MB 78 | October 2010 by Macau Business

OCTOBER AUGUST 2010

OCTOBER 2010

Economy & Finance

28 Fund fails value test Reserve fund achieves poor results 30 No Basel burden Local lenders ready to face new rules 32 Staying strong BNU bullish about the future 33 Playing with numbers Are the GDP figures correct?

Transport

38 Clipping Viva’s wings Who is responsible for the low cost airline’s grounding? 42 Trading places Changes on the Hong Kong-Zhuhai-Macau Bridge

Politics

46 High flier Tracking Fernando Chui Sai On’s trips 49 Open to suggestions New body on the way to coordinate public consultations

Special

51 Moving forward 61st anniversary of the establishment of the People’s Republic of China

OCTOBER 2010

Property

68 Market watch Betting on the Hong Kong-Zhuhai-Macau Bridge 73 Reins pulled on speculators Government announces new measures to curb galloping property prices

Gaming

76 Billions race New yearly revenue record to be set 77 Under pressure Rude clients causing dealers’ work pressure 79 Stock watch Casino shares rise in Hong Kong 82 Land battle SJM wants land parcels reserved for Sands 84 Green consults on slots Former PWC gaming practice director is back in Macau 85 Playing the game Genting leading in Singapore

MB Report

88 A parallel revolution Looking at Macau’s retail sector

Essential

97 Escapes Your guide to indulgence

SEPTEMBER OCTOBER 2010

Illustration: Rui Rasquinho

114

Business

113 Shop Indonesian style Macau to get Indonesian street

Meetings & Conventions

114 Meet, stay and play City needs entertainment to become attractive as MICE destination 117 Money talks Macao International Trade and Investment Fair takes place this month 119 Buyers down at PATA Participants complain about the quality of buyers

Tourism

122 Forget bling, culture’s king New index says that what gives tourists most satisfaction in Macau is the city’s heritage

Telecommunications

124 Information highway dead end CTM is preparing a new fibre-based communication system, but is facing regulatory issues

Environment

126 Need for green City lacks strategy to promote environmental protection

Arts & Culture

127 Star chic Louis Vuitton’s flagship store hosts contemporary art exhibition

OCTOBER 2010

129 Golden harvest Anton Chekhov’s “Cherry Orchard” comes to life at the Cultural Centre 130 Evening with a master “Il Trovatore” to close the International Music Festival in style

Corporate Social Responsibility 134 Socially responsible driving Macau Business Charity Golf Tournament tees off this month

Entertainment

136 Investing in celebrity Ponte 16 hosts Julien’s Auctions’ first sale in Asia 138 Five happy years Business Intelligence, Macau Business’ sister publication in Chinese, is one year older 140 Another edition, another hit Pearl River Delta chambers of commerce meet again in Macau

Opinion

08 From the publisher’s desk Paulo A. Azevedo 11 Editorial Emanuel Graça 45 Walk the talk José I. Duarte 50 I love me Keith Morrison 64 China’s great migration Fan Gang 75 Japan as number three Heizo Takenaka 142 What are you here for? Ricardo Andorinho

SEPTEMBER OCTOBER 2010

Make our public institutions credible I DON’T UNDERSTAND HOW SOME PUBLIC departments go to the trouble of making veiled threats they know they are not willing to fulfil. They are worse than toothless – and clawless – tigers. The Lands, Public Works and Transport Bureau is one example. In April, without anyone quite realising why, the bureau sent written ultimatums to as many as 30 land concessionaires. The letters warned developers about holding onto precious concessions for too long without building on the land. I think we can understand why the bureau is upset. The problem has become almost generational. Out-of-luck developers, with good friends or no scruples – but typically a bit of both – have managed to grab hold of several pieces of land they plan to develop when they see fit. Failing that, they need do nothing at all with the community’s land. They may even choose to speculate, waiting for the perfect time to sell for a good profit. There are even some who ask for the government’s agreement to alter the land’s zoning according to shifting business opportunities. It often seems there is no rational reason behind the request. The requests appear to be as fickle as the direction the wind blows.

Follow through There are many developers that develop their land according to the stated purpose.

OCTOBER 2010

These properties have been used to advance the community’s well-being and promote Macau’s growth. Unfortunately there are some developers that have become players in a circus and it seems no one has learned their lesson or been made accountable. In conclusion, it is a completely shameful situation. We praise the government for making an effort to stop these unacceptable situations – some of them quite recently, as reported in Macau Business. On the other hand, we do not understand why the bureau has not followed though with its threats. Instead, it hides behind the concessionaires’ explanations, the same developers who have failed to keep their agreements with the government. It’s as if there’s no binding law in this city. Even worse, it seems the law is open to interpretation according to the time, blaming some and excusing others. The law is the law and our public officials should know that better than anyone else. If they can’t manage developers, they are not doing a good job and should be dismissed. If land is not being developed according to the timeframe agreed to in a contract, the respective fines should apply. When deadlines for paying the fines are not met and development has not started, the land should be returned to the government and a

The law is the law and our public officials should know that better than anyone else. If they can’t manage developers, they are not doing a good job and should be dismissed

new use decided. How is that so difficult to understand? The core of the problem is a fear of confrontation, which leads the government to occupy an intolerably fragile position. It leads to a government that appears to show its strength against the powerless, opposing small businesses, handfuls of demonstrators and acting on smaller issues, but when facing more formidable opponents, public officials act as though they are afraid. They sit and stare at each other, whispering imperceptible words. They retreat until a new directive is issued, allowing them to come back with a new threat that, again, rarely materialises into action.

End the illegalities The Bureau of Telecommunications Regulation provides another example of toothless behaviour. The telecommunications bureau has been subjected to needless ridicule in its dealings with the providers of public antenna broadcasts. Macau Cable TV has a concession

contract, a monopoly, and from the beginning has been affected by these unlicensed operators that simply steal television broadcasts. Theirs is an illegal business. Tired of fighting a situation that the government should have resolved, the former owner of Cable TV sold it because it stopped earning money. This was a clear example where the government should have stepped in. The current Cable TV owner was itself a provider of public antenna broadcasts, breaking the same laws that it now wants others to stop. It is Macau at its best. Despite lacking the moral high ground to call for an end to the broadcasts, the truth is that according to the law, the owner of Cable TV is right. The telecommunications bureau is not, and never was, right. It hides behind an unexplainable “tradition” in order to escape the subject, acting as if it is none of its business. “They’re stealing but since it’s been done for many years, then it’s really not stealing,” is the bureau’s line. Well, perhaps it is cultural. A culture of paper tigers that shy away from the legal and social responsibilities that they are sworn to uphold. We urgently need to restore the law, reform the institutions at fault and make the government’s actions credible. To fail to do so is to perpetuate gross mistakes and to prevent Fernando Chui Sai On’s government from reaching its higher goals. We wonder who would want that.

OCTOBER 2010

Emanuel Graça Editor-in-Chief

emanuel.graca@macaubusiness.com

The Cotai debate IT CAUGHT ALMOST EVERYONE BY SURPRISE.

By itself, the political decision to turn Cotai into Macau’s equivalent of the Strip in Las Vegas may be easily justifiable. The real issue is how that was coordinated with other macro-level policies to create a better city. In short, it wasn’t

Sociedade de Jogos de Macau’s (SJM) bold declaration of interest in Cotai parcels 7 and 8 was the topic of conversation among leaders in the gaming industry last month. Sands China marked the land as theirs years ago. Although Sheldon Adelson’s company is still waiting for the official grant, the government has allowed the gaming operator to fence off the land and authorised some preparatory works. SJM’s move is even more surprising taking into account common business practices in Macau. Disputes are often solved in back-room negotiations, informally sponsored by the government, and through hushed deals. SJM is no newcomer to the territory and its boss Stanley Ho Hung Sun is regarded as one of the most successful deal makers. Such a direct and confrontational approach was unexpected. Skipping the discussion on how successful SJM’s move may be, it has made the public realise one thing: development on the Cotai Strip is far from being a done deal. Three years after the Venetian Macao opened and with casinos mushrooming on the peninsula and in Taipa, the time has come to ask how the city has benefited from handing over Cotai to the casinos. Yes, gaming revenues are up but how has that helped create a better Macau?

Quid pro quo By itself, the political decision to turn Cotai into Macau’s equivalent of the Strip in Las Vegas may be easily justifiable. The real issue is how that was coordinated with other macro-level policies to create a better city. In short, it wasn’t. Infrastructure in Cotai is under stress and it appears that will continue for some time, especially in terms of transport. Gaming concessionaires with interests there have been forced to step in and partially cover the shortcomings

by operating bus and ferry services. These are roles far removed from their core businesses and that translates into economic inefficiencies. The result of the lack of planning has been bad for both the casinos and the wider population, with significantly increased traffic jams all over the city and reduced mobility. When handing over Cotai to the casinos, the government was unable to implement a realistic trade off. The gaming industry got Cotai but Macau has not received the long-term gains in quality of life it could have expected in return. Instead, the city won short-term economic benefits. There were no casinos – or any other substantial operations – transferred to Cotai to ease the crowded conditions on the peninsula, increase the city’s green areas or create new public amenities.

Planning ahead The debate over how Macau should maximise the one-off benefits from Cotai’s development is more relevant today than ever before as the territory prepares to reclaim another 350 hectares of land. By now, the government should have realised that Macau is too small to allow for urban planning to be done piecemeal, zone by zone and sector by sector. Unfortunately, it seems the lesson is still to be learned. For the sake of the people and the prosperity of industry, an integrated approach is urgently needed. If that had existed before developing Cotai perhaps today’s outcome may have been more successful for all the stakeholders, gaming operators included. Instead of looking at the eye-catching short-term economic gains, we should also be celebrating the long-term benefits of living in a sustainable and pleasant city. We can live with casinos but not with casinos only.

OCTOBER 2010

12 12

VOL.1 Nº78

Editorial Council Paulo A. Azevedo, Albano Martins, Duncan Davidson, Herman He Founder and Publisher Paulo A. Azevedo pazevedo@macaubusiness.com

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

Executive Director Business Development Luis Pereira pereiraluis@macaubusiness.com

Essential Supplement Coordinator Catarina Morgado morgado.catarina@macaubusiness.com

Property Editor Alan Tso tsoalan@yahoo.com.hk

Senior Analyst José I. Duarte

Letters to the editor

Advertising Xu Yu, Irene

Hong Kong Bureau Michael Hoare (Chief), Anil Stephen

irene@bizintellingenceonline.com

michael.hoare@macaubusiness.com

Subscriptions

Europe Bureau Joyce Pina (Chief) jpina@macaubusiness.com

Paula Joyce Macau Headquarters Block C, Floor 9, Flat H, Edf. Ind. Nam Fong, No. 679 Av. do Dr. Francisco Vieira Machado Tel: (853) 2833 1258 / 2870 5909 Fax: (853) 2833 1487

Special Correspondent Muhammad Cohen

pub@macaubusiness.com

maria_belchior@yahoo.com.br

Hong Kong Bureau 20th Floor, Central Tower, 28 Queen’s Road, Central, Hong Kong Tel: (852) 2159 9423 Fax: (852) 2159 9688 Hong Kong Distributor Far East Media (HK) LTD. Unit 1902, 19/F, Hing Wai Centre, Nº7 Tin Wan Praya Road, Tin Wan, Aberdeen, Hong Kong Tel: (852) 2555 0431 Fax: (852) 2873 6807 shonee@feml.com.hk

Bangkok Bureau 37 Charoen Nakorn, Klongsan, Bangkok 10600 Tel: (66) 02437 4932/02437 7329 Fax: (66) 02438 3098

OCTOBER 2010

Regular Contributors Branko Milanovic, David Cheung, Dominique Moisi, Eswar Prasad, Frank J. Fahrenkopf Jr., 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

jid@macaubusiness.com

editor@macaubusiness.com sub@macaubusiness.com

Contributing Editors Alexandra Lages, Carlos Picassinos, Christina Yang Ting Yan, Derek Proctor (Bangkok), Island Ian, João Francisco Pinto, José Carlos Matias, Kahon Chan, Lois Iwase, Luciana Leitão, Ray Chan, Sofia Jesus, Steven Chan, Tiago Azevedo, Wu Yu

info@muhammadcohen.com

Beijing Correspondent Maria João Belchior Manila Correspondent Max V. de Leon maxdeleon_080975@yahoo.com

Assistant to the Publisher Weng Fung weng.fung@macaubusiness.com

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

Photography António Falcão, António Mil-Homens, Carmo Correia, John Si, MSP Agency, Agencies Illustration G. Fox, Rui Rasquinho

Advertising Agents Bina Gupta binagupta@macaubusiness.com

Fátima Cameira

fcameira@macaubusiness.com

José Reis

jreis@macaubusiness.com

Media Relations GRIFFIN | Consultoria de Media Limitada Translations Stephanie Chu, PROMPT Editorial Services Agencies AFP, Lusa Exclusives Gambling Compliance, Hoje Macau, 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

Disclaimer: In Macau Business magazine, the translation of MOP amounts into US$ amounts (and vice-versa) is made at the rate of MOP8 to US$1 for the purposes of illustration only.

OCTOBER 2010

Find us in Macau Airlines

Autos

Hydrofoils and Ferries

Chambers of Commerce

Macau Business Official BlackBerry Carrier

Hotels/ resorts & lounges

Official Host Publication

OCTOBER 2010

Official Show Publication

Convenience stores

We Deliver Decision Makers

NEWSSTANDS AND SUPERMARKETS (Macau Peninsula) 43 Av. Infante D. Henrique 643 Av. da Praia Grande 3 Av. Dr. Mário Soares 221 Alm. Ribeiro 271 Alm. Ribeiro 317 Alm. Ribeiro 327 Alm. Ribeiro 7b Lrg. do Senado 17 Lrg. do Senado 31 Lrg. do Senado 13 Rua de S. Domingos Rua de Horta e Costa 27A Cheng Chong Kie Rua de Coelho de Amaral Av. do Dr. Rodrgo Rodrigues 30C Rua de Entre Campos 54 Rua da Barca Iong Vai Bldg. 5 Estrada de Adolfo Loureiro 73 Rua de Almirante Costa Cabral Av. do Ouvidor Arriaga Rua do Francisco Xavier Pereira Rua do Almirante Costa Cabral Av. do Sidónio Pais

Alm. Dr. Carlos d’Assumpção Mei Kui Koung Cheong (Phase I) Vai Choi Garden Block C KIOSK - Mandarin Oriental Hotel NEWSSTANDS AND SUPERMARKETS (Taipa) Rua de Bragança (Mei Keng Garden Blk. 1 Taipa) Est. Gov. Albano de Oliveira (Mercearia Fruta Man Yip Taipa) Av. Dr. Sun Yat Sen (Mercearia Fruta Man Yip Taipa) Rua de Seng Tou (Supermercado Pou Ip Taipa) Av. Dr. Sun Yat Sen (Seng Cheong Supermarket Taipa) BOOKSHOPS Portuguese Bookshop - Largo do Senado BOOKACHINO- NAPE, Macau TIMES Bookshop - Shop 2526, 2200 (The Grand Canal Shoppes Venetian Macao) Culture Plaza Bookshop - Rua do Campo

Find us in Hong Kong BOOKSHOPS Aberdeen Marina Holdings Ltd. Ah Lo Magazine Co. Bookazine Ltd - Canton House Bookazine Ltd - Far East Finance Bookazine Ltd - Jardine House Bookazine Ltd - Prince’s Building Bookazine Ltd - Shui On Bookazine Ltd - Tsim Sha Tsui Chaip Coin Co Ltd Cham Kee Cosmos Book Co Cosmos Nathan Road The Commercial Press - Jordan The Commercial Press - King Road The Commercial Press - Sha Tin The Commerical The Commercial Press - Yee Woo Nobletime Ltd (c) DFS - Int’t FC (c) DFS - Prince’s Building Exchange Mall Great Food Hall

Hong Kong Book Centre - City Plaza Hong Kong Book Centre - On Lok Yuen Hits Media Centre Jumbo Grade - City Plaza II Jumbo Grade - Grand Century Jumbo Grade - Int’l Finance Ctr Jumbo Grade - Pacific Place II Jumbo Magazine House Kelly & Welsh Ltd Kelly & Walsh - Exchange Square Kwong’s Mandarin Hotel Mannings New Mall - Discovery Bay Page One - Time Square Page One - Central Page One - Kowloon Tong Page One - TST Park’n Shop Swindon - 370 Ocean Centre Swindon - Lock Road Tung Son Magazines Co Variety Worldpac Ltd Y.M.C.A. of Hong Kong Dymocks

Restaurants

OCTOBER 2010

Uncle Sam on the watch United States following up on labour restrictions in Macau he US consul general for Macau and Hong Kong, Stephen Young, says he has been following the recent restrictions on imported labour in Macau. Mr Young says he is optimistic that these policy changes will not damage the interests of US companies operating in Macau. “I’ve been assured by the chief executive and others that the necessary workers that these guys [US-based casino companies operating in Macau] need to do their jobs to both build and run casinos will be available, and it’s an ongoing dialogue that they and I and the government of Macau continue to pursue,” he said, quoted by the Dow Jones Newswires. Mr Young was clear in stressing the importance of

Macau to US interests. “For an American representative here, the fact that we have six to eight billion [US dollars] of direct investment in the Macau gaming industry alone warrants my attention.”

Mr Young said he has already met Macau’s chief executive, Fernando Chui Sai On three times, besides having held meetings with representatives of the three US-based casino operators

present in the Macau gaming market: Las Vegas Sands, Wynn Resorts and MGM Resorts International. Last month, he met with Sands China’s new management team.

Air Macau expects MOP100 million-plus profit in 2010 Air Macau’s executive vice-president, Wang Xuefang, said yesterday that the airline company would finally post a profit this year, following years of losses. Mr Wang told Portuguese language daily Jornal Tribuna de Macau that Air Macau expects to post a profit of MOP100 million-plus (US$12.5 million) for

the whole of 2010. Air Macau lost MOP257 million in 2009, down almost 40 percent on the MOP416 million it lost in 2008. According to Mr Wang, the good results for 2010 are due to a good marketing campaign, a better economic environment and also to the new routes launched by the company.

Legislators’ work not that good: survey

Pay rise for public servants

Only 20.1 percent of the population are “satisfied” or “very satisfied” with the work of the Legislative Assembly’s 12 directly elected legislators in the 2009/2010 legislative term. According to the findings of a survey released by the New Vision of Macau Association, 14.47 percent of the interviewees were “very dissatisfied” or “dissatisfied”. About half of the interviewees ranked the lawmakers performance as “fifty-fifty”. Among the lawmakers, Ng Kuok Cheong and Kwan Tsui Hang were selected as the most popular and the best known. The less popular were Stanley Ho’s fourth wife, Angela Leong On Kei and Melinda Chan Mei Yi. However, around 30 percent of the interviewees admitted they didn’t know who are the current directly elected legislators.

Macau’s public servants are poised to see their wages increase in 2011. Chief Executive Fernando Chui Sai On is set to announce a pay rise for local public servants in November, during the announcement of his Policy Address for 2011, Radio Macau reported. For now, the discussions on how big the pay rise should be are still ongoing. The last pay rise for Macau’s public workers took place in 2008. Back then, their wages were increased by 7.27 percent.

OCTOBER 2010

Taking the lead Macau will have a 51-percent share in the future Chinese Medicine Park

acau will be the major shareholder in the future Chinese Medicine Park to be launched on Hengqin Island, in cooperation with

neighbouring Guangdong. A joint venture will be established to run the Chinese medicine industrial park, of which the Macau government

will have a 51-percent share while the Guangdong provincial government will own 49 percent, said Alexis Tam Chon Weng, who coordinates the project from the Macau side. Hengqin Island is a part of Guangdong’s Zhuhai city bordering Macau. The construction of the industrial park will start after approval by the central government, and the project is expected to be completed in three years, according to Mr Tam. The Macau government has commissioned a group of academics to conduct a study on the planning of the industrial park and a report will be submitted in the first half of next year. The Guangdong provincial government has agreed to allocate 0.5 square kilometres of land on the island for the industrial park and the funds for construction will be provided by Macau. Also until the end of this year, a Macau government-owned company will be set up to take charge of the industrial park’s management. The Guangdong government has already set up a similar firm. The statutes of this governmentowned company will be ready soon, Mr Tam assured. “We already have a draft statute and it should be approved before the end of the year.”

Smartone down in Macau

Big price gaps on beverages

Smartone, which runs mobile networks in Macau and Hong Kong, posted eye-catching results for the year ended 30 June, 2010. Overall, Smartone’s revenues grew by seven percent to HK$3.957 million. Profit surged by six times to HK$294 million. However, in Macau, the profits decreased significantly. The results of Smartone’s Macau operations were adversely affected by the non-recurring accelerated depreciation and impairment loss of fixed assets of HK$51 million, arising from the early retirement of 2G mobile network equipment, upon the launch of its 3G mobile network last July. Revenues in Macau fell by nine percent to HK$221 million, “amid a reduction in the number of non-resident workers,” the company explained. As a result, operating profit in Macau fell by 93 percent to HK$5 million.

A price check on beverage items conducted by the Consumer Council has found a significant price difference of up to 76 percent for the same item sold in different outlets. The council recorded prices of eight common beverages in 22 local retail outlets. “Vita Lemon Tea (250mlx6)” and “Watsons Water Pure Distilled (430ml)” were sold in different outlets with contrasted price differences of over 76 and 75 percent respectively, the council found. Other beverages surveyed recorded price differences of at least ten percent in selling price.

OCTOBER 2010

Workers’ comp to go up The government has approved a five percent increase in the amount of compensation to which an employee is entitled under the local workers’ compensation scheme. The increase will be enacted at the beginning of 2011. For Ho Sut Heng, president of the Macau Federation of Trade Unions, this increase is needed in order to compensate for the inflation effect. Ms Ho told the Portuguese language daily Ponto Final that this increase is part of a five-year plan launched in 2007 to update the compensation amounts, which ends in 2011.

OCTOBER 2010

No limits

Right to freedom of assembly and to demonstrate not to suffer any changes, says government

he government says it is not planning to introduce new limits on the right to freedom of assembly and to demonstrate. According

to a press release from the office of the Secretary for Security, Cheong Kuoc Vá, “the security authorities respect the citizens’ right

New bus system only in August 2011 Macau’s new bus system will only start to operate in August 2011, the Transport Bureau (DSAT) announced. To ensure the normal bus operations until then, the government will extend the current contracts with the two existing concessionaires, Transmac and TCM, until July 31, 2011. The contracts should have terminated this month.

Jet Asia names John Galati as chief executive officer Local private jet operator Jet Asia named former chief officer of operations John Galati as its new chief executive officer. The appointment is effective from September 1, according to Macau Daily Times. Former CEO Chuck Woods left the company and returned to the United States. Meanwhile, Mr Galati admitted that STDM, Jet Asia’s main shareholder, is “very interested in bidding” for a second ground handling license at the Macau International Airport.

OCTOBER 2010

to freedom of assembly and to demonstrate, and it is not necessary at the moment to change the respective law.” According to an

assessment from the office of the Secretary for Security published by Macau Business in its September issue, it was time to consider “imposing restrictions of special scope when, on reasonable grounds, one fears serious injury to public order and peace, and the safety of persons and property because of the inadequacy of the locations for assembly or demonstrations.” “There’s a need and opportunity for legislative action,” the document stressed. The government says that the assessment was only an “internal memorandum”, related to a “technical reflection” from the “juridical standpoint” regarding the execution of the law. Recently, the Court of Final Appeal has rejected several efforts by the administration to have protests called off.

Macau among the sexiest cities in China Chinese consulting corporation HorizonChina has released a ranking of the 10 sexiest cities in China based on a survey involving 30 Chinese cities. Macau was ranked the tenth sexiest city in the country, according to Xinhua news agency. Among the plus factors of the city were its casinos and its nightlife. Shanghai tops the list for its prosperity while Hong Kong and Chongqing take the second and third places respectively for well-developed showbiz and natural beauties.

OCTOBER 2010

Photo: LuĂs Almoster | mspagency.org

In need of hard cash

Unemployment rate remains unchanged The unemployment rate for June-August 2010 remained unchanged from the previous period (May-July 2010) at 2.9 percent, according to official data. The underemployment rate dropped further by 0.3 percentage point to 1.5 percent. The number of the unemployed decreased by about 200 from the previous period to 9,400, with 17.2 percent being fresh labour force entrants searching for their first job, up by 6.0 percentage points over the previous period.

Imported workers on the rise The number of imported workers has increased for the second month in a row, after almost two years of decline. In July, the total number of nonresident workers in Macau stood at 72,209, slightly up by 67 people in comparison with the previous month. In September 2008, Macau had a total of 104,281 imported workers, but since then the number has continually fallen month-to-month until it rose back again for the first time in June 2010.

Small and medium enterprises lending increased in the first half of 2010. In the first six months of 2010, new SME credit limit approved by Macau banks totalled MOP10.3 billion (US$1.29 billion), 16.7 percent up on the second half of 2009 or 67.7 percent up on the same period last year. As at end-June 2010, the outstanding value of total SME loans reached MOP22.5 billion, which represented a growth of 8.7 percent from endDecember 2009 or 14.9 percent from a year earlier. The delinquency ratio, a ratio of delinquent loans outstanding balance to total SME loans outstanding, dropped 0.32 percentage points from end-December 2009 or 0.06 percentage points from a year earlier to 2.15 percent.

Public revenue goes up In the first eight months of 2010, Macauâ&#x20AC;&#x2122;s total public revenue (not including autonomous agencies) rose by 42.9 percent to MOP48.44 billion (US$6.1 billion). The increment was attributable to notable increases in direct taxes from gaming and other current revenue, up by 63.9 percent and 50.9 percent respectively, that was contributed by increasing gross gaming revenue. Direct taxes from gaming totalled MOP40.91 billion. Total public expenditure was MOP20.59 billion, with a year-on-year increase of 11.2 percent. A fiscal surplus of MOP27.85 billion was recorded in the first eight months of 2010, up by 81.1 percent as compared with the same period last year.

OCTOBER 2010

Consumer cases jump

In the first half of 2010, the Consumer Council handled over 4,800 cases, almost as many as for the whole of 2009 (4,875). A total of 1,227 complaints involved Viva Macau, with the claims amounting to MOP6 million. There were also 1,014 information requests involving the defunct low cost company. Other complaint cases included telecommunications services. The Consumer Council indicated that as mobile phone functions become more complex, problems regarding fees charged for surfing the Internet and downloading data using mobile phones have arisen. The numbers of complaints about clothing/apparel (+15%) and home decorations (+26%) also increased.

OCTOBER 2010

Show time Throwing the spotlight on homegrown talent was the theme at The Venetian Macaoâ&#x20AC;&#x2122;s third birthday celebrations, and the show unearthed some real gems

OCTOBER 2010

Sponsored Feature

Partnership people The Venetian Macao-Resort-Hotel celebrated its third anniversary with donations to five higher education institutions and five groups that promote responsible gaming

t was a very happy birthday for The Venetian Macao-ResortHotel in August. Just three years earlier, the property helped to change the face of Macau, leading the city into a new era where it has since developed into one of Asia’s biggest entertainment hubs. The Venetian Macao has since gone on to win a significant place in Macau’s geography, history and, most importantly, as a key supporter of the community. Sands China Ltd used The Venetian Macao’s anniversary to stress its role as socially responsible corporation. The company gave birthday gifts to five higher education institutions and five community organisations. “As part of Macau, Sands China Ltd takes its role in society very seriously. Since 2004, we have extended our support to over 120 community initiatives, with beneficiaries spanning education, medical support and social assistance,” says Sands China Ltd president and chief operating oﬃcer Edward Tracy.

Promoting education From academic year 2006/2007 onwards, Sands China Ltd has run a scholarship and fellowship scheme with the University of Macau, Macao Polytechnic Institute, Macau University of Science and Technology, the Institute for Tourism Studies. The University of Saint Joseph joined the scheme this year. Donations now total MOP2.48 million and about 400 students have directly benefited. This academic year, Sands China Ltd handed out a total amount of MOP590,000 to these five institutions. Funding is allocated to scholarships for students with excellent academic results or for fellowships to students who need financial assistance and have satisfactory grades. “There is absolutely no doubt that, after three great years, The Venetian Macao will continue to provide this type of contribution to these institutions,” says Mr Tracy.

From left: Alex Lai Iat Long (Vice Rector, University of Macau), José Alves (Vice Rector for Academic Aﬀairs, The University of Saint Joseph), Edward Tracy (President and Chief Operating Oﬃcer of Sands China Ltd.), Lei Heong Iok (President, Macao Polytechnic Institute), Keith Morrison (Registrar, Macau University of Science and Technology) and Antonio Chu (Registrar, Institute for Tourism Studies)

Responsible play Following the scholarship and fellowship cheque presentation to representatives from the higher education facilities, Sands’ executive vice-president and chief casino oﬃcer David Sisk presented MOP100,000 cheques to five charity institutions that have been fundamental in promoting responsible gaming. The recipients were: Sheng Kung Hui Macau Social Service Coordination Oﬃce, the Young Men’s Christian Association of Macau, the Macau IFE Rehabilitation Centre for Problem Gamblers, the Macao Catholic Family Advisory Council and the Good Shepherd Sister – Women’s Mutual Help Centre. “We believe it’s important to address community concerns to minimise the potentially negative impact on the quality of life here in Macau and in the wider region,” said Mr Sisk. “We pride ourselves as a responsible corporate citizen, and we are committed to creating awareness of potential problems by promoting a responsible gaming environment.” Sands China Ltd launched its Responsible Gaming Programme in April 2007 and has supported these non-profit organisations since 2006. The company has donated MOP1.7 million in total.

From left: Maggie Chiang (Vice Chair, Macao Catholic Family Advisory Council), Sister Juliana Devoy (Director, Good Shepherd Sister – Women’s Mutual Help Centre), David Sisk (Executive Vice President and Chief Casino Oﬃcer of Sands China Ltd), Peter Loi (Program Secretary, Macau IFE Rehabilitation Centre for Problem Gamblers), Grace Kuan (General Secretary, Young Men’s Christian Association of Macau) and Seiko Lee Wai Wah (Centre in charge, Sheng Kung Hui Macau Social Service Coordination Oﬃce) OCTOBER 2010

Economy & Finance

Fund fails value test The government is creating a new fiscal reserve system led by the Monetary Authority, but the de facto central bank has presided over poor returns from the present reserve fund acau’s “fund for the future” has averaged returns that barely outstrip the inflation rate over the past nine years, owing to the Monetary Authority of Macau’s (AMCM) conservative investment strategy. It is a wake-up call, now that the government is setting up a new fiscal reserve fund, also to be managed by the Monetary Authority. After the authority took charge of the reserve fund in April 2000, the fund achieved an average annual return of 2.21 percent between 2001 and 2009, while the average annual inflation rate in the same period was 2.19 percent. In the past, the fund “has been managed as if it was a general deposit, but following a more conservative strategy,” said Samuel Huang Guihai, associate professor at the Macau Polytechnic Insti-

OCTOBER 2010

tute. The authority favours holdings “in AAA or AA rated debt instruments issued by government agencies and supranational issuers. Those are low-risk investments that also explains the low return rate,” Mr Huang wrote in an article about Macau’s reserves management published earlier this year. The fund finished 2009 with holdings of MOP12.8 billion (US$1.6 billion), after a net income of MOP426.4 million for the year. That represents a 3.44-percent rate of return, the first annual result since 2003 that was above the annual inflation rate. The inflation rate last year was 1.17 percent.

Bad student Between 2001 and 2008 the fund posted an average annual return of 2.06 percent, well below the average annual inflation rate for the

A stash with history

acau’s reserve fund was set up under the Sino-Portuguese Joint Declaration in 1987. It was then known as the land fund. The declaration succinctly states that “from the entry into force of the Joint Declaration until 19 December 1999, all incomes obtained by the Portuguese Macau government from granting new leases and renewing leases shall, after deduction of the average cost of land production, be shared equally between the Portuguese Macau government and the future government of the Macau Special Administrative Region.” With the establishment of the Macau SAR, the assets of the land fund were handed over to the government. The fund had MOP10.2 billion (US$1.3 billion) under management when the Monetary Authority assumed its management in April 2000, and this increased to MOP10.53 billion by the end of that year. By the end of last year, the fund amounted to MOP12.8 billion.

29 same period of 2.32 percent. In contrast, from 1999 to 2007 the rate of return of fiscal reserve assets held by Hong Kong’s Exchange Fund averaged 6.8 percent, while the average inflation rate there was 1.2 percent, according to a study by Jay W. Pao of the Statistics and Survey department at the Monetary Authority. Singapore’s fund also outperforms inflation. The Government Investment Corporation was established in 1981 to maintain the purchasing power of Singapore’s substantial reserves, including fiscal reserves and foreign exchange reserves. By the end of March last year, its 20-year nominal annual real rate of return above an international measure of inflation was 2.6 percent, down from 4.5 percent a year earlier owing to the international financial crisis. The corporation’s portfolio suffered a loss of more than 20 percent in Singapore dollar terms in that period.

One good year

Between 2001 and 2008 the reserve fund posted an average annual return of 2.06 percent, well below the average annual inflation rate for the same period of 2.32 percent

According to the Macau Monetary Authority’s annual report, “while official interest rates in the developed world stayed at historically low levels throughout 2009 and consequently led to a minimal money-market return in aggregate, the fixed-income portfolio under management ended up with a decent yearly performance as a result of a dynamic asset-allocating process,” boosting the reserve fund’s performance. Foreign exchange exposure also contributed to the fund’s growth last year as the US dollar weakened against most other major currencies. Also performing well was the externally managed portfolio; the authority invests part of the reserve fund in external funds. “Against a background of broad-based credit-spread tightening and generally low-interest-rate setting, the external fund managers succeeded in presenting an annual result above the benchmark and achieved a generous positive return in absolute terms,” the authority said in its report. “In the realm of management of exchange reserves and the MSAR reserve fund, and in view of the turbulent international markets, which affected the trends of major currencies, debts, equities and interest rates, the Monetary Authority insisted on a prudent investment strategy in reserve management,” wrote in the report the authority’s chairman, Anselmo Teng.

Major revamp coming A

lthough the reserve fund is a form of fiscal reserve, no regular capital injection into the fund has been made since the handover from Portuguese rule. The fund does not include either retained budget surpluses or the foreign exchange reserves, but this is set to change. The government has announced that the long-awaited fiscal reserve system law proposal will be sent to the Legislative Assembly by the end of this year. The reserve fund and accumulated budget surpluses amounting to more than MOP100 billion (US$12.5 billion) at the end of last year (excluding those of public autonomous agencies) will be used to establish the system, to be managed by the Monetary Authority. According to Secretary for the Economy and Finance Francis Tam Pak Yuen, the system will have two parts: a contingency reserve and an operational reserve. In the contingency reserve there will be enough money to support the government’s expenditure for no less than 12 months. The rest of the assets will be kept in the operational reserve. If there are “actual” budget deficits, as there were in the fiscal years of 1998 and 1999, the government will use the money in the operational reserve to finance the shortfall. However, the use of the assets of the fiscal reserve system will have to be approved by the Legislative Assembly. It has yet to be announced how the Monetary Authority will manage the MOP112 billion-plus assets in the fiscal reserve system - for instance what kind of investment strategy will be followed and what kind of goals for returns will be set. OCTOBER 2010

Economy & Finance

No Basel burden Local lenders are ready to face Basel III’s new liquidity rules, says regulator

he Monetary Authority of Macau says local banks will not face difficulties meeting the Basel III requirements. The new rules require lenders to raise the level of minimum reserves they hold and to improve the quality of the capital held. “As banks in Macau have been maintaining high quality capital components and rigorous risk management processes, their capital adequacy ratio has been at a level

OCTOBER 2010

well above the international standard and hence the banking system is expected to well fulfil the new requirements,” the authority told Macau Business. The monetary authority “is always of the view that capital adequacy is the major foundation for the stability of the banking system and opines that the Basel III is a substantial strengthening of existing capital standards to improve the banking sector’s ability to absorb shocks aris-

ing from financial and economic stress.”

