Archive for 七月, 2010

Not yet voice of the people

Not yet voice of the people

China’s media landscape has changed drastically in recent years in which the country’s rapid economic growth has had a major role to play. The reform and opening up and the subsequent relaxation of government regulations saw the birth of market-oriented media in China, after which even flagship Party newspapers began publishing profitable weeklies and dailies.

But still the future is pretty cloudy, says Qian Gang, former correspondent of the People’s Liberation Army Daily. Qian was a correspondent of the PLA Daily when the mass media were essentially a means to political ends.

Now a writer, and director of China Media Project of Journalism and Media Studies Centre in the University of Hong Kong, Qian says: “There is yet to appear an independent newspaper or broadcaster that I believe could become the mainstream media in China.” Looking at the potential of the mass media in China, Qian shows a clear preference for what he calls “public media”.

“Some say the Internet will change traditional news reporting but I am cautiously optimistic. As a matter of fact, I do not advocate separating traditional media from ‘new media’ because they are mutually interdependent.”

Qian concedes that the Internet, which connects millions of interactive Web users, has immense power in some aspects of reporting, especially when events are shared by great masses of people. “If the Internet had been as popular in 2003 as it is today, the SARS outbreak story would have become public much earlier, even though some officials still might have tried to resolve the crisis by working behind closed doors. But when exploring issues in greater depth, such as the vaccine scandal or mine accidents which require professional expertise or which take place ‘underground’, the traditional media are still the major source of news.”

The new media, especially the Internet, will expedite media reform in China, he says. Yet he remains doubtful about the future of the new media in mainstream journalism. In many ways, the first credible, independent news provider in China seems to be just round the corner. But in reality, there’s still a long way to go, because there is the question of ethics.

“In many cases, the media dangle ‘damaging’ reports in front of corporate executives or officials to force them into signing advertising contracts. The Chinese media, even those that have a strong sense of social responsibility, are still part of the peculiar marriage of commerce and politics.”

Qian distinguishes “public media” from political and commercial media. Public media, he says, is like the Public Broadcasting System in the US. The difference is that public media are similar to so-called “social enterprises”. Their purpose and mandates are distinct from those of the political and/or commercial media. The political media’s aim is to achieve political success for one party or another, whereas the commercial media seek profit to satisfy shareholders. A public media organization can be owned by the State but its purpose should be to serve the people.

Qian was the managing editor of Guangzhou-based Southern Weekend for several years. Reflecting on his experience with the influential newspaper, which built its reputation on investigative reports that routinely exposed social and political issues, he says political support was still key to the success of the paper.

In many countries, governments have newspapers and broadcasters serving their political ends. The Voice of America, which speaks for the US government, is one such example. This may not be such a good thing, he says. But then a totally market-oriented media environment could make newspapers and broadcasters go to the other extreme.

He cites Taiwan’s example, where the media are engaged in such a fierce competition to get advertisements that some of them have stooped down to publishing and airing trivial and sleazy stories to attract readers and viewers. The logic is simple: the more readers or viewers a media outlet has, the more ads it will get.

He says that even if public media get all or a substantial part of their funds from the government or official sources – tax revenue or from license fees – their non- profit motive will allow them to report objectively and fairly. This in itself will be a departure from the culture of publishing giants and broadcasting oligarchs.

In Germany, broadcasting councils comprising representatives from major organized social groups monitor the country’s public broadcasting network, ADR. These groups include labor and industrial bodies, and other organizations representing the general interests of the public.

Citing another example, he says Hong Kong’s sole public service media, Radio Television Hong Kong, is free to criticize the government even if it gets its funds from the government.

“Media reform in China still has a long way to go Public service media may have been a success in many countries. But where can we find a credible group that represents the interests of the public if we want to replicate its experience in China?”

Such is the power of advertising revenue that the media tend to turn a blind eye to the deeds of some powerful companies because they pay huge amounts in ad bills to newspapers and TV channels. It’s either money or politics that seems to be dictating terms to the media worldwide. No wonder, the future of public media appears to be pretty cloudy to Qian.

(China Daily 07/15/2010 page9)

http://www.chinadaily.com.cn/opinion/2010-07/15/content_10108435.htm

HK’s rich the wealthiest among regional seven

The rich in Hong Kong are the most affluent among their peers in the region and are also the oldest and least likely to have a baby, according to a survey by HSBC.

The HSBC Affluent Asian Tracker survey, after face-to-face interviews with more than 2,000 affluent people aged 18 to 65 years in seven Asian markets, says that Hong Kong’s most affluent 10 percent have liquid assets of $301,289 on average – assets that exclude real estate and income, e.g., stocks and bonds, 58 percent more than the richest on the mainland ($126,537), and nearly double a Singaporean’s $183,145.

