MB 90 | October 2011

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Transport 24 Going under Macao Dragon fi les for bankruptcy

Politics 30 Dialogue of the deaf Legislative Assembly returns to work 34 A fair hearing Public consultations have become a cliché in the government’s decision-making process

Property 36 Market watch Government measures have stabilised the property market

Special 41 Times of change 62nd anniversary of the establishment of the People’s Republic of China

Gaming 56 Billions race Gross gaming revenue growth slows 58 Stock watch Macau gaming stocks face awful month

60 Slow boil New cap for gaming tables announced 63 Play by the rules Regulator issues draft standards for slots 64 Parlour games Mocha Slots opens its ninth parlour 66 Constant change Technology is increasingly important for casinos 68 Unbeatable hand Danny McDonagh is the fi rst non-player inducted into the Australian Poker Hall of Fame 72 No fair game Casino opponents in Taiwan launch new campaign 74 Plan B Caesars Entertainment focuses on hospitality in Hainan

Hospitality 76 Pleasant headache Grand Hyatt’s general manager Paul Kwok says hotels in Macau are busy, but lack staff

Advertising 84 Signs of growth JCDecaux to expand ad spots at the airport

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Human resources 86 Out there, somewhere Macau Business goes in search of the city’s unemployed 88 Get a life Career planning is essential in a job market like Macau’s

Environment 90 Sunny days Private companies eyeing the city’s renewable energy market

Telecommunications 95 Getting smart 3Macau bets on mobile content to increase revenue

Entertainment 96 Show of force Audiences for “Zaia” are up 98 Lofty reincarnation Sky 21 is making a comeback

Arts & Culture100 Out of focus Is the government investing enough and wisely on culture?

102 Master class Czech Philharmonic Orchestra comes to town 104 That picture of a girl World Press Photo awarded pictures visit Macau

Corporate Social Responsibility 108 Fun, friends, philanthropy The fi rst round of the Annual Macau Business Charity Golf Tournament was a success

Opinion 8 From the publisher’s desk Paulo A. Azevedo 11 Editorial Emanuel Graça 29 Case studies in couplets Keith Morrison 33 Green fog José I. Duarte 71 Here we go... again! David Green 92 Big reform in small packages Jean Pisani-Ferry 99 Fly me to the moon Gustavo Cavaliere 107 Thinking the unthinkable in Europe George Soros

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Dangerous gamement – since the cap will last for a decade – is simply transmitting what he has been told.

I do not understand how offi cials have reached the 3-percent fi gure. Maybe they tossed a coin?

What I do know is that without fi rst conducting one of the delicious and frequently announced “scientifi c studies” that are so close to the chief executive’s heart, nothing good can come from promising a slowdown until 2023.

First, as the government knows very well, there are projects in the pipeline and bank loans are essential for their completion. With-out tables to generate cash fl ows, banks might be less inclined to get involved. Naturally, loans may be harder to obtain. The sector’s development and associated activities will face diffi culties.

In other words, everything in Macau will be affected.

Second, without more tables, there goes the intention to invest in mass gaming. If no more tables are allowed, can you blame operators for converting mass-market tables into VIP ones?

To impose a slowdown when loans must be negotiated and gaming licenses are being analysed to determine their eventual exten-sions is the equivalent of placing obstacles in the path of operators. It is no wonder then, as Reuters reported, that the international bank-ing system looks at Macau with mistrust.

Mistrust stems from the uncertainty re-garding gaming licenses, as well as from the fact that some operators will need fi nancing for their new Cotai projects but those develop-ments still have no offi cial approval.

Incredibly, this mistrust is not generated

IT SOMETIMES FEELS LIKE OUR GOVERNMENT IS against gaming and the billions in investment dollars it brings. Occasionally, we are led to believe that casinos and the double-digit growth rates for gross domestic product that comes with them, are a monstrosity to be avoided at any cost.

