-price hotels and guesthouses. The website has information on the establishments here and can handle room bookings. Some entrepreneurs are forging ahead with or without the government. The man in charge of Macao Cheng Loi Group Ltd’s operations, Daniel Cheong, says his company intends to open a new guesthouse in Taipa this year. “Macau is getting more high-end hotels that are more and more expensive. Tourists need low-cost hotels, because not all can support such high prices,” he says. Macao Cheng Loi opened another guesthouse, a joint venture with Fok Weng International Hotel Co Ltd, in the city centre last November. The guesthouse cost MOP10 million to build. Mr Cheong says the 40-room Towns Well Motel, a stone’s throw from Senado Square, has an average occupancy rate of 90 percent. Most of the guests come from the mainland, although there is the occasional guest from Southeast Asia, Japan or Korea. A room costs about MOP600 a night, which is not considered cheap. “We are close to Senado Square, perfect for shopping,” Mr Cheong explains. “It’s next to the city centre ... [and] our rooms are very big and clean.” Macao Cheng Loi’s next step is to break into the lodging market in the mainland because, Mr Cheong says, it is difficult and expensive to find somewhere to put a new hotel in Macau. But there are other cheap accommodation projects in the pipeline.
Refuge from expense Timberider Resort Management recently opened a two-star hotel, Ole Tai Sam Un, and added 24 rooms to its Ole London
The 40-room Towns Well Motel, a stone’s throw from Senado Square, has an average occupancy rate of 90 percent, according to co-owner Macao Cheng Loi Group Ltd Towns Well Motel SEPTEMBER 2012
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Hospedaria San Va
Hospedaria San Va, in touristy Rua da Felicidade in the city centre, claims the status of Macau’s oldest guesthouse Hotel. Both hotels are close to the historical centre of the city and rates are up to MOP900 a night. Hospedaria San Va, in touristy Rua da Felicidade in the city centre, claims the status of Macau’s oldest guesthouse. It occupies a private club built in the late 19th century, which became a lodging house in the 1920s to accommodate refugees from the civil war in the mainland. Hospedaria San Va is a family business, headed by Anna Yip. Ms Yip says guests like the combination of low rates and a convenient location. They come from the mainland, Asia and further afield. “Half are usually backpackers, 30 percent are ordinary tourists and 20 percent are university and college students, as well as budget travellers,” she says. Ms Yip says the occupancy rate averages between 80 percent and 90 percent, and guests usually stay two nights. Rates at the 39-room, no-frills guesthouse can be as low as MOP140 a night. Lonely Planet international travel specialist website says Hospedaria San Va “definitely has character, though the cupboard-like rooms, separated by flimsy cardboard partitions, are pretty spartan.” One cause of the increase in demand for low-price hotels is the government’s clampdown on illegal inns. Since the enactment of the law on illegal accommodation in August 2010,
the tourism bureau has shut down more than 260 establishments suspected of providing illegal lodging. One was Augusters Lodge in the city centre, which was shut down in May for operating without a licence. The owner, Richard Sarcar, said it had been operating in a residential building since 2008. Although it was operated illegally, it was popular, and several international guidebooks and travel websites mentioned it. One night at Augusters Lodge could cost as little as MOP100. “The economy was booming and many travellers came from the mainland,” says Mr Sarcar. Others came from elsewhere in Asia, from Europe or America. Many were young adults. Mr Sarcar, a Bangladeshi resident of Macau, says he applied for a licence after the hostel was shut down. The application was rejected. “We cannot have a license because we are in a residential building. We have to be in a commercial building,” he says. Mr Sarcar says the cost of complying with government requirements is too high for him. “It would mean around HK$20 million [US$2.6 million].” He is now looking for a partner. He says there is lack of truly low-price accommodation, as many two-star hotels and guesthouses charge around MOP700 a night. The huge investment required makes it harder to charge much less, he says. “If you have to invest HK$20 million, how can you offer cheap accommodation?” Mr Sarcar highlights that people who stay overnight in cheap accommodation actually stay and spend above average. “My guests spent on average MOP2,000 in Macau. They stayed on average two to three days,” he says. The latest data from the Statistics and Census Service shows tourists stay on average 1.0 days in Macau, spending around MOP1,713 per capita, excluding gaming expenses. SEPTEMBER 2012
Tourism statistics
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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
12.2 15.6 8.4 --
Year-on-year change (%)
Latest
1.4 -1.5 4.8 -0.1 days
16,021,978 8,386,204 7,635,774 1.0 days
Notes Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jul 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
12.4 22.2 131.1 164.2 140.1 191.9 185.6 159.0 151.2 166.8 20.1 1.6 -6.0 -4.2 20.2 -0.6 4.5 3.0 0.3 8.8
Year-on-year change (%)
Latest
15,609,909 9,567,563 4,631,465 471,848 347,190 327,840 186,430 284,271 75,031 110,941 4,010,358 4,113,909 613,654 241,265 250,815 822,703 177,381 143,349 75,668 15,671
Notes
1.4 7.1 0.7 -3.5 8.5 20.6 6.7 6.5 47.9 29.8 7.5 -7.4 -15.5 15.6 8.7 -3.9
Jan-Jul 2012
1.0 4.4 4.0 16.5
Jan-Jul 2012
Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 2012
Jan-Jul 2012 Jan-Jul 2012 Jan-Jul 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 (%)
12.0 24,268 12.2 4,476,310 percentage -0.4 points 81.6 1.43 nights -0.07 nights
Notes Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012
Visitor expenditure Year-on-year change (%)
2011 Total spending (excluding gaming) MOP 45.3 billion - Non-shopping spending - Shopping spending Per-capita spending
SEPTEMBER 2012
MOP 22.9 billion
22.4 MOP 1,619 MOP
billion
20 23 16 7
Latest MOP 11.4 billion MOP 5.8 billion MOP 5.6 billion MOP 1,713
Year-on-year change (%)
13 9 17 16
Notes Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012 Apr-Jun 2012
Source: Statistics and Census Service
Year-on-year change (%)
2011
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PEARL RIVER DELTA GOES INDIAN
The tourism bureaus of Macau, Hong Kong and Guangdong province co-organised a series of joint promotion activities last month in three Indian cities to promote tourism in each of the Pearl River destinations, as well as travel itineraries with multi stops. The Indian cities visited included New Delhi, Mumbai and Chennai. The number of Indian visitors to Macau increased from nearly 10,000 in 2003 to 170,000 in 2011.
MAINLAND VISAS MADE EASIER
The central government announced an easing on restrictions on travel to Macau by people living in six big mainland cities. The Ministry of Public Security said that from this month people studying or working in Beijing, Chongqing, Guangzhou, Shanghai, Shenzhen or Tianjin who are not permanent residents of those cities would be able to get visas for travel to Macau, Hong Kong or foreign countries. This new policy could mean more visitors to Macau.
MACAU TO PAY FOR NEW BORDER CHECKPOINT Macau will pay for the construction of the new border checkpoint with the mainland, to be built in the north of the Peninsula. Lands, Public Works and Transport Bureau director Jaime Carion said last month that Macau would be in charge of the border-crossing project because most of the facilities would be on its soil. There is still no approved schedule or budget for the project, which is awaiting Beijing’s approval. The new checkpoint will be for pedestrians only.
BULLISH FORECAST
Tourist Office head expects 30 million visitors this year The Macau Government Tourist Office director João Manuel Costa Antunes forecast last month that the city would welcome a total of 30 million tourists in 2012. That would be up by 7 percent in comparison with last year’s record 28 million visitors. “There will be overall growth in the visitor arrivals this year but it will not be like in the past, when the numbers grew by 10 or 12
percent,” Mr Antunes told reporters. “But I believe the figure can reach 30 million.” From January to July, visitor arrivals totalled 16 million, up 1.4 percent year-on-year. The number of tourists has been dropping since May. Previously, Mr Antunes had forecasted that the number of tourist arrivals in 2012 would increase by at least 10 percent year-on-year.
“There will be overall growth in the visitor arrivals this year but it will not be like in the past, when the numbers grew by 10 or 12 percent,” says João Manuel Costa Antunes
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Business
Che Lee Yuen, a jeweller with a 145-year history, is pushing hard to keep up with modern tastes Photos: António Mil-Homens
BY YUCI TAI
Glittering heritage Stephen Tse
ow do you refresh a jewellery business with a venerable history without destroying the value in its heritage? That is the challenge Che Lee Yuen faces every day. Founded in 1867, the family-owned company is now in the hands of the fourth generation, in the person of Stephen Tse. Mr Tse has the task of juggling the need to keep the brand’s appeal to residents, while also tapping the burgeoning tourist market. Che Lee Yuen is one of the oldest gold jewellers in Macau. It first gained popularity with silver ornaments and later shifted its focus to gold and custom-made jewellery. More recently it has introduced materials such as diamonds. The company collaborates with various designers to create unique collections. In 2010 Che Lee Yuen launched its Qing collection, inspired by the Qing dynasty court. Che Lee Yuen has three shops, each meant to suit a different market.