The majority of Hong Kong’s rich were able to capitalize on the local equity market’s bull run earlier this year, Bruno Lee, HSBC’s head of wealth management for Asia-Pacific, told a press briefing Tuesday.

He said the wealthiest in Hong Kong have kept one third of their liquid assets in equities – also the highest ratio in the region.

“Almost a quarter of local rich people also hold yuan-denominated investments,” said Lee, who attributed it to the steady performance of the mainland economy during the recent global economic downturns as well as to anticipation of yuan appreciation.

Although the survey finds that Hong Kong’s wealthiest people tend to be older – 48 years old in comparison with 44 in Singapore and only 36 on the mainland – on average, a third of Hong Kong affluent surveyed said they belong to the “double income with no kids” (DINKS) group, compared with 18 percent and 8 percent among Singaporean and mainland respondents, respectively.

The HSBC Affluent Asian Tracker survey studies only the top 10 percent richest population in seven Asian markets, excluding Japan and South Korea. The threshold for Hong Kong families is possession of over $128,500 (HK$1 million) in liquid assets and for mainland households $73,500 (500,000 yuan).

“Asia’s young and upwardly mobile working population is fast accumulating wealth to become this generation’s emerging affluent. In many key markets in the region, investments, particularly in local equities, are a key driver to wealth growth,” said Lee.

Earlier, Forbes said that Hong Kong’s 40 wealthiest are now worth $135 billion, up from $82 billion a year ago, but still well below the peak of $179 billion in 2008.

But Hong Kong is also regarded as “both heaven and hell”, depending on whom you ask. A report from the United Nations Development Program shows the city tops the world when it comes to the wealth gap between the rich and poor.

The employers’ federation is still debating fiercely with trade unions about an hourly minimum pay of HK$24 or HK$33, as Hong Kong is yet to pass legislation on the sensitive issue of setting a minimum wage for the underprivileged groups in the city.

China Daily

(HK Edition 07/14/2010 page3)

http://www.chinadaily.com.cn/hkedition/2010-07/14/content_10102230.htm

Evergrande adjusts full-year sales target upward to 40 billion yuan

Evergrande Real Estate Group Ltd, the second biggest developer by sales on the mainland, said it has raised its full-year sales target to 40 billion yuan, a 4 billion yuan increase, after the developer achieved better-than-expected sales in the first half against the backdrop of the government’s efforts to temper the property market.

The developer told Hong Kong investors Monday in a trading update that it has achieved 58 percent of its original full-year sales target of 36 billion yuan over the past six months after it took the lead in cutting property prices amid a cooling market following the government’s measures.

Evergrande now expects to generate total contract sales of over 40 billion yuan in 2010, representing over 30 percent growth from the 30 billion yuan the developer recorded in 2009.

“We achieved sales of 4.8 billion yuan in June 2010, a record high for a single month this year,” said Evergrande’s Executive Director Xia Haijun. He said the group’s effective marketing and promotion strategies have contributed to the strong sales this year.

On May 6, Evergrande started to offer a 15 percent discount on prices of its 40 property projects across the mainland to promote sales amid government tightening measures to cool down the red-hot sector.

Shares of the Hong Kong-listed company tumbled 10 percent on that day, as investors speculated the developer might be facing a cash-flow problem.

“We took the lead in cutting property prices not because we were short of cash, but because we wanted to stimulate sales by offering better value-for-money products,” said Xia.

The group sold $750 million worth of bonds in January and issued an extra $600 million worth of bonds in April. Xia said Evergrande holds HK$21 billion in cash, calculated as of end-June, which will help the company boost its land bank at lower costs as the market is softening.

Evergrande expanded its business mainly in second- and third-tier cities on the mainland, where, Xia believes, “land prices are low while demand is high.”

He said when the property market in hot-spot cities hits a bottleneck, the second- and third-tier cities will become new targets of developers.

“But I don’t think the property prices will go up again in the short term,” said Xia, adding that developers need to coordinate with the government to curb rocketing housing prices, or the government will carry out stricter measures that will hamper the nation’s economy in the long run.

He believes providing affordable homes to low-income families and boosting land supply to reign in property prices are the two key approaches that can push the country’s property market back into a healthy situation.

China Daily

(HK Edition 07/13/2010 page3)

http://www.chinadaily.com.cn/hkedition/2010-07/13/content_10096783.htm

‘Grace period’ to help stressed firms

Employees’ outstanding entitlements still a major issue the new legislation must address and resolve

The government is expected to soon introduce a corporate rescue procedure that will provide a 45-day statutory “grace period” – a moratorium on civil legal actions – for companies with long-term viability but short-term financial difficulty.

The moratorium will buy time for financially-stressed firms to restructure their business or debts, or seek capital injections to turn themselves around, to avert collapse.