Instead of launching prevention campaigns against the possibly damaging effects of an ad-diction to gambling, Macau’s offi cials prefer to publicly repudiate investors that often do what the government should be doing: investing.

Let us cut the hypocrisy.Would we prefer to have Macau as an

international fi nancial centre or services centre rather than a gaming centre? Of course we would. Unfortunately or fortunately – I don’t know anymore – gaming is our bread and butter.

Without gaming – and since Macau continues to be a victim of the embarrass-ing limitations of many of its leaders, in both the public and private sectors – we would be competing to leave the bottom of the lists that measure how successful a city is.

The central government’s reservations about unlimited numbers of gaming tables are understandable. Still, rules must be clear and you cannot have one position when talking privately to investors and private banks, and another when explaining how you want to “harmoniously” control the sector’s growth.

The topic became relevant after the recent announcements from secretary for economy and fi nance Francis Tam Pak Yuen about a new, annual 3-percent cap for gaming tables starting from the end of 2013.

No one doubts that Mr Tam, while talk-ing on behalf of this and the next govern-

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by the less-than-impressive performance of the gaming sector in the United States or by an en-demic economic recession as is being experienced in Europe. Rather it is caused by the constant promises (many of them unkept) to place obstacles in the path of the sector’s growth.

Mind your languageThe latest victim of an apparent lack of attention to detail and the moral responsibilities a sitting government must accept for prior leadership was Steve Wynn.

Wynn Macau publicly announced the ac-ceptance of the government’s terms and condi-tions regarding the concession of 20 hectares of land in Cotai, a plot that authorities had long ago signalled they would give to the company.

The answer to Wynn Macau’s announcement came swiftly, the government saying the process was still under evaluation and that no fi nal deci-sion had been reached.

To Macau’s public offi cials, the least you could have done was to consult your legal experts before opening your mouths, right?

Wynn said the company had accepted the terms and conditions of the land grant, which were sent to the company by the Macau govern-ment. This is consistent with the law that regulates land grants. It states that after the chief execu-tive has given his approval, only then will the proposed concession be sent to the grantee for acceptance. Once accepted, the contract shall be published in the offi cial gazette.

True, there are other formalities between these two steps but they are exactly that – formalities.

When the government sends a draft conces-sion to the grantee for his acceptance, it loses con-trol over the process. The chief executive could have prevented Wynn from getting the land before

this, on the grounds of public interest, but not after it sent out the draft contract.

What Wynn Macau did after it replied to the government also met all standards. It informed the regulator of the Hong Kong Stock Exchange, where it is listed, that it had accepted the terms of the land concession and was from that moment bound to them.

So what happened?If you ask me, it was Macau’s autonomy (or lack

of it). There may have been someone up north who was not properly informed and wanted to make sure Macau does not proceed without his clearance.

But that is just speculation.

Learning diffi cultiesTo end this editorial, a joke.

The secretary for economy and fi nance was quoted in the press recently as saying the govern-ment would analyse a proposal from eSun Holdings and Lai Fung Holdings that pledged an investment in Hengqin Island to build a “Creative Culture City”.

The project, the companies say, aims to create cinema and music festivals, as well as thematic parks and other entertainment venues.

In other words, more or less the same thing eSun wanted to build at the Macau Studio City but failed to deliver.

The company invested next to nothing, made the government look ridiculous and still earned bil-lions. That the situation was not considered irregu-lar was only due to the fact that no one had what it takes to demand accountability.

Here is a similar-sounding project, apparently already signed off on by the Zhuhai authorities, which may very well occupy part of the fi ve square kilometres the Macau SAR is supposed to co-man-age in Hengqin.

A joke? Must be, but we are not laughing!