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SEPTEMBER 2012
“In recent years, we have spared no effort in finding suitable shop locations to establish footholds and strengthen our presence both in the domestic and tourist markets,” says Mr Tse. He intends to expand the business into the mainland and Hong Kong as soon as next year.
Fresh blood Mr Tse was brought up in Hong Kong and completed his education at Oxford University in England. He was a latecomer to the world of jewellery, having previously worked in trading in Hong Kong for several years. He joined Che Lee Yuen in the mid1990s, taking over from his father and bringing with him several new ideas. One was the establishment in 1997 of RingMaster, a new brand and shop focusing on jewellery for younger people. “Given Macau’s small market, while most of the older generations were already familiar with our brand, we felt the need to expand our customer base
amongst the younger generations,” Mr Tse says. In 2007, Che Lee Yuen opened a third shop, called O’Che 1867, in the Venetian Macao. This shop specialises in fine jewellery meant for wealthy people from the mainland and abroad. The main branch of Che Lee Yuen, in Rua Francisco Xavier Pereira, concentrates on traditional wedding jewellery.
Intangible asset Mr Tse says tourists make up only around 20 percent of the customers in the two shops on the peninsula. At the Venetian shop, 90 percent of the customers are visitors. As each shop caters to a different market, so the business has different approaches to advertising. The Venetian store mainly advertises jointly with the casino resort’s shopping mall, while also linking up with banks and credit card companies for promotions. The other two shops do more direct marketing and re-
93 lationship-building with their customers. Che Lee Yuen is credited with many innovations in the jewellery industry in Macau over the past 145 years. The second generation of managers introduced jewellery gift coupons to the city and the third generation pioneered the use of electrolysis to refine gold on a commercial scale here. “The century-old brand is itself an intangible asset. The company has built a good reputation and the brand’s development potential is vast and pliable,” Mr Tse says. “To preserve our brand image, we had to give up some short-term tricks of the trade. For instance, we won’t wage cut-throat big sales, or enter into complicated relationships with tour agencies to tout tourists into our shops to buy jewellery and gold.”
Critical mass The liberalisation of the gaming industry and the easing of access to Macau for mainland Chinese have increased tourism and the incomes of residents. This has been good news for the jewellery industry, and its sales have rocketed. Sales here of watches, clocks and jewellery amounted to MOP8.1 billion (US$1 billion) in the first half of this year, 49 percent more than a year before. Mr Tse says the gold jewellery market is now more competitive than ever before. In the 1960s Macau had around 30 gold jewellery shops. It now has more than 200, he estimates. These include shops run by Macau jewellers, stores under big international jewellers, and pawnshops that also buy and sell gold items. Che Lee Yuen managers say that unlike some other jewellers here, their company has enough critical mass to cope with competition. This allows it to be more flexible in designing and pricing its products. It has also invested a lot in online marketing, with its own website, Facebook page and online advertising campaigns. The jeweller has a staff of 30 in Macau, one-fifth of whom are imported. It also has a subsidiary in Hong Kong responsible for procurement. Che Lee Yuen cooperates with several Hong Kong designers. Mr Tse says around 30 percent of the products it sells are exclusive designs. The company has collaborated with Macau designers in the past, but Mr Tse says there is a shortage of talented craftsmen and women here.
In 2007, Che Lee Yuen opened a third shop, called O’Che 1867, in the Venetian Macao. This shop specializes in fine jewellery
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Business
True love
SJM’s Louis Ng vows to honour French wine heritage after purchasing the historic Chateau de Gevrey-Chambertin BY STEPHEN COATES*
ouis Ng Chi Sing, the chief operating officer of SJM Holdings Ltd who sparked uproar in France when he bought a historic Burgundy vineyard pledged last month to respect local traditions and restore the chateau to its former glory. Mr Ng has been targeted by the far-right National Front and disgruntled winegrowers since paying US$10 million (MOP80 million) for Chateau de Gevrey-Chambertin earlier this year, over fears he will destroy the estate’s 900-year-old heritage. But in an attempt to allay such concerns, the 60-yearold Macau casino executive said he planned to work with French architects and winegrowers to ensure the historic chateau remains a source of premium wine. “It is our goal to bring this enchanted property to its full former glory,” he said in a statement. “In time, I hope my new Burgundy neighbours will also come to appreciate my sincere passion for great wines as will be reflected in the positive improvements I hope to bring to Chateau de Gevrey-Chambertin.” The estate includes two hectares of vineyards in one of Burgundy’s top appellations, where growers follow strict rules in order to market their wines under legally protected names. “It is my intention to use all the resources at my disposal to ensure that this land continues to produce world-class wines for wine lovers all around the world for generations to come,” Mr Ng said. He added he had appointed French architect Christian Laporte to repair the chateau, which is listed on a registry of historic Burgundy monuments. Along with certain unnamed “friends”, Mr Ng had signed a long-term lease with Burgundy winemaker Eric Rousseau, of Domaine Armand Rousseau, to look after the chateau’s wine production.
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A serious wine lover “As a long-time wine lover over the past 30 years, I am thrilled to have this excellent opportunity to re-energise and reinvigorate this amazing piece of land,” Mr Ng said. “Our architect will help us to restore this monumental chateau to its original beauty and preserve, as a primary goal, the great historical significance of this remarkable building. I am also extremely happy to have Eric’s immense skills and expertise to see that the chateau’s vineyards again produce some of the best wines in Burgundy.” Mr Ng described himself as a serious wine lover and an ambassador of French wines in Hong Kong and Macau. Hong Kong-based wine expert and author Jeannie Cho Lee, who is friends with Mr Ng, says the businessman could be trusted to manage the estate. “I am sure that given his genuine love for wine and for Burgundy, he will lovingly restore Chateau de Gevrey-Chambertin to its former glory,” she says. SEPTEMBER 2012
“It is my intention to use all the resources at my disposal to ensure that this land continues to produce world-class wines,” Louis Ng says Unlike its rival Bordeaux, Burgundy remains dominated by relatively small estates run by winemakers who, regardless of how prosperous they may have become in recent years, regard themselves as farmers first and foremost. Properties generally get passed down from generation to generation, making foreign ownership relatively rare, again in contrast to Bordeaux where Chinese investors have established a strong presence. Ms Lee says Chinese investors were always going to branch out into Burgundy. “If you look back at the period when Japanese first became enamoured with wine in the 1980s and 1990s, there was quite a stir because Japanese started buying Bordeaux properties and investing in Burgundy domaines,” she says. “It is the same thing now with the Chinese.” Davis Fong Ka Chio, director of the Institute for the Study of Commercial Gaming at University of Macau, says low-profile Mr Ng is a very senior and long-term associate of casino tycoon Stanley Ho Hung Sun. “He is very senior but the information about him in the public literature is quite limited. I only know that he’s a very important guy and a decision maker,” he says. In Macau’s glitzy casino business, it is sometimes wise to stay below the radar, Mr Fong notes. “He is very low-profile. Keeping a low profile is a good thing.” *AFP NEWS AGENCY
95 GUSTAVO CAVALIERE HOSPITALITY INDUSTRY EXPERT - gustavo.cavaliere@gmail.com
Blinkered to the point of blindness WHILE OFFICIALS HAVE BIG DREAMS ABOUT CREATING A WORLD-CLASS ENTERTAINMENT HUB IN MACAU, THEY DO LITTLE TO MAKE THEIR VISION COME TRUE
Why are we here? One of the repercussions of persistent inaction here is pointed out by tourists: they go home with the perception that the city has just a handful of attractions. I was involved recently in a survey of 300 international tourists, most of them on day trips to Macau while they holidayed in Hong Kong. For 95 percent, it was their first visit here. Around 30 percent said they would not come back as they had already seen and done everything there was to see and do here. Another 15 percent said they might come back occasionally, to gamble. What really got my attention were the remaining 55 percent. Many of them, when asked if they would ever consider returning to Macau as tourists, were caught off guard and answered the question with a question: “Why?” Why, indeed, would anyone wish to come back? What would they do here? Besides seeing the historical sights, which you can do in one trip, or gawping at a few notable casino resorts or, obviously, gambling, visitors have nothing to do here. Let us face it, this is not Paris or New York, where a tourist
Photo: Carmo Correia
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n December 1999, Fernando de la Rua won the popular vote to become Argentina’s next president. His term ended abruptly just two years later, when he resigned amid a deep economic slump, easily comparable with that faced now by some countries in Europe. Argentinians like me recall Mr de la Rua’s disastrous management of the economy for several reasons. His short stint as president was marked by inaction in the face of recession. I am often reminded of Mr de la Rua when I read the news about Macau. The city reminds me of the procrastination I witnessed in my homeland. In the past two years, I have listened to a string of government speeches stressing the need to push ahead with diversification of the economy, widening its scope from the narrow focus on gambling to take in a greater variety of entertainment. The purpose is to attract more international tourists and offer enough attractions for visitors to stay here longer. The government, however, does not walk the talk. The city is still dominated by gambling and officials have so far done almost nothing to diversify the economy. As the public purse gets ever fatter because of taxes on gambling, the government is sitting too comfortably to be bothered to change the status quo. Why change anything if business is good, right? Wrong. Inaction can lead to negative consequences in the long run. These consequences harm individuals, families, communities, the economy and society as a whole. While the financial and economic effects of inaction are the easiest to measure, there are other, underlying consequences that have deeper ramifications: for instance, poorer healthcare and education, a less qualified workforce and social imbalances.
may return several times just to check out the Metropolitan Museum of Art or the Louvre, let alone the other attractions those cities have to offer. Macau’s lack of sufficient tourist attractions is one of the reasons why the average length of a visitor’s stay fluctuates around one day.