Tougher requirements The Basel III rules are designed to reinforce the financial stability of banks and avoid them taking on excessive risks. The agreement will be phased in until 2019. According to the new rules, banks worldwide need to hold top-quality capital totalling 7 percent of their risk-bearing assets. The

current requirement is set at 2 percent. Top-quality capital is classified as stable assets that do not suddenly lose their value, as was the case during the subprime crisis of 2008. The new agreement was reached last month by the Basel Committee, a standardsetting body of central bank governors from 27 countries, ending months of wrangling.

Hong Kong ready too The Hong Kong banks are

Millennium BCP goes retail

ortuguese bank Millennium BCP opened a Macau branch late last month after operating in the territory through a local offshore subsidiary. A retail license was granted in May. The bank plans to focus on the corporate market, providing loans to companies, institutions or individuals that plan to do business in African countries such as Angola and Mozambique. The local branch has eight employees but intends on doubling that number in two years, director José João Pãozinho told Portuguese news agency Lusa. Mr Pãozinho said business was “going very well so far and profits should increase around 20 percent”. Millennium BCP’s offshore subsidiary posted a profit of MOP48.7 million (US$6 million) last year. Millennium BCP is the biggest private Portuguese bank, with 4.3 million customers and 900 branches around the world.

It’s your daily business

Banks want in on bond market

ome” local banks have told the monetary authority they are interested in investing in the mainland interbank bond market, the president of Macau’s de facto central bank, Anselmo Teng, told reporters. Mr Teng, however, did not mention any names. The People’s Bank of China, the mainland’s central bank, recently launched a trial programme in August that will permit overseas institutions, including Macau lenders, to invest in the mainland interbank bond market. The move is designed to promote yuan cross-border trade settlements.

also not expected to face difficulties in complying with Basel III requirements. The regulator there says the new rules will not have a significant impact on lenders in the former British colony. “Many Hong Kong banks already have a capital ratio that is higher than the new Basel III requirement,” said Arthur Yuen Kwokhang, deputy chief executive of the Hong Kong Monetary Authority. “As such, I do not

think banks in Hong Kong will be under pressure to raise capital over the next few years.” The Basel III agreement has caused little trouble for Asian banks where capital levels are typically well above the minimum standards set. In Europe and the United States, the new rules are likely to cause more pain, with many top banks expected to raise funds to meet the new requirements. OCTOBER 2010

Economy & Finance of the main growth drivers for the bank will be yuan banking services. “As time goes by and the liberalisation of yuan trading increases, this will be a sector which will post a fast growth,” he predicts.

Staying on track

Staying strong Photo: Luís Almoster | mspagency.org

BNU’s new chief says the bank has enjoyed a good first half of 2010 and is bullish about the bank’s future on the back of a 10-year renewal of its note-issuing agent bank status BY EMANUEL GRAÇA

anco Nacional Ultramarino (BNU) is expecting 2010 will be a year to remember. The bank has a new chief and has posted strong first half results that it forecasts will continue into the second half. “We had a very good first semester and we expect

OCTOBER 2010

to finish the year with results above last year’s performance,” says bank chief executive Artur Santos, without disclosing figures. According to the bank’s parent company, Portugal-based Caixa Geral de Depósitos, BNU’s loans and advances to customers in the first half of 2010 were 15.7 percent higher than in

the corresponding period of last year. BNU made a profit of MOP320.1 million last year, down 9.65 percent on the result from 2008. The drop was due to lower interbank interest rates and a contraction of credit demand due to the global financial crisis. Mr Santos says that one

Mr Santos was appointed as BNU’s head two months ago, replacing the retiring Herculano de Sousa. Mr Santos had been the bank’s deputy chief executive for 11 years. Although there is a new chief in place, do not expect big changes at BNU. “We will continue following the same policies we adopted in the past, making, of course, the needed adjustments according to Macau’s economic development and to the requests of our customers,” says Mr Santos. BNU has no plans to expand its network. The bank has 14 branches in Macau and around 430 employees.

Printing money BNU has been one of Macau’s note-issuing banks for many years, a title it will keep after signing a new deal with the government to extend its contract until October 2020. The Macau branch of the Bank of China, the other note-issuing bank, also had its contract extended for a decade. Both banks will have the right to issue equal amounts of notes. The government struck the present note-issuing agreements during Portuguese rule. These 15-year agreements were due to expire this month. BNU founded its first Macau branch in 1902. Three years later, the government reached an agreement with the bank whereby BNU was authorised to print and issue notes in MOP1, MOP5, MOP10, MOP25, MOP50 and MOP100 denominations.

Playing with numbers

Macau’s second quarter real GDP increased by almost 50 percent year-on-year but there is criticism of the way the government calculates it acau’s real Gross Domestic Product (GDP) was 49.1 percent higher in the second quarter year-on-year, according to official figures. The government has also revised upwards the economic growth in real terms for the first quarter, from 30.1 percent year-on-year to 31.4 percent. Although the numbers are impressive by any measure, how correct are Macau’s GDP data? Economist Albano Martins says the figures are exaggerated. According to Mr Martins, no actual deflator is used for exports of gaming services, which pushes up the final real GDP figures. Exports of gaming services are the main component of Macau’s GDP and the component for which no deflator is

used. It has led to the situation where the city is posting real GDP rates higher than the corresponding nominal GDP rates, although Macau is not facing deflation. Indeed, it is facing quite the opposite. For instance, Macau posted 41.2 percent nominal GDP growth for the second quarter, almost eight percentage points below the real GDP growth rate, a situation Mr Martins said was “absurd”. Real GDP is adjusted for inflation. Nominal GDP is not. Economists usually regard real GDP as a more accurate measure of an economy’s output over time.

Revision looming When asked by Macau Business to clar-

Inflation to stay ‘relatively high’

ecretary for Economy and Finance Francis Tam Pak Yuen expects Macau’s inflation rate to remain “relatively high” in the second half of 2010. “The government will keep an eye [on inflation] and it will set up measures to alleviate the pressure on citizens,” Mr Tam said. He said several external factors were likely to keep the inflation rate up, such as the pataca’s exchange rate against the yuan. Macau’s Composite Consumer Price Index (CPI) was 2.55 percent higher in August than a year before because of increases in the price of food and nonalcoholic beverages. August’s Composite CPI was 0.21 percent lower than July’s. The average Composite CPI for the first eight months of the year increased by 2.26 percent year-on-year. For the 12 months ended August, the average Composite CPI was up 1.38 percent year-on-year.

ify the use of GDP, the Statistics and Census Service said it was working on a major revision of Macau’s GDP, which is scheduled to be released later this year. “The major revision, undertaken regularly every five to six years, will incorporate the latest international recommendations applicable to Macau, new sources of data, re-examination of methods used, as well as a revised GDP series,” the bureau said. Mr Martins says that if exports of gaming services had been deflated using the implicit deflator used for private consumption, Macau’s second quarter real GDP growth rate would have been 39.7 percent instead of 49.1 percent. Last year, real GDP would have actually contracted by around 2.3 percent instead of growing, as officially stated, by 1.3 percent. Mr Martins also says Macau should publish its GDP statistics more swiftly, noting that the city takes longer to come up with its figures than the world’s biggest economies, the United States and the mainland. Last month, Secretary for Economy and Finance Francis Tam Pak Yuen said he expected Macau to post real GDP growth of no more than 30 percent for all of 2010. He said GDP growth would slow in the second half, because in the equivalent period last year Macau had “already entered a stage of recovery” from the global financial crisis. OCTOBER 2010

Economic Trends by José I. Duarte TABLE 1 - Employment by sector (In thousands of jobs)

Manufacturing Construction Retail Hotel and Restaurants Administration Education Social services Gambling Other Domestic

350 300 250 200 150 100 50 0 2004

2005

2006

2007

TABLE 2 - Average earnings in major surveyed sectors (In patacas)

2008

Manufacturing

2009

Retail

Hotel and Restaurants

Gambling

18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000

Employment and earnings TABLE 1

The period between 2004 and last year represents a remarkable period for Macau’s economy and the dynamics of its labour force. In just five years, the total number of employed workers rose by about 45 percent or about 100,000 workers in absolute terms. These figures hide the diversity between each of the economy’s sectors. For example, manufacturing was the biggest employer in Macau in 2004. The sector has since lost more than half of its workforce, against the trend in other sectors. It is now ranked sixth, a position that may shortly be lost to the domestic helpers sector if current trends continue. In the construction sector, the size of the workforce more than doubled in size in three years earlier this decade, but now appears to be past its peak in 2007-08. Somewhat surprisingly, the number of retail workers has increased by just 20 percent. That makes the hotels and restaurants group, and gaming the only major employment drivers in this sector, having seen their ranks multiply by a factor of 1.8 and 2.7, respectively. Curiously enough, the champion when judged on relative growth is the comparatively small domestic helpers sector. Its size has more than tripled, making it bigger than the education sector. TABLE 2

2,000 0 04S1

04S2

05S1

05S2

06S1

06S2

TABLE 3 - Median earnings for select sectors (In patacas)

07S1

07S2

08S1

08S2

09S1

09S2

10S1

Manufacturing Construction Retail Administration Hotel and Restaurants Leisure services Domestic

25,000

In the bigger and most closely watched sectors, average earnings increased throughout the period, by values between 40 and 90 percent. In a period were inflation was not significant, these figures suggest a palpable growth in real earnings. The strongest performance was registered in the hospitality sector, reflecting neatly the opening of several luxury hotels. TABLE 3

The trend of steadily appreciating average wages is consistent, although not completely comparable, with the median earnings in various sectors obtained from the general survey. The different classification used in this survey means direct comparisons cannot be made, which is particularly regrettable for the gaming sector. Where comparisons are possible, there appears to be an increase in earnings asymmetries in the most dynamic sectors.

20,000

15,000

10,000

5,000

0 2004

2005

OCTOBER 2010

2006

2007

2008

2009

TABLE 4 - Median earnings for select sectors, showing deviation from the overall median (Percent)

TABLE 4

Manufacturing

Construction

Hotel and Restaurants Leisure services

Retail

Administration Domestic

200 150

100 50

0 -50 -100 2004

2005

TABLE 5 - Median earnings by occupation (In patacas)

2006

Administration

2007

Professionals

2008

2009

Technical

TABLE 5

Clerks Sevices and Sales Skilled workers, primary sector Skilled workers Semi-skilled workers Unskilled workers

25,000

20,000

15,000

10,000

5,000

0 2004

2005

2006

2007

2008

If we look now at the dispersion of earnings in relation to the overall median for all earnings, only three sectors have outperformed. They are: construction, which appears to be losing steam; gambling, which is included in the general category of â&#x20AC;&#x153;leisure servicesâ&#x20AC;? and where earnings are generally about 50 percent above the overall median; and public administration, by far the sector with the highest median earnings. The earnings of those in the public administration sector even appear to have reversed a declining trend evident in the first years of the survey period. The abandoned sectors of the boom, in terms of earnings, have been manufacturing and the domestic helpers sector. In the first case, the relative level of earnings has plateaued. In the second case we have seen a decline.

2009

If the same analysis is made for classes of occupations and not economic sectors, the same general upward trend in median earnings is clear. Note that we follow the nine classes of occupations used in the official statistics, just simplifying their designations. The first two categories include top management, professionals and jobs in politics, and are neatly detached from the rest. However, if we put our faith in the figures, look at relative earnings and exclude unskilled workers from the analysis, the main beneficiaries of the economic boom have been the lowest occupational categories, comprising skilled and semi-skilled workers. This is a surprising result and one that requires more detailed data to be analysed. TABLE 6

Administration Professionals Clerks Technical Sevices and Sales Skilled workers, primary sector Skilled workers Unskilled workers Semi-skilled workers

TABLE 6 - Median earnings by occupation, showing deviaton from the overall median (Percent) 250 200 150 100 50

The final table displays two fundamental features that should not surprise. First, it confirms there are earnings clusters relative to the overall median that appear closely linked to the training associated with each of the classes of occupation. The graph also shows there were some oscillations in the relative position of the various occupations, in terms of relative earnings. Overall, the relative standings of the occupations has been mostly stable across the period surveyed.

0 -50 -100 2004

2005

2006

2007

2008

2009

OCTOBER 2010

Economic Trends

by JosĂŠ I. Duarte

Output and expenditure 2009 (in MOP) GDP current

169,343

million

Consumption

41,601 31,580 13,739 - 39,274 121,695 169,342

million

Investment

Economic Activity

Government Trade balance: goods Trade balance: services GDP constant (2002)

million million million million million

% var

- 2.4 5.7 - 39.0 12.6 - 5.1 9.1 - 2.4

Latest (in MOP)

54,794

million

11,089 6,343 3,549 - 10,979 44,790 48,080

million million million million million million

Notes

% var

41.2 9.8

- 29.0 8.3 22.4 63.3 75.9

% var

Notes

Q2 Q2 Q2 Q2

Money and prices 2009 M1 (in MOP) M2 (in MOP) Credit (in MOP) Deposits (in MOP) IPC/Inflation rate(*) AMCM base

30,608 million 212,153 million 101,064 million 207,247 million 101.40 base - 2008 0.50 %

% var

23.8 11.8 10.1 11.8 1.16 --

Latest

34,433.3 million 222,160 million 112,171 million 217,138.2 million 104.61 base - 2008 0.5 %

27.7 9.3 20.1 9.3 2.96 --

June June June June July July

Population/Labour force

Labour force Median wage rate (in MOP) Unemployment

% var

542,200 329,200 8,500

- 1.3 - 1.5 6.3 - 0.1

3.0 %

Latest

544,600 326,000 8,500 2.9 %

Notes

% var

0.1 0.1 -- 0.9

Q2 Q2 Q2 July

Construction 2009

228,874 Finished 1,406,242 Cement (Apparent consumption) 276,710 Transactions/Commercial (in MOP) 2,976 Transaction/Residential (in MOP) 21,517

Major sectors

Started

m2 m2 tons million million

% var

- 57.1 40.7 - 56.9 - 1.9 - 27.7

Latest

2,304 27,679 16,131 2,642 431

m2 m2 tons million million

% var

Notes

- 64.4 - 87.5 - 27.4 - 0.05 --

July

% var

Notes

July July July July

Gaming 2009 Gross revenue (in MOP) Casinos Tables Machines

120,383 33 4,770 14,363

million

% var

Latest

9.6 2 18.7 21.1

16,448 33 4,828 14,659

million

12.3 0 1.2 2.0

July Q2, var, ytd Q2 Q2

Tourism 2009

21,753,000 Average expenditure (in MOP) - 1,616 Average stay 1.10 days Hotel rooms 19,259 Occupation rate 71.60 % Average Hotel stay 1.50 nights Visitors

% var

- 5.1 - 6.5 -9.8 -2.9 0.6

Latest

2,162,000 1,575 0.90 days 19,560 78.2 % 1.49 nights

% var

Notes

23.2 3.0 - 0.20 7.6 13.9

July

- 0.03

%var - % change on homologous period; var - absolute variation; ytd - % change, year-to-date; x - discontinuous series APRIL 2010 (*) Important note: The inflation base period has changed ( New base: April 2008 to March 2009 = 100)

Q2 Q2 June Q2 June

Sources: DSEC (Statistics and Census Service), AMCM (Monetary Authority of Macau), DICJ (Gaming Inspection and Coordination Bureau)

2009 Population

How could we celebrate without you?

Thanks a million!

OCTOBER 2010

Transport

Clipping Viva’s wings Questions surround the demise of low-cost airline Viva Macau, with the government saying it gave no direct order to Air Macau to cancel Viva Macau’s sub-concession contract. Macau Business has exclusive access to letters between the main players BY LUCIANA LEITÃO

iva Macau stopped flying in March this year. Last month the low-cost airline was officially declared bankrupt at a conference of creditors. But what led to its demise? Documents which Macau Business has had access to mention a decision by the secretary for transport and public works to ground the carrier. The government says this was just “a non-enforceable opinion” given to Air Macau (Viva Macau operated under the umbrella of Air Macau). At the conference of creditors on September 13, the sequence of events leading to the grounding of Viva Macau was made clear. The Nam Kwong Group refused to supply fuel to the airline because of unsettled debts. Air Macau then revoked Viva’s sub-concession contract.

OCTOBER 2010

The end came when the Civil Aviation Authority cancelled Viva Macau’s air operator certificate. Viva didn’t pay because it was having difficulties in getting credit. According to what was said at the conference of creditors, this situation was partially due to the global financial crisis. Viva was on the edge of a cliff. What pushed it over? Three letters decided the airline’s fate, according to the documents seen by Macau Business.

Termination The president of the Civil Aviation Authority Simon Chan Weng Hong sent a letter to Air Macau chairman Zhao Xiaohang on March 28. Within it, he informed that, “according to the decision of the secretary for transport and public

works, Air Macau must terminate immediately the sub-concession contract with Viva Macau”, claiming the company had constantly violated its public service obligations by cancelling flights and refusing to provide support and information for passengers carrying valid tickets. Mr Chan’s letter said that Viva had caused “irreparable damage to passengers, [the] airport and the image of Macau SAR” and considering that “in case of sub-concession, Air Macau maintains all its obligations under the concession contract” Air Macau must terminate the sub-concession contract immediately. Air Macau holds the exclusive concession to fly all air services out of the city. It signed two sub-concession contracts and one joint-venture contract in

39 2006, in a move sponsored by the government to allow Macau to have more airlines. Eventually only Viva Macau began operating. It was obliged to get authorisation from Air Macau before opening a new route.

Revocation On the evening of March 28, Mr Zhao wrote to Viva Macau chairman Ngan In Leng saying that following “official correspondence received from the Civil Aviation Authority, with deepest regret, (he) was instructed to terminate with immediate effect, the sub-concession contract”. The same day, the Civil Aviation Authority’s Mr Chan wrote to Viva Macau chief executive Reg Macdonald saying he had been informed by Air Macau that Viva’s sub-concession had been terminated. Mr Chan’s letter said the authority had to revoke Viva Macau’s air operator certificate because the contract with Air Macau had been cancelled. The letter ordered Viva Macau to stop flying and stop selling tickets. Two days later Viva Macau wrote to

Air Macau. The letter said: “Third-party instructions, even if issued by the regulator, do not constitute legal grounds of termination” of the sub-concession contract. Mr Ngan said he therefore did not consider Air Macau’s letter to be a valid notice of termination. In a letter dated March 31, Air Macau’s chairman, Mr Zhao, replied that it was not possible to recall the prior letter that terminated the sub-concession contract. He insisted that the contract had ended. Viva Macau’s breach of its public service obligations, its repeated cancellation of flights, its refusal to provide the operational and financial data stipulated in the sub-concession contract and its refusal to pay its outstanding royalties, were cited as grounds for termination. On the same day Viva Macau lawyers wrote to the secretary for transport and public works, asking for a “certificate” of the secretary’s administrative decision. On April 16 the president of the Civil Aviation Authority replied. “There was no administrative act,” he wrote.

Who is ultimately responsible for Viva Macau’s grounding? In response to a written enquiry from Macau Business, a spokeswoman for the Civil Aviation Authority, speaking also on behalf of the secretary for transport and public works, said the government “acting within the supervision powers to monitor the activity of Viva Macau, gave the non-enforceable opinion that legal conditions were gathered” for Air Macau to terminate the sub-concession contract. This was not only because Viva Macau “had lost the capacity to provide normal air transport services” but also because of “the need to protect [the] public interest and Macau’s image as a tourism city”. The spokeswoman added: “Following the termination of the sub-concession contract of Viva Macau, their air operator certificate was revoked.” She said the government had tried to help Viva Macau get through its operational difficulties. “We regret to see that the company was not able to overcome them,” the spokeswoman said.

OCTOBER 2010

40 40

Transport

Bird of prey at bay Eagle Airways Holdings Limited is the guarantor of Viva Macau’s loan from the government and the airline’s biggest creditor. The 10th biggest creditor is Kevin Ho, nephew of Macau’s former chief executive, Edmund Ho BY LUCIANA LEITÃO

agle Airways Holdings Limited is the guarantor of the MOP212million loan the government made to Viva Macau through the Industrial and Commercial Development Fund. It is also the defunct low-cost airline’s main creditor, having lent it about MOP469 million (US$59 million). According to the government loan contract, Viva Macau had to pay back an initial instalment of MOP40 million by July 1, 2010 – a deadline the company missed. A spokeswoman for Macau Economic Services said a government committee had then given the loan guarantors another 30 days to pay beginning on July 5. “Since the interest-free loan is signed with a promissory note, the guarantors of Viva Macau are liable for the loan,” said the spokeswoman. When the second deadline was missed, the government appointed a lawyer to sue the guarantors of Viva Macau. “Our lawyer lodged a legal action in the Court of First Instance on August 10 to recover MOP212 million in loans that were granted to Viva Macau,” said the spokeswoman. Although she did not want to comment any further because the case is already in court, she did say the government intends to do its utmost to recover the loan.

OCTOBER 2010

Who’s who Eagle Airways Holdings Limited is the majority shareholder in Viva Macau and has been since the creation of the airline in 2004, according to the commercial registry. Viva Macau was originally called Macau Eagle Aviation Services and changed its name after two years. Along with Eagle Airways Holdings Limited, Viva Macau’s shareholders are the company Peak Projects (Hong Kong) Limited and businessman Andrew Pyne, Viva’s first chief executive officer. According to last year’s annual report, Eagle Airways Holdings is controlled by MKW, a company based in the British Virgin Islands. MKW is connected to MKW Capital, an international private equity fund that also has investments in the electronic media and websites in Macau through the Macau Ignite Media Group. Another major shareholder is Mariri Holdings Limited, a company based in Western Samoa. The directors of Eagle Airways Holdings Limited include Kevin Ho King Lun, the nephew of the former chief executive Edmund Ho Hau Wah; Reg Macdonald, chief executive of Viva Macau; Kevin McKenzie, business development director of Macau Ignite Media Group; and Ngan In Leng, Viva Macau’s chairman.

In its press releases, Viva Macau described itself has a privately owned company with shareholders that included Mr Ngan and MKW Capital.

Big creditors The law says any attempts to enforce the collection of Viva Macau’s debts are now suspended because the company has been declared bankrupt. According to a source close to the matter, this goes for any such attempt by the government. Viva Macau signed five promissory notes to secure its loan from the government. Sources told Macau Business that four of these promissory notes have expired. After Eagle Airways Holdings Limited and the government, Viva Macau’s third-biggest creditor is aircraft leasing company AWAS, which supplied the airline with three Boeing 767s, with a MOP109-million debt to collect. The other main creditors are Viva’s chairman, Mr Ngan (MOP43 million), the Industrial and Commercial Bank of China (MOP38 million), Macau International Airport (MOP36 million), Air Macau (MOP31 million) and BNU (MOP25 million). The ninth-biggest creditor is a company held by Mr Ngan In Leng (MOP24 million) and the tenth is Mr

Last hurrah Failed airline declared bankrupt in just two hours at subdued creditor’s conference, MOP1.14 billion owed he conference of creditors was scheduled to last two days but less than a day was needed. After only two hours, Viva Macau, which ceased operations in March, was officially declared bankrupt. The action now moves to the court where creditors who want their money back will need to make their claims. Some 106 people showed up for the conference on September 13 at the Macau Forum, although there were around 1,900 creditors invited. The small turn-out included creditors identified to the court by Viva Macau and those who had earlier presented their claims directly to the court. The creditors at the conference hold 81.3 percent of the airline’s debt. According to the commercial registry, Viva Macau’s debt amounts to around MOP1.14 billion. But the real figure is difficult to calculate since, for instance, this number excludes what may be owed to creditors that

Kevin Ho (MOP22 million). Speymill Macau, which owns AIA Tower, where Viva Macau’s offices were located also suffered a loss. According to Speymill, the low cost airline had 10 months of outstanding arrears in rent and service charges. “The occupied space is in the process of being repossessed and we expect to re-let this space in the second half of the year.”

Small creditors By August the Consumer Council had received 2,418 complaints from people affected by Viva Macau’s collapse, according to media reports. They include passengers that were unable to fly even though they had already paid for their tickets. The council advised these creditors to approach the Court of First Instance directly or seek help from a lawyer. The council said it had no authority to act on their behalf in any legal proceedings. As for Viva Macau’s employees, the Labour Affairs Bureau said it would make every effort to help them to get their unpaid salaries and severance pay. It has declined to make any further comment because the case is now in court.

were not on Viva Macau’s list and did not lodge their claims in court. The real number of creditors, according to a source that spoke to Macau Business may be more than 10,000. Bankruptcy was not the only outcome possible for Viva Macau - at least, according to the law. The company could have tried to reach an agreement with its creditors to reduce or modify part or all of the debt. Viva Macau could also have asked for a moratorium, which postpones the deadline for repaying the debt.

The final accounting However, what happened was a judicial declaration of bankruptcy. The decision was published in the Official Gazette on September 15. From that date creditors that had not previously lodged their claims with the court (except Viva Macau employees) had 60 days to do so. After that the bankruptcy administrator will have to liquidate Viva Macau’s assets which, Macau Business has learnt, comprise nothing more than some chairs and office equipment. The administrator must, by law, use the proceeds to first pay the judicial expenses, then the employees and finally the creditors, who each receive a pro rata share of the remainder - if there is any money left. During the creditors’ conference, it was stated that Viva Macau had a total debt of US$38 million (MOP304 million) last December, three months before ceasing to operate. By September 13, the day of the conference, the figure had grown to MOP1.14 billion. Viva Macau got its name from the Portuguese word “viva”, meaning “hurrah”. There is now little left of it to cheer about. OCTOBER 2010

Transport

Trading places The mainland landing point for the Hong Kong-ZhuhaiMacau Bridge appears likely to change to Nanping, near Hengqin Island BY HERMAN HE

uthorities are preparing to ditch the original mainland exit plan for the Zhuhai end of the massive Hong KongZhuhai-Macau Bridge, according to a source close to the project. Sources say the Zhuhai government has decided to choose Nanping, a town near Hengqin Island, as the landing point for the bridge after examining concerns about increased traffic in the Gongbei area, which was initially chosen as

OCTOBER 2010

the landing point in 2005. The 2005 decision was made by a panel organised by the National Development and Reform Commission, which also recommended adopting the current northern bridge and tunnel alignment option. Nanping has a much larger hinterland and greater available area for development. If the new proposal is approved, the project will potentially boost Nanpingâ&#x20AC;&#x2122;s economy.

The source also says the Zhuhai section of the bridge will now include a 14-km link road stretching from the Zhuhai-Macau border checkpoint, located on an artificial island, to connect with the Guangdong expressway in Nanping.

New RMB6 billion link Much of the link road will be constructed inside a tunnel and run below four major water reservoirs in Zhuhai and

the Gongbei border area. The Zhuhai Municipal Coordinating Office for bridge planning has already sent the new proposal to the provincial government for approval. The estimated cost of the link road is RMB6.01 billion (MOP71.15 billion), of which RMB50.58 million has already been spent on land surveys and design projects. Although the new landing point has yet to be approved, it has already impacted on Zhuhaiâ&#x20AC;&#x2122;s real estate market.

T I M E L I N E

According to Hou Ji Ming, from Huafa Industrial, the group’s Huafa Century City development in Nanping is already attracting investors who expect to cash-out on apartments once the bridge is built.

1983 Gordon Wu, chairman of Hopewell Holdings proposes the idea of a bridge connecting Hong Kong to the west side of the Pearl River Delta.

Built to last

2002 First public signs of support for the project seen by Beijing.

August 2003 The Hong Kong-Zhuhai-Macau Bridge Advance Work Coordination Group is established.

April 2005 An expert panel organised by the National Development and Reform Commission agrees on the bridge’s three landing points at San Shek Wan in Hong Kong, Gongbei in Zhuhai and A Pérola (Areia Preta area) in Macau. The commission also recommends the northern bridge and tunnel alignment option.

February 2008

August 2008 The three governments agree to share project costs according to a benefit to cost ratio where Hong Kong will bear 50.2 percent of the cost, Guangdong 35.1 percent and Macau 14.7 percent. It is agreed that the total contributions will be RMB15.73 billion, about 42 percent of the project cost of the main bridge. The remaining 58 percent would be financed by loans.

Photo: Luís Almoster | mspagency.org

The three governments agree on the scope of the bridge’s main body and responsibility for construction, operation and maintenance of their own boundary crossing facilities and associated link roads.

The Hong Kong-Zhuhai-Macau Bridge is due to be completed in 2016. The bridge’s main body includes construction of a 29.6-km dual three-lane carriageway in the form of bridge and tunnel structure. The tunnel on the Hong Kong side of the delta will be about 6.7 km long. Two artificial islands for the tunnel landings west of the Hong Kong boundary and the construction of an artificial island off of Macau were also included in the project. Each territory is responsible for the construction of the link roads to the main body of the bridge. Overall, the Y-shaped bridge will have a total length of almost 50 km, of which about 35 km will be built over the sea. The speed limit will be set at 100 km per hour. The infrastructure will have a life of 120 years and will be designed to withstand the impact of strong winds with speeds of up to 51 meters per second, or equal to a maximum Beaufort scale 16 (184 to 201 km per hour), according to Zhu Yongling, an official in charge of project construction. The bridge is seen as strategically important for the further economic development of Hong Kong, Macau and the Western Pearl River Delta region and will significantly reduce transportation time and costs.

December 2008 The bridge’s feasibility study report is submitted to the central government for approval.

August 2009 The bridge’s budget is revised, almost doubling to RMB73 billion. Hong Kong agrees to pay RMB6.75 billion, the mainland to pay RMB7 billion and Macau to contribute RMB1.98 billion. A Bank of China-led consortium will provide the remaining 78 percent though loans.

December 2009 Construction begins. OCTOBER 2010

OCTOBER 2010

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

Walk the talk THE GOVERNMENT CONSTANTLY STRESSES ITS COMMITMENT TO CARING FOR THE ENVIRONMENT ALTHOUGH THE REALITY SHOWS US OTHERWISE aving recently attended another event where environmental issues were at the heart of the presentations and debate, I was asked about environmental policy in Macau. It is a topic that is more troublesome than you might expect. There is probably no topic on which there is greater general agreement about the basic principles than environmental protection and ensuring quality of life for all. But you would be naive if you did not realise that the unanimous and enthusiastic support of almost everyone depends on a bit of a trick. At best, nobody should ever try to define too precisely what we mean by these expressions. At worst, it would be unwise to look too carefully into what people or organisations proclaiming to have green credentials say and actually do. We regularly have events in Macau or in neighbouring regions to discuss how to promote environmental protection. Myriad social or political organisations, research institutions, think tanks, expert analysts, and public speakers are dedicated to the environment - you name it, they deal with it. Governments worldwide pledge their commitment to environmental protection and there is hardly any major political statement on the future (or strategy, if you wish to sound more impressive) that does not liberally refer to it and underline how important it is. And yet...

A world of words

Macau fits neatly into this trend. Public surveys clearly show that we are all concerned about quality of life and environmental protection. These issues are priorities. Various professional and social organisations promote them. The government never fails to order new surveys or create new research or consultative bodies to deal with them. There is hardly a single policy address in which the relevance of these issues is not underscored and the commitment to them proclaimed in the most unambiguous terms. And yet... It appears there is one world of words and another, altogether different, world of deeds. Few things tell us more about this duality than the sad fate of the present legal framework as it applies to matters of environmental protection. Almost 20 years ago – in 1991, to be precise – the Legislative Assembly approved a law outlining general principles and objectives for the protection of Macau’s environment. The law is still in force, at least formally. Sure, as a framework law, it states mainly general principles and goals. Its application depends on the subsequent approval of specific regulations to turn the guidelines into practical and effective rules.

Creaking framework

The law identifies several areas where specific legislation is required, laying down the basis for a vast amount of lawmaking. However, most of the required subsidiary legislation has failed to materialise and none has been produced since 1997. Is it not a telling fact that on the website for the Official Gazette there is only one law listed under the heading ‘Definition of Environmental Policy’? Let us, out of curiosity, focus briefly on two aspects of environmental protection that are particularly revealing about its practise (or rather, non-practise) in Macau. First, there are the environmental assessments. The law flatly states that, as a rule, no “plans, projects, works and actions likely to impact on the environment, health or quality of life” can be approved or initiated without an environmental impact assessment being carried out. I wonder if any assessment of this kind has ever been done in Macau, let alone published. There is no dearth of works or projects that even under nottoo-stringent conditions would need to meet the requirements set down by the law.

Toppled pillar

Second, there is a central role assigned to environmental policy. According to the law, environmental protection is defined as the “guiding” principle for all government activity and should form part of the annual policy address. Also, every year, the head of the government should present a report on the state of the environment to the Legislative Assembly. This being the law and knowing what the reality is, nothing more needs to be said. Environmental policy in Macau, as defined 20 years ago, had another pillar besides the law. That pillar was the now defunct Environmental Council, conceived as an autonomous public institution endowed with various broad powers to develop policies to promote environmental protection and to monitor their implementation. This body never had the human or financial resources it needed to meet its responsibilities, even assuming that its members had the will to do so. Nowadays, most of its work falls within the ambit of a bureau more concerned with the uncontroversial topic of environmental education than with the drafting of policy that may provoke an argument. It has not prevented the government from hailing the present arrangements as a “reinforcement” of the importance of environmental protection in public policy. Is there a moral to this story? Maybe it can be summed up by a small piece of Portuguese folk wisdom: ‘How well preaches Friar Thomas! Do as he says, not as he does!’ OCTOBER 2010

Politics

HIGH FLIER The chief executive has racked up the air miles and raised eyebrows by spending much of his time outside the territory this year. Chui says it’s all part of the job BY KAHON CHAN

hief Executive Fernando Chui Sai On has spent up to a third of each month away from Macau since making his maiden policy address in March when he pledged to “fully listen to public opinion and give priority to the well-being of Macau residents.” Mr Chui has spent anywhere between six and 11 days on trips that have included eight days in Portugal, three visits to the Shanghai Expo where Macau’s giant rabbit pavilion is proving popular, and official tours to another 10 cities in the Pearl River Delta region.

OCTOBER 2010

Dubbed the “off-coast” or “travelling” chief executive on Internet chat forums, Mr Chui’s absence from Macau is a public talking point, especially when a different acting chief is named at the helm each time he leaves. This has allowed most government secretaries a limited chance to steer the Special Administrative Region while the boss has been away. Early September was by far the 53-year-old Chief Executive’s busiest period, with three two-day mainland trips in eight days. He says an extra effort was made to show support for the Pan-Pearl River Delta cooperation movement and boost ties with mainland counterparts as part of a broader strategy to diversify Macau’s economy and promote locally produced products. But Mr Chui has also pledged to spend less time in the airport and more of the working week at government headquarters where more pressing issues include a revision of the territory’s gaming laws and a rising inflation rate.