The government will proceed to prepare the draft legislation, Deputy Secretary for Financial Services and the Treasury John Leung Friday told a press briefing for the publication of the conclusions drawn from the public consultation on the matter.

“One of the main concerns is still the treatment of employees’ outstanding entitlements, as the failure to reach a consensus on the issue has left the procedure unsettled twice in the past. We have taken into account public views, in particular the labor sector’s views this time and suggested a phased payment schedule for employees’ outstanding entitlements,” said Leung.

Earlier efforts to introduce a corporate rescue procedure were in vain in 2001 and 2003 as both proposals failed to pass through the Legislative Council (LegCo). The new attempt is in response to the global financial crisis in 2008 to help companies in financial difficulties – a proposal, which, according to Leung, has elicited the most favorable general response in the three-month public consultation since last October.

According to the revised proposal, a company will have to pay arrears of wages up to HK$36,000 per employee within the first month. Wages in lieu of notice and severance payments owed to former employees whose employment contracts are terminated before the commencement of provisional supervision – the first step in a rescue process for a financially-stressed firm – should be paid up to the relevant caps of the Protection of Wages on Insolvency Fund around two and a half months later.

Any remaining amount will be paid within 12 months after the start of the voluntary arrangement. If the company fails to pay according to the schedule, the employees concerned will no longer be bound by the moratorium and may petition for winding up the company, which will lead to liquidation.

Leung said that, compared with the 2003 proposal that requires the company to set up a trust fund before the commencement of provisional supervision and which was considered too onerous to require a financially-stressed company to set aside a significant upfront payment, although disparate views on employee’s outstanding entitlement still exist, the revised approach this time seems to strike a reasonable balance among different stakeholder groups.

“Another challenge to winning the legislators over is the insolvent trading provisions we proposed to introduce, which aim to encourage distressed companies to act on insolvency earlier,” he added.

The provisions empower liquidators of a distressed company to seek a declaration from a court that a “responsible person” – a director or a de facto director who failed to prevent insolvent trading – is personally liable for debts of the company that continues to conduct business while insolvent.

“If a director knows or ought reasonably to know that the company is insolvent but still carries out trading, he or she will be personally liable for the debts,” said Leung.

Leung said having learned from the previous two failures, the government sees better odds this time for approval by the LegCo. But its earliest implementation will be the end of the year even if the proposal sails through.

China Daily

(HK Edition 07/10/2010 page3)

http://www.chinadaily.com.cn/hkedition/2010-07/10/content_10089509.htm

ECIC posts 36 percent business gain in 2009

ECIC posts 36 percent business gain in 2009

Container ships sail through Victoria Harbour in Hong Kong earlier this year. The Hong Kong Export Credit Insurance Corporation said Wednesday its total insured business registered a 36 percent jump in the fiscal year ended March. Jerome Favre / Bloomberg news

The Hong Kong Export Credit Insurance Corporation (ECIC), which provides insurance protection to local exporters against default, reported a 36 percent surge in its total insured business to HK$64.1 billion for the financial year ended March, as the rough trading environment and high credit risks forced more exporters to seek cover from it.

“It was a tough year for exporters, though the global financial crisis began to ease and some tentative signs of recovery were seen in the second half,” said Ralph Lai, commissioner of the ECIC.

“Since the trading environment stayed difficult and the level of credit risks remained high, more exporters approached the ECIC for cover,” he said.

Growing by 30 percent from the previous year, the US remained the ECIC’s largest insured market, followed by the UK and the mainland, which rose 21 percent and 50 percent, respectively.

Lai said the body has helped exporters to mitigate their credit risks through a number of measures last year, including the extension of policy fee waivers and some free credit assessment, as well as expediting the processing time for credit limit applications.

Looking ahead, Lai said though the gradual recovery in the global markets will bring new business opportunities for Hong Kong exporters, the company remains cautiously optimistic about the prospects for Hong Kong’s overall exports in the coming months, in consideration of the uncertain outlook in major export markets and other challenges ahead, such as currency fluctuations and intensifying protectionism.

“Exporters should continue to exercise effective risk management, handle credit business prudently to recover and expand their business, and consider taking out export credit insurance as a tool to minimize credit risks,” Lai suggested.

Established in 1966 and wholly owned by the Hong Kong government, the ECIC protects Hong Kong exporters who trade on credit terms with overseas buyers against non-payment risks and helps them conduct export business in a prudent manner.

According to data released by Hong Kong Trade and Development Council (HKTDC), Hong Kong’s exports increased by 25 percent during the January-April period of this year, marking the strongest expansion in two decades.

The HKTDC has revised its forecast for the city’s exports growth in 2010 to 12 percent from the 5 percent estimated previously, in view of the much better-than-expected turnout.