Where are we going? Macau is not the Las Vegas of the East, as some have dubbed it. It has neither the kind of glamorous nightlife one can find in Las Vegas, nor the kind of shows and family entertainment available there. Las Vegas is an exemplar of the diversification of an economy once dominated by gambling. While casinos are still the backbone of its economy, Las Vegas has big meetings and conventions taking place every day, pick-of-the-crop concerts, glamorous spectacles and more, which all provide enough action for a family on holiday to stay for a week. Las Vegas is not unique. Ten years ago, few would have been able to find Dubai on a map. Today it is full of tourists. To pull them in, the emirate did not need to build casinos. It created other attractions of its own devising. Like Macau, Dubai is a place where different civilisations meet. It has achieved a perfect balance between tradition and modernity. To make up for its natural shortcomings, it became a world leader in trade and other business. It is an international, dynamic city with an outstanding record – all because of its visionary leadership. Will Macau ever be able to do the same? Will it be able to turn its back on procrastination and embrace the opportunities ahead? Will our leaders adopt a visionary strategy to wake the city from its sleepwalk and transform it into an attractive, international entertainment hub? Today, owing to the absence of foresight among those in government, the goal of transforming the city into a tourist destination of global renown is just empty talk. An illustration of this is that instead of a waterfront boulevard brimming with fresh air, entertainment and tourists, what we have are fences made of metal siding blocking the view. Talk about a lack of vision. SEPTEMBER 2012
MACAU’S HIGH EMPLOYEE TURNOVER RATE NOT ONLY HURTS THE ECONOMY AND BUSINESSES, IT CAN RUIN A WORKER’S CAREER BY SARA SILVA MOREIRA
GOING FOR THE RIGHT CHANGE
Human Resources acau is bursting with job opportunities for permanent residents. While the rates of employee turnover in several industries here are higher than in many other places in the world, human resources consultants say people are beginning to think twice before changing jobs. The prospect of more money is no longer enough to tempt people away from their current employers – at least in some cases. “There are less financial strains nowadays than in the past and local workers are becoming more focused on how to increase their work-life balance,” says Lancy Chui, managing director of the Hong Kong, Macau and Vietnamese operations of international human resources consultancy Manpower Inc. Human resources consultants say residents now want not just a better-paid job but a career. Many workers are more careful about choosing and changing jobs. “Those who have jumped one or two times already in the last few years are now settling,” says Queenie Zhou, managing director of human resources consultancy MyJobs Macau. “They are not so eager to change jobs for just a small salary increment, but are rather more interested in investing themselves in the existing company if they feel they are being treated well”. The slowing of economic growth contributes to the inclination to stay put. Human resources consultants say pay and benefits have stabilised in most sectors of the economy, reducing the chances of a worker getting much more money for doing the same job for a different employer. Even so, the rates of employee turnover are edging up in several industries. Statistics and Census Service data shows that the turnover rate among hotel and restaurant employees was 7.5 percent in the first quarter of this year, 0.2 percentage points higher than a year before. Among bank employees the rate was 4.0 percent, 0.3 percentage points higher. In the second quarter, the turnover rate among gaming industry employees was 5.9 percent, 1 percentage point higher than a year before.
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Quantum of constancy While job-hopping can bring immediate financial benefits, it may do more harm than good to a worker’s career in the long run, human resources consult-
ants say. They say constantly changing jobs can slow the progress of a worker’s career, reduce job satisfaction and mean fewer opportunities for development – especially for junior managers and unqualified labour. Employers will take special note of a resume filled with short stints in many companies. “Ideally, staying for a reasonably long period in each job could help to impress employers and enhance future employability,” says Ms Chui of Manpower. Although money is a necessity, and for many job applicants the deciding factor, consultants say applicants should keep other things in mind. “Macau employees are in a market where they are a limited resource and therefore can find new or better jobs easier than they could
“Local workers are becoming more focused on how to increase their work-life balance,” says Lancy Chui, from Manpower Inc
“Macau employees are in a market where they can find better jobs easier than they could in other markets,” says Pentasia’s Starr Xian
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in other markets,” says Starr Xian, principal consultant of the Macau branch of Pentasia Group, a gaming industry recruiter. She says it is most important for workers to “have a clear career plan and clear goals for long-term career development”. Ms Zhou of MyJobs Macau says that before changing jobs, employees should find out all they can about their prospective employer by studying its website and news about it in the media, and by talking to friends who work there.
Reputation preservation Human resources consultants recite long lists of things to check before changing jobs. They suggest job applicants check whether a job on offer fits their career plan and if it has peripheral advantages
“Those who have jumped one or two times already in the last few years are now settling,” says MyJobs Macau’s Queenie Zhou such as opportunities to learn and advance their careers and a good working environment. They advise applicants to bear in mind the effects a job change can have on their private lives. In Macau, many jobs entail working shifts or at night. Consultants also advise job applicants to consider the disruption that changing jobs can cause to their current employer. And they say it is important for applicants to learn to say “no” to a job offer, and to be prepared to explain why they are turning it down. Such explanations can keep them on good terms with interviewers. In a small market such as this, keeping a cooperative reputation is an advantage in unlocking further job opportunities. Ms Xian says some employers make it easy for employees to leave as soon as the first opportunity arises. Some companies neither invest in training and retaining staff nor foster team spirit, giving employees a feeling of detachment. Other employers are slow to promote or increase the pay of competent workers, SEPTEMBER 2012
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Human Resources
in effect telling them that the only way to move up is to move out. Some firms are changing their practices in an effort to retain employees. Instead of focusing only on offering attractive pay and benefits, they are improving the working environment, and giving staff more training and opportunities to advance their careers.
Resisting temptation Ana Coutinho said “no” to what might be considered an almost perfect job. After two years with the same com-
pany, she felt trapped in her current position. She decided to look for a more challenging job with better career prospects. Ms Coutinho was eventually offered a position in the banking industry that included a higher salary, housing allowance, more leave, an annual bonus and a career advancement plan. On paper, it was a great offer but, after some thought, she declined it. “Even though the offer was very tempting in terms of salary and benefits, and would have given me experi-
A survey by Macau Business this year, showed 42 percent of respondents considered pay the most important factor in employee retention ence in a new field, working in banking didn’t fit with my career goals,” she says. A few months later, Ms Coutinho was offered a position which matched her goals in a trading company in Hong Kong. “Originally, I had intended to stay in Macau but this offer included not only satisfactory salary and benefits but also autonomy, learning opportunities, good career development possibilities and the chance to have hands-on experience in managing business accounts, which is what I had wanted in the first place.” Ms Chui of Manpower advises workers to “maintain a learning mindset to ensure they continue to develop and unleash their own human potential throughout their careers, instead of just focusing on monetary concerns and other benefits”. Still, most employees continue to be money-driven. A survey commissioned by Macau Business this year and conducted by the University of Saint Joseph, showed 42 percent of respondents considered pay the most important factor in employee retention. Just 9 percent thought the working environment was the most important. “Although many employees, namely croupiers, have a low emotional commitment to their job and find it exhaustSEPTEMBER 2012
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“Although many employees have a low emotional commitment to their job, they remain for the salary alone,” says social psychology expert Angus Kuok ing, they remain for the salary alone,” says Angus Kuok Chin Him, a doctoral student of applied social psychology at the University of Macau.