Piling up the miles Mr Chui’s first official trip to Beijing as Chief Executive in March was widely expected. There to attend the annual session of the National People’s Congress, he put Macau firmly on the agenda.

It was after his maiden speech that Fernando Chui Sai On really began piling-up the frequent flyer miles. At least eight days a month from April to August were spent on official tours or the odd holiday He had already notched up three days away in February – for reasons undisclosed –but it was after his maiden speech that the travelling chief executive really began piling-up the frequent flyer miles. At least eight days a month from April to August were spent on official tours or the odd holiday. Portugal in June, followed by five trips to the 10 noteworthy mainland cities lying within the Pearl River Delta in early summer were highlights on his itinerary, but nothing compared to early last month, with three two-day trips ranging from the north to the south of mainland China within just eight days, including trips to two investment fairs. Mr Chui had an additional two-day visit scheduled to Nanchang, in Jiangxi province on September 25-26 but eventually it was cancelled on the day due to bad weather. The airplane the chief executive was travelling on was obliged to do a U-turn and come back to the territory.

Who’s the boss? Mr Chui’s frequent absence from Macau has given all five secretaries a chance to take charge. Among them Secretary for Social Affairs and Culture Cheong U and the Secretary for Transport and Public Works Lau Si Io, who rank fifth and sixth in the government’s hierarchy. The Secretary for Administration and Justice Florinda da Rosa Silva Chan, Mr Chui’s number two, has so far spent more than 40 days as interim chief executive. The revolving door to the top post became clear between September 6 and 8 when the top job was shared between four people including a few hours put in by Mr Chui himself. The travelling chief executive deserves his moniker at least when compared with the former top politician Edmund Ho Hau Wah, who travelled far less than his successor. Over the corresponding period from

January to September last year, Mr Ho was out of town for just 27 days according to the Official Gazette. Mr Chui has clocked up 62 away days.

Cutting back Mr Chui said his participation in some mainland events came down to tradition, while his attendances elsewhere were part of a broader strategy to develop cooperative framework arrangements with neighbouring cities. These trips, he stressed, were also meant to promote “Made in Macau” products and help promote economic diversification. “Actually we have planned to cut back trips as far as possible but I will continue to focus on work related to mainland China because I have highly valued the cooperation with the Pearl River Delta region,” Mr Chui said, insisting Macau would be the ultimate beneficiary of his ‘tour de force’. “I still think the extra effort [to travel a lot] is very worthwhile. With the active promotion made in the past few months, I am optimistic about the panPearl River Delta cooperation.” Outspoken legislator Paul Chan Wai Chi accepts Mr Chui’s explanations but is still worried about the negative impact of having the territory’s chief out of town so often. “There are many difficult and urgent problems in Macau that require instant solutions,” Mr Chan says. “The impact on the government operations of having an acting chief executive is also an issue.” The New Macau Association legislator was also concerned about the true motives regarding the many trips made by Mr Chui. He said many of the objectives argued by the chief executive to justify his extraordinary travel schedule could also be achieved by a delegation led by a secretary or another high official. OCTOBER 2010

Politics

FLYING LOG Month

Number of days away

Date

Acting chief executive

Where and Why

February

19-21

Florinda Chan

Not disclosed

March

3-7

Florinda Chan

Beijing, to attend NPC’s annual session

Florinda Chan

Shanghai, to inspect the Macau Pavilion at Expo 2010

9-10

Florinda Chan

Boao (Hainan), to attend the Boao Forum For Asia

16-17 18-19

Florinda Chan Cheong Kuoc Vá

Not disclosed

Lau Si Io

7Guangzhou, to meet key leaders in Guangdong

Florinda Chan

Shanghai and Jiangsu, to attend Expo 2010 opening and official visit

1-3

Florinda Chan

Zhongshan and Guangzhou, official visit

Cheong Kuoc Vá

Not disclosed

17-18

Cheong Kuoc Vá

Jiangmen, Zhaoqing and Foshan, official visit

April

Where’s Chui Sai On?

In Zhongshan

May

June

July

August

September

24-26

Florinda Chan

Shanghai, Expo 2010

3-5

Florinda Chan

Chaozhou, Jieyang and Shantou, official visit

17-24

Florinda Chan

Portugal, official visit

2-4

Francis Tam

Not disclosed

6-7

Cheong Kuoc Vá

Shenzhen and Dongguan, official visit

11 12-14

Francis Tam Florinda Chan

Sichuan province, to inspect redevelopment projects financed by Macau

10-15

Florinda Chan

Not disclosed

27-29

Cheong Kuoc Vá

Fuzhou, to attend the Pan-PRD Economic Cooperation Forum

1-2

Florinda Chan

Jilin, to attend the Northeast Asia Investment and Trade Expo

5-6

Cheong Kuoc Vá

Shenzhen, for the 30-year anniversary ceremony of the economic zone

7 8

Cheong U Florinda Chan

Xiamen, to attend the China International Fair for Investment and Trade

Sources: Official Gazette and Government Information Bureau

OCTOBER 2010

During a visit to Jiangmen, Zhaoqing and Foshan

Inspecting the Macau Pavilion at the Shanghai Expo

Meeting with the Portuguese premier, in Lisbon

49 than 30 days. However, several public consultations on the same topic may be organised at different stages of the policymaking process. The central agency will work under the Public Administration Reform Coordination Committee.

Open to suggestions

Photo: Luís Almoster | mspagency.org

Greater transparency

The government has plans to create an internal body to coordinate public consultations BY VANESSA AMARO

one will be the days when each bureau of Macau’s government launches a public consultation process of its own initiative, within its own parameters and with the urgency it deems necessary. The government has announced it wants to make public consultations more efficient and it plans to create an internal, central agency to coordinate each outreach. A proposal to standardise the preliminary preparation, format, summary

reports and yearly plans of public consultations has already been drafted. However, the changes will not be made this year as the document is now the subject of internal consultations. The proposal outlines the creation of a single body to coordinate all aspects of public consultations, the priority to be given to each consultation and the guidelines for each project. The draft proposal states that public consultations should not last for more

Government walks back T

he government has decided to drop a controversial article in the public workers judicial aid bill after strong public outcry. The removed article would have allowed civil servants to launch legal actions against ordinary citizens using public funds. That isn’t the only change in the bill. The chief executive, principal officials and judges will be excluded from the proposal. “I see this event in a positive way. The population’s reaction was a good opportunity for active participation and it also proved the Legislative Assembly does more than just rubber-stamp the Government’s proposals,” the Secretary for Administration and Justice, Florinda da Rosa Silva Chan said. She stressed the bill will still allow civil servants to apply for legal aid if they are the subject of a lawsuit. Meanwhile, the government will create a new group to coordinate the legal reform works, Ms Chan announced. Its main goal will be to ensure that law revisions run smoothly and within the given deadlines.

When a public consultation is considered finished, a final report should be made available to the public within 90 days. This report is to take the form of a summary of the conclusions. The government says the proposed guidelines will support greater transparency and more participation by citizens in public affairs. The director of the Public Administration and Civil Service Bureau, José Chu, says the central agency would be responsible for determining the parameters for each public consultation but would not carry out the consultation itself. “Such still remains the responsibility of each department. The central body would have the role of a consultant and adviser in the process,” Mr Chu said. The way the government organises public consultations has previously been criticised by some interest groups and legislators. They have raised doubts about the rigour of consultations and questioned how conclusions are drawn.

More bureaucracy Political analyst Larry So Man Yum slams the idea of creating another body with a singular role to coordinate public consultations. “It is really adding more bureaucracy,” he told Macau Business. But Mr So, who is an associate professor at the Macau Polytechnic Institute, agrees with the 90-day period for the government to announce the results of each public consultation. He said there should be “a balance between which topics are more technical and should involve direct consultations with specific groups and those which involve livelihood or similar matters” and should involve wider public consultation. Mr So also says the government should make better use of the three community service consultative councils in gauging public opinion. These bodies, created less then two years ago, were intended to improve communication between the government and the people. Additional reporting by Emanuel Graça

OCTOBER 2010

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

I love me DYSFUNCTIONAL LEADERSHIP IS ALIVE IN MACAU AND SPOILING EVERYTHING IN SIGHT acau needs better leaders in business, administration and politics. Recent newspaper reports have carried criticisms of our deadbeat, arrogant, irrational, selfprotecting, power-wielding, under-qualified leaders. The criticism came to a head with a corrosive attack on Macau’s current leaders by the former President of Macau’s Legislative Assembly Susana Chou. Macau must rid itself of dysfunctional leaders if it is to prosper. Let me tell you a story of leadership. Once upon a time there was a middle manager. He thought he knew everything. His self-importance was staggering and he would brook no disagreement, even when he talked nonsense. He trumpeted his own exaggerated achievements in every area. He had done everything, knew everything and everyone, achieved everything, been everywhere, beaten everyone and so on. He would preface his email with details of what he had done and what successes he had achieved, believing that it made him famous or admirable. Indeed what most people would see as humdrum in their lives, he saw as remarkable in his. He considered himself as only answerable to the big bosses of the organisation and he answered only to them. He dismissed everyone else as contemptible, lower minions, incapable of understanding his high-level thoughts or unworthy of receiving them. Sadly, he really thought that he was unrivalled, that nobody else could match him, that nobody else had ideas as good as his, and that his brain power was of unequalled and unlimited brilliance. He demanded special treatment and special attention from his superiors and subordinates alike.

No emotional control His emotional intelligence and empathy were almost zero. Emotionally challenged, he had a childlike inability to control his emotions. He was unable to see a situation through other people’s eyes or even to concede that there just might be an alternative, worthwhile view of a situation. He was the paragon of arrogance but emotionally frail, OCTOBER 2010

for, if challenged, he would throw a histrionic tantrum, either during a meeting or metaphorically by email. Indeed anything could trigger a disproportionate, vitriolic and abusive response. He was true to the saying “if all you have is a hammer, then everything looks like a nail”. He was viscerally incapable of apologising for his grotesquely bad behaviour. Here was a spoilt or emotionally damaged child trapped inside the body of an adult, constantly seeking to be the centre of attention at any price. He demanded adulation, which, understandably, he never received. He was obsessed with power and control, and unable to work with people, only against them. The staff turnover in his department was colossal. Being highly competitive and needing to win every competition, he was constantly watching out for others, just in case they were trying to be better than him or, as he imagined, to do him down. He displayed monstrous envy if others were praised in his presence. It was paranoid behaviour.

Delusions of grandeur He was clearly delusional and unhinged. A simple question was seen as a challenge to his authority. Even a normal conversation was seen as a battle that he had to win. Like a dog with a bone, he could not let another person even try to win a disagreement, even when this led to protracted exchanges of endless emails. Clinically, he was perseverating or repeating himself uncontrollably. He was unable to solve the problems he had caused; his appalling behaviour provoked responses from his colleagues, which then prompted a yet more violent, petulant response from him, and so on endlessly, unless people simply walked away from him. He could not see that, actually, his behaviour was the problem. It was impossible to have a rational conversation or correspondence with him, as rationality was not in his dictionary. Do you recognise such a person in your organisation? It is called Narcissistic Personality Disorder and it’s pathological; a classified mental/borderline personality disorder. The syndrome is well documented and is largely incurable except by prolonged therapy but it is unlikely that anyone suffering from the disorder would put themselves in the position to seek help. Sufferers are typically unstable and impossible to work with. They are toxic in any organisation and yet we find them in positions of power thanks to their ability to manipulate their way upwards. This isn’t a made-up story. It’s true and alive in Macau. Leadership? They can only lead slaves.

Anniversary of the establishment of the People’s Republic of

CHINA MOVING FORWARD OCTOBER 2010

61st Anniversary of the establishment of the People’s Republic of CHINA 52

THE NEXT STEPS by Maria João Belchior in Beijing he central government has reason to be happy. In 2008, Beijing hosted the Olympics. Last year, the Chinese economy was the motor for a global recovery from the financial crisis and the country achieved eight percent GDP growth while the rest of the world was in the middle of a recession. This year the Shanghai Expo became the biggest ever held, a record-breaker that will set the standard once it finishes at the end of the month.

OCTOBER 2010

Added to these achievements, the economy surpassed Japan’s in August to become the second largest in the world. Tokyo announced the country’s nominal GDP in the second quarter of the year was US$1.29 trillion (MOP10.3 trillion), less than China’s, which was US$1.34 trillion. Amazing as it sounds, China’s economy has grown 90-fold since Deng Xiaoping began the country’s reform and engagement policy in 1978. The nation has carved itself a new place in the world

economy and in the geostrategic arena. From its new perch in the world, Beijing now has something to say on almost every global issue, and when it does, the world stops to listen.

Going green More than three decades of non-stop development have created impressive economic growth in China. The late 1970s were the first turning point in its development. Now it is time for a second. Going global has resulted in the ex-

From its new perch in the world, Beijing now has something to say on almost every global issue pansion of Chinese products and brands all over the world. The “going global” battle cry is now being replaced by “going green”. The number of institutions dealing with the environment has increased impressively in recent years, as has the number of investments in sustainable development. The government’s awareness is shown by its strong support for clean energy and environmentally-friendly projects. In various sectors, the mainland is the leader in innovation. At the national level, “eco-concepts” fall from the lips of officials. In wind and solar power, the mainland is No 1. According to the latest report by the Pew Charitable Trusts, China has invested more in clean energy than any other member of the G20.

COUNTING HEADS B

eijing embarks on the first national census of this century on November 1. It coincides with a vital need for the government to understand the country’s demography. The government wants to count everyone and aims to publish the data next year. It has trained 6.5 million staff to collect the information. The first national census was taken in 1953. This year, the sixth census will count people from Macau and Hong Kong for the first time, as well as expatriates. According to the Chinese Academy of Social Sciences, the biggest difficulty will be collecting data on migrant workers. Floating populations that leave the countryside in search of jobs in the urban centres, migrant workers are a largely anonymous mass that could number 210 million this year according to the academy. Understanding of the main characteristics of its population should help Beijing create policy next year. For the demographers, the census has a special relevance as the one-child policy and its results will be reviewed in the light of the data collected. The rapidly aging population, a phenomenon that is beginning to pose challenges to the economy, will also be studied after the census. The data will be published between May and July. The National Bureau of Statistics has announced that the census will cost between RMB8 billion (MOP9.55 billion) and RMB10 billion, making it the most expensive yet. It is an investment in the future, contributing to the comprehension of the social and geographical mobility of the Chinese people and so better informing polices for the years to come.

Putting up the money China invested US$34.6 billion in clean energy last year, the United States invested US$18.6 billion and third-place Britain invested US$11.2 billion – less than one-third of Beijing’s spending. The growth rate of investment over the past five years has been 78.9 percent. In renewable energy, the mainland is the world’s No 2, with a power generating capacity of 52.5 gigawatts. Its ambition is to have 30GW of wind power generating capacity and 30GW of biomass power generating capacity by 2020. Beijing continues to attract capital investment in clean energy. The wind power sector receives most but investment in the production of photovoltaic panels should eventually top the list. Going green is not only a desire but also an urgent need. In the next decade, Beijing has to follow an environmentally-friendly development pattern. With one of the biggest consumption markets, the mainland will continue to have a high demand for energy. The OCTOBER 2010

61st Anniversary of the establishment of the People’s Republic of CHINA 54 long-term challenge is to supply its population while ensuring sustainable economic growth. The sustainability challenge is a big one, owing to the fast rate of urbanisation. Although Shanghai and Beijing continue to be the best known mainland cities, there are a significant number of urban centres that are driving progress.

Looking west Chongqing, with more than 30 million people, has become a case study of the mainland’s economic development. It is the economic centre of the upper reaches of the Yangtze and often called the Chicago of China. More than 4,000 foreign-invested companies have already opened offices in Chongqing and more are planning to go there. A focus of the mainland’s “go west” policy, which is meant to develop inland cities, Chongqing is a major financial and manufacturing centre after just 15 years of investment. The city’s growth has spurred the development of the surrounding region. Following this example, the central government plans to invest in mediumsize cities, transforming them into drivers of the national economy. The 11th Five Year Plan, covering 2006 to 2010, established the need to move 45 million rural workers to non-agricultural sectors. The National People’s Congress will unveil the 12th Five Year Plan in March and the results of the previous plan will be announced.

All aboard The newly powerful cities can bring development to the countryside. Across the mainland, new cities are being constructed from old towns. For investors, it is easier to open businesses where the skyscrapers are just beginning to rise and where modernity is just arriving. According to a McKinsey report, by 2025, the mainland will have 221 cities with populations of one million or more. In 2004 there were 108. The urbanisation of the country helps more people to access the benefits of development, renewing the hopes of those who are too remote from the wealth created on the east coast. But the new cities will take more resources to sustain their populations and this is why it is important to define who lives where – a task for the takers of the forthcoming census (see box). OCTOBER 2010

GUANGZHOU READY FOR ASIAN GAMES G

uangzhou will host the 16th Asian Games from November 12 to November 27. The games are being held in mainland China for the second time, after Beijing in 1990. This year’s will be the largest in the history of the Games. Guangzhou was chosen in 2004 to host this year’s games. Both the Beijing Olympics and Shanghai Expo prove that China can organise and host big international events. More than 10,000 volunteers will be deployed in Guangzhou to help visitors and ensure security. More than RMB2 billion has been spent on security alone. The 45 countries participating are expected to bring thousands of tourists to Guangzhou. The construction or renovation of the sports venues began five years ago in the four host cities of Guangzhou, Dongguan, Foshan and Shanwei. Some of the new transport links between these cities are to be opened this month. Guangzhou, a city of 10 million people and the capital of the province of Guangdong, has seen many of its public facilities renewed. Details of the opening ceremony on November 12 are being kept secret. Chen Weiya, the assistant director of the Beijing Olympics opening ceremony, is the director of the show.

OCTOBER 2010

61st Anniversary of the establishment of the People’s Republic of CHINA 56

SHENZHEN’S MIDLIFE CRISIS n just three decades, the small fishing village of Shenzhen has transformed itself into a city of 14 million people. Last month it celebrated its 30th anniversary as the mainland’s first special economic zone or SEZ. President Hu Jintao stressed the achievements and said the central government would continue to support the city. “The Shenzhen SEZ created a

OCTOBER 2010

miracle in the world’s history of industrialisation, urbanisation and modernisation and has contributed significantly to China’s opening up and reform,” Mr Hu said. In August 1980 Shenzhen began accepting foreign investment, offering lower taxes and less red tape to manufacturers who set up there. In Beijing’s parlance, it became the first SEZ. Combined with abundant cheap la-

bour and the city’s position next to Hong Kong, Shenzhen attracted several international investors, creating an explosive manufacturing-based economic boom. The changes have allowed the city to post an annual growth rate of 25.8 percent over the past three decades, compared to about 9.8 percent for the entire country. The zone’s area has expanded and it now occupies almost 2,000 square km, making it similar in size to Luxembourg.

57 Besides Shenzhen, Beijing established other SEZs in Zhuhai and Shantou in Guangdong province, at the port of Xiamen in the south-eastern province of Fujian and on the southern island of Hainan.

Last century’s model But 30 years later, some analysts wonder whether the model still makes sense. One of the main questions is if manufacturing for export is as beneficial as it once was. The model has shortcomings, with social services in these special zones not matching the economic progress achieved. Wages have changed little and the workforce is on edge. The official news agency Xinhua reported that some lowlevel workers in Shenzhen have not had any pay increases in the past decade. The secretary of the Shenzhen Municipal Committee of the Communist Party of China, Wang Rong, believes the model is still relevant and that the city will continue to play the role of “first mover” and strive to be at the “vanguard of China’s scientific development”.

There are high expectations that Shenzhen will pave the way towards wider political reform, setting an example for the rest of the mainland In August, the State Council decreed the city to be “a national economic centre” and “a city of global clout” in cultural, economic and technological exchange. During his recent Shenzhen visit, Mr Hu outlined a role in politics, saying Beijing would “support the brave exploration of the special economic zone as

well as its role of testing and carrying out reforms ahead of others”. Qin Xiaoying, a researcher at the China Foundation for International and Strategic Studies, is more cautious, arguing that to keep its leading position in economic development, Shenzhen should rely on the judgment of its people in charting its future. There are high expectations that the city will pave the way towards wider political reform, setting an example for the rest of the mainland. Shenzhen is changing and correcting some of the faults it has grown up with. After a series of strikes and worker suicides earlier this year, the city has drafted new labour rules to smooth industrial relations. The proposals include the establishment of a mechanism for collective negotiation of periodic pay increases in order to reduce labour disputes. The city’s future as an international city is just “around the corner”, says billionaire Li Ka-shing, chairman of Cheung Kong Holdings. There remains an air of optimism about Shenzhen’s development.

OCTOBER 2010

61st Anniversary of the establishment of the People’s Republic of CHINA 58

BRIDGING THE STRAITS by Maria João Belchior in Beijing t was historic. Last month, the mainland cut tariffs on more than 500 products imported from Taiwan. It was the first tangible benefit of a hard-won trade agreement signed in June. The Economic Cooperation Framework Agreement cut the tariffs on 539 Taiwanese products and 267 mainlandproduced goods. The agreement has been hailed as a big step towards closer ties and stronger financial dealings across the Taiwan Strait. It was a watershed by any measure. Economic realities are pulling the estranged neighbours in the same direction.

Banking on it The rapprochement policy adopted by Taiwanese President Ma Ying-jeou upon his election in 2008 has no name but the

BYWORD FOR THE FUTURE IS ‘TRUST’ M

aintaining the status quo was once the mantra from Taiwanese officials when the subject of relations with the mainland were brought up. The provocative attitude of former President Chen Shui-bian prompted Beijing to respond in kind, sending Taipei a strong message in 2005 when it passed the AntiSecession Law. It formally announced Beijing would consider using “non-peaceful means” against Taipei if it declared independence. For younger mainlanders, the idea of reunification has been a constant and unquestionable prerogative. Alternatives are not up for debate. In Taiwan, the issue pits two broad ideological approaches against each other; independence OCTOBER 2010

and reunification. Reunification is off the agenda at high-level meetings between the two governments. The approach is based on small steps aimed at deepening economic bilateral ties ahead of easing political relations. Within Taipei’s parliament, the opposition fears that policy may leave Taiwan economically dependent on its giant neighbour and without the clout to bargain on political matters. They have warned that the Economic Cooperation Framework Agreement enacted last month could make that a reality. The pact is expected to create more than 200,000 jobs and boost the island’s economic growth by 1.7 percent. Clearly not everybody is a fan.

59 friendlier approach to the mainland has obvious benefits. Hostilities in the region have been reduced with investors on both sides regarding the fresh approach as a “win-win” situation. Trade between the two already totals US$110 billion (MOP880 billion) a year and the trade agreement is seen as one more step in promoting the “peace and prosperity” agenda. Beijing and Taipei relations appear set on a healthier track economically, with Mr Ma putting business first. After the pact was signed, the China Banking Regulatory Commission approved the opening of mainland branches for four Taiwanese banks. The commission also granted the Bank of China, Bank of Communications and China’s Merchant Bank permission to open offices in Taiwan.

Trade between China and Taiwan already totals US$110 billion Affairs minister Emile Sheng has since mentioned the possibility of the mainland’s Culture Ministry opening a representative office in Taiwan. After trade, promoting cultural contacts is seen as another step towards improving mutual trust. Better mainland ties with Taiwan

have benefits for Macau too. The visit by Secretary for Social Affairs and Culture Cheong U to Taipei last month was ground-breaking. It was the first highlevel official to visit Taiwan since the handover in 1999. For the near future at least, Taiwanese relations with the mainland are expected to continue focussing on commerce and the economy. But in Beijing, the word reunification is becoming more common which is not surprising given that both sides have achieved more together in the past two years than in the previous six decades.

Tourism also growing The fanfare around improved relations is also impacting on tourism at a time when Taipei is seeking to diversify its economy. More than two-thirds of the island’s GDP comes from exports, a high figure that the government is not entirely happy with. In 2008, the first regular direct flights from the mainland landed in Taiwan. A year later the number of weekly flights to Taiwan had increased from 108 to 270. Now, 27 Chinese cities have direct flights to three cities in Taiwan and the mainland is promoting Taiwan as a holiday destination. Mutual curiosity is a big tourist draw card. For older people in Taiwan, there is a touch of nostalgia, some hoping to indulge their memories and find what has survived from the pre-1949 era, before Chiang Kai-shek’s Nationalists lost to Mao Zedong’s Communist forces and fled to Taiwan.

Official visits increase High-level visits from the mainland are becoming more common. Last month, the acting governor of Shaanxi province, Zhao Zhengyong, took a delegation of 500 members to Taiwan. Of the 24 mainland companies attending the week-long Taiwan-Shaanxi 2010 trade event, seven signed agreements with Taiwanese companies. Also last month, Culture Minister Cai Wu became the highest mainland official to land in Taipei for 12 years when he floated the idea of cultural exchanges. Taiwan’s Council of Cultural OCTOBER 2010

61st Anniversary of the establishment of the People’s Republic of CHINA 60

RESHAPING THE CITYSCAPE by Maria João Belchior in Beijing he environment in China is definitely undergoing rapid change - the urban environment, that is. Architecture in the country has been booming in recent times, with the face of most cities being transformed in just a few years. A new reality has been created since the 1990s, mainly since 2000. Modern urban areas have mush-

OCTOBER 2010

roomed all over the place, bringing with them new architectural icons. Nowadays, anyone who is anyone in contemporary architecture has offices in China. Beijing and Shanghai continue to attract professionals from all over the world who wish to be a part of the swift transformation of the country. Propelled by its prosperity, China is the world’s laboratory for

urbanism and design. One of the first institutions to dedicate itself to the study of the concept of urbanism and space in Chinese cities was the Dynamic City Foundation, with its “Urban China 2020” research project. Dutch architect Neville Mars started the project in 2004, while Beijing was in the midst of its makeover for the 2008 Olympic Games. The objective of construct-

ing 400 new cities by 2020, as announced by the government, was the basis for the project.

Hard questions Mr Mars observed the rapid changes in the capital and other main Chinese cities. But the project did not focus solely on the urban landscape. The countryside and the industrial centres, the backstage of the economic boom, also had material to be explored.

61 To the west of Tiananmen Square, the National Grand Theatre, designed by French architect Paul Andreu, is one of the new must-see attractions. Hundreds of people stop there to be photographed in its surroundings, against a backdrop of an artificial lake with a dome of titanium and glass at the centre. With the economic boom, buildings not to be missed have multiplied in China in the last 15 years. It is now as important as to see the CCTV tower in Beijing as it is to see the historic Bund in Shanghai or the Great Wall. The 54-floor skyscraper by architects Rem Koolhaas and Ole Scheeren, which houses the national television network’s headquarters, is still not fully occupied, but is already a major national attraction. The modernisation of Beijing before the Olympics In 2008, together with writer Adrian Hornsby, Mr Mars published “The Chinese Dream - A Society Under Construction”. In the beginning, the book threw some troubling questions at its readers: “What if you built the whole mass of Western Europe in 20 years? What if 400 million farmers then moved in? What would it look like? How would it work? Would you be able to go to sleep at night? And if you did, would you dream of somewhere else...?” There are no set answers to these questions, at least in China. The transformation of the country’s cities put various issues on the public agenda. How to organise the space and the people into new communities became a topic of national debate. Today, China is one of the most amazing places to work in the field of architecture. To keep pace with growth, projects are devel-

ranged from creating new public parks to constructing enormous office buildings, modern shopping centres and upmarket hotels. Today a thematic tour of the capital can take tourists from the Ming dynasty Forbidden City to the 21st Century Bird’s Nest, the nickname for the Olympic Stadium. A new iconic architecture has been created. The Shanghai World Financial Centre, at 474.2 meters, held the record for the world’s highest roof and highest occupied floor until the Burj Khalifa in Dubai took its place. China continues to hold some records in architecture but the challenge is no longer to have only the highest or biggest building. China wants to maintain its fast pace of urban development, and it is poised to become the most urbanised nation in the world.

oped much more quickly than anywhere else in the world.

Glass and steel The Shanghai Expo followed the trend toward modernity. “Better city, better life” was the slogan that inspired the expo pavilions, some of them astonishing pieces of spectacular architecture. Meanwhile, all over the biggest urban centres in the country, the old grey official buildings are being replaced by modern glass-and-steel versions. China’s new cities present today a vista completely different from that of just two decades ago. Before 2007 tourists in Beijing would send home postcards of the Forbidden City or the Tiananmen Gate. Today the range of iconic buildings in the capital is much wider and tourists must choose between the traditional and the modern faces of the city. OCTOBER 2010

61st Anniversary of the establishment of the People’s Republic of CHINA 62

Best wishes of success to The People’s Republic of China on the 61st Anniversary of its establishment

MEGACITY SLICKERS

ast year the McKinsey consultancy firm published a 540-page report on the future of the landscape of China. The research, done by the McKinsey Global Institute, involved more than 20 experts from various academic fields and hundreds of interviews. “Preparing for China’s Urban Billion” is a two-volume work which gives the most recent insight into Chinese cities. The numbers and the scale are impressive. By 2025, around 350 million people will have moved to cities and 40 billion square metres of floor space or five million buildings will have been built. By 2030, China is expected to have one billion people living in urban areas. China is becoming more and more an urban society. The country’s level of urbanisation has more than doubled since 1980. Its cities, towns and villages are growing and this expansion is expected to continue for at least another 20 years. In 2025, 90 percent of the country’s GDP is expected to come from the urban economy. Numbers are frequently immense in China. In its study the McKinsey Global Institute forecasts that the country will have eight megacities by 2025: Beijing, Shanghai, Tianjin, Shenzhen, Wuhan, Chongqing, Chengdu and Guangzhou. Together they will account for 25 percent of China’s GDP. The concept of a megacity, a place with more than 10 million inhabitants, has become commonplace in Chinese architectural discourse. These metropolises will be huge markets not only for the national economy but also for foreign companies looking for new expansion opportunities. According to the McKinsey report, between 2008 and 2025 the incremental growth in China’s urban consumption will be equivalent to the creation of a new market of the same size as that of the German market in 2007. Small cities (by Chinese standards) are also set to continue to expand. This growth is essential in order to absorb millions more new migrants. The urbanisation of China in the near future will continue to entail something that for many outside the country could happen only in computer games: designing entirely new cities in just a couple of years.

OCTOBER 2010

61st Anniversary of the establishment of the People’s Republic of CHINA 64 FAN GANG PROFESSOR OF ECONOMICS AT BEIJING UNIVERSITY

China’s great migration CHINA’S REGIONAL DISPARITIES IN TERMS OF ECONOMIC PROSPERITY MAY NEVER NARROW; INDEED, THEY COULD EVEN WIDEN hina’s Henan province has a population of about 100 million – larger than that of most countries. In China’s administrative system, a province is at the highest level of sub-national government, followed by counties, cities, and townships. But a township in Guangdong province can easily serve a population of 500,000 to one million – larger than that of many cities outside of China. Thus, it is difficult to overestimate the importance of regional issues – particularly inter-regional disparities – for China’s politics. China is divided by nature. Among the large continental countries, including India and Brazil, only China has a small segment of coastline but vast interior regions. When the main object of human consumption was food, this was not a problem, because what mattered was land and water. But in modern industrial, urban, and market-based societies, what may matter increasingly are transport costs, which means that geography can cause deep regional inequalities. Though such disparities can, of course, have other causes as well, geography does seem to explain a lot. First of all, it explains why China’s coastal regions developed earlier and faster after the country launched its market reforms and opened to the world. It was not “preferential” policies or skewed resource allocation by the government that caused China’s coastal cities to boom, but rather their proximity to the ocean, which was and remains the cheapest way to move resources and products.

Coast areas to continue winners China may have more and larger high-tech and service industries – sectors that do not depend so heavily on transport – in the future. But, as China grows increasingly dependent on imports of resource commodities to meet its basic needs, its coast will continue to enjoy a transport-cost advantage. Thus, regional disparities in terms of economic prosperity may never narrow; indeed, they could often widen. Lanzhou, the capital city of Gansu province in the west, might never catch up with Suzhou, a well-known manufacturing base near Shanghai. China’s effort to develop more evenly, despite the permanent in-built advantages of the coast, takes the form of two-way traffic in capital and labour between coastal and interior regions. Financial transfers flow from the coast to interior regions, via government fiscal allocation or other mechanisms, to improve infrastructure, including transport. Such investments may not be as profitable as in other regions, but they should be regarded as public goods intended to equalize conditions for growth. China’s central government has attempted this for the past 10 years through its “Western Development Program.” OCTOBER 2010

Of course, the government’s efforts alone cannot entice industrial investors to “go West,” because public infrastructure spending cannot overcome all problems. Without a road, you cannot transport resources and finished goods. But, even with a road, you still must pay for tolls, gasoline, fleet maintenance, and other costs – and it can still take five days to get your goods to the coast if you want to export.

Where is the labour going? The other “traffi c” may, in some ways, be even more important. This is the labour that fl ows in the opposite direction, from west to east, promoting the only economic equality a country can ever achieve – equality of per capita income, not of GDP. A coastal city that produces more GDP and boasts higher productivity and wages will attract more people to share in its prosperity until “marginal productivity” decreases. As some people migrate to the coast, fewer people will share the interior regions’ resources, causing their per capita income to increase. This is why mobility is so important to achieving greater social equality. Most developed countries underwent great domestic migrations as they modernized, with 80 percent of their populations eventually re-allocated to coastal regions. China is experiencing this process now. If China’s authorities continue to encourage domestic migration, the problem of regional disparities will eventually be solved. The same could be said of the global North-South disparity. Some people used to argue that as long as one factor of production – i.e., capital – could move freely, the world could be equalized. But I believe that other factors are also essential. One-factor mobility may work well in a theoretical model, but in the dynamic real world, if the income gap cannot be narrowed rapidly enough, conditions that serve to enlarge the gap – such as unfavourable geography – may come to dominate. This will sustain, if not deepen, global disparities, especially given northern countries’ unwillingness to allow free international migration. The good news for China now is that the new national Five-Year Plan for 2010-2015 calls for the government not only to encourage domestic migration between regions, but also to improve the conditions for rural people to move and settle in the cities. The infamous “Hukou” system (the resident registration system that restricts migration) may not be abolished overnight, but will be phased out step by step. Of course, migration and urbanization will produce social problems and conflict. But these have occurred in every country at China’s current stage of development, and China, too must go through it. Otherwise, the country will remain divided forever.

OCTOBER 2010

61st Anniversary of the establishment of the People’s Republic of CHINA 66

THE MACAU JOB remier Wen Jiabao is expected to visit Macau in November in a show of support for the territory’s bid to position itself as a platform between the mainland and the Portuguese-speaking world. The trip comes after question marks over the future of the Macau-based Forum for Economic and Trade Cooperation between China and Portuguesespeaking Countries have arisen. According to reports, Premier Wen will preside over the forum’s next ministerial meeting but neither the meeting nor the premier’s presence have been confirmed. But the Portuguese news agency Lusa quoted unnamed diplomatic sources as saying Mr Wen would attend the opening session of the summit, scheduled for next month. It will be the first time a Chinese

premier has attended a forum event and the message behind the meeting could not be clearer.