China Daily

(HK Edition 07/08/2010 page3)

http://www.chinadaily.com.cn/hkedition/2010-07/08/content_10078718.htm

Chalco delays share sale, turns to bank financing

Market volatility blamed for year-long postponement of planned rights offer

Aluminum Corp of China Ltd (Chalco) said it will turn to bank financing to support its business expansion after the country’s biggest aluminum producer postponed its equity fundraising plans.

Chalco said in a statement filed with the Shanghai stock exchange Tuesday that the deadline for a planned sale of yuan-denominated shares on the mainland will be extended by 12 months from August 23.

The company did not provide reasons for the postponement in the statement. But a spokeswoman with the company told Bloomberg that the current market conditions are not favorable for the share sale and that the company will seek bank loans instead.

The metal producer said last July it planned to raise up to 10 billion yuan by selling as many as 1 billion A-shares to institutional investors. The company earlier gained approval from the China Securities Regulatory Commission for its share sale plan.

“The difficulties Chalco is facing, together with the lackluster broad market could explain its decision to delay the shares sale plan,” said Patrick Yiu, managing director of CASH Asset Management.

The company returned to a profit last quarter after it restarted plants and as metal prices rebounded.

As the mainland economy is expected to slow down in the second half of this year, shrinking demand for aluminum – due also to a slowdown in the mainland real estate market after the government took actions to curb price rises – will blight the performance of Chalco, Yiu said.

Last month, Chalco’s president Luo Jianchuan said aluminum prices had dropped below the costs of production, putting pressure on producers.

Many mainland companies have postponed or shelved their share sale plans after share prices slumped amid gloomy market sentiment.

Some mainland firms also called off their initial public offerings in Hong Kong in recent months, including the country’s second largest wind-turbine manufacturer, Xinjiang Goldwind Science & Technology Co, which cancelled the IPO plan in June “in light of the deterioration in market conditions and recent unexpected and excessive market volatility.”

The benchmark Hang Seng Index has dropped 8.9 percent and the Shanghai Composite Index has declined 26 percent this year.

Chalco shares, which rose 4.9 percent to close at HK$5.99 in Hong Kong and gained 1.75 percent to close at 8.74 yuan in Shanghai trading Tuesday, have slumped 30 percent and 40 percent, respectively, in the two stock exchanges this year.

Yiu believes Chalco is still under pressure to raise funds for capital expenditure, even though the company has sold 5 billion yuan of one-year bonds on the domestic interbank market in June and 3 billion yuan of three-year bonds in March.

China Daily

(HK Edition 07/07/2010 page3)

http://www.chinadaily.com.cn/hkedition/2010-07/07/content_10073198.htm

Home sales drop 17% in June, govt figures show

Government figure released Monday showed that Hong Kong’s residential property sales slid to 9,130 transactions in June, the lowest this year, representing a 17 percent decrease from the 11,014 transactions in the previous month.

The total dollar value of property transactions managed to reach only HK$33 billion in the same period, the lowest in the last 12 months, down 23 percent from the previous month, or down 34 percent year-on-year, according to the Land Registry.

The June figures actually relate to transactions in May, as there is usually a four-week time lag between closing a transaction and the lodging for registration with the Registry.

In April, the Hong Kong government announced a package of measures, including plans to increase land auctions and home supply, and initiatives to boost transparency in flat pre-sales, as well as plans to stimulate the secondary market for Home Ownership Scheme (HOS) flats and for heftier stamp duties for property transactions.

The weaker official data may have indicated some impact from the government’s moves aimed at cooling down the market amid warnings of a potential property bubble after residential prices climbed around 30 percent over the past year.

However, actual transactions in June may turn out to be substantially different from the official data due to the time lag for registration, as the city’s property agency has already recorded a strong rebound in property sales in the past few weeks.

“After nearly two months’ correction, pent-up demand for homes has been fired up by land sales in the last month, which is also kicking off the rebound of the property market in the second half,” said Willy Liu Wai-keung, executive director from Ricacorp Properties in another report on Monday.

Ricacorp’s latest research report, which compiles data from 50 key residential estates in the city, recorded a total of 2,645 residential transactions in June, surging 73 percent over the 1,531 transactions in May, which was the best sale volume in five months.

Liu said the transaction volume last month also represents the “best June” since 1997. Hong Kong people’s strong desire for owning homes together with the influx of hot money from the mainland will definitely boost sales in both the primary and secondary markets.

“Residential sales will increase by another 10 to 20 percent from the June figure, while home prices are also likely to inflate about 2 percent in July,” Liu added.

China Daily

(HK Edition 07/06/2010 page3)

http://www.chinadaily.com.cn/hkedition/2010-07/06/content_10067677.htm