Wise heads “A great deal of casino workers would prefer to switch to another industry and to regular office hours,” says Ms Xian. But because the pay is much lower, they feel their best option is to stay put, she adds. Ms Zhou of MyJobs Macau says younger people are more moneyfocused and therefore more prone to change jobs for better pay alone. “Younger people haven’t experienced a slower economy, so they expect high salaries from the start, as well as a fast progression within a company,” she says. When their expectations are not met, they prefer to leave for higher pay, instead of staying to acquire skills and experience. Ms Xian says some young workers start out pursuing a career in a field they are interested in, but soon begin to compare their pay with that of friends in other industries. They may begin to focus on how much they get paid rather than on their careers, and then feel compelled to change to higher-paying jobs, she explains. Senior employees are less inclined to job-hop. At a certain level, getting more pay is not as important as a better position and better career prospects. “Higher-level managers are more careful with their moves and are more aware of the potential negative effects of job–hopping,” says Ms Zhou. According to her, senior managers understand their market value better and have more negotiating power than their juniors, accepting a better offer only after studying it and the prospective employer carefully. SEPTEMBER 2012
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Technology
Start-up incubator Manetic is creating a legacy of hundreds of good ideas, spread across more than a decade
BY SARA FARR
ill Gao and his business partner set up Boss Translation Company Ltd in February last year after seeing demand for translations spike in each of the three main languages commonly used in Macau. The company bridges linguistic gaps and breaks down geographical barriers by providing computer-aided translation software online. For the company to succeed, Mr Gao felt he needed additional support. He found it at the Macau New Technologies Incubator Centre, or Manetic. Manetic was established in 2001 and has since been helping individuals
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SEPTEMBER 2012
and fledgling technology companies turn businesses or product ideas into full-blown commercial ventures. Companies are offered hardware, such as office facilities; a range of commercial support, including business development services, market research and promotion; and finance. “We provide new companies with customised knowledge and experience, as well as equity investment capital,” says Gilbert Chan, Manetic’s executive director. He says Manetic’s support allows entrepreneurs to focus on the development of new technologies and products
rather than investing time in “less-productive infrastructure and capital raising activities”. In the last 10 years, the incubator has received 173 applications for assistance and accepted 99. About 43 percent of those businesses have been further developed and commercialised; 16 companies are already capable of operating on their own and have sustainable businesses, says Mr Chan. At any one time, the incubator can accommodate a maximum of 20 start-ups. There is significant diversification among the businesses that Manetic has helped.
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A SAFER PLACE TO SURF
Photo: Carmo Correia
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The scope of businesses ranges from software development to IT consultancy, to e-marketing and e-commerce services. There is a company providing gaming software. A number of start-ups are focusing on clean energy and recycling. The combined muscle of the startups provides work to more than 100 people and there are about 300 clients in the portfolio, both corporate and government, from Macau and abroad, according to Manetic’s website. Among the incubator’s shareholders are Australia’s Crossland Developments Pty Ltd, with a 25-percent stake, the Macau government and Vodatel Net-
ost developed markets have a computer emergency response team. There is a CERT team, as they are known, in Macau too. The Macau Computer Emergency Response Team was established by Manetic in February 2010. It receives financial backing from the government to provide computer security “incident handling” information, and promotes security awareness. Manetic executive director Gilbert Chan says the response team collaborates with bodies here and overseas. For instance, it has already handled phishing cases in which the targeted banks were from Southeast Asia and North America. “Every region has a CERT team and we know each other well. So when there is a problem, we act very fast,” he says. The response team has worked to increase its profile and ensuring that complaints are handled effectively. Today, the Computer Emergency Response Team is handling more incident reports and is enjoying an improved standing, Mr Chan says. “In the beginning, people were a little wary of telling others what had happened. But after two years of raising awareness and organising seminars with experts from all over the world, people in Macau are becoming more aware that this happens everywhere else and Macau is no exception.” In 2007, Manetic also helped support the establishment of the Macau chapter of the Information Systems Audit and Control Association, an international professional association that deals with information technology governance.
work Holdings Ltd, each with a 15-percent share. State-owned Nam Kwong (Group) Co Ltd is among the incubator’s major shareholders, with a 10-percent stake. Manetic is also supported by the Macao Foundation, which granted it MOP7 million (US$875,000) to support its activities this year.
Recognition gained Even before Boss Translation got off the ground, Mr Gao had been in contact with Manetic. Once the company was set-up, Boss Translation was accepted into the incubator.
“Manetic has helped us in offering free or low-rental offices, providing business opportunities, informing us about fairs, hiring employees, [as well as] promoting our products and services,” Mr Gao says. Mr Chan says Manetic also provides the latest information and environmental technologies, auditing techniques and standards to start-ups. For Mr Gao, growing his company through an incubator has been advantageous. “The company’s business has grown quite a lot,” he says. “We started from zero, and now we have more than 10 major clients from the government and media. We are known by many people and are widely recommended in Macau’s forums.” Mr Gao says being “incubated” gives Boss Translation professional recognition. Nobody would care about his “micro-company” without Manetic’s weight behind it, acting as a “kind of certification,” Mr Gao says. “At least, professionals and experts regard our product as feasible or promising.” Being part of Manetic also offers start-ups the opportunity to build networks and take part in seminars with experts from their fields. “There are a lot of micro-companies like us [at Manetic]”, Mr Gao says. “We know each other and are like a big family ... we know we are not alone.” Mr Chan says the number of companies attracted to Manetic’s service will continue to grow. “I can see that [some] incubatees are looking at business in the mainland,” he says. This is true among companies designing software apps for smartphones and tablets. “The market here is not very healthy. People are not willing to pay much for a quality app,” Mr Chan says. He says the scenario is different in the mainland. Companies there are willing to pay more for quality apps “because it affects their image and business.” Another problem growing companies face is a lack of qualified human resources. “Labour is the biggest challenge for almost all incubatees. Good local programmers are too expensive to afford,” Mr Gao says. That hinders the global competitiveness of start-ups. “We are small and not competitive in the international market because of our expensive labour costs.” SEPTEMBER 2012
102 AMY LEE*
Confusion in the cloud FEAR OF DATA BREACHES HOLDS BACK SMALL BUSINESSES FROM ADOPTING CLOUD COMPUTING SOLUTIONS orldwide, entrepreneurs running small and medium enterprises understand that business is more reliant on technology than ever before. In several cases, business and technology have become inseparable. One emerging trend is cloud computing. The premise is convenient, on-demand access to servers, storage, applications and other resources through the Internet. Users no longer need their own servers, storage or networks, which are, instead, available in the “cloud”. Highlighting the importance and growth of cloud computing, United States consulting firm Gartner suggests that this is one of the top-10 strategic technology trends that will influence companies this year. A survey last year by global professional services firm Ernst and Young found that 51 percent of organisations worldwide already used cloud computing services or planned to do so within the next 12 months. Cloud services were already being used by several departments of the organisations surveyed, including administration, human resources, accounting, marketing and customer relationship management departments. Management of an enterprise’s data storage, software applications and complex business processes in the cloud enables it to perform more efficiently and cost-effectively. Companies no longer need to worry about hardware or software maintenance. Time, effort and investment can be focused on their core businesses. Cloud computing is far from being available only to big corporations. One familiar cloud computing application winning the hearts of SMEs is Google Apps. It has been adopted by start-ups because it integrates basic office tools, including email, chat, calendar, storage and document management functions. Google Apps also allows the users of smartphones, tablet computers or any other mobile devices connected to the Internet to get access to the same data. Google’s charge depends on the number of users, so it is more cost-effective than in-house servers and storage, private networks and the support teams such things require.
W
The pros
A close look at Macau reveals that although gaming appears to dominate the business landscape, SMEs are undoubtedly the backbone of the economy. Almost 99 percent of businesses here are SMEs. They employ more than 50 percent of the workforce, Statistics and Census Service data shows. The rapid expansion of the city’s economy is further fuelling the growth of SMEs. The government has also been supporting their development by providing several kinds of assistance, financial and non-financial. Information technology resources used by SMEs in Macau might include email, accounting and back-up software, and data security applications – all of which are available in the cloud. The question is whether managers are putting their money to good use and adopting these more cost-efficient cloud applications. To better understand the use of cloud computing by Macau SMEs, and as part of my MBA programme at the University of Saint Joseph, I studied how much of this new technology SEPTEMBER 2012
is used here, what motivates SMEs to adopt it and what, conversely, deters them from adopting it. The research included interviews with managers of SMEs in manufacturing, retailing and wholesaling, restaurants, logistics, real estate, financial and legal services, education and healthcare. The results highlight that SMEs perceive that what is valuable about cloud services is the ability to get access to data with fixed and mobile devices, to be able to retrieve information remotely, and to share and back it up more easily.