Strong message Such a high-level presence is regarded as one way for Beijing to stress its commitment to the forum and its place alongside Macau in developing ties with Portuguese-speaking nations. The forum’s first ministerial meeting was held in October 2003, followed by another in

TRADE FORUM, POLITICAL STATEMENT

he Forum for Economic and Trade Cooperation between China and Portuguese-speaking Countries – also dubbed Forum Macau – promotes trade and economic ties between its members, using the SAR as a platform. More than just an economic and trade tool, several analysts regard it first and foremost as a political initiative, boosting the mainland’s soft power, while stressing Macau’s historical place in the world. The territory hosts the supporting office for the forum’s permanent secretariat and all ministerial meetings take place here. Besides the People’s Republic, other members of the forum are Portugal, Brazil, Angola, Mozambique, Guinea-Bissau, Cape Verde and Timor-Leste. São Tomé and Principe, a small African archipelago, is the only Portuguese-speaking country that is not formally a member of the forum because it maintains formal political relations with Taiwan. OCTOBER 2010

September 2006. The visit would also remove much of the uncertainty which has overshadowed the forum after the central government surprised observers by taking more than a year to fill a key post. The role of secretary-general of the forum’s permanent secretariat was been vacant since the death Zhao Chuang in July 2008. Chang Henxi was appointed last November. He has previously been linked to the Chinese Trade Ministry and held an array of positions in Chinese Embassies based in Portuguesespeaking countries around the world. But the appointment was late. Eventually, that led to the postponing of the forum’s third ministerial meeting, which was initially scheduled to happen last year and now is set to take place next month. The failure to fill the post in time increased perceptions of political indecision surrounding the forum. Those perceptions developed into questions regarding its usefulness. Trade between the mainland and the Portuguese-speaking world has boomed over the past 10 years, however, it is difficult to assess how much of that success can be attributed to the forum. During the forum’s second ministerial meeting, delegates signed an Economic and Commercial Cooperation Action Plan for 2007 to 2009. The document set out new areas for cooperation, including tourism, transport, health, science and technology, culture and the news media. Bilateral trade targets in terms of volumes were set at US$45-50 billion (MOP360-400 billion) last year. According to official figures for the first seven months of this year the figure reached US$50 billion, an increase of almost two-thirds year-on-year.

October 15th

Caesars Golf Macau

October 22nd Macau Golf & Country Club For more information visit macaubusiness.com or write to golf@macaubusiness.com

OCTOBER 2010

Property | Market Watch

Betting on the bridge Down in July, up in August; the real estate market has lacked drive this summer but the cross-Delta bridge has the potential to stimulate higher prices BY ALAN TSO

espite summer’s rising temperatures, the volume of housing sales cooled in July before spiking again in August, but it is the Hong Kong-Zhuhai-Macau Bridge that is shaping up to provide real heat to the market. According to the most recent government data, there were 1,204 homes sold in July – down 11 percent on last year – with a total value of about MOP2.64 billion, a figure which is four percent less than one year ago. July is traditionally considered the low season for the housing market. Sales volumes for August were not available at press time but leading

OCTOBER 2010

Macau real estate agencies say the market has again picked up steam. In particular, the market for second homes has performed better than expected, thanks in part to the sales launch of the second phase of the upmarket One Oasis project near the Cotai Strip. About 40 apartments in the luxury condominium were sold through Centaline Property Agency in August. The topsy-turvy results come after a golden second quarter that saw more than 5,000 homes sold.

A bridge to value Apart from the Cotai Strip, the Oriental Pearl district, in the Areia Preta recla-

mation area, has also stirred intense interest among homebuyers and investors. It is here that the Hong Kong-ZhuhaiMacau Bridge will make landfall. Although the ambitious project is six years from completion, prospective buyers seem eager to take advantage of the “bridge factor”, a phenomenon that is widely expected to push up prices in the area. The bridge is touted as the most important infrastructure project in South China in years. It will bring the two banks of the mouth of the Pearl River closer together than ever before, speeding up the creation of a single economic entity comprising Guangdong, Hong

69 Value of residential units sold per record of stamp duty

Residential units sold per record of stamp duty* NUMBER OF TRANSACTIONS

YEAR

MONTH

2009

January

VALUE (10^6 MOP)

YEAR

MONTH

2009

January

172

February

235

February

372

March

394

March

594

April

580

April

May

775

May

1,156

June

922

June

1,627

July

1,339

July

2,767

August

1,730

976

August

2010

299

980

September

1,366

September

3,161

October

1,185

October

2,130

November

1,360

November

2,643

December

2,003

December

4,057

January

1,297

February

January

3,140

1,084

February

1,995

March

1,503

March

2,806

April

2,202

April

6,180

May

1,627

May

4,281

June

1,543

June

3,319

July

1,204

July

2,642

2010

Source: DSEC

* Note: The data includes transactions of residential units valued below MOP3 million, which are exempt from stamp duty.

Average transaction value of residential properties Value (10^3 MOP)

3000 2500 2000 1500 1000 500 0

May

Jun

Jul

Aug Sep 2009

Oct

Nov

Dec

Jan

Feb

Mar

Apr 2010

May

Jun

Jul

Average transaction price of residential units per square metre Value (MOP)

3500 3000 2500 2000 1500 1000 500 0 Q2

Q3 2007

Q3 2008

Kong and Macau (read more about the Hong Kong-Zhuhai-Macau Bridge in this edition’s Transport section). The housing market will be a major beneficiary. An illustration is that prices in neighbouring Zhuhai have been rising since last year. The average value of

2009

Q2 2010

residential space in the city is now above 10,000 yuan (MOP11,900) per square metre and is on track to equal the cost of space in Macau.

Express demand There are market players that believe

Mortgage lending rises N

ew mortgage approvals continued to increase significantly in the second quarter, the Monetary Authority of Macau has announced. New residential mortgage loans approved by Macau banks in the second quarter, at MOP8.5 billion, were 21.7 percent higher than in the first quarter. They were markedly higher than a year before, rising by 115.2 percent. After falling 16.0 percent in the first quarter, newly approved loans for commercial real estate increased by 55.3 percent in the second quarter to MOP8.3 billion. They were 231.4 percent higher than a year before. At the end of June, the delinquency rate for residential mortgage loans stood at 0.13 percent, 0.02 percentage points lower than three months earlier and 0.10 percentage point lower than a year before. The delinquency rate for commercial real estate loans, at 0.39 percent, was 0.05 percentage points higher than three months earlier but 0.12 percentage points lower than a year before.

Zhuhai’s rising prices will make property in Macau more attractive to investors. “Many people will choose to pay a bit more for a home in Macau which can offer better quality and amenities than a similar property in Zhuhai,” says Rachel Chen, a real estate agent whose clients OCTOBER 2010

Property | Market Watch

The total number of buyers in residential transactions in the first 7 months of 2010:

14,350 Proportion ion of buyers rs

MOP

10% 90%

Non-Residents

The total value of residential transactions in the first 7 months of 2010:

Residents

24,364,000,000

Proportion on of buyerss

20% 80%

Non-Residents

Residents

Photo: Luís Almoster | mspagency.org

are mainly mainland Chinese. In the short term, the opening of the Guangzhou-Zhuhai express railway later this year is also expected to boost demand for property in the Oriental Pearl district, which is near the Zhuhai-Macau border. The district’s prime position has made it the new darling of developers and posh properties have mushroomed there. With better connections to Guangdong province, home values in the area could climb to new heights in the near future.

Approval for Nova City’s next phases T

he government has approved the lease modification proposed by Shun Tak Holdings for the Nova City project in Taipa, giving the go-ahead for phases four and five of the development. The hotel originally included in the project has been scrapped and the size of commercial and residential areas has been increased. According to Shun Tak, Nova City phase four, comprising three 39-floor residential towers containing more than 680,000 square feet (63,000 square metres) of space, will have an open view of the Central Garden now under construction. Phase five, comprising more than 2.3 million OCTOBER 2010

square feet (214,000 square metres) of residential space in eight towers with a maximum height of 43 floors, will sit above a large shopping centre. Foundation work for phase four will begin in the fourth quarter and foundation work for phase five will begin in the second quarter of next year, the company said in its interim report. Nova City is one of the largest residential developments in Macau. Of the five phases, the first three are complete, with 97 percent of units in the 13 residential towers sold by June 30.

Property | Market Watch

Notable residential property rentals - 16/08 to 15/09, 2010

Source: Centaline, Midland & Ricacorp.

District

Building/Street

Unit

Floor area (sq. ft)

Macau Macau Macau Taipa Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Taipa Taipa Taipa Taipa Taipa Coloane Macau Taipa Taipa Taipa Macau Taipa Taipa Macau Macau Taipa Macau Taipa Macau Taipa Macau Taipa Macau Macau Taipa Macau Taipa Macau Taipa Taipa Taipa Taipa Taipa Taipa

One Central L’Arc One Central The Manhattan Edf. Tai Keng Yuen One Central One Central One Central One Central One Central Edf. Tai Keng Yuen One Central Edf. Lung Tou Kok One Central Edf. Lung Tou Kok Nova City Flower City Nova City Supreme Flower City Flower City Hellene Garden One Central Nova City Supreme Flower City Kings Ville La Cite The Pacifica Garden Nova City La Cite The Praia Edf. Lai Chun Hin La Cite The Pacifica Garden Nova City Jardins do Oceano Leisure Garden Nova City La Cite The Praia Edf. Happy Valley The Praia Edf. Nova Taipa Garden The Praia Edf. Nova Taipa Garden Flower City Jardins do Oceano Edf. Palácio do Sucesso Edf. Jardim de Wa Bao Plaza Grande China

Block 3, H/L, unit B H/F, unit A Block 7, H/F, unit F L/F, unit E M/F, unit E Block 7, H/F, unit F Block 1, M/F, unit F Block 7, M/F, unit H Block 7, M/F, unit F Block 7, L/F, unit E L/F, unit A Block 7, M/F, unit C M/F, unit A Block 7, M/F, unit H L/F, unit A (with car park) Block 16, H/L, unit C H/F, unit C Block 4, M/F, unit E Block 1, M/F, unit D M/F, unit C Block 4, L/F, unit G (with car park) Block 1, H/L, unit D Block 15, L/F, unit A Block 3, L/F, unit F (with car park) Block 2, H/L, unit C Block 4, H/F, unit A Block 2, M/F, unit I Block 14, L/F, unit F Block 5, H/F, unit B Block 4, H/L, unit W M/F, unit A Block 4, H/L, unit E L/F, unit C Block 8, M/F, unit F Magnolia Court, L/F, unit J L/F, unit B Block 4, M/F, unit D Block 2, H/F, unit B Block 4, H/F, unit V Block 2, M/F, unit X Block 4, H/F, unit W Block 26, M/F, unit O Block 4, H/L, unit Y Block 30, L/F, unit L Block 4, M/F, unit U Apricot Court, L/F, unit O (with car park) Block 1, L/F, unit C Block 1, L/F, unit F Green Lake Court, L/F, unit A

3,006 2,261 1,301 1,626 2,500 1,301 1,759 1,178 1,301 1,274 2,183 1,176 1,820 1,178 1,735 1,975 2,070 1,314 2,060 2,066 2,530 654 1,729 2,060 1,423 1,624 1,197 1,340 1,500 979 1,332 1,631 1,226 1,340 1,503 1,360 1,045 1,191 938 960 979 1,175 938 1,187 1,422 1,268 1,100 1,131 985

Rent price (HK$)

Price per sq.ft. (HK$)

38,000 22,000 20,000 20,000 20,000 19,000 18,000 17,000 16,500 16,000 16,000 15,000 15,000 14,000 14,000 14,000 13,000 12,500 12,500 12,500 12,500 12,000 12,000 12,000 9,500 9,500 9,000 9,000 8,200 8,000 8,000 8,000 7,500 7,500 7,500 7,200 7,000 7,000 6,500 6,500 6,500 6,500 6,300 6,300 6,300 5,700 5,500 5,300 5,000

12.64 9.73 15.37 12.30 8.00 14.60 10.23 14.43 12.68 12.56 7.33 12.76 8.24 11.88 8.07 7.09 6.28 9.51 6.07 6.05 4.94 18.35 6.94 5.83 6.68 5.85 7.52 6.72 5.47 8.17 6.01 4.90 6.12 5.60 4.99 5.29 6.70 5.88 6.93 6.77 6.64 5.53 6.72 5.31 4.43 4.50 5.00 4.69 5.08

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

Notable commercial property rentals - 16/08 to 15/09, 2010 Type Shop Office Shop Office Office Shop Shop Shop Shop Shop Shop Shop

Property Rua de S. Paulo China Civil Plaza Av. Almirante Lacerda AIA Tower AIA Tower Edf. Lok Yueng Fa Yuen Edf. Lok Yueng Fa Yuen Pereira Plaza Pereira Plaza Edf. Tin Tak Pereira Plaza Av. Conselheiro Ferreira de Almeida

Unit Shop M/F, unit A + B Shop M/F L/F Shop Shop Shop Shop Shop Shop Shop

Source: Centaline

Floor area (sq. ft) 1,200 3,757 1,595 1,911 1,911 2,476 955 418 418 500 333 4,626

Rent price (HK$)

Price per sq.ft. (HK$)

120,000 48,000 30,000 26,754 26,754 21,000 13,000 9,600 9,600 9,000 7,700 4,000

100.00 12.78 18.81 14.00 14.00 8.48 13.61 22.97 22.97 18.00 23.12 0.86

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

OCTOBER 2010

Property | Market Watch

Notable residential property transactions - 16/08 to 15/09, 2010 District

Building/Street

Unit

Macau Coloane Coloane Coloane Coloane Macau Coloane Coloane Coloane Macau Coloane Macau Macau Macau Macau Macau Macau Coloane Taipa Coloane Macau Taipa Taipa Taipa Macau Macau Macau Macau Taipa Coloane Macau Macau Taipa Macau Macau Macau Coloane Taipa Macau Macau Macau Macau Taipa Coloane Taipa Macau Macau Coloane Coloane Macau Taipa Macau

One Central One Oasis Cotai South One Oasis Cotai South One Oasis Cotai South One Oasis Cotai South L’Arc One Oasis Cotai South One Oasis Cotai South One Oasis Cotai South L’Arc One Oasis Cotai South One Central One Central One Central La Baie du Noble One Central La Baie du Noble One Oasis Cotai South One Grantai One Oasis Cotai South L’Arc One Grantai One Grantai One Grantai L’Arc L’Arc One Central L’Arc Jardins do Oceano One Oasis Cotai South Edf. Ching Bic Kok The Residencia Edf. Panorama One Central One Central L’Arc One Oasis Cotai South Nova City One Central The Phoenix Terrace La Baie du Noble La Oceania Nova City One Oasis Cotai South Pearl On The Lough The Phoenix Terrace La Baie du Noble One Oasis Cotai South Hellene Garden Villa de Mer Jardins do Oceano La Cite

Block 2, H/F, unit A Block 3, M/F, unit A Block 1, M/F, unit D Block 3, M/F, unit A Block 1, M/F, unit D H/F, unit C Block 1, M/F, unit C Block 3, M/F, unit B Block 3, M/F, unit A M/F, unit H Block 3, M/F, unit B Block 3, M/F, unit A Block 4, M/F, unit A Block 4, M/F, unit A Block 4, H/F, unit I Block 7, H/F, unit A Block 1, H/F, unit C Block 3, M/F, unit A Block 3, L/F, unit J Block 3, M/F, unit A H/F, unit B Block 3, M/F, unit N Block 3, H/F, unit L Block 3, H/F, unit M M/F, unit B H/F, unit E Block 1, M/F, unit F H/F, unit F Edf. Koon, L/F, unit B (with car park) Block 1, L/F, unit A Block 2, L/F, unit A Block 1, M/F, unit B Block 2, L/F, unit A Block 7, H/F, unit H Block 7, M/F, unit F H/F, unit K Block 2, M/F, unit G Block 7, L/F, unit D (with car park) Block 1, H/L, unit B H/L, unit A Block 2, M/F, unit H M/F, unit D Block 7, M/F, unit A Block 2, M/F, unit F M/F, unit D H/L, unit A Block 4, M/F, unit Q Block 2, M/F, unit D Vidlet Court, L/F, unit F (with car park) Block 4, M/F, unit B Peony Court, L/F, unit C Block 1, M/F, unit E

Source: Centaline, Midland & Ricacorp.

Floor area (sq. ft) 4,623 6,326 3,337 3,557 3,337 3,557 3,178 3,562 3,178 3,571 3,332 2,636 2,326 2,326 3,811 2,299 3,673 2,368 2,206 2,356 2,803 2,283 2,027 2,020 2,803 2,261 1,759 2,261 2,471 2,398 3,300 1,693 4,380 1,178 1,301 2,261 1,789 2,505 1,374 2,700 2,196 2,214 2,505 1,776 2,055 2,607 2,236 1,695 2,530 1,475 2,135 1,732

Sale price (HK$) 46,230,000 41,505,000 20,637,000 20,402,000 20,233,000 20,000,000 19,481,000 19,226,000 19,090,000 19,000,000 17,473,000 16,340,000 16,282,000 15,120,000 14,800,000 14,483,700 13,500,000 13,058,000 12,795,000 12,737,000 12,300,000 12,100,000 11,959,000 11,918,000 11,912,750 11,800,000 11,785,000 11,531,000 11,500,000 11,158,000 10,500,000 9,172,000 9,000,000 8,835,000 8,457,000 8,366,000 8,301,000 8,180,000 8,100,000 8,100,000 8,000,000 8,000,000 7,980,000 7,967,000 7,800,000 7,800,000 7,600,000 7,379,000 5,680,000 5,600,000 5,600,000 5,500,000

Price per sq.ft. (HK$) 10,000 6,561 6,184 5,735 6,063 5,623 6,129 5,397 6,006 5,321 5,243 6,199 7,000 6,500 3,883 6,300 3,675 5,514 5,800 5,406 4,388 5,300 5,900 5,900 4,250 5,219 6,700 5,100 4,653 4,653 3,181 5,417 2,054 7,500 6,500 3,700 4,640 3,265 5,895 3,000 3,643 3,613 3,186 4,485 3,796 2,992 3,399 4,353 2,245 3,797 2,623 3,176

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

Notable commercial property transactions - 16/08 to 15/09, 2010 Type

Building/Street

Unit

Shop Shop Shop Shop Shop Shop Shop Shop Office Shop Shop

Travessa da Sé Nan Yue Commercial Centre Treasure Garden Treasure Garden Rua de Pedro Coutinho Treasure Garden Estrada de Adolfo Loureiro Rua do Almirante Costa Cabral Edf. Industrial Tong Lei Edf. Jardim Kam San Edf. Jardim Kam San

Shop Shop Shop Shop Shop Shop Shop Shop L/F, unit B Shop Shop

Source: Centaline

Floor area (sq. ft) 1,000 5,500 2,711 2,651 800 1,667 4,340 1,142 7,000 714 468

Sale price (HK$) 33,000,000 28,000,000 16,200,000 16,000,000 13,980,000 12,800,000 8,500,000 5,000,000 4,850,000 3,030,000 3,030,000

Price per sq.ft. (HK$) 33,000 5,090 5,975 6,035 17,475 7,678 1,958 4,378 692 4,243 6,474

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

OCTOBER 2010

73 increase the supply of affordable housing while raising transaction costs for would-be speculators. The measures have already been approved by Chief Executive Fernando Chui Sai On, who said one of the government’s main tasks was ensuring housing was affordable and that the property market developed in a “healthy way”.

Reins pulled on speculators

Photo: Luís Almoster | mspagency.org

Affordable land

The government is moving to restrain galloping property prices and curb speculation with measures rolling out this month, and there is the promise of more to come he government has announced a package of measures it hopes will help curb rising property prices. Land supply for affordable housing will be eased, changes to duties, stricter mortgage requirements and an overhaul of legislation are included in the measures. Proposed changes to

laws include the regulation of real estate agencies by the Housing Bureau, among others. The moves have won broad support from the real estate industry. The Secretary for Transport and Public Works Lau Sio Io said the government’s overarching aims were to

Chief among the measures, the government said it would auction a plot of land this year. The size and location of the lot have not been made public. Mr Lau said any development on the land would only be smaller units of around 800 square feet, about 74 square metres. Although the smaller-sized flats should be relatively affordable, the government has ruled out setting a ceiling price for either the land or the apartments. Mr Lau said the highest bidder would get the parcel and the developer could sell the flats at a price it thinks is suitable. “It’s a free market,” he said. Meanwhile the government will work with developers to convert old industrial buildings into homes. Mr Lau said several owners of industrial property had shown interest. The government predicts up to 10,000 new flats could reach the market through this new scheme.

Higher costs for buyers There are also plans to increase transaction costs by cancelling the 0.5 percent intermediate transfer duty. All property transactions will now be subject to the full stamp duty, which ranges between one percent and three percent, depending on the value of the property. First-time homebuyers will remain exempt. A draft of the law to accommodate the change will be sent to the Executive Council this month and then to the Legislative Assembly for approval. The loan-to-value ratio for bank mortgages will be tightened, effective from December. Buyers of properties worth more than MOP3.3 million will be able to get a loan for a maximum of 70 percent of a property’s value. If the property is cheaper, the maximum loan will be 90 percent of its value – but only for Macau residents and only up to a limit of MOP2.31 million. Monthly mortgage payments should not be more than half of the OCTOBER 2010

Property

Quality pledge may boost costs

he government is revising the urban construction legal framework with public consultation on the draft law running until October 9. Among the proposals are doubling the warranty period for a building’s foundations, concrete structure and infrastructure to 10 years, and a five-year warranty for waterproofing. Developers fear the proposed rules will increase construction costs by forcing them to guarantee the quality of their work for longer. Other proposals are for fines ranging from MOP5,000 to MOP200,000 for illegal construction projects and fines of up to MOP20,000 for putting steel bars or cages on the outside walls of buildings, a very common practice in Macau.

buyer’s income and the loan period should not extend past the borrower’s normal retirement age. The new measures are supported by developers. Legislator Fong Chi Keong, chairman of the Macau Association of Building Contractors and Developers, said he was in favour and pointed to a need to regulate real estate agencies to fight property speculation as an important part of any package to tackle speculators. Association president Tommy Lau Veng Seng also applauded the measures. Mr Lau, who is also a legislator, said the

land auction could be a good way to provide affordable flats. But not everyone agrees with the need for the measures. Last month, the president of the Macau General Real Estate Association, Chong Sio Kin, insisted that the growth in property prices was “healthy”. He noted that prices in Macau were still lower than they were before the global financial crisis, unlike prices in Hong Kong, Beijing or Shanghai, where new property prices records have already been set. Legislator Lee Chong Cheng

Make that a triple

he government has decided to more than triple the size of the two public housing towers under construction in Seac Pai Van in Coloane. The economic housing development will have 360 flats instead of the 117 originally planned. The 66-metre-high towers will have a total floor area of 2,684 square metres and are expected to be ready by 2012. This is the first phase of the Seac Pai Van project. The development is planned to have 6,800 public housing units accommodating up to 22,000 people. The government builds two varieties of public housing: economic housing that is meant to be sold, and social housing that can be rented.

OCTOBER 2010

slammed the new measures, saying they were insufficient. Mr Lee, who is a representative of the powerful Macau Federation of Trade Unions, wants more restrictions on foreigners investing in the local real estate market.

Middlemen in the sights Effective immediately, the government will improve transparency in the market by issuing more detailed information more swiftly, and by promising regular monthly announcements. There are more changes planned, backed by new legislation. Housing tax regulations will be changed, lowering the rental property tax to the same rate as the residential property tax in an effort to stimulate the local rental market. A draft law will be sent to the Executive Council this month. Another law, to regulate pre-construction sales, is to be drafted. It would cover the registration system and mandate certain terms and conditions for contracts. A draft is scheduled to be ready next year.

75 HEIZO TAKENAKA FORMER JAPANESE MINISTER OF ECONOMICS UNDER PRIME MINISTER JUNICHIRO KOIZUMI

Japan as number three WITHOUT A STRATEGY FOR GROWTH, WHICH INCLUDES EFFORTS TO REDUCE GOVERNMENT EXPENDITURES AND A POLICY TO STOP DEFLATION, JAPAN’S ECONOMY WILL REMAIN IN THE DOLDRUMS hina has now officially supplanted Japan as the world’s second largest economy. The question for Japan is whether or not the country will continue to tumble down the list of the world’s great economies, or whether its politicians will return to a path of reform that can revive growth. That the ruling Democratic Party of Japan now seems trapped in a power struggle between Prime Minister Naoto Kan and party power broker Ichiro Ozawa suggests that serious economic reform is not at the top of the DPJ agenda. In the 1980’s, Japan’s annual GDP growth averaged 4.5 percent; since the early 1990’s, the economy has been virtually stagnant, averaging barely 1 percent annual growth. In the 1990’s, Japan’s government, grossly misjudging the sources of the economy’s difficulties, vastly increased government expenditures on public works, but ignored supply-side adjustments. This policy created new vested interests, and thus a new political environment, as construction companies and other beneficiaries of government contracts began donating heavily to the ruling Liberal Democratic Party. This kept the LDP’s coffers brimming, but posed the risk of a serious financial crisis in the late 1990’s.

Political instability It was in these circumstances that Prime Minister Junichiro Koizumi took office in April 2001. Under Mr Koizumi’s leadership, insolvent banks were made whole again. At the start of Mr Koizumi’s government, 8.4 percent of bank loans in Japan were non-performing. By the end of his tenure, the rate was down to 1.5 percent, restoring the country’s potential for growth. Indeed, this was one reason why Japan was so little affected by the “Lehman Shock” that incited the global financial crisis. But macroeconomic reform came to a screeching halt after Mr Koizumi stepped down in 2006. A series of short-term prime ministers began a pattern of huge government outlays. Not surprisingly, the economy deteriorated. Frustrated by the long-ruling LDP’s poor political and economic management, voters opted last year for change at the top. But the pattern of economic mismanagement, far from being reversed, has only become worse. Huge spending increases were directed at farmers and households. As a result, the share of tax revenue to total spending this fiscal year slipped below 50 percent, something unseen in Japan’s entire post-war history.

Problematic bonds Despite the parlous fiscal position, for now the market for Japanese government bonds (JGBs) remains stable. But this is because government bonds are purchased mostly by domestic organizations and households. In another words, the government’s negative saving is financed by the private sector’s positive savings.

But that private-sector safety net of savings is fraying. Japanese households hold savings of about ¥1.1 trillion (around MOP0.1 trillion) in net monetary assets. In about three years, however, the amount of JGBs will exceed the total assets of Japanese households. Government debt will no longer be backed up by taxpayers’ assets. Confidence in the JGB market will likely decline. Moreover, as Japan’s society ages, the household savings rate will decrease dramatically. This will make it difficult, if not impossible, for the domestic private sector to finance the budget deficit indefinitely. And new demands for fiscal expenditures are expected to grow as the country ages. In about five years, all baby boomers will be over 65, but pressure on government expenditures for pensions and health care is expected to start sooner, around 2013.

No growth strategy Japan’s new government, led by Prime Minister Naoto Kan, started discussing a consumption-tax hike to offset the growth in spending. But a consumption-tax hike is no panacea, particularly given the government’s lack of a growth strategy. Although a tax increase will undoubtedly be needed, it is the wrong priority at the moment – and could prove counterproductive if it causes the economy to decline dramatically. Indeed, Mr Koizumi’s government demonstrated the best way to tackle fiscal consolidation. Mr Koizumi decided that a primary budget balance should be restored in 10 years. And he came close to being successful, as the primary deficit of ¥28 trillion in 2002 was reduced to just ¥6 trillion in 2007. Had this effort been continued for two more years, a primary surplus could have been realized. Without a strategy for growth, which includes efforts to reduce government expenditures and a policy to stop deflation, Japan’s economy will remain in the doldrums. But Mr Kan still seems unwilling to focus on growth. Instead, like so many other leaders before him, he proclaims his desire to find a “third way.” But, as history has shown, no third way exists. Mr Kan continues to believe that a large government, with growing social-welfare expenditures, is the way to get the economy moving. This should not be surprising. He used to be involved in civic movements and groups – like environmental organizations – that take little heed of the need for economic growth. Increasing the tax burden seems almost a natural part of such a mindset, as does ignorance of the need for increased economic competition. Without that, and a renewed focus on growth, Japan will continue to climb down the global ladder of success. Indeed, any Japanese who thinks that complacency is an option should look to Argentina. A hundred years ago, Argentina was arguably the world’s second wealthiest economy. Now, thanks to bad policies, and even worse politicians, it ranks among the world’s also-rans. OCTOBER 2010

Gaming

though Galaxy has a slight edge over Wynn. Statistics compiled by Macau Business reveal that Stanley Ho Hung Sun’s Sociedade de Jogos de Macau (SJM) continues to lead the ranking, with a September market share slightly above 31 percent, followed by Las Vegas Sands with a 19-percent share, and with a 16-per cent share, Melco Crown. MGM closes out the list with a 9-percent market share. Note that the figures are rounded to the nearest unit.

Billions race

Lower growth ahead

Three months from the end of the year and Macau’s casinos have bettered last year’s revenue

his year will see a new record for casino revenue. Gross gaming revenue at Macau’s casinos has surpassed last year’s total take, with a quarter of the year still to come. Macau casino operators earned MOP15.3 billion (US$1.9 billion) in September, according to data released by the Gaming Inspection and Coordination Bureau – up by 39.8 percent year-on-year. In addition to the MOP117.9 billion taken between January and August, gross gaming revenue has topped last

year’s MOP119.4 billion in revenues. The total casino gross gaming revenue for the nine months through September rose 60.1 percent year-on-year to MOP133.24 billion.

Changing fortunes The fortunes of Wynn Macau continue to change for the worse with the former No 3 sliding to fourth a month ago and now to fifth on the league ranking of casino gross gaming revenue. Wynn and Galaxy Entertainment both have a market share of about 12 percent, al-

The Secretary for Economy and Finance, Francis Tam Pak Yuen, expects to see a slowing in the gaming gross revenue growth rate across the rest of the year. He said it was more realistic to expect an annual growth rate of about 30 percent. Mr Tam’s prediction sits at the conservative end of the range of projections. The government has traditionally maintained conservative estimates. Several gaming operators and industry analysts expect the year’s growth rate to exceed 50 percent. Mr Tam said he believed the growth of gaming revenue in the fourth quarter would slow since the basis for comparison was higher. Macau started showing signs of economic recovery from the global financial crisis during the fourth quarter of last year.

Wynn still most profitable property

t wasn’t all bad news at Wynn Macau this month; its only property in Macau remains the biggest single generator of gross gaming revenues in the city. For the first eight months of the year, Wynn Macau’s casino take was MOP17.42 billion (US$2.18 billion), according to figures quoted in Portugueselanguage newspaper Jornal Tribuna de Macau. Wynn was the most profitable property throughout last year, a lead that is likely to be extended this year with Encore coming online at the start of the second quarter. Local regulators consider the

Gaming Results: Gross Revenue

additional tables at Encore an extension of the Wynn Macau property. The Venetian sits in second with MOP13.04 billion in revenue, while StarWorld, which was ranked seventh last year, is third with MOP10.56 billion. City of Dreams has risen from ninth last year to fourth with MOP9.99 billion, followed by the Grand Lisboa (MOP9.47 billion) in the same position as last year. MGM Grand Paradise’s only Macau property, MGM Grand Macau, is sixth on the list with MOP9.14 billion, down from third last year with gross gaming revenues of MOP10.36 billion.

In Million MOP (1HKD:1.03MOP)

18,000

17,075

16,000 14,000 12,000 10,000

12,600

12,215

Oct 2009

Nov 2009

10,943

13,937

13,445

13,569

Jan 2010

Feb 2010

Mar 2010

14,186

16,310 13,642

15,773

15,302

Aug 2010

Sep 2010

11,347

8,000 6,000 4,000 2,000 0

Sep 2009

OCTOBER 2010

Dec 2009

Apr 2010

May 2010

Jun 2010

Jul 2010

Gaming Results: Market Share Per Operator 2010

2009 Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

SJM

31%

32%

31%

30%

32%

34%

33%

32%

30%

32%

29%

31%

Sands China

20%

24%

21%

22%

20%

21%

20%

22%

19%

20%

19%

Galaxy

10%

12%

13%

10%

11%

10%

12%

13%

12%

Wynn

14%

12%

17%

13%

15%

13%

14%

16%

17%

15%

14%

12%

MPEL

17%

13%

12%

16%

14%

13%

14%

13%

15%

16%

MGM

TOTAL

100%

SJM

Sands China

Galaxy

Wynn

MPEL

MGM

30 20 10 0

Sep 2009

Oct 2009

Nov 2009

Dec 2009

Jan 2010

Feb 2010

Mar 2010

Apr 2010 May 2010

Jun 2010

Jul 2010

Aug 2010

Sep 2010

*Figures are rounded to the nearest unit, therefore they may not add exactly to the rounded total.

Under pressure

Rude clients are main cause of work stress for Macauâ&#x20AC;&#x2122;s casino staff he main source of work pressure for local casino staff in Macau is handling rude customers, according to a survey released by the Macau Federation of Trade Unions. The second main source of pressure is second-hand smoking. The study noted that 78.2 percent of the 372 respondents felt that they were working under pressure, the media reported. Among the pressure sources identified by the survey were the need to pay extra attention to their work; the long shift hours causing muscle pains; working on shift; and the lack of job promotion opportunities. Some casino workers were identified by the survey as not being able to handle pressure in a positive way. From the total number of respondents, 8.6 percent said they used alcohol to deal with work pressure, while 5.1 percent admitted they used drugs for the same purpose. A total of 12.4 percent of respondents said they gambled to deal with work pressure. At the end of the second quarter of 2010, the gaming sector had 43,870 employees, down slightly by 0.2 percent year-on-year. Among the employees who are directly related to betting services, 18,684 were dealers, up by 3.3 percent year-on-year. Overall, in June 2010 average earnings (excluding bonuses and allowances) of full-time employees in the gaming sector rose slightly by 0.9 percent year-on-year to MOP15,390.