The cons
The results also show that what worries managers the most is unauthorised access to data due to cyber attacks and other breaches. They are highly sensitive about the confidentiality of their business data, notably personal data on customers, and about the damage that inappropriate use of such data might do to their reputations or finances. SMEs are also concerned about exactly where their data is stored. Notably, businesses in Macau are generally not as keen to adopt new kinds of IT as SMEs elsewhere. So the infrastructure for cloud computing and the knowledge of it here may be insufficient at this stage to allow them to reap all the benefits. And managers are reluctant to learn how to use cloud applications. Another concern is the reliability of Internet connections. The performance of cloud computing applications is closely linked to the reliability of the Internet service. Connections to the web have to be stable and dependable for cloud computing to be a viable business tool. Unfortunately, Macau lags behind Hong Kong, Taiwan, Japan and Singapore in this respect. These obstacles to the adoption of cloud computing, and the further obstacle presented by the shortage of IT manpower here, can be overcome by opting for physicalvirtual-cloud computing – in other words, a hybrid of on-site and off-site services. This would allow SMEs to keep some of their IT resources in-house, while moving others to the cloud. Ultimately, this would diversify their IT resources and still be more cost-effective.
Balance point
On the other hand, cloud computing service providers here should ensure their services are secure, safe from cyber attacks and other breaches. They should also be more open about where their servers are. They should give their customers regular reports on risk management of their data. They should invite external auditors to regularly assess their levels of security. Only then can they dispel the distrust of cloud computing among SMEs and get them to adopt it more widely. A new technology is only considered good when it is used appropriately. Cloud computing allows SMEs access to worldclass computing services and tools at lower costs, backed up by world-class support. But SMEs should never underestimate the harm that can be done to their business by data breaches. * MS LEE RECENTLY RECEIVED AN MBA FROM THE UNIVERSITY OF SAINT JOSEPH. HER MBA THESIS WAS ON THE USE OF CLOUD COMPUTING BY SMES IN MACAU
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September Date: Event: Venue: Organiser: Address: Tel: Fax: Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail: Date: Event: Venue: Organiser:
9 th – 11th
Global Tourism Economy Forum Macau 2012
Macau Tower Convention & Entertainment Centre, Macau Secretariat for Social Affairs and Culture Rua de São Lourenço, No. 28, Headquarters of the Macau SAR Government, 2nd floor, Macau (853) 2872 6886 (853) 2872 7594
Corruption & Compliance, South and South East Asia Summit
Hilton Hotel, Singapore Beacon Events 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong (852) 2219 0111 (852) 2219 0112 www.corruptionandcompliance.com info@beaconevents.com 21st – 23rd
3rd China Catering Expo
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:
Website: E-mail:
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
October
Tel: Fax: Website: E-mail:
Date: Event: Venue: Organiser: Address:
18th – 20 th
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
Date: Event: Venue: Organiser: Address:
October
17th Macao International Trade & Investment Fair
Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail: 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 52 Beach Road, #25-05 Gateway East, Singapore (65) 6500 6712 (65) 6294 8403 www.wineandgourmetasia.com l.how@koelnmesse.com.sg 26th – 28th
3rd Annual Integrated Resorts
Renaissance Sanya Resort & Spa, Hainan Island, China Marcus Evans Marcus Evans, Suite A-20-1, Level 20 Hampshire Place Office, 157 Hampshire 1, Jalan Mayang Sari, 50450 Kuala Lumpur, Malaysia (603) 2723 6736 (603) 2723 6699 www.integratedresorts-lse.com estherw@marcusevansskl.com
Date: Event:
27th – 28th
Venue: Organiser: Address:
Galaxy Macau, Macau Beacon Events 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong (852) 2219 0111 (852) 2219 0112 www.asiangamingcongress.com info@beaconevents.com
Tel: Fax: Website: E-mail: Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:
Asian Gaming & Hospitality Congress
29 th
Social Gaming Asia Summit
Galaxy Macau, Macau Beacon Events 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong (852) 2219 0111 (852) 2219 0112 www.socialgamingcongress.com info@beaconevents.com
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 |
: A Macau Business partner event SEPTEMBER 2012
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Arts & Culture
Culture of expectancy After a wobbly start, Hong Kong’s West Kowloon Cultural District is now on the right track, says its boss BY MARY ANN BENITEZ* IN HONG KONG
rom his office with a wide view, veteran arts administrator Michael Lynch looks down at the construction site of the West Kowloon terminus of the Guangzhou-ShenzhenHong Kong Express Rail Link. Right now, it is just a hole in the ground, being dug on a 40-hectare site where the West Kowloon Cultural District will be built. Mr Lynch’s interest in the hole is more than curiosity. He wants to see that the new terminus is completed on schedule in 2015. When the work is finished, Mr Lynch, the chief executive of the West Kowloon Cultural District Authority, will then be able to start work on an underground car park for what will eventually become a hub for culture and the arts.
F
SEPTEMBER 2012
The West Kowloon Cultural District is part of Hong Kong’s audacious plan to foster cultural and creative industries. It is the largest cultural project in the city to date. Macau is expected to benefit too as it will be an hour away by ferry from one of the world’s biggest centres of culture and the arts. The plan envisages a cultural quarter for Hong Kong and facilities for holding world-class exhibitions, performances and other artistic and cultural events. The district will have 17 core venues and 30,000 square metres of space for arts education. It will be a low-density development, with ample green space. It will have two kilometres of harbour-front promenade, 23 hectares of open space and a huge park. Assuming the devel-
opment plan for the district gets statutory approval, construction is due to begin next year. The master plan is designed by British architect Sir Norman Foster. It is meant to be “a place for everyone”. The district will have a museum of modern art called M+, theatres, concert halls and other venues for performances.
Water interface The West Kowloon Cultural District Authority is an agency of the Hong Kong government. Its chairman is Chief Secretary for Administration Carrie Lam Cheng Yuet-ngor. Mr Lynch, an Australian, was appointed chief executive in July last year. He was formerly a director of the
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The West Kowloon Cultural District is part of Hong Kong’s audacious plan to foster cultural and creative industries
The district will have 17 core venues and 30,000 square metres of space for arts education
The master plan is designed by British architect Sir Norman Foster. It is meant to be “a place for everyone”
Australian Broadcasting Corporation, chief executive of London’s Southbank Centre and chief executive of the Sydney Opera House. Mr Lynch feels everything is going according to plan so far. “It’s been a pretty exciting first year,” he says. “We’ve kept up to the timetable that we set out when I came in last year.” In the past year Mr Lynch has concentrated on the quest for statutory approval for the development plan, while getting some pioneering cultural events going on. The idea is to stimulate interest among visitors even before anything is built on the site. By giving “a sense of what it is going to be like in a few years’ time”, Mr Lynch hopes to generate enthusiasm for the district. Once the West Kowloon railway terminus is finished, Mr Lynch can take a deep breath and get on with putting the development plan fully into action. He is particularly excited about what can be done with the West Kowloon Cultural District’s huge outdoor area. The district is beside Victoria harbour and will have some hilly features. It will have a lot of public art, a venue for modern music and an outdoor performance space big enough for 5,000 people, where large concerts and other events can be held. “There’s a huge opportunity to interface with the water,” Mr Lynch says. “The park itself will be a really good opportunity to be able to do outdoor performances, ride your bikes, play games,” he says.
Diplomatic gift “What we’re trying to create with the park is a different notion of what a park in Hong Kong is,” Mr Lynch explains. Other parks there are “much too formal and constrained in terms of what happens.” His aim is to make the park work “whether you are interested in the arts, or whether you just want to go and lie in the grass, or see or talk to your boyfriend or girlfriend, or whatever”. The West Kowloon Cultural District Authority announced this year a competition for the design of the Xiqu Centre, the first of the district’s venues designed for traditional opera performances. The names of five architects are now on the short list of prospective designers. The Xiqu Centre is scheduled for completion in 2015. SEPTEMBER 2012
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Arts & Culture
“Progressively over the next year, we will undertake competitions for the pieces of cultural infrastructure on the site,” says Mr Lynch. The first part of the park is due to be finished by early 2015 and phase one of the M+ museum is due to be ready at the end of 2017. Most of the main venues will be in place by 2020, although the plan envisages work on projects continuing beyond that date. Switzerland’s former ambassador to China, Uli Sigg, has given the M+ museum a collection of modern Chinese art worth at least HK$1.3 billion (US$168 million). The 1,463 works by more than 300 artists – including Ai Weiwei, Ding Yi, Fang Lijun and Geng Jianyi – is perhaps the biggest and most important collection of modern Chinese art in the world. The West Kowloon Cultural District Authority has signed an agreement to lend some of the Sigg collection to Australia’s National Portrait Gallery in Canberra.
Messy moniker One of Mr Lynch’s priorities is to rename the West Kowloon Cultural District. He says the present name is too SEPTEMBER 2012
much of a mouthful. He wants the district to be easily identifiable and distinctive. “What we’re looking at is an appropriate name and brand for the whole 40-hectare site that will make it easier for people to be able to know what it is, to be able to communicate with us and to understand what’s happening on it,” he says. Mr Lynch had what he thought was a great idea for a name. “It was ‘WoK’ – West of Kowloon,” he says. “What is the one Chinese thing that every home in the world has?” But the idea was derided. Wok also means “mess” in Cantonese. A branding company is now trying to come up with a new name. While the branding company brainstorms over a new handle, the West Kowloon authority has other things to attend to. One is the need for more money for road tunnels and the underground car park. Estimates of the extra amount needed range from HK$4 billion to HK$8 billion. The authority said last year that the cost of developing the district could rise to between HK$28 billion and HK$29 billion. The authority has HK$23 bil-
lion, having invested the HK$21.6 billion that the government granted it in 2008. Mr Lynch told The Standard newspaper that it had given half to the Hong Kong Monetary Authority to invest and had put the rest in “a range of non-risky investments including renminbi”. When Mr Lynch took charge the authority had a staff of 80. A year later it had almost 120. By July next year it will have 250. “We’re now in a position to be able to say that over the course of the next five years, we will change Hong Kong’s perception of what this project is about,” he says. “The difficulty from my point of view is that we want to stop talking about what we’re doing. We need people to see artistic events, commercial events or building. That progress is being made.”
False starts There is much scepticism about the West Kowloon Cultural District. It has been in gestation for 14 years, having originally been announced by Hong Kong’s first chief executive, Tung
107 Chee-hwa, in 1998. But it was not until 2008 that the West Kowloon Cultural District Authority was set up. The authority was subsequently shaken by resignations of senior executives. Mr Lynch’s predecessor as chief executive, Graham Sheffield, a Briton, resigned after only five months in the job in December 2010, citing health reasons. The authority’s first executive director for project planning, Angus Cheng Siu-chuen, formerly an executive of Walt Disney Imagineering, lasted only one week and left for personal reasons. Later, Hong Kong Chief Executive Leung Chun-ying’s name was dragged into a controversy over a conflict of interest in a design competition connected with the development. Mr Lynch is well aware of the scepticism but says he is more worried about other tasks. “The [smart] phone generation is a big challenge for art organisations everywhere,” he says. “We’ve got to think about what we are going to do in terms of how connected [the Cultural Dis-
“It’s been a pretty exciting first year,” says the CEO of West Kowloon Cultural District Authority, Michael Lynch. “We’ve kept up to the timetable that we set out when I came in last year”
trict] is and how well it works.” Hong Kong-Filipino freelance artists Azon and Jun Canete say they are excited by the development of the West Kowloon Cultural District. “Since it was conceptualised, we thought that it would be a good venue, physically, to show art works of an artist. As we are both minorities here in Hong Kong and
both freelance artists, we also thought that we would be given a space to showcase our art works, and also for other artists in Hong Kong,” Azon says. “Actually, every time we passed through the planned area, we were imagining that we would have our exhibits there,” she says. *COPY EDITOR OF THE STANDARD (HONG KONG) NEWSPAPER
SEPTEMBER 2012
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Arts & Culture
AGENT PROVOCATEUR
“HERE” TAKES SPECTATORS OUTSIDE THE WALLS OF THE CONVENTIONAL INTO THE WORLD OF SITE-SPECIFIC PERFORMING ART
HERE PRODUCER
Macau Cultural Centre WHERE
Water soundscape
Macau Cultural Centre and its surroundings
But art spaces can also be worked in a site-specific way, in the sense that artists must take the physicality of space and make it play an active role in their work, allowing the historical, sociological or other non-physical aspects of that space to define the creation. Site-specific art also serves as an invitation to see and experience well-known types of spaces through the lens of performances. “The site-speciftJ ic is a provocateur,” oh nso n says Johnson. “It blocks the way. It puts out the light and sends in the vandals. It fiddles with the control desk and gives habit a push.” For the piece she will be premiering next month, Johnson has established a “dialogue” with the Cultural Centre complex. During the two weeks in March when she was in Macau to select the artists for “Here”, she explored the nooks and crannies of the centre to look for aspects hidden under its concrete structure. What struck Johnson most distinctly was the feeling of the presence of water. “You feel the presence of the water very strongly. You have the fountains in the square and the downslope fountain that works as a water soundscape, as well as a visual, almost textural, experience of water,” she says. “And you have the wavy patterns in black and white on the paved areas. Knowing that also it’s reclaimed land and that the sea played an important role in the Portuguese expansion in the world adds even more significance to the aquatic presence in the Cultural Centre.” t
SEPTEMBER 2012
for non-artistic purposes, often space used in day-to-day life – for example a supermarket, a car park or even a public toilet.
Ki
repare yourself to abandon the comfort of a theatre seat for the latest production by the Cultural Centre. In “Here”, performers take art to some unlikely outdoor places. The site-specific production is a brand-new, tailor-made theatre creation to be presented in the Cultural Centre’s surroundings by three Macau performers, in partnership with multi-award winning Danish dancer and choreographer Kitt Johnson. The production is the culmination of the Cultural Centre’s latest artistic exchange programme, aimed at inspiring Macau artists by providing them with opportunities to interact with international talent. This year, Johnson is the invited star. She is known as a solo performer, although her work covers a wide spectrum. The Danish artist has worked extensively on site-specific projects throughout Europe and has created a series of ensemble productions in the past few years. Preparation for “Here” started in March, with an audition workshop in Macau on the basic concepts of sitespecific performance, led by Johnson. The three Macau performers eventually selected – Candy Kuok, Jojo Lam and Oscar Cheong – were sent last month for a two-week residency in Copenhagen to follow up on their training under Johnson. Their stay in Denmark ended with a show assessed by a panel of invited guests. Back in Macau, the trio are now working on their outdoor creations, to be shown in the Cultural Centre’s urban surroundings. The pieces created will be linked with Johnson’s own new performance. All pieces will premiere on October 26. Johnson says site-specific art is “works that are created within and for a specific site in a public or private space”. Primarily, it uses space meant
WHEN
October 26 to 28, at a time to be announced TICKETS
MOP120, available from www.macauticket.com INQUIRIES
telephone +853 2870 0699 or email enquiry@ccm.gov.mo
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JOJO LAM
OSCAR CHEONG
CANDY KUOK
Lam first got in touch with performing art in 2002, with a site-specific performance entitled â&#x20AC;&#x153;Lost and Foundâ&#x20AC;? at the Fourth Chinese Drama Festival. Since then she has been active in various kinds of art presentations, including dance theatre, drama, musicals and cinema.
A youthful performing art worker, Cheong is actively involved in various kinds of dance and theatre. Cheong has performed in Macau, Bangkok, Guangzhou, Beijing and Taiwan. He also creates and performs solo works of his own.
Kuok is a core member of Comuna de Pedra, a well-known arts association here. She has presented individual works at several Macau festivals. Kuok completed a three-year choreography course at the Macau Conservatory and has taken part in previous artistic exchange programmes run by the Cultural Centre.
SEPTEMBER 2012
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Arts & Culture
M UC H MUSIC
© Esther Haase / DG
himsical, largely classical and most definitely musical, this year’s Macao International Music Festival brings a sampler of global sounds to the city for one month from October 5. The Cultural Affairs Bureau has put together 23 performances in the 26th season of the festival, investing MOP30 million (US$3.75 million) in an East-meets-West fusion of opera, musical theatre, symphonic sounds, choral and chamber music and dozens of contemporary shows. Among the headliners are the familiar in Italian and Chinese operas, the unusual – including Lithuanian folk and choral music – and the exceptionally popular – the free shows. The festival organisers have renewed their efforts to provide additional activities, paired with the events. It is part of the festival’s aim to stimulate public interest in the arts. More details are available at the festival’s website. Inaugurating the festival on October 5 and running for three nights is a full-scale Broadway production of hit show “Peter Pan – The Musical”, starring Tony Award nominee Cathy Rigby. A highlight of this year’s festival is Vadim Repin’s violin recital, on October 14. Undeniably one of the leading violinists in the world today, the Russian musician has been
Yuja Wang SEPTEMBER 2012
BY ANNIE CHAU
HEAR THE WORLD’S MUSIC IN A MAJOR KEY AT THIS YEAR’S EDITION OF THE MACAO INTERNATIONAL MUSIC FESTIVAL
Haya Band
awarded numerous prizes and appeared with some of the world’s greatest orchestras.
Hometown heroes Festival regulars the Macao Chinese Orchestra bring “New Styles of National Music” to the Macau Cultural Centre Grand Auditorium on October 21. Three prominent contemporary performers – Dai Ya (dizi), Wu Yuxia (pipa) and Jiang Kemei (banhu) – join forces with the orchestra to present
San Francisco Symphony
masterworks by renowned Chinese composers, putting a modern slant on folk music. The trio are stars of their arts in the mainland, highly sought after for global collaborations. Macau-born composer, pianist, conductor and living treasure, Lam Bun-Ching performs on October 27 and 28, bringing her Chinese sensibility and Western composition techniques. In each concert, she will be joined by a different group of guest artists. More traditional music, this time from Inner Mongolia, with the Haya Band. If you have never had the pleasure of hearing “khoomei” or throat singing, or the “morin khuur” or horse-head fiddle, prepare for a real experience. Since 2006, the group has been smashing through preconceptions of national and ethnic ties, mixing traditional Mongolian singing and instruments with modern instruments. In their festival piece “Migration”, the Haya Band – “Haya” means boundary in the Mongolian dialect – infuses ancient melodies with fresh sounds and thinking. Haya perform on November 5 at the Cultural Centre Small Auditorium but the group will host a free seminar, in Mandarin, the day before at the Macau Conservatory.