In June 2010, average earnings of local dealers rose by 3.6 percent over June 2009 to MOP13,590 (US$1,699), official data shows. At the end of June 2010, the number of vacancies in the gaming sector increased substantially by 74.0 percent year-on-year to 628, with 174 for dealers needed for the gaming tables. OCTOBER 2010

Gaming | Billions Race

Gross revenue from different gaming activities 2Q 2010

1Q 2010

4Q 2009

45,219 44,902 32,368 8,310 2,028 856 541 266 161 55 52 43 41 30 24 20 22 9 0.2 0.3 0.4 n/a 110 91 102 12 1 0.001

41,248 40,951 28,761 8,024 1,948 869 594 273 135 55 48 45 39 29 28 19 19 8 2 1 0.5 n/a 124 91 52 27 2 0.0002

36,476 36,161 24,976 7,259 1,820 779 509 262 257 45 42 42 37 27 28 13 26 7 1 1 0.5 n/a 102 110 80 21 1 0.001

3Q 2009

2Q 2009

1Q 2009

4Q 2008

25,619 25,408 16,287 5,898 1,533 638 432 223 125 40 32 39 42 23 37 8 20 5 2 2 0.4 n/a 71 60 68 11 1 0.001

26,252 26,019 16,828 5,804 1,533 687 489 174 150 47 32 44 18 21 52 10 24 6 3 4 0.5 n/a 90 45 72 55 2 0.000

24,358 24,078 15,616 5,186 1,478 654 503 182 177 42 20 45 1 13 49 9 25 6 2 7 0.5 n/a 126 53 83 17 1 0.001

-2.4% -2.3% -3.2% 1.6% 0.0% -7.1% -11.7% 28.2% -16.7% -14.9% 0.0% -11.4% 137.1% 9.5% -28.8% -20.0% -16.7% -16.7% -33.3% -50.0% -20.0% n/a -21.1% 33.3% -5.6% -56.0% -50.0% -1100.0%

7.8% 8.1% 7.8% 11.9% 3.7% 5.0% -2.8% -4.4% -15.3% 11.9% 60.0% -2.2% 1358.3% 61.5% 6.1% 11.1% -4.0% 0.0% 50.0% -42.9% 0.0% n/a -28.6% -15.1% -13.3% 47.1% 100.0% -110.0%

-7.0% -7.3% -9.5% -2.7% 3.6% -9.8% -3.3% 5.8% 24.6% -12.5% 5.3% -8.2% 20.0% -23.5% -3.9% -40.0% -7.4% 0.0% -33.3% 0.0% 25.0% -100.0% 20.0% 0.0% 59.6% 183.3% -50.0% n/a

Macau Patacas (Million)

Total Games of Fortune (total) VIP Baccarat Baccarat Slot Machines Cussec Black Jack Stud Poker Roulette 3-Card Baccarat Texas Holdem Poker Fantan Casino War 3-Card Poker Fish-Prawn-Crab PaiKao Craps Lucky Wheel Makccarat Q Poker Tombola Mini Baccarat Horse Racing Greyhound Racing Sports Lottery - Football Sports Lottery - Basketball Chinese Lottery Instant Lottery

32,036 31,781 21,742 6,536 1,616 723 473 253 161 53 39 49 45 22 36 12 23 6 2 2 0.4 n/a 70 111 60 12 1 0.000 QoQ%

Total Games of Fortune VIP Baccarat Baccarat Slot Machines Cussec Black Jack Stud Poker Roulette 3-Card Baccarat Texas Holdem Poker Fantan Casino War 3-Card Poker Fish-Prawn-Crab PaiKao Craps Lucky Wheel Makccarat Q Poker Tombola Mini Baccarat Horse Racing Greyhound Racing Sports Lottery - Football Sports Lottery - Basketball Chinese Lottery Instant Lottery

9.6% 9.6% 12.5% 3.6% 4.1% -1.5% -8.9% -2.6% 19.3% 0.0% 8.3% -4.4% 5.1% 3.4% -14.3% 5.3% 15.8% 12.5% -90.0% -70.0% -20.0% n/a -11.3% 0.0% 96.2% -55.6% -50.0% 400.0%

Source: Gaming Inspection and Coordination Bureau OCTOBER 2010

13.1% 13.2% 15.2% 10.5% 7.0% 11.6% 16.7% 4.2% -47.5% 22.2% 14.3% 7.1% 5.4% 7.4% 0.0% 46.2% -26.9% 14.3% 100.0% 0.0% 0.0% n/a 21.6% -17.3% -35.0% 28.6% 100.0% -80.0%

13.9% 13.8% 14.9% 11.1% 12.6% 7.7% 7.6% 3.6% 59.6% -15.1% 7.7% -14.3% -17.8% 22.7% -22.2% 8.3% 13.0% 16.7% -50.0% -50.0% 25.0% n/a 45.7% -0.9% 33.3% 75.0% 0.0% 150.0%

25.0% 25.1% 33.5% 10.8% 5.4% 13.3% 9.5% 13.5% 28.8% 32.5% 21.9% 25.6% 8.4% -4.3% -2.7% 50.0% 15.0% 20.0% 0.0% 0.0% 0.0% n/a -1.4% 85.0% -11.8% 9.1% 0.0% -60.0%

Gaming | Stock Watch

Bull’s rush Casino shares in Hong Kong rise on optimism ahead of the Golden Week holiday, outperforming the market BY RAY CHAN

35 30 25 (x)

EV/EBITDA US casino stock

20 15 10 5 1-Jan-2010

31-Jan-2010

2-Mar-2010

Las Vegas Sands

1-Apr-2010

1-May-2010

Wynn Resorts Ltd

31-May-2010

30-Jun-2010

MGM Resorts Inte

30-Jul-2010

29-Aug-2010

Penn Natl Gaming

EV/EBITDA Macau casino stocks* 30 25 20 (x)

ho dares to question where the world’s most dynamic gaming market is? The answer is undoubtedly Macau, where gaming revenue continues to surge month-on-month. This is also reflected in the other commonly traded “chips”. Macau casino stocks finished positively in Hong Kong last month amid a better-than-expected macro outlook for the mainland economy. Melco Crown Entertainment, co-headed by Lawrence Ho, the son of gaming mogul Stanley Ho Hung Sun, and Australian James Packer, launched “The House of Dancing Water” last month. The aquatic stage show will promote its brand in mainland China, a market that currently accounts for more than 60 percent of the tourist traffic to Macau. The gaming operator invested HK$2 billion on the Vegas-style show that features grand stage design and

15 10 5 1-Jan-2010

31-Jan-2010

2-Mar-2010

1-Apr-2010

1-May-2010

31-May-2010

30-Jun-2010

30-Jul-2010

*excluded Melco Int’l for peer comparison purpose.

Galaxy

SJM

Sands China

Wynn Macau OCTOBER 2010

29-Aug-2010

Gaming | Stock Watch

MGM Macau gets closer to Hong Kong IPO

GM Macau is closer to being listed on the Hong Kong stock exchange. MGM China Holdings Limited, a Cayman Islands company which has been formed by MGM Resorts International and businesswoman Pansy Ho Chiu King, last month filed a proposed listing application with the Hong Kong Stock Exchange, MGM Resorts International announced. MGM China Holdings will “become the owner of substantially all of the economic share interests of MGM Grand Paradise, S.A.”, a joint venture between MGM Resorts

US casino stocks by market capitalization Melco Crown-ADR

Melco Crown-ADR

Wynn Resorts Ltd.

26% Penn Natl Gaming

US casino stocks by sales

Wynn Resorts Ltd. Las Vegas Sands

51%

18% Penn Natl Gaming

14% MGM Resorts Inte

11% OCTOBER 2010

International and Ms Ho, which owns and operates the MGM Macau. According to MGM Resorts International, “there have not been any decisions made regarding the timing or terms of any such listing or whether MGM China Holdings Limited will ultimately proceed with such a transaction or whether the proposed transaction will ultimately be approved by the Hong Kong Exchange.” According to previous media reports, the goal of the IPO is to raise US$300 million (MOP2.4 billion).

Macau casino stocks by market capitalization

34%

SLM Holdings Ltd

Sands China Ltd

18%

Galaxy Entertain

41% MGM Resorts Inte

Melco Intl Devel

Las Vegas Sands

26%

Macau casino stocks by sales

Wynn Macau Ltd

11%

28%

Sands China Ltd

30% Wynn Macau Ltd

SLM Holdings Ltd

39% Galaxy Entertain

16% 14%

23000

22000

a mixture of audio and lighting effects. It is believed that the massive investment – comparable in size to the budget of a topflight movie – was not intended as a mere show for gamblers but as a platform for promotion that will draw the attention of mainland Chinese to the City of Dreams. Gaming ads are illegal in mainland China. The strategy was generally welcomed by the Hong Kong stock market. Melco International (200.HK), one of Melco Crown’s major shareholders, saw its share price performance outpace other rivals, leaping 25 percent on a month-on-month basis.

21000

Rosy performers

Macau casino stocks performance year-to-date (Base=HK$10) 25 22 19 16 13 10 7 Jan-2010

Feb-2010

Mar-2010

SJM

Apr-2010

May-2010

Galaxy

Jun-2010

Wynn

Jul-2010

Aug-2010

Sep-2010

Sands

Melco

Macau casino stocks performance year-to-date vs Hang Seng Index (Base=HK$10)

19 16

20000 13 19000

18000

7 Jan-2010

Feb-2010

SJM

Mar-2010

Apr-2010

Galaxy

May-2010

Wynn

Jun-2010

Sands

Jul-2010

Aug-2010

Melco

Sep-2010

Hang Seng Index (RHS)

US casino stocks performance year-to-date (Base=US$10) 25 22 19 16 13 10 7 Jan-2010

Feb-2010

Mar-2010

Apr-2010

MGM Resorts

May-2010

Jun-2010

Wynn Resorts

Jul-2010

Aug-2010

Las Vegas Sands

Sep-2010

Melco Crown Ent.

US casino stocks performance year-to-date vs S&P 500 Index (Base=US$10) 25

1250

1200

1150

16 1100 13 1050

1000

7 Jan-2010

Feb-2010

MGM Resorts

Mar-2010

Apr-2010

Wynn Resorts

May-2010

Jun-2010

Las Vegas Sands

Jul-2010

Aug-2010

Melco Crown Ent.

Sep-2010

S&P 500 Index (RHS)

SJM (880.HK), the biggest operator by revenue among the six local gaming concessionaires, provided the second-best monthly performance, up 17 percent on a month-on-month basis. The company’s share price has more than doubled year-to-date. There were few surprises for the junket-focused Galaxy Entertainment (27.HK) which extended its resilient share price performance to HK$6.90 towards the end of September, an increase of 114 percent so far this year. This is the best share price performer among the six operators. Undoubtedly, investors still favour this small but fast-growing company, supported by their soon-to-open flagship resort, Galaxy Macau. The company, led by Francis Liu, has invested HK$14.9 billion in the resort to expand its market share and offset its demanding valuations (see the EV/EBITDA graph). Galaxy Entertainment expects that Galaxy Macau will boost the company’s results. “Carving out market share is not our main target. Profit growth is more important. But our new resort hotel may help us increase market share and be our profit driver,” Mr Lui told Sing Tao Daily. OCTOBER 2010

Gaming

Land battle

Photo: Luís Almoster | mspagency.org

SJM wants two parcels of land in Cotai that are earmarked for Sands China. Sands’ boss Sheldon Adelson is not worried

play by Sociedade de Jogos de Macau (SJM) to develop two parcels of land in Cotai reserved for Sands China has been waived off by Sands’ boss Sheldon Adelson. “Wishful thinking goes on everywhere,” Mr Adelson replied when asked about the matter at a CLSA investors’ conference in Hong Kong last month. SJM has already made a formal approach to the government to express its

OCTOBER 2010

interest in parcels seven and eight but the land has been unofficially reserved for Sands China. Sands expects the government to grant it the parcels. “We hope to have a larger space for development,” SJM’s chief executive, Ambrose So Shu Fai, told reporters. “SJM has the least exposure in Cotai, so we’ve said that if there is other land available we’ll be interested in it.” SJM applied for two other parcels in

Cotai in 2007 but is waiting for a decision from the government. Mr So said his company was hoping to get an answer this year. Sands China has said it has received no official notice of SJM’s interest and is prepared to defend its toehold on the land.

Fair shares It is not unusual in Macau for the government to reach ad hoc agreements

Sands’ dollars stay here: Adelson

as Vegas Sands chairman Sheldon Adelson says his company is not taking profits generated by subsidiary Sands China out of in Macau. “We have independent directors here in Hong Kong and, believe me, they are independent. And they speak their mind and I’m very glad they do,” Mr Adelson said at last month’s CLSA investors’ conference in Hong Kong. “I want Sands China to be as successful as Las Vegas Sands is. No bank or any investor has ever complained that I’ve cannibalised, that I’ve shifted profits from one to the other.” Mr Adelson, who is the chairman of both Las Vegas Sands and Sands China, has announced that Las Vegas Sands is considering changing its name to reflect the fact that it is no longer confined to Las Vegas. Las Vegas Sands spokesman Ron Reese said a name change might be voted on at the next board meeting in November. In June, American gaming company MGM Mirage changed its name to MGM Resorts International to reflect its global character.

Flying the co-op

he director of the Lands, Public Works and Transport Bureau, Jaime Carion, said last month that there was no law against Sands China turning its Four Seasons apartment hotel into a housing co-operative. Although quite common in the United States, co-ops are new to Macau. In a housing co-op arrangement, a corporation, usually owns a building and each shareholder has the right to occupy one housing unit. The shareholders do not own the real estate, only a share of the legal entity that does. Sands China has asked the government for permission to cede its title of the Four Seasons apartment hotel to a subsidiary. Mr Carion told reporters that Sands China was still waiting for permission. If permission is given, Sands China needs no further government approval to set up a co-op. Melco Crown may be the next gaming company to do something similar. Last month the government amended the grant of land for the company’s City of Dreams to allow for a bigger, yet-to-be developed apartment hotel tower. Melco Crown chief executive Lawrence Ho said his company had no plans as yet to start constructing the apartment hotel. “Right now, we are happy with the 1,400 rooms we have at the City of Dreams,” he said. Asked if Melco Crown would consider a co-op-type structure, Mr Ho said the company would follow the government’s instructions.

with developers on the use of land, and for land to be officially granted to a developer only after construction work is well under way. The development of the Venetian Macao, Grand Lisboa and City of Dreams followed this pattern. In August, Sands China’s acting chief executive, Mike Leven, said his company had already spent US$162 million (MOP1.3 billion) on preparatory work on parcels seven and eight. Mr Leven admit-

ted that Sands China had no construction schedule or definite plans for developing the land. Mr Leven then told Macau Business that the government had never discussed with Sands China the possibility of taking back parcels seven and eight if development was delayed. JP Morgan gaming analyst Joe Greff said the government was unlikely to take the land from Sands China. “That said,

we do believe the government is working with SJM and the other concessionaires so that each has a presence on the Cotai Strip,” he said in a research note. Mr Greff said if the government did take parcels seven and eight from Sands China, the effect on its parent company, Las Vegas Sands, would be minimal because it would be offset by Las Vegas Sands’ new operations in Singapore and a stronger performance in Las Vegas. OCTOBER 2010

Gaming

Green consults on slots

practice director and continuing to consult for the authorities here. Newpage Consultadoria’s contract with the government, which runs until December, is not exclusive, so it can consult for other clients at the same time. It is one of the reasons that the price of its contract is lower than that of the exclusive deal the government had with Soconsult for gaming law-related services. The Soconsult contract was scrapped this year. “I would like to think it is the first step of a long partnership,” said Mr Green.

First step

David Green, the former PricewaterhouseCoopers gaming practice director, is back in Macau e was away for about a year, but David Green has returned to Macau. The government has hired his recently created firm, Newpage Consultadoria, to study and consult on the gaming industry. Newpage Consultadoria has a MOP1.8-million contract to help the government in its first minimum internal risk control audit on casinos, which will focus on slot machines. The audit is to take place this year and the outcome may be a set of new rules. “There is not yet a formal set of rules for slot machines,” Mr Green told Macau Business. “The technology is moving very fast and what we need to do is to have a good set of controls in place. “The challenge is an ongoing one,

not only to keep up with technology but also to be able to understand where it is heading to. There are issues from the player point of view and from the operator’s point of view, while ensuring the protection of tax revenue.” Mr Green is a familiar figure to industry insiders. The Australian has lived and worked in Macau for most of the past 10 years and is a permanent resident. His first role was with the Arthur Andersen team hired by the government in 2000 to advise on the liberalisation of the casino industry. Arthur Andersen in China merged with PricewaterhouseCoopers in June 2002, and, as a legacy Andersen partner, Mr Green became a partner at PricewaterhouseCoopers, serving as gaming

Farewell, Jorge Oliveira

orge Oliveira, who was head of legal affairs for the Gaming Commission until February, is no longer in public service. The Portuguese, who was in charge of the secretary for administration and justice’s International Law Office, tendered his resignation for “family reasons” after 21 years with the Macau government. Mr Oliveira, now in Portugal, said he wanted to return to Macau, but did not know when. He is planning to go into private practice as a legal consultant. Mr Oliveira played an active role in the team in charge of preparing the liberalisation of the gaming industry in 2002. He is widely considered to be a top expert on gaming-related legal issues, and former Chief Executive Edmund Ho Hau Wah held his work in high regard. OCTOBER 2010

The director of the Gaming Inspection and Coordination Bureau, Manuel Joaquim das Neves, says the government hired Newpage Consultadoria because of its longstanding consulting relationship with Mr Green. Mr Neves says it was necessary to hire an outside consultant to help with the audit because of the highly specialised know-how required. Besides having worked with the Macau government, Mr Green has also consulted on gaming for authorities in five other jurisdictions, including Australia and Taiwan. From 2004 to 2005, he worked with Singapore’s government, helping it draft legislation needed for the legalisation of casinos there. Newpage Consultadoria will help with the first audit since the Gaming Inspection and Coordination Bureau issued the Minimum Internal Control Requirements in August 2006. They set out the government’s minimum expectations for internal risk control systems and cover a range of situations. Concessionaires must establish and maintain an adequately resourced internal audit capability, to enable frequent and thorough testing of the adequacy of internal controls. The importance of controls is growing, since the slot machine market has expanded. “In 2001, it was said slot machines were as useful as urinals,” Mr Green said. Today they provide about five percent of gross gaming revenue. Having been involved in the liberalisation of the Macau gaming industry since 2000, Mr Green recalls that he was at first doubtful about how successful it would be. Those doubts are long gone. “There is nothing like the Macau story and there will never be,” he said.

Playing the game Singapore’s Genting Resorts World Sentosa has an early lead over Las Vegas Sands’ Marina Bay Sands in gaming revenue, owing to superior marketing and bending the rules BY MUHAMMAD COHEN

hen Marina Bay Sands opened its doors in April, experts believed the Singapore casino race was over. With its iconic design, international heritage and downtown location, the Las Vegas Sands property was expected to soar above rival Resorts World Sentosa, just as the property towers 57 stories above Singapore’s financial district. Six months on, as expected, one casino holds a dominant market share, collecting 67 percent of gaming revenue by some estimates. But that casino is Genting’s Resorts World Sentosa, not Marina Bay Sands. According to parent company Las Vegas Sands’ second quarter financial report, Marina Bay Sands generated US$94 million (MOP752 million) in earnings before interest, taxes, depreciation and amortisation (EBITDA) on revenue of US$216.4 million in its 65 days of operation. Gaming revenue was US$190.8 million or about US$2.9 million daily. Genting reported EBITDA for Resorts World Sentosa at S$504 million (MOP3 billion) on revenue of S$861 million, without giving additional details.

Analysts estimate Resorts World Sentosa’s gaming revenue at S$600million to S$700 million for the second quarter, or between US$5 million and US$5.8 million per day, giving it a market share above 60 percent. Genting shares, as low as S$0.86 in April, have rocketed past S$2.00.

A running start High EBITDA and observations from the gaming floor suggest heavy slot machine play, which produces higher operating revenue than the tables. Slots have done well in Singapore with Las Vegas Sands chairman and chief executive Sheldon Adelson telling last month’s CLSA Investors’ Forum in Hong Kong that slot win per unit at the Marina Bay Sands was “probably record-setting”. Analysts cite several factors behind the Resorts World Sentosa advantage. Opened during the Lunar New Year, 10 weeks before Marina Bay Sands, “Resorts World Sentosa was able to get a small strategic advantage”, said Jonathan Galaviz, managing director of travel and leisure consultant Galaviz and Company. “Genting has deep operating ex-

perience in the Southeast Asian marketplace, which gave them a running start.” Genting opened its Highlands Resort outside Kuala Lumpur in 1965. That resort, the only legal casino in Malaysia, has traditionally catered to Malaysian ethnic Chinese and Singaporeans. Malaysian law prohibits ethnic Malay Muslims from gambling.

Stopping the bus Those groups constitute the market for Singapore’s so-called integrated resorts and Resorts World Sentosa has marketed to them far more aggressively than Marina Bay Sands. “Resorts World Sentosa managed to rally the critical mass of the Malaysian mass gaming market segment through its effective bussing programme from up north, across the causeway,” Platform Asia managing director Felix Ling told Macau Business. Both resorts had shuttle bus services within the city state but again, Resorts World Sentosa was more aggressive, drawing parliamentary scrutiny for running shuttles into Singapore’s so-called “Heartland” public housing estates. OCTOBER 2010

Gaming

The government discourages Singaporeans from gambling, imposing a daily casino entry fee of S$100, or S$2,000 annually, on citizens and permanent residents. Laws ban casino advertising and direct marketing except to VIP players. Shuttle buses in residential areas were thought to violate the spirit of the rules, if not letter. On September 10, the Casino Regulatory Authority banned all shuttle bus services within Singapore to both resorts.

Undercover junket deals Shuttle buses may not be the sole example of casinos bending the rules. Singapore has imposed stringent regulations on junket operators and none have been

Singapore versus Macau I

“ ’ve always felt Singapore has its own radius of markets, separate from Macau,” Las Vegas Sands chairman Sheldon Adelson told the CLSA Investors’ Forum in Hong Kong last month, denying that Singapore’s casinos have affected Macau gaming revenue. The industry is in agreement. Galaviz and Company managing director Jonathan Galaviz summed up the consensus: “The casinos in Singapore have not had an impact on Macau, and I would not expect them to have a substantive impact on Macau moving forward”. OCTOBER 2010

openly allowed to operate. However, Macau Business has previously reported on unlicensed junket operators that are bringing in customers with the knowledge of casinos and regulators. Casino insiders say Resorts World Sentosa is again leading the way, skewing both market share and overall gaming numbers. Singapore’s regulators, Marina Bay Sands and Resorts World Sentosa declined the opportunity to comment. Some junkets bring players from Hong Kong but most serve Southeast Asians on high credit terms with the casino, according to Mr Ling. “Junkets are here every week. They’re here and they’re operating. They’re just unlicensed,” said an ana-

lyst who requested anonymity. “Resorts World Sentosa is doing a disproportionate share. Genting has many years’ experience in a largely unregulated jurisdiction. The [Singapore] government hasn’t been operating casino regulation very long and hasn’t worked out how to deal with it. If you’ve got a company going out of its way to breach regulations, what do you do?”

Returns required Huge capital investment on all sides complicates the situation. Genting and Las Vegas Sands have together spent more than US$10 billion on their properties and are after a return. The resorts themselves remain incomplete and are missing important non-gaming revenue drivers.

Too early to call C

Singapore Prime Minister Lee Hsien Loong has invested political capital in the casino experiment in the face of unprecedented public debate. His government cannot afford to have the resorts fail but must also combat social ills associated with casinos. “Governments around the world tend to do things before elections and some initiatives they only do before elections,” said the analyst. “We have an election pending in Singapore and, well, the bus issue got lots of news time. My guess is the bus issue will have no impact on gaming revenue and therefore no impact to tax dollars, but get lots of publicity.” Junkets, however, are a different matter, according to the analyst. “They probably represent between 30 and 40 percent of casino gaming revenue today,” he said. “That segment is now a large contributor of taxation revenue. But alas, strangely enough, we have heard nothing from government.” Casino regulation is proving to be a difficult balancing act for a government that is accustomed to having things its own way.

Adelson calls the shots Nothing has come easy for Marina Bay Sands so far. In mid-September the shopping mall had opened barely half of its planned 300 stores. The resort has delayed opening its theatres, the primary entertainment component, the convention business is still ramping up and many areas that are open have problems,

starting with casino floor inefficiency. Mr Adelson has nevertheless professed he was “extremely happy with Singapore. It’s outdone our expectations.” Observers say Mr Adelson himself has contributed to the slow start. “Current operating strategy is being set by Mr Adelson,” the analyst said. “Sheldon has limited management’s ability to offer competitive programmes and pricing.” Just as when the Venetian debuted in Macau, Mr Adelson is balking at promotions, convinced that Las Vegas Sands offers the best product in the market and that customers will gladly pay for it. Management has yet to conceive an effective marketing strategy and lacks international marketing expertise, the analyst added. Mr Ling wonders how long it will be before Mr Adelson orders a management shake-up. Mr Adelson’s ambivalence about bus customers from Malaysia contributes to positioning difficulties. The overseas visitors Marina Bay Sands seemingly prefers are more evident in the hotel and shopping mall than on the casino floor. This may be a good sign over the long haul, Mr Galaviz said. “Measuring the success of the integrated resorts in Singapore should be done by analysing the total return on investment for Resorts World Sentosa and Marina Bay Sands, rather than just measuring casino cash flow,” he said.

urrent estimates peg daily gaming revenue for Singapore’s two casinos at S$16 million (MOP96 million). DBS Bank, controlled by Singapore government investment fund Temasek Holdings, forecasts that the two integrated resorts, which prompted unprecedented public opposition when proposed in 2005, will add S$2 billion, or 0.7 percentage points to the country’s GDP this year. Second quarter results seem to have convinced most analysts that the resorts will be winners although it may be too early to pass judgement. The quarter’s implied annual gaming revenue of S$5.8 billion is at the high end of forecasts for the gaming market, but no blow-out, and is amplified by the weakness of the US dollar. Moreover, the figures are for a single quarter and may not be sustainable. “The Singapore gaming market is currently exceeding expectations, but whether these monthly gaming figures can be maintained for a multiyear period is another question,” said Galaviz and Company managing director Jonathan Galaviz. The travel and leisure consultant said “the booming macroeconomic situation of Asia” and not the integrated resorts was boosting visitor numbers. Platform Asia managing director Felix Ling believes there is a novelty factor at work that will fade over time. He also warns that a Universal Studios theme park in South Korea, due to open by 2014, will diminish interest in Singapore’s version. Investors may be well advised to enjoy it while it lasts. On the other hand, Las Vegas Sands chairman Sheldon Adelson predicts Singapore gaming revenue will overtake the Las Vegas Strip’s current annual revenue of US$6.5 billion by 2012, suggesting nearly 50 percent growth during the next five quarters. “We’re never going to change the culture of a society,” Mr Adelson said in Hong Kong last month. He asked the audience if they knew anyone who did not play mahjong. When no hands went up, he said: “That’s the nature of all Asian people. They like to play... They’re never going to give up the spirit of challenging luck.”

OCTOBER 2010

mbreport 88

Retail sales volumes have increased five-fold in a decade. Luxury items such as watches and jewellery have led the way, attracting world-famous brands as well as those seeking fame. Where is Macauâ&#x20AC;&#x2122;s retail sector headed? BY SOFIA JESUS

A PARALLEL REVOLUTION OCTOBER 2010

89 f you put “Macau” and “boom” in one sentence, most people will fill in the blank space with “gaming”. However, it is not only the local casinos that are seeing their revenue skyrocketing. Retailing is also posting striking results. In just 10 years the volume of retail sales in Macau has posted an almost fivefold increase, from nearly MOP4.59 billion in 2000 to more than MOP22.34 billion last year. Several positive economic trends help to explain this rapid growth. For starters, tourists are spending more and more on shopping. Per capita shopping spending by visitors amounted to MOP761 in the second quarter, up by 49 percent year-on-year. The number of people visiting Macau is also rising. Total visitor arrivals reached 16.7 million in the first eight months of this year, up 18 percent year-on-year. And there is anecdotal evidence that domestic demand is also growing as GDP surges, taking purchasing power along for the ride. Official data shows that in the second quarter the value of retail sales amounted to MOP6.84 billion, a 32 percent year-on-year increase. At the end of June, 17,390 people were working in the retail trade in Macau.

Photo: Luís Almoster | mspagency.org

All that glitters Watches and jewellery top the list of the most soughtafter items, posting the highest growth rate in retail sales over the past decade, from MOP392 million in 2000 to more than 4.8 billion in 2009 – close to a 12-fold increase. But it is only since 2006 that sales of watches and jewellery have been the biggest piece of Macau’s retail pie. It seems this is a trend that will continue. OCTOBER 2010

mbreport 90 Official data from the second quarter shows retail sales of watches, clocks and jewellery took the largest share of turnover - 24 percent - posting a yearon-year increase of almost 50 percent. Goods sold in department stores represented the second largest share, 14 percent of the total value of retail sales.

Shopping for shops

Photo: Luís Almoster | mspagency.org

As retailing grows, so does the price of shops. The government says 1,551 commercial units changed hands last year. In the first seven months of this year, 1,005 transactions were recorded. Midland Macau chief executive Ronald Cheung expects this year to close with about 1,700 transactions, a number close to the record high achieved in 2007 when 1,823 commercial units were bought. Around 90 percent of units sold are second-hand. The total value of the transactions gives a clue about the development of the retail sector in Macau. Mr Cheung says from January to July “we’re talking

OCTOBER 2010

As retailing grows, so does the price of shops. The government says 1,551 commercial units changed hands last year. In the first seven months of this year, 1,005 transactions were recorded about around MOP2.5 billion”, the same as for the whole of last year. “Definitely this year the total value of transactions will be higher than last year and will hit a record high,” he said. Who is buying all these shops? Mr Cheung says 82 percent of buyers are

based in Macau. That is a significant deviation from the record year of 2007, when non-resident people were behind one-third of the total transaction value. The demand is driving up shop rents, especially in the city’s tourist areas. A shop near the ruins of Saint Paul’s was recently rented for HK$120,000 (MOP123,600) a month.

Why the frown? Curiously, retailers are not particularly bullish. According to the government’s latest retail sales survey in the second quarter, 59 percent of retailers reported a decrease in sales volume from the first three months of the year, while just nine percent reported an increase. Seventy percent of retailers reported that prices remained stable, while 12 percent reported an increase. However, most retailers seemed confident about the outlook with 56 percent expecting sales volume to remain stable and 18 percent forecasting an increase through the third quarter.

91 ong gone are the days when you had to go all the way to the Mandarin Oriental, now the Grand Lapa, to find an outlet selling world-famous brands in Macau. High-end shopping malls are now flourishing all over the city and there are enough luxury offerings to meet a more demanding type of customer. Investors call it an “exciting” market. And more is yet to come. When you enter some of Macau’s top-end shopping malls, crowds are something you will probably not come across. But the developers reassuringly say that, though there are fewer people there than you might expect, they are doing more shopping.

Luxe for life Luxury brands are selling like hot cakes in the growing retailing market, bought mainly with tourist dollars BY SOFIA JESUS

Golden Sands One of the biggest investors in the retail sector is Sands China, which owns two high-end shopping malls in Cotai at The Venetian Macao and the other in the Four Seasons. Senior vice-president of Asian retailing operations for Las Vegas Sands David Sylvester told Macau Business that the city’s retail market is an exciting one, because “it’s just starting”. He says there has always been a link between gaming and retailing. But looking at the past 12 months, he believes Macau is becoming a shopping destination in its own right. Mr Sylvester says that, before, people would stay in Macau for gaming and eventually would do some shopping. “Now we are getting an increasing amount of people that are coming for a shopping trip, and gaming while doing this,” he says. Sands’ shoppers come mainly from the mainland and Hong Kong, though there are an increasing number of people from India, Korea, Japan and Taiwan. The competition from other midmarket and high-end malls in Macau does not scare Mr Sylvester. It is actually a good thing, he says. “It works for us. It’s going to help in making Macau a retail destination,” he said. Sands’ recent investment in Singapore, Marina Bay Sands, is nothing for Macau to worry about, Mr Sylvester believes. “There will be a little crossover from China and maybe a little from India, but they are not threats to each other. It’s a different customer base,” he said. Mr Sylvester appreciates that luxury brands and jewellery are a big chunk of OCTOBER 2010

mbreport 92 the market, but retailers “cannot flood the whole of Macau with luxury goods,” he said. “It’s good to have high-end malls, but we have to attract a broader customer base. That’s why if we just continue to do luxury malls, we’re going to miss the market, because there are customers out there looking for other things. Not everybody is going to drop MOP500,000 on a watch.” He says Macau will eventually evolve into “a retail market that’s got variety”.

Central challenge A relative newcomer to Macau is the shopping mall at One Central. One point of difference is the size of its shops, according to David Martin, head of retail and commercial property for Hongkong Land, which manages One Central’s retailing area. “I believe it’s really the first time in Macau that the major luxury brands have brought their large, flagship retail formats,” he says. Bigger shops can carry a “much wider range of merchandise” that spells better customer service, Mr Martin says. It is also a better experience for VIP shoppers, who can find areas set aside for them inside these larger shops, where they can even enjoy a drink away from the main store. Most of the customers in One Central come from the mainland. Many are sophisticated shoppers, he says.

Some are VIP players but there are also general tourists. Some customers are from Macau. Overall, the quality of the shoppers is among the best in the world, Mr Mar-

tin says. “Once the shoppers are here, they are spending on quite expensive items. So, from the retail point of view, they’re good shoppers,” he said. He admits that “there’s not much

BAGS OF MONEY L

ouis Vuitton is one of the most famous luxury brands in the world. The company opened its first shop in Macau in 2002 and has four stores here. Business seems to be going well. “Year after year, we have been developing our business steadily. We have been growing our network and we have been quite active,” says Jean-Baptiste Debains, president of Louis Vuitton Asia-Pacific. “We opened in One Central less than one year ago. We are currently expanding our store in the Four Seasons. The business has been good. “Luxury shopping, for a number of people, can be an important part of travelling. It is quite natural. If you go away for one or two weeks, you usually have more time. In the case of Macau, wherever you are staying, you may be 15 minutes away [from a luxury shop area] or maybe it is just coming down from your hotel. That is why it is important to be in different places: people may not move around too much.” OCTOBER 2010

Although the brand has no plans for more shops at present, Mr Debains says Louis Vuitton will continue to look at new projects under development and probably “open one or more stores”. However, location is important because “not every place is suitable to have a luxury shop,” he says. As for the local urban myth that Louis Vuitton’s shop in Wynn Macau is the group’s most profitable in the world, Mr Debains says it is not true, although it “is a very successful store.” Indeed, he feels the store is too small. “We are not able to give the right experience to the people. Quite often there are queues outside. Quite often the shop is quite crowded,” he says. Louis Vuitton has a 156-year history and boasts that it never gives discounts or holds sales. The company has been in mainland China since 1992. “Today, in mainland China we have 32 stores in more than 25 cities. We are leaders in China and it is also one of the reasons for our success in Macau,” he says. EMANUEL GRAÇA

93 traffic” in One Central and says his company is trying to change this. Even so, one advantage to the way things are now is that there are fewer window-shoppers. “For every two people that walk through the door, one is spending. That’s a 50 percent conversion rate, which is pretty high,” he says. This is why shops in One Central are performing according to plan or “maybe slightly better,” Mr Martin says. One Central focuses on luxury however, Mr Martin admits that Macau residents “would like to see a really good mid-market” shopping centre, which would mean an opportunity for potential investors. Mr Martin is not afraid of more competition. He says there is still room for at least one more luxury shopping mall in Macau because each development in Cotai is self-contained and the number of hotel rooms helps make the market sustainable.

Wynning bet Wynn Macau is another satisfied investor in luxury retailing. In a written reply to enquiries by Macau Business, the company said that its second quarter figures show retail revenue was up 75.5 percent. This was “in part as a result of the addition of several new retail outlets in Encore at Wynn Macau,” the statement said. “It is true that some of our stores are among the best-selling stores in the world, although we cannot disclose exact details. In general, all of our stores have been very successful, and we are very pleased with their performance. “Demand for the exclusive fashion labels at Wynn Macau is so high that there are often queues outside the shops - regardless of whether it’s day or night.” Most customers come from the mainland and Hong Kong but there are also customers from Japan, Korea, the United States, Canada and Australia. “Our plan is to attract the most discerning clientele with the distinctive luxury brands and the specialised offerings to meet their needs,” Wynn Macau says. “The high-end visitor has high expectations, is very mobile, and has travelled widely. This new high-energy group, including upper-middle-class guests from China, is bristling with curiosity and for this we have a strong luxury retail strategy.”

Lei Chi Fong (right) and his son (left)

PRECIOUS METAL I

n the city centre, there are jewellery shops everywhere. For the shops lining Avenida Infante D. Henrique and Avenida Almeida Ribeiro, more commonly known by its Cantonese name San Ma Lou, this year is expected to bring a double-digit increase in revenue. But not all that glitters is gold. The president of the Macau Goldsmith’s Guild, Lei Chi Fong, told Macau Business that while “business is going a little bit up” compared to last year, “profit is going slightly down”. The main reason is the rise in the price of gold, which has reached record highs in international markets. Around 70 percent of the items sold in local jewellery shops are gold and profit margins are not following the increase in wholesale prices. Gold’s appreciation does not seem to scare Mr Lei, who is optimistic about the future of the trade. He sees the arrival of famous international brands in Macau as an advantage for local retailers. Sales depend on what the customer wants but he says his sector is growing and retailers

Tourists believe in the quality of Macau jewellery and the head of the Macau Goldsmiths’ Guild believes in an even brighter future for the business, since “Asian people, especially Chinese people, like gold”

are learning from the international experience of their challengers. There are exceptions. “Small shops in narrow streets may be a little bit affected,” he says. Even so, he argues that their costs are lower and the customers are different, and they manage to survive. But is there really room in the market for all these jewellery shops? Apparently, the answer is yes. Mr Lei, who is also a member of the Guangdong provincial committee of the Chinese People’s Political Consultative Conference, points out that there are not only more and more mainland tourists coming to Macau but they are also wealthier than ever before. They are “very happy to spend their money in Macau and Hong Kong”, he says. “They believe in our laws, in our commitment. They know we’re fair”. Tourists believe in the quality of Macau jewellery and the head of the Macau Goldsmiths’ Guild believes in an even brighter future for the business, since “Asian people, especially Chinese people, like gold”. The guild represents 68 jewellery shops, not including pawnshops. Its history goes back more than 80 years. For Mr Lei, jewellery is a passion that he hopes future generations of his family will retain. He is following in the footsteps of his father and now his son, a graduate gemmologist working for family firm Seng Fung Jewellery, is doing the same. Mr Lei’s grandson is still a baby but his hopes are high. “It’s a matter of DNA,” he says. OCTOBER 2010

mbreport 94

Adapt or perish The boom is not benefiting every retailer. For many small shops it is a fight to survive BY SOFIA JESUS

o one seems to doubt that Macau’s retail market is growing rapidly, changing the face of the city. But can traditional retailers keep pace? Macau Association of Retailers and Tourism Services vice-president Osborn Lo sounds a warning: “If all the small businesses disappear, Macau is no longer special.” From his perspective, people can buy brand-name goods in European

countries making a trip to Macau for the same items redundant. A more traditional form of retailing is what helps make Macau different. “The government needs to support small businesses to maintain these special features. This is Macau’s image,” he says. The association represents about 50 shop owners, both big and small. It is trying to help its members survive in a changing environment. It is trying to

teach them how to change the way they present and promote their products in order to stay in business. Three representatives of the association - Mr Lo, Patrick Choi and Philip Yeung -- told Macau Business that small shops need to understand the new reality, but that the government should also continue to offer a helping hand. As the market gets bigger, Mr Lo says sellers of luxury brands and more traditional retailers alike will face similar problems in running their businesses. “We have to restructure our strategy,” he says. Mr Choi is the general manager of Enoch International, which represents several international brands. He argues that for more traditional shop owners a change in strategy means changing their mindset, their service skills and their product.

Encouraging change Philip Yeung, Patrick Choi and Osborn Lo

The association is trying to organise training courses and other activities to help owners. It is designing tourist maps, one of them available online, that lead tourists to shops belonging to the association’s

WISING UP TO FRANCHISING W

hile some still wonder how to adapt in order to stay in business, others are turning to franchising. Vincent Ip is one of the directors of the Macau Chain Stores and Franchise Association. He says that when people have some money in their pockets and choose to set up their own businesses, franchising is the first choice for many. It is becoming more and more popular in Macau. Mr Ip told Macau Business that some local people do not have a clear idea about doing business, so franchising has the advantage of providing them with the training, the knowledge and the experience of others. Many of the brands franchised here are from Taiwan, which enjoys strong cultural similarities with Macau. The most popular franchising brands are food brands. Mr Ip estimates that MOP500,000 to MOP1 million is “quite enough” to start a business selling a brand from Taiwan. The exact amount depends on the brand. Problems in sourcing labour are also reduced by operating a franchise, he said. Employees know they are selling an international brand, so they are more loyal than they would be to a local business. It is also easier to hire part-time workers. There are some successful case studies already in the OCTOBER 2010

market. The Royal Supermarket chain had just a few branches in Macau 10 years ago but now it has more than 20, Mr Ip says. The San Miu Supermarket chain has a similar history and it now has 14 branches. Mr Ip predicts more investment in franchising in the future. Competition, he believes, will be good for business. “They can learn from each other,” he says.

Photo: Luís Almoster | mspagency.org

Operating costs for shop owners have increased in line with the boom in retail. High rents have forced several traditional shops to close or move members. But are local businessmen ready to face the challenge? “The process is very difficult,” Mr Lo says. He tells entrepreneurs they need to sell to tourists, not just local customers, and advises them to “repackage” their products in order to make them more attractive. “They must have a policy of facing the market and building up management skills capable of meeting international standards. Otherwise, they can’t survive,” says the association’s treasurer Mr Yeung. Mr Choi wants the government to do more to help retailers. “For example, to provide more training courses or supply some new places for small and medium enterprises to develop their businesses,” he suggests. That may include new shopping malls. The association recommends that malls should reserve some space for more traditional shops to help them promote Macau’s traditional image. Mr Choi also argues that the govern-

ment should prevent tourism companies from channelling tourists into particular shops without giving them the opportunity to stroll freely around others.

‘P’ is for preservation For Mr Yeung, it all comes down to place, price, production and promotion. If these four elements can be improved, then Macau’s traditional image can be upgraded, he says. Operating costs for shop owners have increased in line with the boom in retail. High rents have forced several traditional shops to close or move. The lack of labour is another serious problem. At the end of June, the wholesale and retail sector reported 3,072 vacancies – 82.2 percent more than a year before. “We worry about next year, when more hotels will open. If they need 2,000 or 3,000 people for retail, it will be difficult to handle,” Mr Choi says. Additional reporting by Mandy Wong

SELLER BEWARE I

f times are changing for retailers, spare a thought for the consumers. After awarding shops Consumer Council certification for nearly a decade, Macau’s Consumer Council has decided to find out what customers think of the shops it certifies. Last month the council announced that it had asked the Macau University of Science and Technology to conduct a survey to find out how much consumers trust its certified shops. The rules say certified shops are obliged to solve any dispute with customers through the Consumer Arbitration Centre. According to the council, its Certified Shop emblem shows customers they can have confidence in the shop. More than 1,200 businesses in about 50 industries have been certified. OCTOBER 2010

mbreport 96

The unreal deal While legitimate retailing is on the rise, fake products are still found in Macau by customs officials BY SOFIA JESUS

igh-end brands are betting on a future in Macau regardless of the cheap price tags on counterfeit goods available across the border. It seems all the fakery going on next door sometimes may actually be playing in their favour, as consumers turn to Macau in search of the real deal. Senior Superintendent Ian Chan Un, head of the enforcement division of the Macau Customs Service, sums it up, saying “violations of intellectual rights occur often in Asia but in Macau the situation is not serious”. As he explained to Macau Business, counterfeit CDs are an endangered species but “there are still some shops that sell fake goods, such as sportswear, sports shoes, bags or mobile phones,” he said. Other counterfeit items commonly found by customs are computer games and other software. From January to August, customs handled 527 cases involving counterfeit goods, of which 298 involved fake leather items. This figure is significantly higher than the figure for all of last year, when there were only 27 cases. Also on the rise is counterfeiting of cigarettes. There were no cases last year but this year there have already been 83. Most of the counterfeit goods found in Macau come from the mainland. The authorities believe there are no counterfeiters in Macau.

Web of deceit Customs officials typically detect fakes either because counterfeit goods are intercepted at the border or through an investigation that has been launched after acting on a complaint. There is an average of 30 complaints every year. Customs then calls the brand owner, as long as the brand is registered in Macau, to confirm whether there has been any piracy and, if so, the case is handed over to the courts. The penalties handed down vary from fines to prison sentences. Additional penalties, such as the OCTOBER 2010

temporary closure of a shop, may also be imposed in some cases. If the courts consider the counterfeiting proven, the goods are destroyed. Mr Ian says the Internet “is the biggest challenge and the biggest difficulty for Macau Customs”. Unless there is a complaint, customs inspectors can do little about piracy. Mr Ian fears that in the future there will be more cases of people buying counterfeit goods on the Web. There have already been such cases, with most of the goods bought at websites located in mainland China or Hong Kong. Louis Vuitton is among the most counterfeited brands in China. JeanBaptiste Debains, president of Louis Vuitton Asia-Pacific, considers piracy “a very serious” problem. “First of all, we are the only brand that sells its products only in its stores. If you don’t buy it in a Louis Vuitton store, you need to be careful. They can still be second-hand products but you need to be careful,” Mr Debains tells Macau Business.

New mentality “Fighting against crime is a neverending story but I think the mentality

is changing. The authorities are realising it is a serious problem and that behind counterfeiting activities there are criminal organisations, there is money laundering and that it is often linked to other kinds of illegal activities,” says Mr Debains. “We work with the authorities to make sure the laws are enforced.” Mr Debains says counterfeiting operations may employ child labour, poor working conditions or materials that can be dangerous. But he believes people are becoming increasingly aware of the realities and he is optimistic things will change. The senior vice-president of Asian retailing operations for Las Vegas Sands David Sylvester says he is not worried about counterfeit products. He stresses that customers who go to his company’s shopping malls know the goods they get are real. The manager for One Central’s retail area, Hongkong Land’s head of retail and commercial property David Martin has a similar view, saying that brands which run their own stores reassures customers their purchases are genuine. Additional reporting by Emanuel Graça

OCTOBER 2010

EX XCLU USIV VE RET TREAT

A glimpse at the Beach House Maldives CR RUIS SING G DES STIN NAT TIO ONS

When how you get there is everything! THE E HOT TTE EST T SPO OTS

Wish list of places to go

BREAKDOWN BY THE NUMBERS

FACING REALITY BY THE NUMBERS...

Vacation time!

5.3 square kilometers the size of Expo grounds

the number of times the previous Expo, held in Spain in 2008, could fit into the Shanghai Expo grounds

191

the number of countries participating in Expo Shanghai 2010

195

the number of countries in the world

70 million

the total expected visitors to Expo Shanghai 2010

20 million

the population of Shanghai

the percentage of visitors expected to come from within China

RMB 160

The Cost of one Expo Shanghai 2010 ticket 98

It’s the sweetest time of the year and it makes all that work worthwhile, even if it’s for a couple of weeks, or even just a couple of days. In this Essential issue, we give you several suggestions, either for a vacation or a little escape, depending on which side of the globe you are on right now, and we’ve chosen to enjoy the journey too, instead of simply getting to the vacation destination as fast as we can. This time, we suggest the trip be part of your own vacation/escape time. Forget about planes, airports and jet-lag. We’ve chosen the old fashion way, boats and trains, and for these we give you some of the best destinations and route options together with a range of different rates and levels of luxury, with something to suit every budget. Not only have we chosen the best ways to travel, but we have also decided to pick some of the places for you to go, for the night or even just for dinner, in some of the most visited destinations in the world, such as New York, London, Paris and exotic Malaysia. And for such trendy places don’t forget to look your best. We give you some suggestions for the items to buy when you’re off to that paradise destination. Whether it’s a notebook to write down all of your experiences and thoughts or a special luggage bag from a well-known fashion designer, the most important thing is to be prepared to enjoy your own time. Working for others on their vacation time is not always easy, but someone has to do it. In this issue we feature an interview related to the hospitality industry in order to find out some of the best kept secrets: where do the hospitality professionals spend their vacations? It doesn’t really matter where you spend your vacation, but it really matters to spend it well. Thinking about body and mind relaxation, on this issue, we offer some sex tips for Her to make Him happy!

Snow vacation

It’s all about chills, thrills, lumps and bumps on the slopes Expect numerous falls, bruises and embarrassment. Coat, trousers, gloves, ski boots, just to name a few clothing items Minus zero temperatures means freezing cold!

Deep blue lakes brushed with vibrant green land below, snow covering the tops of the mountains and sheep dotting the hills. Breathtaking views that make the descent more than worth it! Skis and snowboards everyone! It’s such fun!

Aches all over the body, whether the knees, the back, the leg muscles, the arms and even the feet for the uncomfortable position you have to stay in your ski boots. If you’re a beginner you have to struggle to control the turns and all the moves wishing you could ski with natural confidence, just like that 4 year old kid that passed you by. The feeling of sliding down the slopes can turn into a huge adrenalin rush. Great workout! You’re about to fall on the ground anytime soon. How great is it?

Beach vacation

IIt’s all about relaxing by the water and topping up some tan EExpect to fall asleep S Swimsuit....and you’re ready to go! T bliss of the warmth of the sun against the skin, The pplus the warmth of the sand beneath your feet, no matter the water temperature. T waves lapping at the golden sand, the water sparkling under The tthe glow of the sun. But at the end of the day, blue and gold that’s what you’ll see...well, maybe a little boat crossing the water... S Some surf boards and boogie boards. If you don’t surf, at least yyou can play rackets...still fun, right!? Sunburn! Worst thing ever! S

IIf you have a family with small kids just by your side, all you have tto do is take a swim and enjoy the silence

Again..if you’re not surfing, the beach is not adrenalin material. It’s A aall about relaxation. You’re quietly lying down most of the time. Isn’t it great!? Y

TEN COMMANDMENTS 1 Thou shalt promise to be a smart traveler and shalt not succumb to the temptation of phony “last-minute travel deals”.

6 Thou shalt understand that weather happens. If a climatecontrolled vacation is what you want, stay in your living room.

2 Thou shalt ignore those seemingly friendly people in Cancun who want to give you a “free ride” to your hotel.

7 Thou shalt not complain about Mexicans speaking Spanish in Mexico, Italians speaking Italian in Italy, or Japanese speaking Japanese in Japan.

3 Thou shalt promise to understand the meaning of “nonrefundable” 4 Thou shalt promise to remember that your safety is not the responsibility of the cruise line, the FBI, the Aruban government or even your flight attendant. Your safety is your responsibility. 5 Thou shalt understand that the people in the brochure are not going to be vacationing with you.

8 Thou shalt exchange your currency for the local currency and use it. 9 Thou shalt remember that when something does go wrong, you should complain about it immediately — not after stewing about it for weeks after you get home. 10 Thou shalt control thine offspring. Traveling with your

kids is a lot of fun, but please, try to keep them in check.

FEATURE

DO NOT DISTURB

100

BIG SPENDER

The Beach House Maldives

is an exclusive retreat within one of the world’s most exceptional travel destinations. Here, the legendary luxury of the Waldorf Astoria Collection is enhanced by nature’s marvels, creating a resort that is both wonderfully indulgent and deeply inspiring. Located in the most northern atoll of the Maldives, Beach House Maldives offers a world of possibilities that combines local flavor with global sophistication. At once exclusively chic and wonderfully laid-back, this Maldives luxury resort upholds the highest standards of modern luxury whilst maintaining indigenous traditions and an authentic island ambiance. The Beach House Maldives features 83 beautifully designed villas, each of which has its own private pool, outdoor dining area, and personal butler. The Beach Villas, Water Villas and the Grand Beach Pavilion showcase their own unique characteristics, all offering an exquisite combination of ecosensibility, breezy tropical ambiance, and truly limitless luxury. The sea life in the Maldives. Is nothing short of astonishing, and there are few better places in the world to dive and snorkel. Catch a glimpse of sleeping turtles, schools of barracuda, manta rays, moray eels and the famous long-nose hawk fish. For more information: www.beachhousemaldives.com

THE LOVE BOAT

The Annaliese, a HK$698 million super-yacht owned by Greek entrepreneur Andreas Liveras, is the most expensive private yacht charter in the world, coming in at HK$882,509 per day. Onboard facilities help explain the price: a spa, including a marble Roman bath, saunas and steam rooms, Jacuzzis (in the spa as well as on the sun deck), a full-size movie theater, a business center and a helicopter landing pad. Customised itineraries include the Mediterranean, the Caribbean and the South Pacific. The Annaliese and her sister ship, the Alysia (which has the same daily rate), each accommodate 36 people. If you’re not sure about getting this yacht for a small vacation, just ask some of the regulars like Beyoncé, Jay Z and Jon Bon Jovi. They usually spend one week or so on this yacht. For more information, visit www.liverasyachts.com.

101

INTERVIEW

HUMAYOON SHAIKHZADEH IS THE GENERAL MANAGER FOR THE WESTIN RESORT COLOANE IN MACAU, ONE OF THE MOST PEACEFUL AND NATURALLY SURROUNDED PLACES IN TOWN. ESSENTIAL SPEAKS WITH THE PERSON IN CHARGE OF THIS LITTLE PIECE OF HEAVEN.

rom your perspective what’s the most important thing when planning a vacation?

I would start by identifying my purpose or need to ensure that the destination I select can provide me with what I am looking for – i.e. a place where I can be at my best in mind, body and spirit. There’s no point heading out to a remote island which goes to sleep as the sun sets when one’s definition of relaxation calls for a good meal followed by some entertainment! At Westin, we work hard at identifying our guests ‘persona’ (which may vary, trip to trip) so that we are better able to identify with the guests wants and expectations. Tourism also reacts to trends. How can one cope with it in the tourism industry? While it is extremely important to keep up with trends, it is however equally important to identify with what makes you unique. The most realistic way of coping with trends in this industry is to (a) firstly, be aware of them, and (b) to constantly innovate your products and services so that you are, at all times, staying competitive.

102

The Westin Macau Resort is the most different option in the territory. What makes it so special? I would highlight three key factors: 1. Location – The Westin Resort Macau is the only true golf resort in the territory, surrounded by the lush plantations of Coloane, the unique Hac Sa beach and the South China Sea; 2. Product – we are geared towards relaxation and rejuvenation, the fact that we are the only major hotel in Macau without a casino has as much to do with our success as anything else; and 3. People – This is what I like talking about! People here does not only refer to our associates, who deliver personalized service second-to-none, but also to our customers, who are collectively the BEST in Macau!

How do you create a unique experience vacation/escape for your guests? There are many tools that a great majority of hotels utilize in order to enhance a guests’ experience at their property. A prime example would be the guest history (of preferences) which is retained in our system in order for us to pro-actively service our returning customers. Additionally, Starwood has this wonderful program whereby an ‘Ambassador’ alerts each property as to the preferences for upcoming VIP guest’s days in advance of the visit – which provides us with a better opportunity to ‘Surprise & Delight.’ But, at the end of the day, it is the daily interaction which any guest would have with any member of our team, which is the most important and, in that respect, we rely on our core brand values of Personal, Instinctive and Renewal to enhance our guests experience. What’s your personal idea of a great vacation? As we say it at Westin, to leave feeling better than when I arrived! 103

DESTINATIONS - ONBOARD

Cruising

Sometimes the way you get to your destination is more important than getting there. Ocean and sea cruises are definitely one of the best ways to enjoy a vacation. You won’t miss anything onboard, it’s all there: pools, nightlife, dining, great accommodation and most of all, the serenity. Between the ocean blue, the port beaches and the spas on board you will have every opportunity to feel away from it all. Which is exactly what a getaway is all about.

ALASKA This just might be the best chance to explore the natural beauty of Alaska. The Crystal Alaska cruise is truly the best way to experience all Alaska has to offer with eight sailings visiting the awe-inspiring Glacier Bay National Park. Aboard the award-winning Crystal Symphony, you’ll not only revel in your ship’s recent multimillion-dollar makeover, but also soon realize you’ve made the perfect vacation choice. From the charming Gold Rush towns of Skagway and Ketchikan to the cosmopolitan yet natural wonderlands of Vancouver and Victoria, Alaska’s final frontier is just waiting to be explored. www.crystalcruises.com

104

BAHAMAS Cruise for a week to the sunny beaches and fun theme parks of the Bahamas and Florida or make it a quick 3 or 4-day getaway to the Bahamas. Whether you’re looking for a tropical adventure, a little romance or just a great time with the kids, these are the perfect 3, 4 and 7-day vacations. Add in Freestyle Cruising with Norwegian Gem, award-winning dining, entertainment, accommodations and tons of fun for

everyone and you’ve got one perfect cruise. From traditional fine dining to endless buffets with custom-order action stations, there is a host of delicious options included in your cruise fare. For an additional cover charge, you’ll have access to a world of possibilities including gourmet French, Japanese teppanyaki and an upscale steakhouse – up to 20 dining options in all. The Second City comedy troupe,

Broadway-style shows, a state-ofthe-art fitness center, a sports court, bars and lounges of all kinds, pools, hot tubs, kid’s centers, teen discos and more are all on board and included in your cruise fare. Flexible accommodations are on offer ranging from the affordable to the over-the-top opulence of Suites & Villas. For more information: www2.ncl.com

NORWEGIAN FJORDS Fjords, amazing northern lights and the exotic midnight sun are just some of the reasons for this cruise destination to be one of the most wanted. At the Norwegian Coast you will have the chance to meet amazing Fjords, the Arctic Circle and the Lofoten islands, Lapland and the North Cape, dramatic Arctic scenery and scattered fishing settlements. You can add land excursions such as dog sledding and snow mobile safaris in winter, the North Cape, Midnight concert in Tromso, white water rafting and city sightseeing to this authentic cruise onboard one of the Norwegian Coastal Voyage ships. The Norwegian Coastal Voyage (called Hurtigruten in Norwegian) has been cruising the Norwegian coast for more than 100 years. Today it offers a fascinating mixture of first-class passenger vessels and local working ships. The Norwegian Coastal Voyage offers you a wide range of cruise packages along with the 11 nights Bergen-Bergen cruise, the 6 nights Bergen-Kirkenes cruise and the 5 nights Kirkenes-Bergen cruise. Choose your Norway cruise package according to the preferred travel season.

105

GET ON BOARD

THE ROYAL RAJASTHAN ON WHEELS

Just like Kings

Rajasthan is the magnificent land of numerous kingdoms, majestic forts and palaces, diverse cultures, varied landscapes and vibrant colours. Experience the land of regal splendour with Royal Rajasthan on Wheels, the contemporary royal living. The concept of the Royal Train has been taken from the rulers of the erstwhile princely states, who designed their individual luxurious rail-coaches which were their â&#x20AC;&#x2DC;palaces on wheelsâ&#x20AC;&#x2122;. Here was laid the foundation of luxury trains and travel. The Royal Rajasthan on Wheels is the regal delight where every moment is woven together into an everlasting and immemorial experience to be lived and cherished forever. The makers of the Palace on Wheels have rekindled the charm of luxury with utmost consideration for your comfort and modern amenities at the Royal Rajasthan on Wheels. This tour is extensively planned to take you through the whispering sands of desert, the intriguing sagas of forts and palaces, and the adventurous escapades to the wilds; while you witness the luxuries on the train in a truly royal fashion. This train is newly built and designed in a contemporary royal style. You will be delighted with the magnificent interiors, sumptuous meals, expensive wines, and personalised service by the Khidmatgars, the likes of which you would rarely experience. The luxurious Royal Rajasthan on Wheels takes you through a seven day exploration of the vibrant Rajasthan. The magic of the splendid journey begins at New Delhi and prepares you to weave the fabric of delightful imagination becoming reality over the next seven days. Your royal journey takes you through various erstwhile princely states of Jaipur, Jaisalmer, Jodhpur, Sawai Madhopur, Chittorgarh, Udaipur and Bharatpur. After experiencing the multi-faceted Rajasthan, you will be ushered to a new exploration at Agra. The entire expedition has been thoroughly planned like the Palace on Wheels, to take you back into history. Most enjoyable journeys are short-lived but long remembered. This journey will come to an end at Delhi, which will mark the onset of your reliving these cherished memories for a lifetime. For more information, please visit: www.indialuxurytour.com

106

THE VENICE SIMPLON-ORIENT-EXPRESS

La créme de la créme A work of art in itself and a true Art Deco icon, the legendary Venice Simplon-Orient-Express train offers a journey unlike any other. Romance, adventure and style are all intimately bound up in journeys and tours that criss-cross Europe, rolling through sublime scenery to some of the continent’s most alluring cities. Whether it’s time for a ‘once in a lifetime journey’, or a shorter trip maybe for just a day, or dinner to celebrate something special, life onboard is thoroughly memorable, enjoyable, and comes highly recommended. The adventures of celebrated historic personalities are still palpable today, held in the original 1920s carriages with their Lalique glass panels, wood burning stoves and Art Deco marquetry. The ride whizzes you past urban landscapes, forests and central Europe’s snow-capped mountains en route to romantic Venice. The train’s smart bar car and gourmet restaurant provides the perfect excuse to dress up to the nines and sip cocktails as the pianist tickles the ivories. From the legendary Venice Simplon-Orient-Express, and its sister trains in the UK, these trains’ portfolios also include special departures across the world from the high Andes in Peru to heart of south-east Asia. For more information: www.orient-express.com

TRANS-SIBERIAN

The longest railroad While the Trans-Siberian Railway may not be not as luxurious as the two other options we give you in this Essential, it’s definitely one of the most adventurous railroads in the world. It is also the longest railway in the world and crosses wonderful views and amazing cities. Connecting Moscow and European Russia with the Russian Far East provinces, the TransSiberian has one junction with the Trans-Manchurian line, a junction with the TransMongolian line and the Korea branch to the Sea of Japan. Until today, the Trans-Siberian line remains the most important transportation link within Russia; around 30% of Russian exports travel on the line. But its 9,288 km of track (Moscow to Vladivostok) keeps attracting many foreign tourists and domestic passengers. Even in first class, the fares are not too expensive and the train cabins are very comfortable. It’s certainly a trip not to miss. For more information, please visit: http://www.seat61.com/Trans-Siberian

107

TAKE NOTES

Whereabouts

Even the “dolce fare niente” has to be well chosen, so we’ve gathered some of our wishlist places to go, whether for dinner, a spa or to spend the night.

LONDON

Circus in Town Circus is an innovative combination of West End cocktail bar and London cabaret restaurant set in the vibrant Covent Garden, the heart of theatre-land. This London performance restaurant boasts a stylish surrealist interior created by iconic British designer Tom Dixon, which transports you into a decadent world of glamour and escapism from the moment you enter. If you’re looking for a brunch or dinner venue in Covent Garden to escape the hustle and bustle of the outside world, then Circus is ideal, and the Pan-American menu is sure to please everybody. As day turns into night, this Covent Garden cabaret restaurant really comes to life and the spectacle begins as diners sip exotic punches and cocktails. West End London is synonymous with theatre and drama, so it is fitting that Circus hosts complementary entertainment at centre-stage of the venue. After dinner, the adventures continue with the distinction between performer and audience blurring as the stage opens to the brave. Circus, the late night cabaret bar, means diners and drinkers alike can relax for an entire evening, with a seamless transition from bar to dining room to dance-floor. NEW YORK

Crosby’s Nestled in the centre of SoHo, between Spring and Prince Streets and one block behind Broadway, The Crosby Street Hotel is surrounded by shopping and entertainment opportunities in all directions as well of some of the best galleries in New York. The impressive 11-story construction was built from scratch on the site of a former parking lot in downtown New York, right in the heart of SoHo, famed epicentre of Manhattan chic. The interior look is classic Kit Kemp – elegant and quirky yet entirely cosy. Each of her 86 individually designed rooms and suites comes fully equipped with flat screen LCD television, DVD/CD player, iPod docking station, WiFi and custom-made Miller Harris bath products, while the top-floor headline suites offer the additional luxury of uninterrupted, 360-degree skyline views. Further highlights include a leafy courtyard garden, ground-floor bar and restaurant, well-appointed gym, guest-only drawing room and several private event spaces, all impeccably designed and peppered with art works selected by Kemp herself. This impressive list of facilities is rounded off by a luxurious private screening room – a perfectly-executed Firmdale trademark sure to be as big a hit in New York as it has been in London.

108

MALASIA

Spa in the jungle Located near the city of Ipoh (Perak), 2 hours by car from Kuala Lumpur, The Banjaran Hotsprings Retreat is the ultimate heaven for relaxation, offering lifestyle enhancement inspired by authentic Malaysian practices. Surrounded by stunning mountains, caves and deep jungle, you can enjoy the natural hot springs with temperatures ranging between 35°C to 70°C, a thermal steam cave (if you want more heat), a fish spa, where hundreds of Garra Rufa fish will eat your dead skin (if you are not too ticklish) and of course a very good spa with a wide range of body treatments. Designed specifically for short-term stays, this unique place will surely become a landmark of healing hospitality in South-East Asia because of its natural resources from thousand of years, its 25 villas, each one set within your own garden, private pool and Jacuzzi geothermal tub, and the magic of the mystic jungle of Malaysia. PARIS

Ooh la la! At place de la Madeleine stands one of the city’s most popular sights -- not the church, but Fauchon, a hyper-upscale megadelicatessen that thrives within a city famous for its finicky eaters. It’s divided into three divisions that include an épicerie (for jams, crackers, pastas, and exotic canned goods), a pâtissier (for breads, pastries, and chocolates), and a traiteur (for cheeses, terrines, pâtés, caviar, and fruits). Prices are steep, but the inventories - at least to serious foodies - are fascinating. On the same premises, Fauchon has a restaurant, Brasserie Fauchon, and a tea salon, which showcases the pastry-making talents of its chefs. Among the many offerings is a Paris-Brest, a ring in the shape of a bicycle wheel that’s loaded with pastry cream, almond praline, butter cream, and hazelnut paste capped with almonds. Open Monday to Saturday 9:30am to 7pm.

109

SHOW OFF

Sound master What goes best with your mp3 device? The best pair of headphones one can get: Sennheiser. Besides a great design, these headphones are noisecancelling, energizing sound and referenceclass. Qualities enough to make you enjoy that awful long plane trip to your dream vacation destination.

Keep your hands free as you dive Do it the proper way without losing an instant of what you’re seeing while you dive. This is the world’s only dive mask that has an integrated waterproof digital video camera plus photographs at 5mp. It operates to a depth of 65ft / 20m and eliminates the need to hand carry an underwater camera. Ideal for snorkeling, SCUBA, spearfishing, freediving, shark cage diving and shallow SCUBA diving.

“Never hide” There are loads of brands for sunglasses, but there’s only one model that will fit your vacation style whether you’re a man or woman: Ray Ban Aviators. With or without polarized lenses, the Aviators are a fashion icon and they have the ability to look good on everyone. Choose the color of your lens and the silver, golden or leather details and you’re good to go anywhere!

Sporty vacations Having seen various high end fashion houses develop unorthodox products as of late, this latest development from Parisian label Chanel comes as no surprise. For its Sports Collection, Chanel produces a wide range of items synonymous with sports, including products such as tennis rackets, snowboards, helmets, roller blades, surfboards and even a set of guitars. Each one of them perfect for your vacation get-away! Although a bit out of the ordinary, each still manages to showcase the brand’s simple yet elegant design mentality.

110

SEX AND VACATIONS

Since 1853 The Goyard Malletier intricate logo, signature handpainted initials and stripes represents 150 years of serving exclusive clientele such as the likes of kings, queens, maharajahs and movie stars. Traveling with such a bag makes the trip even more worthwhile. Wouldn’t you agree?

Until the end of the world

Ah, vacations! According to experts, it really is the season that brings your lust life to a boil. Especially in the sun, for the heat relaxes your muscles, heightens skin sensation, and causes you to slow down and get in touch with your more languid, sultry side.

Globe-Trotter has linked up with fellow English brand Hackett on a small capsule collection. By now you should know that we are big fans of the luggage brand, still today presenting some of the most classy, if not most practical, masterfully crafted luggage on the market.

THIS TIME, WE’VE COME UP WITH SOME TIPS FOR THE LADIES: Dress for the Weather

To light up your man, treat him to his very own wet T-shirt fantasy. Put on a tissue-thin white tee or tank top and “accidentally” get wet (say, by getting sprayed by the garden hose...it happens quite often) so that it clings alluringly to your body. Men respond strongly to visual cues and being partially clothed creates a bit of mystery that guys find very erotic.

Write it down

Moleskine is a brand that identifies a family of notebooks, diaries, and city guides: simple tools for use both in everyday and extraordinary circumstances, such as vacations. Moleskine will ultimately become an integral part of one’s personality. Created as a brand in 1997, it has brought back to life the legendary notebook used by artists and thinkers over the past two centuries, among them Vincent van Gogh, Pablo Picasso, Ernest Hemingway, and Bruce Chatwin. A trusted and handy travel companion, the nameless black notebook has held invaluable sketches, notes, stories, and ideas that would one day become famous paintings or the pages of beloved books. Moleskine have become a symbol of latter-day nomadism, and they are the perfect companion for a vacation journey.

Good taste is guided

Small enough to fit in a shirt pocket, but big enough to contain hundreds of hand-selected entries of the very best each city has to offer, Luxe City Guides are distilled from the recommendations of people who actually live in the city itself, and collated by a resident editor. Besides being design unique guides with valuable information, the Luxe Guides have also conquered the most fashionable voices around the world who’ve claimed Luxe as a culttrendy-must-have. Luxe City Guides offer you the best places to go and visit from Bali to Florence, Miami to Istanbul. Luxe has 31 cities for you to choose from.

Turn Off the AC

Perspiration can have an invigorating effect on your sex life. When you sweat, mate-attracting pheromones are excreted by scent glands in your skin. Neither of you will consciously notice the pheromones, but they register in the part of your brain that controls sexual urges and triggers desire. When you’re in love or even just in lust with somebody, there’s nothing more enticing than their smell, and the heat really amps it up. To tap into sweat’s seductive powers, let your bedroom’s temperature get tropical.

Work the Slow Burn

In the heat, your breathing and movements naturally slow down. You can make the most of this effect by taking your sweet time during foreplay.

Blast Your Hot Spots

The term cold shower may be a modern euphemism for “sex ain’t happening,” but icy spritzing on a small scale can actually prolong your pleasure. When there’s a constancy in warmth, the body begins to adapt — meaning, sensitivity is decreased. A well-timed—and placed—shock of cold against sweltering skin will step up arousal and send a pleasure charge coursing through your body. Keep a spray bottle filled with ice water next to the bed.

Hit the Floor

If your summer sex session gets too steamy to bear, take it to ground level. The novelty of switching your locale from in the sack to on the floor will also pump up your excitement levels.

Savor That Post-O Flush

When you finally collapse back onto the bed in a blissful coma…stay right where you are. Don’t make a move for the AC. Allow your body to remain warm while you’re coming down from the height of climax. So lie back with your man, close your eyes, and enjoy that bliss. Just think: Later on, you can have more of the same...you have all the time in the world. You’re on vacation!