© KASSKARA/DG
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Vadim Repin
Lam Bun-Ching
Red, white, blue There has always been a strong classical music flavour at the festival. This edition features performances by the Kodály Quartet from Hungary, Lithuania’s Kaunas State Choir and interpretations of works by Puccini, Wagner and Verdi, among others. A headline classical act is the San Francisco Symphony on November 7 at the Macau Cultural Centre Grand Auditorium. One of the United States’ and the world’s most loved orchestras, they round out the month-long celebration. Founded in 1911 by a group of San Francisco citizens, music-lovers and musicians, the San Francisco Symphony has become one of the most artistically adventurous arts institutions in the United States. Among the host of international awards they have collected in the past 100 years, the symphony has won 14 Grammy Awards and been awarded 15 times by the American Society of Composers. There’s a hectic performance schedule to meet too, with an average of 220 concerts a year for a total audience roughly equivalent to the population of Macau. Mainland pianist Yuja Wang joins the symphony in Macau. Her command of the keys has been described as “astounding” and “superhuman”. She has been praised for her authority over the most complex technical demands and depth of insight.
26TH MACAO INTERNATIONAL MUSIC FESTIVAL
Kodály Quartet
Peter Pan – The Musical
Date: October 5 to November 7 Venues: Various sites across Macau Tickets: Prices begin at MOP80, with great discounts for seniors, students and group buys from the Kong Seng Ticketing Network, either online or by phone. There are limited tickets to free events Online Reservations: www.macauticket.com More information: Check the festival website at www.icm.gov.mo/fimm; or call 2855 5555 in Macau, (852) 2380 5083 in Hong Kong, (86) 139 2691 1111 elsewhere in the Pearl River Delta region SEPTEMBER 2012
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Entertainment
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BURSTS OF LIGHT TEN PYROTECHNICS TEAMS WILL VIE IN THIS YEAR’S FIREWORKS DISPLAY CONTEST TO BRING FIERY DELIGHTS TO THE EVENING SKY BY SARA FARR
or the past 23 years crowds have gathered on the waterfront to view the delights that the Macau International Fireworks Display Contest has to offer. This year’s contest promises to be just as thrilling. Ten pyrotechnics companies are due to set the evening sky ablaze on five occasions between September 8 and October 1. They will be from Australia, the mainland, France, Italy, Japan, South Korea, Portugal, Thailand, Taiwan and the United States.
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Entertainment
The companies from France and Italy will be competing here for the first time. The mainland team won last year. Each display will last about 18 minutes, with two displays every evening of the contest, one at 9pm and the other at 10pm. Competing teams are asked to complement their displays with music. Sound systems will be installed on the waterfront, namely in the Macau Tower outdoor plaza, in Rua da Torre de Macau and in the square in front of the statue of Kun Iam on Avenida Dr Sun Yat Sen, so that the public can enjoy the soundtracks synchronised with the shows. Radio Macau will simultaneously broadcast the soundtracks on FM100.7. This year’s contest has a budget of MOP11.5 million (US$1.4 million), 21 percent more than last year’s. The Macau Government Tourist Office has raised its subsidy to entrants by 25 percent to US$25,000 to cover the cost of fireworks. Logistics support has also been increased for every team. The tourist bureau is also holding a competition to design a trophy to be presented to the winners of next year’s contest, the 25th edition.
Old rivals The International Fireworks Display Contest is meant to celebrate Macau’s industrial heritage. Making fireworks used to be one of the main crafts here and fireworks were one of the city’s main exports. Fireworks manufacturing reached its
SPARKLING FACTS 1) Fireworks were first made only from gunpowder. Today, chemicals are added for special effects, including colour 2) For all their variety, fireworks are all made in much the same way. The ingredients are put in a shell, the shell is wrapped up and then a fuse is inserted 3) In other countries the authorities advise that only adults light fireworks but in Macau children set off firecrackers and rockets by the hundreds to celebrate the Lunar New Year
SEPTEMBER 2012
peak during the first half of the 20th century but the industry fizzled out in the 1990s with the closure of the last factory. One of the newcomers to the contest this year is French company Lacroix-Ruggieri, which has more than 250 years’ experience of setting off fireworks with unique effects and colours. It is among the top-ranked companies in Europe. In 2010, it won the World Fireworks Championship. The other newcomer here is from Italy. Orzella Fireworks Srl, established in 1884, specialises in combining special effects with music.
Wealth of experience The other eight companies are veterans of previous contests. Some have finished in the top three more than once. For
The International Fireworks Display Contest is meant to celebrate Macau’s industrial heritage. Making fireworks used to be one of the main crafts here and fireworks were one of the city’s main exports
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BIG BANG THEORY H
istory tells us that firecrackers and then other kinds of fireworks were invented in China. It has been suggested that the first firecracker was created more than 2,000 years ago â&#x20AC;&#x201C; well before the invention of gunpowder. The suggestion is that bamboo was heated, causing the pockets of air inside to expand until the bamboo exploded. The noise of the explosion scared living creatures, so the Chinese believed that it would also scare away spirits. The belief spread and it became customary for people to burn bamboo sticks at Lunar New Year to ensure happiness and prosperity, much as they set off firecrackers today. It subsequently became common to burn bamboo to mark other special occasions, such as weddings and births. Then, in the 9th century, gunpowder was invented. Legend has it that it was invented by accident when a cook mixed charcoal, sulphur and saltpetre, all materials once commonly found in the kitchen. Chinese alchemists decided that putting this mixture into the pockets of air in bamboo would result in stronger, louder explosions. Subsequent experiments showed that bamboo could be dispensed with altogether and cylinders made of stiff paper or cardboard substituted, and so firecrackers evolved. Further experiments with leaving one end of the cylinder open resulted in rockets, and so the first aerial fireworks were created.
Panda Fireworks of China, 2011
Italians became fascinated by fireworks in the late 13th century, when Marco Polo brought knowledge of them back to Venice from the mainland. But it was not until the 15th century that firework displays became an art form, attracting crowds throughout Europe. These displays became popular in the English-speaking world in the 1700s, when instead of being put on for royalty alone, they were put on for the general public, too. The novelty reached America only in the 18th century. European settlers used firework displays to mark special occasions and impress native Americans. S.F.
Marutamaya Ogatsu Fireworks of Japan, 2007 SEPTEMBER 2012
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Entertainment
example, the mainland’s Panda Fireworks Group Co Ltd, which has competed here for the past two years, won last year and came second in its debut in 2010. United States will be represented by Pyro Spectaculars by Souza, which has huge experience of putting on fireworks displays for big sporting events – including the Olympic Games and the World Cup. This is the company’s second outing in Macau, after finishing second in 2006. Japan’s Marutamaya Ogatsu Fireworks Co Ltd has also competed here twice. It won in 1993 and came third in 2007. The company is known for its hand-made spherical fireworks. It has visited nearly 50 countries in the past six decades and put on more than 200 shows. Pirotecnia Minhota Lda of Portugal was one of the first teams to compete here. It won the contest in 1991.
The “people’s choice” The tourist bureau and telecommunications provider CTM will hold a competition for spectators. Spectators can vote by text message for their favourite team each night of the fireworks contest. Those who vote for the most popular team of the night will go into the draw for tickets for the Macau Grand Prix in November. The most popular team each night will receive the “people’s choice” certificate. There will also be a contest to find the best drawings and photographs of the displays. And each night during the event, the General Union of Neighbourhood Associations and the tourist bureau will hold a fireworks carnival. Last year’s edition attracted 25,000 visitors.