111

Fashion

Grand Canal Shoppes, The Venetian Macao 5cm Abiste agnès b. Aigle Aimer Alqvimia Anteprima Apothecary Armani Exchange Arté Madrid Artini Ashworth Autore b+ab Bauhaus Belle Blancpain Blush Boucheron Boutique di Gondola Breil Brooks Brothers Butani BVLGARI Canudilo Caran d’Ache Carat Carl F. Bucherer Century Chai CHARRIOL Chevignon Choi Wai Jewellery Chopard Cirque du Soleil Boutique City Chain CK Calvin Klein Clarins Club Monaco Coach Corona Crocodile Damiani Davidoff Deicae Demandor Derain DG Lifestyle Store Diesel Dilys’ Don Gilato Dooney & Bourke Ecco Edelweiss Jewellery Elle Jewellery Elov Emphasis Jewellery Emporio Armani Emporio di Gondola Enzo EQ:IQ Expressions Fabio Caviglia Fables Fancl Fila Fiorucci Florsheim Folli Follie Fossil Francesco Biasia Franck Muller French Connection Furla Geox; Joy & Peace girls talk Giviea Glashütte Original Godiva Göessele Grossé Guess Accessory Guess Jeans H&B Medicine Shop Hatta Fine Jewelry Hearts On Fire Herborist Hogan Home of Swallows Hugo Boss Orange Label i.t innée

Next month look for FINE DINNING

guide to indulgence

2611 2629 2615 2419 2628a 2606 2618 1036b 2442a 2623c 2015 2323 2643 2312 2428 2108 2706 2642 2007a 2301, 2660 2610 2711 2523 2006 2705 1001a 2400 2207 2402 2646 2402c 2432 2118a 2010 1044 2019a 2622a 2625a 2446 2009 2212a 2023a 1013a 1001/ 2623b 2107 2105 1019 2201 2632 2109 K1 2616 2025 1020a K3 2207a 2020 2700 2660 2115 2612 2103 1008 2300a 2635 2401 2111 2603 2407 2413 2612b 2012 2440 2628 2641 2302c K5 2706 2640a 2627 2631 2601 2429 2120a 1013 2008 K6 2510 2201a 2031a 2328 2636

Izod Izzue Jaquet Droz JC Versace Jean Scott Jipi Japa Just Gold Kaltendin Kego Kilara & Ceu Killah Lacoste Lancel Laneige Le Saunda Levi’s Links of London LLadró L’Occitane Luisa Cerano Luk Fook Jewellery Lush M Missoni Malo Clinic & Spa Manchester United Mango Marisfrolg Marjorie Bertagne Marlboro Classics Massimo Dutti Maud Frizon Paris Max&Co. Mercato Michel René Michele Mikimoto Millie’s Mirabell Miss Sixty Mocca Moiselle Montagut Montblanc Moreline Murano Murphy & Nye NaRaYa Natural Beauty Mix Nautica Next Nike Nine West Normana O’Che 1867 Omega Optica Boutique Optica Fashion Optical 88 Osim Oto Outdoor Fashion Passion Play Patchi Paul & Shark Piaget Piquadro Promod Q’ggle Rado Raffles Rayure Replay Rich Jade Richard Mille Rimowa Rockport S. Culture S.T. Dupont Samsonite Shiseido Sisley Sisley Paris Soft & Intimate Sparkling Color ST GE Staccato Stefanel Stella Luna Stone Market Sulwhasoo Swarovski Swatch Tasaki Thomas Sabo Tie Rack / Bric’s

2423 2613 2523b 2001 2433 2102a 2113 2017a 2402a 2306 2306a 2508a/ 2403 2701 2409 2210a 2425 2608a 2013c 2608 2622 2018 2636a 2630 3015 2215 2321 2619 2648 2509 2442 2650 2623 2508 2703 2621 2011 2405 2658 2438 2322 2607 2525a 2002 2639 2652 2702 2212 2128 2709 2211 2432a 2605 1020 2426c 2003a 1010 2005a 2019 2106 2120 2523a 2300b 2111a 2007 2013 2023b 2316 2216 2006a 2119b 2606a 2427 2117 1002 2708 2203 2300 1022 2527a 2017 2310 2630a 2527 K9 2612a 2319a 2421 2026 2402b 2617 2415 2426a 2101 2426b 2435

Tiffany & Co. TISSOT Tommy Hilfiger Tonino Lamborghini Tourneau Toywatch Triple Five Soul Triumph and Hom TSL Tumi U-Boat United Colors of Benetton Valente Venilla Suite Verri Vertu Vilebrequin What For Wolford Y Nan Yes Zara Zydo

2003 2411 2710 2646a 1003 2417 2436 2220 2022 2707 2426 2308 1021 2600 2703a 2006b 2623a 2205 2626 2625 2023 2313 2013b

DFS Galleria, The Four Seasons

Armani Bally Burberry Cartier Celine Chanel Chaumet Chloe Chopard Clinique Debeers Dior Dior (Beauty Zone) Dunhill Estee Lauder Fendi Folli Follie Gucci Hermes IWC Jurlique Kiehl’s The City of Dreams Lancome L’Occitane Alfred Dunhill Level 1, The Boulevard Loewe Level 1, The Boulevard Bally Louis Vuitton Level 1, The Boulevard Burberry Omega Level 2, The Boulevard Cartier Prada Level 2, The Boulevard Chopard Ralph Lauren Level 2, The Boulevard Chow Tai Fook Salvatore Ferragamo Level 1, The Boulevard Coach Shiseido Level 2, The Boulevard Hublot Swarovski Level 1, The Boulevard Hugo Boss Tag Heuer Level 1 and 2, The Boulevard Tod’s i TO i Level 1, The Boulevard Insider Tumi Level 2, The Boulevard IWC Vacheron Constatin Level 1, The Boulevard LeSportsac Van Cleef & Arpels Level 2, The Boulevard Longines Level 2, The Boulevard PENACHE Shoppes at Four Seasons Level 1, The Boulevard Ralph Lauren Level 1, Hard Rock Hotel Rock Shop Abiste Level 1, The Boulevard Salvatore Ferragamo Alain Mikli Level 1, The Boulevard Swarovski Altea Milano Level 2, The Boulevard Tag Heuer Aquascutum Level 1, The Boulevard The Bubble Shop Armani Collezioni Level 2, The Boulevard Timeless Audemars Piguet Level 1, The Boulevard Tumi Autore Level 1, The Boulevard Valentino Bottega Veneta Level 1, The Boulevard Vivienne Westwood Brioni Butani The Esplanade, Wynn Macau Canali Cerruti 1881 16 Alfred Dunhill Chic Elegance 3 Bvlgari Coach 5 Chanel Cole Haan 12 Christian Dior David Yurman 17 Ermenegildo Zegna Diamond SA 10 Fendi Diane Von Furstenberg 21 Ferrari Dilys’ 8 Giorgio Armani Ed Hardy / Christian Audigier 25 Gucci Gieves & Hawkes 18 Hermes Giuseppe Zanotti 23 Hugo Boss Givenchy 6 Louis Vuitton GoldVish S.A. 11 Miu Miu Guess by Marciano 4 Cigar Imporium H&B Medicine Shop 9 Piaget Hugo Boss 27 Prada Jimmy Choo 13 Sundries Juicy Couture 4 The Signature Shop Kate Spade 7 Tiffany & Co. Kent & Curwen 24 Van Cleef & Arpels Kenzo 26 Versace Kwanpen 22 Vertu La Perla Lancel Grand Lapa Hotel Mango Tree Marc by Marc Jacobs 13 Bally Marni 1 Burberry Max Mara 12 Cartier On Pedder 11 Christian Dior Optica Privé 17 Cigar Imporium Renaissance Arts Gallery 10 Alfred Dunhill Roberto Cavalli Class 9 Emporio Armani and Cesare Paciotti 2 Ermenegildo Zegna Samsonite Black Label 16 Florinda Jewelry Shamwari South African Diamonds 8 Hermes Shanghai Tang Hugo Boss Orange Label 5 Shiatzy Chen 4&5 Louis Vuitton Shimansky 6 Omega St. John 7 Salvatore Ferragamo Stefano Ricci 15 Valentino Stuart Weitzman tsesay Valentino Versace

1112 1123 1110 1125 1109 1117 1101/41 1123a 1101/43 1101/22 1101/42 1120 1101/23 1106 1101/20 1102 1101/37 1108 1116 1101/44 1101/26 1101/21 1101/28 1101/25 1121 1115 1101/45 1126 1111 1113 1101/29 1101/38 1101/33 1105 1101/31 1101/39 1101/40

1208 1212 2835b 2836 2805 & 2806 1130 & 1131 1129 2845 2802 1223 2850 2801a 1207 2856 2812 2801 2816 2846 1211 2820 2835a 2847 2851 1226 2858 1215 2807 2838 2859 2829 2837 2840 2817 2849 2857 2813 2831 2841 2808 2848 2823 1213 2800 2825 2818 2839 2833 2821 & 2822 2809 1128 2850a 2832 2842 2853 & 2855

Business

113

Shop Indonesian style Macau will be the sixth Chinese city to have an Indonesian street, an indication that trade between Indonesia and the mainland has never been stronger BY LUCIANA LEITÃO

here is a new street in town, one filled with Indonesian products. Hosted at the Ocean Plaza within Taipa’s Ocean Gardens development, Indonesian Street will cover 1,600 square metres and feature more than 50,000 items of furniture, food, clothing and design artefacts, as well as a restaurant with traditional food.

Macau’s Indonesian street opens to the public on October 23. The mainland’s first Indonesian street opened in Shanghai two years ago and similar streets soon appeared in Nanjing, Beijing, Hangzhou and Kunming. More are expected in the future. The Indonesian shopping experience will promote Indonesian culture in Macau says Sunny Sukandi, the project’s promoter and chief executive of Indonesia’s TH Group. The prices will be very appealing, Mr Sukandi promises. “The products’ prices in Macau will be about the same as in Indonesia,” he comments.

Trade surplus The mainland enjoys a trade surplus with Indonesia but the gap has shrunk to about US$800 million (MOP6.4 billion). “It is reasonable be-

cause China exports diverse products,” observes Indonesia’s trade attaché to China, Marolop Nainggolan. Machinery, electrical appliances and chemicals are some of the most important exports to the Southeast Asian nation. Indonesia’s most important exports to the mainland are mining products. Mr Nainggolan believes a target of US$50 billion in total trade between Indonesia and the mainland will be reached before the target date of 2014. But trade between Indonesia and Macau is still insignificant, he says. “In 2008, we already reached US$30 billion. There was a downturn in 2009 but now there is an increase of 62 percent when compared to last year,” Mr Nainggolan notes. The trade attaché is optimistic about the commercial utility of the Indonesian streets. He says they play an important role in increasing awareness of Indonesian products among consumers. OCTOBER 2010

114

Meetings & Conventions

Meet, stay and play

In the regional battle for business tourists, Macau needs more than its top-class venues to flourish – it needs more entertainment and more fun BY EMANUEL GRAÇA

ore than good infrastructure, a good variety of entertainment is essential to make Macau attractive as a destination for meetings, incentives, conventions and exhibitions or MICE, says a local academic. And in the face of competition from destinations such as Hong Kong and Singapore, at least two operators are trying to create a little more excitement.

“When we host an event, the attendees come here not just for the event,” says Anthony Wong, visiting assistant professor at the Institute for Tourism Studies. “My studies show that cultural heritage, the food and quality of accommodation, as well as some of the entertainment facilities, they all attract people to stay. These are elements that work as an incentive to drive people to a destination.”

â&#x20AC;&#x153;Gambling is interesting but other than that there is not that much in the way of other entertainment options in Macau. If we want to work with the organisers, we need to build up these entertainment facilities.â&#x20AC;? While Macau may already have world-class MICE facilities, it ranks behind Hong Kong and Singapore in terms of entertainment, says Mr Wong. He

Illustrations: Rui Rasquinho

115

116

Meetings & Conventions

says Singapore is the No 1. “Singapore is an international hub, easy to access. The accommodation is plentiful. And the food is great,” he says. To make Macau a contender against the two big players, the authorities need to raise their game, says Mr Wong. “I will recommend the government to play a more active role,” he says. “Right now, the government is being passive. What it does mostly is promotion. They can offer reasonably low rents or even waive them to create business opportunities in entertainment. Labour costs are also expensive.”

It’s playtime The Venetian Macao is already highlighting its full range of offerings in an effort to promote its MICE business abroad. “We are changing the way meetings and company incentives in the Asia-Pacific are organised,” says Wolfram Diener, vice-president of conven-

tions and exhibitions for the Venetian Macao. He stresses the need for entertainment to make the stay of MICE visitors more enjoyable. Mr Diener says many groups coming to Macau are incentive groups, so the organisers emphasise the entertainment options. Incentives are essentially motivational, and fun is regarded as an important motivation. The Venetian recently released its new entertainment and meeting packages for groups of 20 or more, incorporating entertainment, dining options and leisure facilities. “Our aim is to use entertainment to turn ordinary meetings into unforgettable events,” says the vice-president of sales for The Venetian, Brendon Elliot. The idea seems to be working. The Venetian’s MICE revenue in the first half of the year was 42 percent higher than a year before. Mr Diener says there is no sign of a slowdown this year or next.

Let’s dance The Grand Hyatt Macau in the City of Dreams complex is also vigorously chasing MICE business. General manager Paul Kwok says it takes more than convention rooms to make Macau attractive. “The 400 years of Portuguese colonial history and heritage and the fusion with Chinese culture make today’s Macau an experience found nowhere else in the region,” he says. The diversions Macau offers - including shows, heritage tours, sports facilities and nature - enhance this experience, he says. Like the Venetian, the Grand Hyatt is trying to boost the synergies between its MICE business and entertainment facilities. “We have been working very closely with City of Dreams for synergistic promotions for the opening of ‘The House of Dancing Water’ show and we will continue to do so,” he says. He believes the MICE business in Macau has potential. “The introduction of a greater diversity in entertainment and lifestyle options has Macau ideally placed for continued success, and the attraction as a MICE destination is set to grow exponentially,” Mr Kwok says.

Diversify or perish Secretary for Economy and Finance Francis Tam Pak Yuen is less optimistic. He says the local MICE industry seems to be on the rise but faces further obstacles to development. “In recent years, the government of Macau has been vigorously promoting the MICE industry and other service sectors so as to moderately diversify the economic structure of the economy of Macau,” Mr Tam says. The government recently created a committee for the development of the convention and exhibition industry. At its first meeting, last month, it was announced that the Economic Services Bureau would take the lead and centralise anything MICE-related. The industry appears to be expanding swiftly. In the first half of the year, 809 MICE events were held in Macau, 11 percent more than last year. The average duration of the events – which is critical to boosting tourism receipts – rose by 0.2 day to 2.2 days, and the number of participants rose by 7 percent to 224,301 attendees. OCTOBER 2010

117

Money talks

Record numbers of sellers are due at this month’s Macau International Trade and Investment Fair acau’s biggest annual trade event, the Macau International Trade and Investment Fair (MIF), takes place this month between October 21 and 24 with an offering that has been beefed-up for its 15th edition. The fair will feature more than 1,400 booths in an exhibition area of about 30,000 square metres, making it the biggest yet held, with a budget of MOP26 million (US$3.25 million).

This year’s trade fair at the Venetian Macao has the theme “Cooperation - Key to Business Opportunities” and aims to encourage regional cooperation between Macau, the mainland, Portuguese-speaking countries and members of the Association of Southeast Asian Nations. About MOP4.3 billion in deals were signed in 60 agreements struck at last year’s fair, says the organising committee. While the numbers make for im-

Beijing in B

eijing will send a delegation to attend the 15th Macao International Trade and Investment Fair. This is the first time that the capital city has ever participated in a large-scale international economic and trade event held in Macau. Themed on “Fantastic Beijing: A Date with Macau”, the total area of the exhibition booth is approximately 520 square metres. It is estimated that as many as 40 enterprises will participate in the exhibition. Beijing will be promoting the city’s image, its food industry, sci-tech products, tourism and cultural and creative industries. A Beijing-Macau Economic Cooperation Promotion Conference will also be held at the trade fair.

pressive reading, there is no official data on the fair’s value to the economy.

New attractions “On the basis of the further strengthening of regional cooperation and the ties established with the Portuguesespeaking countries and other countries, we have injected new elements into the MIF,” said Secretary for the Economy and Finance Francis Tam Pak Yuen. “Besides giving prominence to the MIF’s function of investment promotion, by attracting investments to infrastructure-related projects in Macau, businesspeople from abroad are also encouraged to use the MIF platform to promote their development projects.” The event attracted 288 trade and economic delegations from 61 countries last year and more than 60,000 visitors. During the four-day fair, more than 5,000 participants attended 36 forums, seminars and presentations on the event’s sidelines. OCTOBER 2010

118

A number of forums are scheduled to take place during the fair, including an international trade and investment forum and a world summit of Chinese entrepreneurs Several countries will have their own pavilions this year, including Portugal, Malaysia and Thailand. The American Chamber of Commerce and the British Business Association of Macau will also be present. Visitors can expect to see pavilions from mainland provinces, exhibitions from cultural and creative industries, leading Taiwanese brands and makers of domestic electrical appliances.

Promoting Hengqin This edition of the fair will also feature pavilions promoting the Hengqin New Area and Hainan International Tourism Island project to develop tourism facilities in southern Hainan. “It’s not the first time we are pro-

moting such projects in the MIF but this year we want to expose an overall picture to the whole public, not only the Macau public but also visitors from abroad,” said Irene Va Kuan Lau, the chief coordinator of the fair’s organising committee. The officials in charge of developing the Hengqin New Area will be invited for a special presentation session to shed light on new investment deals on the island. The deputy director of the Hengqin New Area administration committee Liang Taowen said the development “is open to the world and to all investors” but priority would be given to investors from Macau and Hong Kong. A one-trip, multi-stop service will

be available for trade visitors that want to inspect the Hengqin development.

Looks good too A number of forums are scheduled to take place during the fair, including an international trade and investment forum and a world summit of Chinese entrepreneurs. Business matching sessions will also be available. The Macau government is continuing its sponsorship of local small and medium enterprises by subsidising 120 booths in the International SME Exhibition area. And the trade event has not lost its fashion sense. It will include fashion shows to illustrate new trends in the industry at home and abroad.

Macau Business now comes to you ur inbox with free daily updates from our newsroom Go now to macaubusiness.com and sign up for our e-newsletter

OCTOBER 2010

119

Buyers down at PATA The official figures show there were more than 300 buyers at the PATA Travel Mart 2010 but some exhibitors said it was less profitable than last year’s event BY LUCIANA LEITÃO

he Pacific Asia Travel Association’s Travel Mart 2010 should have been a chance for stakeholders in the tourism sector to show their work, make business contacts and meet new clients but participants complained about the quality of the buyers. This year the event took place in Macau from September 14 to 17 with about 1,000 people from 60 countries participating. The general manager of Cape Sienna Hotel and Villas in Phuket, Frank Dreist, said he was not all that satisfied with this year’s outcome. “I think last year was probably better in terms of the quality of buyers,” he said, explaining that this year’s clients were smaller operators. When an enterprise such as Cape Sienna decides to be involved in the PATA Travel Mart, it expects to “meet new people, new contacts, see old customers” and to do business. This year’s “probably wasn’t [profitable],” Mr Dreist said. Bali’s The Samaya hotel director of sales and marketing, Johannes Makati-

The gold and the beautiful

longside Pacific Asia Travel Association’s Travel Mart, Macau also hosted the 2010 PATA awards ceremony. This year’s PATA awards were given to 24 organisations and individuals. Of the four Grand Award winners, Tourism New Zealand got the marketing award, Banyan Tree Spa Academy the education and training award, AlamKulKul Boutique Resort in Bali the environment award and the Indian Ministry of Tourism the heritage award. Multiple awards were won by the Hong Kong Tourism Board, the Indian Ministry of Tourism and to the Tourism Authority of Thailand.

ta, said he had accomplished his marketing targets. “A lot of people came to ask about Samaya,” he said. As for the number of visitors, he said it was

“okay” but “compared to last year, it’s less, a bit less”.

World stage According to the Macau Government Tourist Office, PATA Travel Mart attracted 530 sellers from 295 organisations, 303 buyers from 269 organisations – as well as 152 journalists from 13 different destinations. From Macau, 28 entities participated. PATA chief executive Greg Duffell said the numbers showed the event was one of the biggest international occasions for the travel trade in Asia. They also revealed the leading role Asia plays in world tourism. “According to our latest data, the Asia-Pacific region registered an increase of 11 percent in total arrivals for the first half of 2010,” he said. “Just in June, arrivals progressed by a stunning 17 percent. We see good growth all across the continent with arrivals up by 30 percent in Macau, by 44 percent in Hong Kong, by 48 percent in OCTOBER 2010

120

Meetings & Conventions

Hello? Room service?

he PATA Travel Mart 2010 was not only about finding tourists. The event included a seminar looking at the challenges in finding staff for the tourism sector. Macau was among the destinations analysed. “Macau still needs to provide better service, not only to the gaming industry,” said Edmund Ngan of the Macau Polytechnic Institute. According to official data, he said “demand for dealers has decreased while, on another hand, the demand for hotel workers has increased”. The president of the Institute for Tourism Studies, Fanny Vong Chuk Kwan, said the lack of local workers in Macau is more a question of quantity than quality.

Sri Lanka, and by 16 percent in Nepal.” Mr Duffell would eventually announce his resignation as PATA’s CEO at the closing session of Travel Mart. The reasons for the decision are still unknown. PATA is a non-profit association dedicated to the responsible development of the tourism industry in the Asia-Pacific region. It has 800 members, including tourism authorities and governments, airlines and hundreds of smaller companies.

Neighbourly interest Every company has its own expectations when participating in an event such as PATA’s Travel Mart. Some hope to get

OCTOBER 2010

new markets, others are more interested in exposure, while several are really interested in building local business. General manager of Top China Travel, Charlie Chan sought to attract the attention of Macau residents. “We expected to get new customers from the industry and some locals,” Mr Chan said. “If PATA could improve the number of solid buyers, it would be much better.” Senior sales manager of The Kowloon Hotel Fanny Tang agreed, saying “the buyers were a little bit less than last year”. However, she was pleased by the opportunity to open up new markets in India and Russia. As for Peerapong P., director of sales

and marketing of Thailand’s Aiyapura Resort and Spa he was disappointed with this year’s number of clients. “It was soso,” he said. Most of the potential customers he encountered came from Europe, not from Macau and mainland China. Ms Joyce Joeman, a project consultant at the Malaysia Convention and Exhibition Bureau, felt the results and numbers of “good buyers” at the expo seemed healthy. “We saw many quality buyers. They are interested in Malaysia as a destination”, said Ms Joeman, who didn’t participate in last year’s event. “[We also saw] new buyers that want to know more about Malaysia, specifically for MICE.”

If you know of an event that you believe should be listed with Macau Business, please drop us an e-mail: calendar@macaubusiness.com 121 In the subject bar, type in “List me as an event”. TBA : To be advised |

: A Macau Business partner event

October

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

5th – 7th

Asian Casino & Gaming Congress

Marina Bay Sands, Singapore 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 12th – 14th

Gaming Executive Summit Australasia 2010

Date: Event:

21st – 24th

15th Macau International Trade & Investment Fair (MIF)

Venue: Etihad Stadium, Melbourne, Australia Organiser: Terrapinn Address: Level 14, 111 Pacific Highway North, Sydney, NSW 2060, Australia Tel: (61) 2 9021 8808 Fax: (61) 2 9281 5517 Website: www.terrapinn.com/2010/ges E-mail: enquiry.au@terrapinn.com

Venue: The Venetian Macao-Resort-Hotel Organiser: Macau Trade and Investment Promotion Institute Address: Av. da Amizade No 918, Edf. World Trade Centre, 1-4 andar, Macau Tel: 853 2882 8711 Fax: 853 2882 8722 Website: www.mif.com.mo E-mail: info@mif.com.mo

Date: Event:

15th

IV Macau Business Charity Golf Tournament (1st Round)

22nd

IV Macau Business Charity Golf Tournament & Gala Dinner

Venue: Caesars Golf Organiser: MB Events Address: 9/F Flat H, Block C, Nam Fong Ind. Bld., 679 Av Dr Francisco Vieira Machado, Macau Tel: (853) 28331258 Fax: (853) 28331487 Website: www.macaubusiness.com E-mail: golf@macaubusiness.com

Venue: MGCC/ Westin Resort Organiser: MB Events Address: 9/F Flat H, Block C, Nam Fong Ind. Bld., 679 Av Dr Francisco Vieira Machado, Macau Tel: (853) 28331258 Fax: (853) 28331487 Website: www.macaubusiness.com E-mail: golf@macaubusiness.com

Date: Event:

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

18th – 20 th

2nd Annual Asian Casino Symposium

Venue: Macau, venue TBC Organiser: T.U.N Address: 16 Jalan Kilang Timor,Redhill Forum, #03-07, Singapore 159308 Tel: (65) 6376 3178 Fax: (65) 65 6271 9029 Website: www.tun.sg E-mail: swati@tun.sg Date: Event: Venue: Organiser: Address: Tel: fax: Website: E-mail: Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

18 – 20

CIO & CFO Asia Summits 2010

The Venetian Macao Marcus Evans 4 Battery Road, 13-01 Bank of China Building, Singapore 049908T (65) 6720 0620 (65) 6720 0621 www.asianciosummit.com | www.cfoasiasummit.com WebEnquiries@marcusevanscy.com 19th – 21st

The 9th Annual European iGaming Congress and Expo

Bella Center, Copenhagen, Denmark Clarion Gaming Earls Court Exhibition Centre, London SW5 9TA, UK (44) 0 20 7370 8579 (44) 0 20 7370 8561 www.eigexpo.com yeemay.huang@clariongaming.com

28th – 30 th

Wine & Gourmet Asia 2010

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

November

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

15th – 18th

Global Gaming Expo (G2E)

Las Vegas Convention Center AGA | Reed Expo 1299 Pennsylvania Ave., NW, Suite 1175, Washington, D.C. 20004 +1 203 840 5626 +1 203 840 9626 www.globalgamingexpo.com info@globalgamingexpo.com 24th – 26th

6th International Hotel Expo

The Venetian Macao Coastal International Exhibition Co., Ltd. Room 2106, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Tel: (852) 2827 6766 Fax: (852) 2827 6870 Web Site: www.coastal.com.hk E-mail: general@coastal.com.hk OCTOBER 2010

122

Tourism

Macau is increasingly known for its casinos and entertainment but what gives tourists most satisfaction is the city’s heritage, a new survey has found

OCTOBER 2010

ith all the bling at the gaming tables, you might assume that the casinos are what tourists like most about Macau. A new study turns that assumption on its head. The Macau Tourist Satisfaction Index found that visitors ranked heritage as the most satisfying part of their experience in the city. The index is a new project from the Institute for Tourism Studies and includes survey data from nearly 2,000 tourists since the third quarter of last year. Macau’s heritage attractions had

the highest average score for the past 12 months, while the casinos were seventh on the list, behind events and shopping. Surprisingly, restaurants and hotels were the lowest ranked of the 10 different sectors tracked by the survey.

Perception and reality The team responsible for the project, led by Professor Don Dioko, believes differences in the satisfaction scores can be attributed to discrepancies between tourists’ expectations and the reality, and between the value they expect

123

Measuring satisfaction

he Macau Tourist Satisfaction Index measures the satisfaction of visitors across 10 tourism-related service sectors and collates the results in an overall index, using a scale of zero to 100 points. It tracks, over time, how well tourism services and organisations in Macau perform in satisfying visitors. Research for the index will be conducted throughout the year and reports showing the results for each sector and the overall index will be published quarterly and annually. Macau joins a growing list of tourism destinations using similar satisfaction indices, including Singapore, Shenzhen and Hong Kong, which was the first to introduce a tourism satisfaction index last year. Hong Kong’s overall tourist satisfaction rate is higher than Macau’s. Across last year, tourists rated Hong Kong at an average of 72.6 points and this year’s satisfaction levels appear to be increasing.

and the value they actually get. “The findings may suggest that Macau may have portrayed an image of an ideal destination with attractive hotels and restaurants, as it has been known as the Asian Las Vegas,” the report says. “However, when tourist perceptions fall below their expectations, tourist satisfaction drops. This is particularly serious during the peak season.” That may signal a worrying trend as Macau is facing a shortage of qualified labour in the tourism sector. Macau

Government Tourist Office director João Manuel Costa Antunes says the tourism industry will need 10,000 new workers next year if all of the city’s developments come online as scheduled. Mr Antunes says the city is expected to welcome a staggering 24 million or more visitors this year.

The fewer, the merrier The results show that the index hit its lowest point in the last quarter of last year, usually a peak tourism season, and reached its highest point in the sec-

ond quarter this year, in the low season. According to Dr Dioko’s team, the findings seem to suggest an inverse relationship between tourist satisfaction and tourist numbers, pointing to a “bottleneck” effect. The index promises to become an important statistic for Macau. The teams says satisfied tourists are more likely to return and less likely to complain to their friends and relatives about their experience in Macau. Previous studies have also shown that repeat visitors tend to spend more money in the city.

HOW DO TOURISTS RANK THEIR SATISFACTION WITH VARIOUS ASPECTS OF THEIR VISIT? Sector Heritage Events Retail shops Non-heritage Tour guides/operators Transportation Casinos Immigration Restaurants Hotels Overall average

2009 Q3 (pilot)

2009 Q4 (pilot)

77.5 75.6 75.8 68.8 71.1 68.0 67.9 67.7 64.7 67.1 70.4

71.4 69.8 73.8 68.6 71.5 67.2 66.4 71.4 65.1 66.3 69.2

2010 Q1 73.0 72.0 68.2 78.7 69.2 76.2 73.0 68.9 68.6 63.8 71.2

2010 Q2

Average

76.2 75.1 72.8 72.8 73.0 70.5 73.9 72.5 69.7 65.3 72.2

74.5 73.1 72.6 72.2 71.2 70.5 70.3 70.1 67.0 65.6 70.7

OCTOBER 2010

Source: Macau Tourist Satisfaction Index

Photo: Luís Almoster | mspagency.org

According to Professor Dioko’s team, the findings seem to suggest an inverse relationship between tourist satisfaction and tourist numbers, pointing to a “bottleneck” effect

124

Telecommunications

INFORMATION HIGHWAY

DEAD END CTM’s new fibre-based communication system could provide TV as well as broadband Internet and phone services, but a regulatory framework that includes an exclusive concession contract held by Macau Cable TV is proving to be a speed hump BY LUCIANA LEITÃO OCTOBER 2010

elevision, Internet and telephone services in a single, bundled package is a reality in several countries but remains a dream in Macau. It is not the technology Macau lacks but a regulatory framework. Telecommunications company CTM is currently testing a system that provides built-in phone and broadband services. The fibre-based system has the capacity to provide television too, but the company has no agreements with content providers. CTM’s vice-president of sales and marketing, Donald Shaw, says he is “hoping to have some kind of video service” included when the system goes live. One of the obstacles to the inclusion of television in the package is Macau Cable TV. The company has exclusive rights

to provide paid cable television in Macau. According to Mr Shaw, CTM may have to reach an agreement with Macau Cable TV to include TV content. The two companies are in discussions and he says “they’re making progress” and there is a chance of “working in collaboration”.

Coming soon Mr Shaw believes CTM’s new service may be launched “within the next 12 months”. For now, CTM is looking at the experience of other territories, such as Portugal and Hong Kong, that already have bundled packages. The company is still thinking about what to charge. Mr Shaw says CTM has been looking at “international benchmarks”. Even so, Macau has one disadvantage, he admits.

125

Ref’s indecision is final

he providers of public antenna broadcasts resumed relaying English Premier League matches last month, after stopping for one weekend because of concerns about the legality of their businesses. However, Macau Cable TV still admits the possibility of “taking legal procedures” against these companies. The question of the broadcasts’ legality depends on the interpretation of the difference between terrestrial and cable television broadcasting. Government-owned TV station TDM, which bought the rights to terrestrial broadcasts of Premier League games, says its contract allows public antenna broadcasters to relay the football matches, while Macau Cable TV has the exclusive rights to paid cable TV broadcasts. Although TDM is a terrestrial broadcaster, most viewers receive terrestrial broadcasts through public antenna services that use unlicensed local cable networks. They charge much less than Macau Cable TV and include relays of Hong Kong, mainland and foreign channels in their services. In reply to a Macau Business enquiry, the chief commercial officer of Macau Cable TV, John Chiang, confirmed that the exclusive rights of his company cover only paid cable television. “They [TDM] have free TV, don’t charge anything. They transmit it on air. This is their right. There is no problem. We are not against TDM,” he said. At issue is the practice of the public antenna services relaying TDM’s signal through unlicensed local cable networks. “We just want local public antenna providers not to use their cable networks. This is our right,” Mr Chiang said. Indirectly, the government has backed the public antenna service providers, invoking the need to protect the public interest by allowing people to watch TDM programmes. The public antenna service providers argue they are not broadcasting the matches but providing the technical means for TDM programming to reach people’s homes.

“It’s a small community in terms of media industry,” he notes, which means fewer potential customers among whom to split the technology costs. However, he assures the company is “looking at more innovative, cost-friendly prices”. Besides the hitch with television content, CTM also faces a “lack of clarity in the regulatory framework”, says Aguinaldo Wahnon, the company’s vice-president of legal and regulatory matters. “It’s an old legal framework and it doesn’t give the necessary guarantees to investors.” Mr Wahnon says there are grey areas in the legislation about the regulation of Internet protocol television that make investment riskier. From a technological standpoint “we see a business opportunity”, Mr

Shaw notes. He argues that CTM has strong support from investors, adding that Portugal Telecom, one of the company’s major shareholders, already has experience in this area.

Timing is everything The government is aware of CTM’s moves. “The government was impressed with the technology showed but pointed out the timing,” comments Mr Wahnon, referring to Macau Cable TV’s exclusive concession that runs out in April 2014. In a written reply to questions from Macau Business, the Bureau of Telecommunications Regulation said the Internet was a liberalised service in Macau, while paid cable TV services were still the exclusive preserve of the concessionaire.

The bureau did not rule out the possibility of a bundled television, Internet and phone service but it did not say when that might be possible. “A converged service is yet to emerge with full liberalisation of the markets and marketdriven demand for convergence,” the bureau said. When asked about the possibility of Macau Cable TV’s contract being revised or cancelled to enable that to happen, the bureau simply stated: “The concession contract can be finished at any time within the concession period given various circumstances. The government will not preclude the possibility of early finishing of the contract if necessary, but due consideration will be given to the market development and the evaluation of other alternatives.” OCTOBER 2010

126

Environment must store energy, which doubles the price of the system.” “I don’t think that green construction is a government priority right now in Macau,” said Mr Whitfield. “Rather than subsidies, I would like to see the government lead by example. There are a number of government buildings that could be improved with green projects.” Mr Whitfield said that by going green, the university’s new campus construction budget faced an increase of “around 10 percent plus”. However, “the payback comes with the lower operating costs of the structure”.

Testing green cars António Trindade

Need for green Macau lacks strategy to promote environmental protection, says industry insider and academic

he Macau government doesn’t have a strategy to push forward environmental protection and according to António Trindade, president of the Macao Association of Environmental Protection Industry, such a master plan is urgently needed. “We need to change the way the market works and that is policy-driven”, he stressed. However, a strategy is needed in the first place, “to set the basis for regulation”. Mr Trindade’s comments were made during last month’s Delta Inter Chamber Event, which included a two-panel conference devoted to environmental issues, besides a networking session (see Entertainment section). The event was organised by the Delta region publication Delta Bridges, Macau Business and the production company Work In Progress Productions. Mr Trindade emphasized that, in terms of sustainable development, Macau “is in a unique situation.” Even given the central government’s acknowledgement that development and use of energy resources must become more sustainable in regards to growth, “in Macau,” he says, “this problem is even more severe: our energy and water all come from elsewhere. For Macau to have quality water, it must get it from

OCTOBER 2010

parts of Guangdong province which regularly face severe shortages of water.” Panel moderator Paulo A. Azevedo, from Macau Business, posed a question to the conference: “With Macau’s rapid growth,” he asked, “are we aware of the challenges?” “Everyone is aware,” responded Trindade, “but a sense of urgency is not there, particularly in Macau.”