MACAU INTERNATIONAL FIREWORKS DISPLAY CONTEST SATURDAY, SEPTEMBER 8 9PM WOORI FIREWORKS, SOUTH KOREA 10PM THAILAND FIREWORKS, THAILAND SATURDAY, SEPTEMBER 15 9PM SYYUAN FIREWORKS, TAIWAN 10PM INFINITY PYROTECHNIC, AUSTRALIA SATURDAY, SEPTEMBER 22 9PM PIROTECNIA MINHOTA, PORTUGAL 10PM LACROIX-RUGGIERI, FRANCE SATURDAY, SEPTEMBER 29 9PM MARUTAMAYA OGATSU FIREWORKS, JAPAN 10PM PYRO SPECTACULARS BY SOUZA, UNITED STATES MONDAY, OCTOBER 1 9PM ORZELLA FIREWORKS, ITALY 10PM PANDA FIREWORKS, CHINA
Pyro Spectaculars by Souza of the United States, 2006 SEPTEMBER 2012
117 SANJEEV SANYAL DEUTSCHE BANK’S GLOBAL STRATEGIST
Who are tomorrow’s consumers? WE ARE IN THE MIDDLE OF A SOCIAL AND DEMOGRAPHIC SHIFT THAT WILL BOTH DESTROY AND CREATE CONSUMER MARKETS uxury-brand companies’ stock prices plunged in July, after their financial results disappointed investors, owing largely to slower sales in emerging markets, especially in China. Meanwhile, news reports indicate that high-end shopping malls in India and China are increasingly empty. What is going on? Many analysts had expected emerging markets to generate exponential growth over the next decade. But now there is talk of how the global crisis is slowing down these economies and killing off discretionary spending. But a slowdown in China’s economic growth cannot really be blamed for slower sales of luxury goods or empty malls. The annual growth rate of China’s US$7.5 trillion (MOP60 trillion) economy decelerated to 7.6 percent in the second quarter, from 8.1 percent in January-March – hardly a cause for panic. Moreover, two-thirds of the decline is attributable to slower investment rather than slower consumption. For all of China’s long-term structural problems, it is not exactly slipping into recession. The real problem is that many analysts had exaggerated the size of the luxury-goods segment in emerging markets. China is by far the largest emerging-market economy, with 1.6 million households that can be called “rich” (defined as having annual disposable income of more than US$150,000). But this is still smaller than Japan’s 4.6 million and a fraction of the 19.2 million rich households in the United States. The number of rich households amounts to barely 0.7 million in India and one million in Brazil.
L
Asia’s middle class The point is that developed countries still dominate the income bracket that can afford luxury goods. The explosive growth recorded by this segment in emerging markets in recent years reflected entry into previously untapped markets, with the subsequent slowdown resulting from saturation. The number of high-income households is still growing, but not enough to justify the 30 to 40 percent compounded growth rates expected by some. This does not mean that growth opportunities in emerging markets have disappeared, but expectations do need to be recalibrated. Despite the economic boom of the last decade, China still has 164 million households that can be called “poor” (with annual disposable income of less than US$5,000) and
Despite the economic boom of the last decade, China still has 164 million households that can be called “poor” (with annual disposable income of less than US$5,000) and another 172 million that are “aspirant”
another 172 million that are “aspirant” (between US$5,000US$15,000). Similarly, India has 104 million poor households and 107 million aspirant households. The real story for the next two decades will be these countries’ shift to middle-class status. Although other emerging regions will undergo a similar shift, Asia will dominate this transformation. A study by the economist Homi Kharas of the Brookings Institution gives us a sense of the scale of this change. He estimates that 18 percent of the world’s middle class lived in North America in 2009, while another 36 percent lived in Europe. Asia’s share was 28 percent (after including Japan). But Mr Kharas’s projections suggest that Asia will account for two-thirds of the world’s middle class by 2030. In other words, Asia will displace not just the West, but even other emerging regions. This is the real business opportunity. Of course, the rise of Asia’s middle class is not the only change we should expect. We are in the middle of a social and demographic shift that will both destroy and create consumer markets. The aging of developed markets is well known, but the latest data show that emerging markets are aging at an even faster pace.
A changing world China’s median age is today 34.5 years, compared to 36.9 years for the United States. However, the average Chinese will be 42.5 years old by 2030, compared to 39.1 for the average American. The median Russian will be even older, at 43.3 years. The impact of aging is already being felt in these countries’ education systems. The number of students enrolled in primary schools in China has fallen by 18 percent since 1990, and by an astonishing 33 percent in South Korea. At the other end of the demographic scale, the share of the aged is growing explosively. Meanwhile, the nature of the basic consuming unit – the household – is also changing rapidly. In most developed countries, the traditional nuclear family is in severe decline and is being replaced by single-individual households. In Germany, for example, 39 percent of households consist of just one person. Couples with children now account for barely 19 percent and 22 percent of households in the United Kingdom and the U.S., respectively. Nevertheless, it is not all about consumer atomisation. We are simultaneously witnessing the re-emergence of the multigenerational extended family, with as many as 22 percent of American adults in the 25-35 age group living with parents or relatives. By contrast, the extended family is giving way in India to nuclear families, which now account for 64 percent of households. All of these changes will profoundly affect the future of consumer markets. For example, we need to revise our mental image of the nuclear family from American suburbia to fit the rapidly expanding cities of India. By the same token, our mental image of the multigenerational extended family needs to include those in the West. An aging but increasingly middle-class Asia will be at the core of this new consumer landscape. SEPTEMBER 2012
118 118
Moments
BURLESQUE SPECTACULAR City of Dreams’ cabaret show “Taboo” elevated the level of naughtiness last month with the guest appearance of Dita Von Teese. The American-born diva is famous for her dance shows, often inspired by the 1930s and 1940s. The guest appearance of the “Queen of Burlesque” even attracted some Hong Kong A-list celebrities to Macau, all eager to experience the allure of Ms Von Teese. “Taboo” is scheduled to put on its last show this month, on September 15.
Sally and Robert Lo
Dita Von Teese and her trademark martini glass filled with champagne
Walter Hau, Vinci Wong and Stephanie Cheng
Ingrid Chen and Charlotte Chen
Stephen Hung, Yvette Yuen, Deborah Hung, Ryan Lam and Fanny Sieh SEPTEMBER 2012
Hanjin Tan
Chrissie Chau
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THE MODERN ULTRA-TRIATHLON Officials said there were at least two unrelated cases of mainland punters illegally entering Macau last month who admitted to having swum from Zhuhai just to gamble. Inspired by these cases and still fired up after the Olympic Games, Frozen Spy hereby proposes the establishment of Macau’s very own triathlon. It would consist of a night swim in the, ahem, pristine waters of the Pearl River Delta from Zhuhai to Macau; then a 20-hour baccarat marathon; and, finally, a 100-metre sprint, chased by the police. Those that finish will get the ultimate reward: gold-standard service in one of the city’s fine massage parlours. Frozen Spy is sure such a competition would be a success, attracting a high number of entries. There are so many mainland athletes practising for the event that it would be a certain gold medal for China. Does anyone have the phone number for the International Olympic Committee’s Jacques Rogge?
RESEARCH EXERCISE THREE-PIECE SWIMSUITS Still on swimming, one of the hottest trends for beachgoers in the mainland, specifically in Qingdao, is the use of nylon facemasks. Many swimmers wear these protective masks to stop jellyfish stinging their faces. The masks – known as “face-kinis” – are most popular among females, who want to prevent sun damage from spoiling their pearly white complexions. Frozen Spy thinks these masks should be compulsory for the brave swimmers venturing into the waters off the beaches at Cheoc Van and Hac Sá. With the pH values of one in every three samples of the water there outside the recommended range, and with excessive concentrations of lead and mercury in the briny, a swim at the beach in Coloane is like playing Russian roulette.
GOING DADA The Venetian Macao put on an exhibition last month called “Masters in Ink”, a selection of 90 Chinese ink paintings with an combined value estimated at more than MOP100 million (US$12.5 million). The exhibits included some unique works. Admission to the exhibition was free and even the catalogue cost nothing. Frozen Spy applauds such initiatives. Other resorts in Cotai are following the same path. It is nice to know casino operators are doing their fair share to sponsor the arts. The same cannot be said about the government-funded Art Museum. It is a tough task to remember any noteworthy international exhibition there under the management of Chan Hou Seng. While Hong Kong hosted a Picasso exhibition, 55 pieces for a two-month stint earlier this year, the Art Museum here enlightened us last year with a display of photos of food taken by residents and tourists with their mobile phones. Talk about Dadaism.
Lee Chong Cheng, a directly elected member of the Legislative Assembly and trade union leader, has been under fire because the Macau General Volunteers Association, which he heads, has established a research centre. The research centre is in the Macau Daily News building. The conditions of the lease of the land occupied by the newspaper’s building prohibit subletting of the premises. But the government has approved “lending” space to the research centre. Questions have also been asked about funding for the centre, most of which comes out of the public purse. The Macao Foundation granted it MOP5 million (US$625,000) for the lavish refurbishment of its facilities in the Macau Daily News building. Frozen Spy is sure none of this has anything to do with the Macau General Volunteers Association being well connected: Legislative Assembly president Lau Cheok Va and former Executive Council spokesman Tong Chi Kin are both involved, and the group is informally backed by the influential Macau Federation of Trade Unions. Frozen Spy has just one question: why does a research centre need a private gym?
Lee Chong Cheng
SEPTEMBER 2012
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September 2012
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