No green priority Professor Richard Whitfield, who is currently involved in a “green campus” construction project for the University of Saint Joseph, agreed. While noting that construction was proceeding, the project, which includes rooftop gardens to minimize use of air conditioning and rainwater storage to water gardens, has faced several hurdles. “We face many time-related difficulties,” he said. “Approval for construction, finding labour... all these things are difficult.” The project also includes the installation of solar panels to generate electricity. However, the university has bumped into an unexpected regulatory problem. “In Macau, you cannot sell power back to the grid,” Mr Whitfield said. “If you cannot sell power to the grid, you

Professor Herman Ching, from the University of Macau echoed calls for sustainable development while discussing his work on electric vehicles. “In 2008,” he said, “China became the second-biggest market for automobiles.” Mr Ching is currently involved in a project sponsored by local electricity utility CEM to study the performance of an electric compared to a similar fuelpowered one. The results have been impressive. Fuel costs were 70 percent less, while carbon monoxide emissions were down 90 percent and carbon dioxide emissions, a gas linked to global warming, were down 40 percent. The calculations for the gas emissions already include the emissions needed to produce the electricity needed to power the electric vehicle. According to Mr Ching, electric cars are a good option for Macau since the daily distance a local vehicle covers is short. Studies from the University of Macau show that private vehicles cover an average eight kilometres per day, while business vehicles go up to 20 kilometres. Special vehicles like those for fast food delivery, travel an average of 40 kilometres per day. Stephen Browne, CEO of Beepo, a company in Shenzhen that develops and produces electric commercial vehicles, was cautiously optimistic that electric vehicles could provide one avenue towards increased sustainability. There are many issues to be resolved, he acknowledged, “for example, battery recycling, etc,” but “our company is first developing, and bringing to the market, electric commercial vehicles, because their use and driving times are more easily predicted.”

Arts & Culture

Star chic

Louis Vuitton’s flagship store is hosting one of the best exhibitions of contemporary art held in Macau BY EMANUEL GRAÇA

f the names Damien Hirst and Yan Lei make you sit up, then get up and head to the Louis Vuitton flagship store in Macau, at the One Central shopping mall. There you can appreciate art works not only by these two but also by Cai Guoqiang, the Yangjiang Group and David Spriggs, among others. The brand’s gallery is hosting what is arguably the best contemporary art exhibition Macau has seen recently. Dubbed ‘Raining Stars’, the exhibition showcases world-famous artists from different cultures interpreting fireworks, a beloved Chinese invention. “We thought it would be very interesting to link it to the fireworks festival that annually takes place in Macau. Hence the theme of ‘Raining Stars’, with works that are more or less directly inspired by this firework theme,” said president of Louis Vuitton Asia-Pacific Jean-Baptiste Debains. “For us, it is a celebration of Macau, trying to bring a cultural dimension to the experience that people can have

here. This store in Macau is one of the most beautiful we have anywhere in the world, by its size, by its location. “We want, through this exhibition, to make it a destination, both for people who live in Macau and for visitors around the world that come here.” Mr Debains did not disclose how much Louis Vuitton has invested in the exhibition but he says more similar events are poised to take place in the store’s gallery, even if a schedule has yet to be decided. “What we want is to bring more than a shopping experience,” he said.

Bad boy in town Considered one of the bad boys of the mainland art scene, Yan Lei came to Macau to attend last month’s opening. His work “Landing Shanghai B” is one of the pieces on display. The six tonalist paintings of fireworks are abstractions from a set of photographs taken during Lunar New Year celebrations in 2006. Yan himself never actually touched

127

the canvas. A group of contributors did the paintings under his supervision. “I wanted to convey an attitude by art,” he says. “Without touching it directly, art is even more pure. Art is the concept in the mind, not doing the work yourself.” This is not Yan’s first cooperation with a luxury brand. Previously he has participated in exhibitions held by other fashion houses. It seems a difficult match with his “enfant terrible” image. “This helps my work to be seen by more people. Many museums have collected my work, like New York’s MoMA and the Pompidou Centre in Paris, but these partnerships allow me to reach out to people better,” he says.

Calligraphy in the sky Also in Macau for the exhibition’s opening were the Yangjiang Group, comprising Zheng Guogu, Chen Zaiyan and Sun Qinglin. The trio’s work is represented by “Regretful for Not Being Cautious When Attacked”. This is a set of four photos and a video of a 2007 fireworks performance presented by the group on the River Mersey during the opening night of a Tate Liverpool exhibition of contemporary Chinese art called ‘The Real Thing’. Their performance combined fireworks, sound and lasers and took the form of a choreographed battle between two opposing sides that culminated with these words flaming across the OCTOBER 2010

128

Arts & Culture

Yangjiang Group Chen Zaiyan, Zheng Guogu and Sun Qinglin

Yan Lei

battlefield “If I knew the danger ahead, I’d have stayed well clear.” Taking Chinese calligraphy as their starting point, the Yangjiang Group produce photographs, videos and installations that include ironic comments on the way Chinese traditions are becoming commoditised and repackaged as mere entertainment. “Chinese calligraphy is very powerful and visually very attractive, like fireworks,” says the group’s leader Zheng. “In the same way, both don’t convey a direct meaning. They are more abstract.” The trio decided to include new art forms in their portfolio along with traditional Chinese calligraphy because calligraphy does not allow “going out of the box,” he Ken Kitano

says. “It is difficult to combine calligraphy with modern art.”

Gaming inspiration However, the Yangjiang Group still connects with some traditions of the ancient Chinese calligraphy masters. Like the revered Zhang Shui or Huai Su of the Tang Dynasty, the members of the group like to create under the influence of alcohol. “Our art is very conceptual. Like fireworks,” says one. Hailing from Yangjiang city in Guangdong province, all the group’s members know Macau well. They have even been inspired by the main driver of Macau’s economy. “We did a lot of work on gambling previously. Especially on online gambling,” said Zheng. “Those were our Thomas Heatherwick

OCTOBER 2010

most exciting pieces.” The group liken their collaborative work to gardening. “If we work together as a collective unity, it is like we are planting a seed. We all water the plant together for it to become a flower of harmony,” he said.

Colour explosion Works by Yan and the Yangjiang Group compete for attention in the exhibition with other contemporary art heavyweights, including some from the West. Since the late 1980s, Briton Damien Hirst has produced some of contemporary art’s most memorable and contentious works. His work derives from the existential dilemma of the human condition and is a sustained investigation of the theme of mortality. He is

the creator of “For the Love of God”, a piece consisting of a human skull recreated in platinum and adorned with 8,601 diamonds. At the exhibition, Hirst is represented by “Beautiful Soft Exploding Rainbow Painting”, a spin painting suggesting the dramatic expansion and death of an exploding firework rocket, and “Beautiful Ergonomic Painting”. In a more abstract way, the seed head of the dandelion flower is nature’s firework. British designer Thomas Heatherwick has employed the structure of dandelion flowers in a number of his works. The most recent, the “Seed Cathedral” building, chosen to serve as the British pavilion at the Shanghai Expo, is a 20-metre high structure sporting 60,000 wands, arranged radially, each of which allows light to filter along its length and into the interior. A model of the project is on display at the exhibition. One of the most impressive works is David Spriggs’ “Event”. The Canadian artist airbrushes his images onto multiple sheets of clear acrylic film that are then hung one behind another creating a three-dimensional effect. Are you ready for the fireworks?

129

Golden harvest

An up-and-coming Macau troupe takes on the classic Russian work “Cherry Orchard” in celebration of the 150th anniversary of the birth of its author, Anton Chekhov seminal moment in Russian literature comes to life at the Macau Cultural Centre next month, as Chekhov’s “Cherry Orchard” is performed by the Macao Horizon Theatre. “Cherry Orchard” tells the story of a woman, Ranevskaya whose aristocratic family is forced to sell a vast orchard in order to pay for a mortgage. Faced with several options that could have saved the asset, the family does nothing to avoid the situation and the estate is finally sold to Lopakhin, who is the son of a serf to Ranevskaya’s family. The family leaves the estate to the sound of the beloved cherry orchard being chopped down. The play was hailed as a masterpiece upon its premiere at the Moscow Art Theatre in 1904.

Comedy or tragedy? Originally written as a comedy, the text has also been interpreted as a tragedy, released as it was on the eve of the Russian Revolution. Not only is the play a reflection on the socioeconomic forces at work in Russia at the turn of the 20th century but also around the globe. Powerful themes run through

the play. The decline of the bourgeoisie, the rise of the middle and working classes, and the abolition of serfdom are themes playing out during the performance. This presentation of the “Cherry Orchard”, interpreted by the Macao Horizon Theatre, commemorates the 150th anniversary of Anton Chekhov’s birth.

A Russian master Born on January 29, 1860, Chekhov was one of the world’s greatest short-story writers. His representative works include “Surgery”, “The Calendar”, “Sorrow”, “A Work of Art”, “The Twilight” and “The Kiss”. He was a remarkable playwright, with his work having a profound influence on dramatic productions throughout the 20th century. His earlier plays employ direct narratives to let audiences feel part of the action onstage, whereas his later works focus on representing the characters’ dramatic events in life, with the main plots happening behind the scenes. All of Chekhov’s works revolve around two major characteristics. There is the ruthless satire of anything distasteful and a deep sympathy for the poor. These common themes have helped

make Chekhov’s work near universal, and his short stories and plays have since been translated into many languages and produced around the globe.

A talented group Bringing the “Cherry Orchard” to life next month is the Macao Horizon Theatre. This developing, popular local theatre group has presented a series of acclaimed works with a past successful classic repertoire. These include “Beyond the Horizon”, “Our Town” and “We Won’t Pay! We Won’t Pay!” This talented ensemble is directed by Chan Chu Hei. Well-known in Macau as an actor and director, Chan was recently awarded Best Director at last year’s Hong Kong Theatre Libre. Julia Mok takes on the responsibility of movement instructor. The “Cherry Orchard” runs for two nights, on November 5 and 6. Tickets are MOP120, with discounts for friends of arts. The presentation is in Cantonese only, with no subtitles available. There is a 30-minute, free art appreciation talk starting at 7pm on November 5. More details are available from the cultural centre website, http://www.ccm.gov.mo.

OCTOBER 2010

130

Arts & Culture

Some of the best music ever written for opera fills the Cultural Centre for three nights with performances of Giuseppe Verdi’s “Il Trovatore”

OCTOBER 2010

131

t is set to be a highlight of this year’s Macau International Music Festival: Giuseppe Verdi’s “Il Trovatore” will close the event in style. The famous four-act opera is a joint production of the Cultural Affairs Bureau and Opera Australia running across three consecutive nights. Maestro Lü Jia will conduct the Macao Orchestra with an international cast that includes the Slovak National Theatre Chorus. “Il Trovatore” has been a success since it was first staged in Rome in 1853. For more than 150 years, the work has been firmly among the world’s most popular operas. Verdi’s favourite themes of destiny and desire are woven through this suspenseful story of a corrupt count, a dashing officer and a gypsy who plots to avenge her mother’s wrongful death. One of the opera’s most striking features is the music. “Il Trovatore” features a spectacular tenor aria, coupled with a series of intense soprano arias, some unique music for the mezzo-soprano and Verdi’s signature baritone arias. On top of this, there is the famous Anvil Chorus from Act II. With direction by Elke Neidhardt and featuring striking stage design, “Il Trovatore” is set to come to life at the Macau Cultural Centre Grand Auditorium.

Putting on a show There will be more to “Il Trovatore” than just the show itself. In the past, the Macau International Music Festival has invested in providing workshops, talks and other activities to accompany its shows, with the aim of stimulating public OCTOBER 2010

132

Arts & Culture

interest in the arts. With “Il Trovatore”, people will have the chance to peek at what is needed to stage such a grand production. On October 30, make-up artist Yeung King Hung will give a talk in Cantonese at the School of Theatre of the Macau Conservatory on the role of stage make-up in the production. For those more interested in understanding the set, Michael ScottMitchell, the man responsible for its design, will lead a stage tour on

the morning of October 31. This is a unique opportunity to see in detail the settings where the action takes place. The tour will be conducted in English, with Cantonese translation. Both talks are free but numbers are limited and reservations are required.

brought renowned artists from all over the world to the city and this year is no different. Running from October 3 to November 7, there are a wide variety of offerings embracing Western and Chinese opera, symphonic, choral and chamber music and performances in the contemporary, folk, pop, fusion and jazz genres. Twenty-two diverse programmes – from Germany, Austria, Italy, Slovakia, Norway, the Netherlands, Portugal,

More to hear “Il Trovatore” is just a portion of what this year’s Macau International Music Festival offers. Over the course of its 24-year history, the event has

Plan B, for free

roke? Is that show you wanted so much to see at the Macau International Music Festival already sold out? Looking for something a little different? No worries. There are still plenty of options available at the event and for free. For jazz buffs, the festival presents the Jazz Orchestra of the Concertgebouw. The secret of this versatile big band’s success lies in its 18 jazz musicians from the Netherlands and in its founder and leader, Henk Meutgeert, who has written and arranged countless compositions for this ensemble. In its 14 years, the group has attracted the attention of and performed with a wide variety of guests, among them Lee Konitz,

Jazz Orchestra of the Concertgebouw

Daniel Bernard Roumain OCTOBER 2010

133 the United States, Chile, Australia, Hong Kong, Macau and mainland China – will bathe the city’s stages in ancient and more modern sonic colours. The list features the Gürzenich Orchestra from Cologne, highly-regarded Chinese pianist Yundi Li and the songs of the late Cantopop icon Teresa Teng. Tickets for the festival are available at Kong Seng Ticketing outlets, online or through the reservations and inquiries hotline, (853) 8399 6699. Chick Corea, Branford Marsalis and Dee Dee Bridgewater. They will play at the Mount Fortress on October 29. On October 31, acclaimed local rock duo Soler, formed by twin brothers Julio and Dino Acconci, performs with the Italian Omniart Ensemble at the Mount Fortress. Those who enjoy fusion can add October 30 at the Nam Van Lake to their schedule. In what promises to be a wild concert, Haitian-American Daniel Bernard Roumain, known as DBR, and members of his touring ensemble, DBR and the Mission, perform tracks from his newest release, “Woodbox Beats and Balladry”. The release echoes Roumain’s eclecticism, fusing elements of classical minimalism, dance club beats, traditional ballads and thick distorted noise. On November 1, the stage at Nam Van Lake will host Blasted

Il Trovatore

Opera in four acts by Giuseppe Verdi Dates: November 5 to 7, 8pm Venue: Macau Cultural Centre Grand Auditorium Production: Cultural Affairs Bureau and Opera Australia Libretto: Salvatore Cammarano Conductor: Lü Jia Director: Elke Neidhardt Set Designer: Michael Scott-Mitchell Costume Designer: Judith Hoddinott Lighting Designer: Nick Schlieper Performing group: Opera Australia, Slovak National Theatre Chorus, The Macao Orchestra With subtitles in Chinese, Portuguese and English Tickets: MOP400, MOP300, MOP200, MOP100, available at all Kong Seng Ticketing outlets, online and via the hotline, (853) 8399 6699

Mechanism, a Portuguese electro-rock band famed for its live shows featuring elaborate costumes as a backdrop to their music. Dressed extravagantly in alien-like, tribal, futuristic attire, Blasted Mechanism prove both visually outstanding and melodically sumptuous, combining revolutionary technology with ancestral soundscapes. There will be plenty of sounds from alternative rock, electronic music, reggae, dub and folk to create a truly unique musical style.

Omniart Ensemble

Blasted Mechanism Soler, Julio and Dino Acconci OCTOBER 2010

134

Corporate Social Responsibility

GET READY FOR THE ANNUAL MACAU BUSINESS CHARITY GOLF TOURNAMENT AND GALA DINNER LATER THIS MONTH

SOCIALLY RESPONSIBLE DRIVING

he final preparations for the fourth annual Macau Business Charity Golf Tournament and Gala Dinner are underway. Some 30 teams representing the cream of Macau’s socially responsible corporate citizens will head for the fairways of Caesars Golf Macau on October 15 for first leg of the two-day charitable golf contest. The second round takes place the following Friday, October 22, at the Macau Golf and Country Club. That evening, the Westin Resort Macau, an event patron, will host the traditional Gala Dinner in luxurious surroundings while indulging guests in fine dining and entertainment.

OCTOBER 2010

After only three years, the charity tournament has become the biggest golf event in Macau and one of the most prestigious corporate social responsibility commitments in Southern China, having raised and dispensed more than MOP1.5 million to benefit projects in Macau and beyond.

Responsible partners While long-term partner Melco Crown Entertainment has continued its support as an event partner in the Macau Business Charity Golf Tournament, this year it does so alongside another good corporate citizen, Jupiters and Star City casinos, owned by the Australian gaming and entertainment operator Tabcorp. This year’s trophy and prize sponsors include 113 East Executive Search, Galaxy Entertainment, MGM Macau,

Sands China and SJM Grand Lisboa. Beer Tech, Coca-Cola and Seapower Trading are counted among the event supporters. Another event supporter is the host of the first round of the tournament, Caesars Golf, and The Westin Resort, Macau, the venue sponsor of the Gala Dinner following the second round.

Exceeding expectations As we went to press, there were 30 teams registered for event, exceeding the expectations of the organisers, who had set their sights on 25 teams. Twenty teams took part in each of the past two editions. This year’s patrons come from all corners of the business community, from banking institutions to gaming and entertainment operators and suppliers, and from professional service

135 providers to building contractors. Aristocrat, Aruze, BNU, Dog One Life, Helping Hands, IGT, Leighton, MBSK Events, MGM Macau, Galaxy Entertainment, Sands China, SJM Grand Lisboa, Shufflemaster, Silver Heritage, SK Support, Walker Digital Gaming and Wynn Macau are among the socially responsible corporate patrons who will wield their clubs for charity at the event.

Double challenge With the expansion of the event to a two-day contest, the organisers have devised a number of golfing and nongolfing challenges to entertain competitors. The first round will have a more entertainment-oriented ambience, building up the players’ competitive spirit for the second round. The tournament will have a threesome-Texas-scramble format, allowing both experienced and novice players to compete on an equal footing. The total prize money for the tournament is HK$200,000, to be split equally between the two teams who finish the two rounds with the best gross and net scores. Patrons will compete for the right to nominate the charity they would like to forward their winnings to.

social responsibilities, there were many other enterprises that could do more. “Companies who feel that their sole operational role is to reap the most benefits have no place in the local business community,” said Mr Azevedo, the founder and publisher of Macau Business.

Greatest reward “The greatest reward from the growth of a company comes from the public’s recognition of its positive role in improving the society in which it operates”, he said. The organisers are confident this year’s event will again break records in terms of both participation and funds

raised. To help raise the bar, a special line-up of items from the worlds of entertainment, sports and the fine arts have been picked for the traditional live auction of memorabilia. MBSK Events is certain that the fourth annual Macau Business Charity Golf Tournament and Gala Dinner will be an event to remember, and one that will be spoken about for a long time to come.

Moderate optimism The organisers, MBSK Events, are optimistic about the event’s development. Co-managing director of MBSK Events Stefan Kuehn said: “Bringing together the entire local gaming industry, as well as businesses across the board from Hong Kong, Macau, South China, and even Australasia, meant the event had to be spread over two days. By doing this, we’re now the biggest event of its kind in the region. “As with any new enterprise, it has not been an easy task to establish something you’ve been envisioning for a long time. But the team behind us did an incredible job, helping us to raise the bar high, again.” Co-managing director Paulo A. Azevedo said that while some companies had embraced their corporate

OCTOBER 2010

136

Entertainment

Investing in celebrity Julien’s Auctions is looking to Asian investors to power its expansion in the memorabilia market as Ponte 16 hosts the company’s first sale in Asia

ook at your feet. How much do you think someone would pay for your used pair of shoes? If you were Marilyn Monroe, you could make a handsome profit. Memorabilia sales are Julien’s Auctions’ area of expertise. The American company will hold its first auction in Asia on October 9, in partnership with the Ponte 16 ResortHotel. The auction is open to bidders from all over the world. Until the 400 items go under the hammer, around half are being exhibited at Ponte 16. The lots include collectibles from a number of superstars and celebrities, including Princess Diana, The Beatles, Elvis Presley, Michael Jackson, Madonna, Marilyn Monms inroe and Bruce Lee. Other items clude an array of costumes and props from Hollywood blockbusters such as “Batman Returns”, “Mr and Mrs Smith”, “Pirates of the Caribbean” and “Star Trek”, and from the TV series “24” (see photos). Some of the objects are ex-0 pected to sell for MOP400,000 or more. The estimated price for Princess Diana’s ball gown and uitar Elvis Presley’s autographed guitar is MOP800,000 apiece.

million) in revenue. “But we look at the long term, not at the short term,” says Mr Julien. The memorabilia auction house entered Japan five years ago with a number of exhibitions but has never held an auction there. Meanwhile, a small revolution was happening, bringing a significant increase in business. “Over the last five years, we saw an increase of 30 to 40 percent in our bidder registrations” from Asia, he says. At last year’s Michael Jackson Julien’s special auction, around one-third of the items went

Eyeing Asia

Bruce Lee stunt double costume from “Game of Death” OCTOBER 2010

The Asian market is “very important” Darren Julien, president nt and chief executive of Julien’s Auctions, ctions, told Macau Business. “It is a market basically untapped,” he says. He expects Ponte 16’s auction tion to make around US$1 million (MOP8 MOP8

Michael Jackson’s black glove

137 to buyers from this side of the world. “The Asians, when they want an item, they do whatever it takes to buy it,” he says. “In five years’ time, Asia will make up to half of our revenues.” The company is negotiating with Ponte 16 to hold more auctions. They are now in the early stages of discussions about a Hollywood movies auction, to happen next year.

Investment tips Memorabilia is not just for die-hard fans. It is also an investment. “Some of our biggest buyers in Europe and America invest in this kind of item to diversify their portfolios,” says Mr Julien. The returns can be great. For instance, two pairs of shoes used by Marilyn Mon-

A photograph signed by Marilyn Monroe

The Asian market is “very important”, says Darren Julien. “It is a market basically untapped”

The costume from “Batman Returns” worn by Michael Keaton

roe were bought for US$3,000 in 1999. Ten years later each pair was sold separately, one for US$15,000 and the other for US$13,000. When investing in memorabilia, it is important to establish authenticity. “We get everything directly from the celebrities, friends or family members. We don’t bring in something if we don’t know the story behind it,” he says. The story of an item can even help push up its value. The market for Western memorabilia is already established but Mr Julien is convinced a market exists for mementos from Asian stars. “There is a market, especially for stars like Bruce Lee or Jackie Chan,” he says. “For an Asian celebrity to be highly collectible, they must be worldwide-known. They must have a global appeal, like Michael Jackson.” Other good investments are items associated with Marilyn Monroe, Elvis Presley or The Beatles, says Mr Julien.

Madonna’s stage ensemble A ball gown owned by Diana, from the Girlie Show Tour Princess of Wales

A signed promotional image of The Beatles

An Elvis Presley shirt, which he both owned and wore OCTOBER 2010

138

Entertainment

Five happy years

Photos: Carmo Correia

usiness Intelligence, Macau Business’ sister publication in Chinese, is one year older! The magazine, also under the umbrella of De Ficção – Multimedia Projects celebrated its fifth birthday last month. For the first time, Business Intelligence threw a party to celebrate its anniversary with its closest patrons. The event took place at The Veranda, at Grand Lapa hotel. A lucky draw was organized, giving all the guests the chance to win amazing and very exclusive awards. Next year, there will be another party, and it will be even bigger!

The Macau Business and Business Intelligence Team

Linda Wong and Hoi Kou

Patricia Cheong

On behalf of Summergate, Luis Pereira delivers the award to Ada Chan

Carmel Yeung delivers the Grand Lapa prize to Neila Chang

On behalf of Sofitel, José Reis delivers the award to Ada Chio De La Cruz

OCTOBER 2010

Dickson Yip receives the Westin Resort prize from Ada Chan

Andrea Mansfield hands the Morton’s The Steakhouse prize to Ana Rita Amorim

Buddy Lam delivers the Galaxy Entertainment prize to Wenda Wong

139

Jiji Tu, Katherine Liu, Paulo A. Azevedo, Reddy Leong and Ada Chio De La Cruz

Herman He, Business Intelligence’s editor-in-chief

Grace Tong, Emanuel Graça and Reta Wong

Hoi Kou won SJM prize, handed out by Frank McFadden

Ana Teo Mexia receives the Mandarin Oriental Macau prize from Ada Chio de la Cruz

Frank McFadden and Buddy Lam

Carlos Cheang receives the Pacific Cigar prize by Dickson Yip

Ray Fong wins the Macau Golf Country Club prize

On behalf of The Venetian Macao, Paulo A. Azevedo delivers the award to Beth Doherty

Albano Martins chats with Mimi Chan

Li Wei gives José Costa Santos the Caesars Golf prize

Katherine Liu delivers the Wynn Macau prize to Cecilia Kuan

Carlos Cheang delivers the Malo Clinic prize to Katherine Liu

On behalf of MGM Macau, Herman He hands the prize to Buddy Lam OCTOBER 2010

140

Entertainment

ANOTHER EDITION, ANOTHER HIT A

fter a successful launch in July, Macau Business together with Delta Bridges Publications and Work In Progress Productions hosted the second edition of its Delta Inter Chamber Event. The trendy bar Vida Rica at Mandarin Oriental Macau was the perfect place for the guests gathering from Macau, Hong Kong and Guangzhou to network, after a two-panel conference devoted to environmental issues (read more on our Environment section). The amazing view from the bar offered the event a special atmosphere. Once again the Delta Inter Chamber Event could count on the support and presence of the European Chamber of Commerce (Hong Kong), Amcham (Macau) BBAM (Macau) Cancha (Macau) the German Chamber of Commerce (South China), the Portuguese-Chinese Chamber of Trade and Investment in Macau, the Zhuhai Chamber of Commerce, the Australian Chamber of Commerce (Macao) and the French Chamber of Commerce (Macau). The Delta Inter Chamber Event is becoming bigger and better. Check out the pictures! In three months time, there will be more!

Ada Chio De La Cruz and Martin Schnider Yvette Li

Sophie Lei

Neil P. Jonhston and Luciano Baptista

Cristina Lobo and Mafalda Melo Afonso Pessanha and Carolina Bettencourt

JosĂŠ Lupi and Ana Tique

Michel Seyves, Kevin Brown, Ana Tique and Patrick Segarel OCTOBER 2010

141 Photos: Carmo Correia

Patrick Segarel and John Wieja Rui Afonso, Shirley, Carla Pires, Bruno Beato Ascenção and Paulo Azevedo

António Trindade and Gilberto Lopes

Meinrad Heinitz and Amélie Lu

Catarina Morgado and Michael Grimmes

Boris Michel and Michel Seyves

Angelina Gomes Wong wins a copy of a book about event management, presented by the author, Glenn McCartney

Veronica Llorca, Amanda Eriksson, Kim Larsen

Julia Brockman receives the lucky draw prize from Inspiration Fashion

Priscilla Hageman, Jan Hageman and Chan Shek Kiu

Beth Doherty receives the Beishan Jazz Festival prize from JJ Verdun

OCTOBER 2010

142

RICARDO ANDORINHO BUSINESS DEVELOPER | MB INTELLIGENCE CONSULTANCY LIMITED (“MBI”) andorinho@mb-intelligence.com

What are you here for? or centuries, people have been struggling with the purpose of their existence. Maybe you have wondered, you are wondering, or you will one day in the future, wonder what your purpose in life is, what your true north is, what gives your life meaning or simply what you are here for. The truth is only some of us are living a life of purpose and these people are easily identifiable. Just think about a particular person, past or present, who has achieved great things... Now, consider what is behind such accomplishments? Don’t you recognize passion and love as his or her drivers? Once you identify such emotions you will probably find out that they were aroused by a compelling purpose.

Not an easy task Finding your life meaning is often tougher than it might sound. Chances are that you are always busy with your professional life, that you don’t have time to stop and think about what your purpose might be, or actually what you want to do with your life. So, we are here to ask you now: why do you do it? Why do you have that particular job or activity that takes up most of your time? Is there some part of it that you absolutely live for? Professionally speaking, are you doing your job because you are passionate about it, or are you doing it because of the money? If you find something in the job that keeps you coming back, day after day, that is probably your purpose. From there, can you identify your gifts and passions? Can you identify how you can serve others, how you can add value, how you can provide solutions to the problems of others? Once you are able to discover your gifts and passions, your values and roles will be the way through which you express them; or in other words, how you operate daily will reflect those gifts and passions. That is why people who are living a life of purpose are easily identifiable!

Some guidelines Here are some tips to assist you in living a life of purpose: 1) Imagine you are at your funeral and ask yourself how you would like to be remembered. 2) Write down how you want your parents, your siblings, your coworkers, your friends, your spouse and children to remember you. 3) List what you consider to be the three or four priorities in your life. 4) List the most important relationships in your life. 5) For each priority and each relationship, write down a purpose statement, your current reality and your goals. 6) Think about how you would like to spend the week if you knew that you only had six months to live. 7) Take action! Do yourself a favour: unlock your gifts and passions and start living a meaningful life! Living a life of purpose is being in tune with who you really are. It is a spiritual or mystical experience that everyone should allow him or herself to live.

OCTOBER 2010

KEEP YOUR GREEN ENERGY, GIVE US GOLF GREENS It is a fact in Macau that civil society does not do much unless it gets a government subsidy. And sometimes officials prefer to give out money rather than take the trouble to do something themselves. The latest example: several chambers of commerce from the mainland, Macau and Hong Kong held a conference about “green transportation”. The organisers invited the heads of two government bureaus so they could share what Macau is doing in this area. Both the boss of the Environmental Protection Bureau and the chief of the Office for the Development of the Energy Sector decided not to attend. As usual around here, they did not even bother to answer the invitation until the eleventh hour or send someone in their place. Frozen Spy, who has eyes everywhere, was not surprised to spot a black car and driver from the Office for the Development of the Energy Sector waiting at the Macau Golf and Country Club on the day of the conference at 11:15 am. Yes, life is beautiful if you work for the Macau government.

GUIDES OR ROBBERS? Stories about corrupt tour guides continue to shame Macau. They use scams that nobody, it seems, is able to put an end to. Last month a mainland tour group was asked to pay MOP200 each to see Wynn Macau’s “Tree of Prosperity”, a free show. When an old lady asked for a receipt from the tour guide, she was left to stew on the street for more than four hours. Revoking the guide’s license is the least the government should do. Tougher measures should be taken before the city’s reputation is ruined.

143

JACKPOT CRACKPOT

CONSTRUCTION NIGHTMARE The construction of the Macau Dome, that incredible white elephant that nobody accepts responsibility for in this never-never land, is a great soap opera about how to build something of terrible quality and still charge almost double the tender price. Frozen Spy would not be surprised to see the builder receiving one of those medals given annually by the government for services rendered to Macau and its people. Another medal should be given to the developer of the city’s newest jewel, the Science Centre. So what if the press reports peeling paint, mould and other problems? Let us all give the developer more millions to redo a project that should have been done right in the first place. Macau is a great city to learn lessons about human nature.

That Chinese gamblers are superstitious is old news. That they can be superstitious enough to avoid collecting a jackpot is something new. A Chinese player last month refused to take the 4,444 pounds (MOP56,217) he won playing online slots at the international online casino, Jackpot City. As we know, the word for four in Chinese has a similar sound to the word for death. A spokesperson for Jackpot City said the player was obviously keen not to lose out on the money but at the same time was wary of bringing bad luck on himself or his family. For all the superstitious punters out there, Frozen Spy offers a piece of advice: look at the jackpot before you gamble if you don’t want a win that leaves a sour taste.

CAM COMES TO ITS SENSES After years of silence, Macau International Airport Company or CAM is finally shedding its coyness about Air Macau’s monopoly, saying it is time to revoke it if the city wants to develop its airline business. Well done, CAM. It only took 10 years of everyone else saying the same thing for you to reach your brilliant conclusion. By the way, does this have anything to do with the way the winds from the north are blowing?

SAUNAS TOO HOT FOR LOCALS Frozen Spy is happy to see the government is finally letting in more imported labour. However, there is one thing that is difficult to understand: why is it that some sectors, such as construction, have to obey the rule that one local worker must be hired for every imported worker, while others can easily bend it? Look at the sauna business. According to March’s official figures from the Labour Affairs Bureau, several companies in the sector had at least twice as many foreign workers as locals. There was even one sauna company without a single resident on its staff. Frozen Spy wonders why we want more jobs for locals on construction sites but not in perfectly legitimate businesses such as personal services? It makes you wonder if there is something dodgy about Macau’s saunas.

SETTING A BAD EXAMPLE Frozen Spy always enjoys watching those public service announcements on television telling people how they should respect their neighbours and put their garbage in the bin. However, it is time that the government started doing a special series for police officers. Everyone in Macau has a story to tell about police officers disobeying the law. Frozen Spy has seen it all: police officers riding motorcycles without helmets or crossing the road against a red light, and police cars that do not stop at pedestrian crossings or park in no-parking zones so the occupants can grab lunch. Frozen Spy thought being a police officer meant setting a good example. In Macau, it seems, it means racking up the perks that come with the uniform and disregarding everything else. OCTOBER 2010

www.7luck.com

October 2010

Aristocrat

Page 01

www.aristocratgaming.com

Aruze Gaming

Page 13

www.aruzegaming.com

Bally

Page 05

www.ballytech.com

BNU

Page 23

www.bnu.com.mo

Consulate General of the Republic of Angola

Page 61

www.consgeralangola.org.mo

CTM

Page 66

www.ctm.net

English for Asia

Page 31

www.englishforasia.com

Galaxy Entertainment

Page 21

www.galaxyentertainment.com

Galaxy Entertainment

Page 65

www.galaxyentertainment.com

IPIM

Page 10

www.ipim.gov.mo

Macau Cultural Centre

IBC

www.ccm.org.mo

Macau Daily Times

Page 44

www.macaudailytimes.com.mo

Macau Post Office

Page 120

www.macaupost.gov.mo

Melco Crown Entertainment

Page 19

www.melco-crown.com

Melco Crown Entertainment

Page 57

www.melco-crown.com

MGM Macau

Page 17

www.mgmmacau.com

MGM Macau

Page 59

www.mgmmacau.com

MGTO

IFC

www.macautourism.gov.mo

MIT

Page 74

www.mit.com.mo

Our Dental Clinic

Page 43

www.ooioc.com

PokerStars Macau

Page 07

www.pokerstarsmacau.com

Sands China

Pages 24-27

www.sandschinaltd.com

Sands China

Page 55

www.sandschinaltd.com

SJM

Page 39

www.sjmholdings.com

Star City Hotel & Casino

Page 02

www.starcity.com.au

Wynn Macau

Page 63

www.wynnmacau.com

Zung Fu Motors â&#x20AC;&#x201C; Mercedes

Page 03

www.zungfu.com.mo

index

7 Luck Casino

Advertisers

144

OCTOBER 2010