Would we prefer to have Macau as an international financial centre or services centre rather than a gaming centre? Of course we would. Unfortunately or fortunately – I don’t know anymore – gaming is our bread and butter

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Editorial CouncilPaulo A. Azevedo, Albano Martins, Duncan Davidson

VOL.1 Nº90

Founder and PublisherPaulo A. [email protected]

Editor-in-ChiefEmanuel Graç[email protected]

Executive Director Business DevelopmentLuis [email protected]

Property EditorAlan [email protected]

Senior AnalystJosé I. [email protected]

Hong Kong BureauMichael Hoare (Chief), Anil [email protected]

Europe BureauPaula [email protected]

Special CorrespondentMuhammad [email protected]

Beijing CorrespondentMaria João [email protected]

Manila CorrespondentMax V. de [email protected]

Assistant to the PublisherWeng [email protected]

Art DirectorsConnie Chong, Luis [email protected]

PhotographyAntónio Mil-Homens, Carmo Correia, Greg Mansfi eld, Gonçalo Lobo Pinheiro,John Si, MSP Agency, Agencies

IllustrationG. Fox, Rui Rasquinho

Contributing EditorsAlexandra Lages, Christina Yang Ting Yan, Derek Proctor (Bangkok), Filipa Queiroz, Joana Freitas, João Francisco Pinto, José Carlos Matias, Kahon Chan, Kim Lyon, Lois Iwase, Luciana Leitão, Ray Chan, Sara Farr, Sara Silva Moreira, Sofi a Jesus, Steven Chan, Tiago Azevedo, Wu Yu

Regular Contributors Branko Milanovic, David Cheung, David Green,Dominique Moisi, Eswar Prasad, Frank J. Fahrenkopf Jr., Gustavo Cavaliere, Hideaki Kaneda, José António Ocampo, José Sales Marques, Joseph Stiglitz, Leanda Lee, Keith Morrison, Kenneth Rogoff, Kenneth Tsang, Marvin Goodfriend, Pan Yue, Paulo J. Zak, Peter Singer, Richard Whitfi eld, Rodrigo de Rato, Robert J. Shiller, Sin-ming Shaw, Sudhir Kalé, Sun Shuyun, Vishakha N. Desai, Wenran Jiang

AdvertisingXu Yu, [email protected]

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Media Relations

GRIFFIN Consultoria de Media Limitada

TranslationsStephanie Chu, PROMPT Editorial Services, Poema Language Services Ltd

AgenciesAFP, Lusa

ExclusivesGambling Compliance, Hoje Macau,Project Syndicate

Printed in Macau by Welfare LtdPublished 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 MOP 8to US$1 for the purposes of illustration only.

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Think twice

Emanuel GraçaEditor-in-Chief

[email protected]

announced and implemented in 2003, following the SARS crisis.

Nevertheless, as huge plots of land were given out for the construction of mammoth casino-hotel resorts in Cotai, better planning from the authori-ties should have been expected. Let us just assume for now that strong growth in terms of gaming revenue and tourist arrivals caught the government off-balance.

Excuses such as these are no longer valid. Everyone now knows what to expect.

People-focused cityUnfortunately, Cotai Version 2.0 has already started off on the wrong foot.

There is still no clear development blueprint and transportation continues to be a mess, with the light rail transit system that was promised by early 2015 looking like a mirage.

Beyond that, Macau residents, a major stake-holder in the Cotai development, continue to be ex-cluded from the development process. In a territory with an obsession for public consultation, here is a topic where the people are not heard. Strange.

Macau is a city crammed with people. Unlike other tourism destinations where residents can choose to live in the suburbs, here there are thou-sands of residents who cannot go elsewhere.

When the government opts to hand out valu-able land to a casino operator instead of building public facilities or housing, it must publicly explain the trade-off.

In Cotai 1.0, the equation was easy. Aside from the obvious benefi ts of more jobs and tax revenues, the new resorts ushered in international-standard shopping and entertainment options. These were new to Macau.

Now, the trade-off is more complex. The city enjoys full employment and the public coffers are bursting with money. In some areas, such as human resources and traffi c fl ow, it seems counterproduc-tive to maintain the frenetic development of the past fi ve years.

This is not to say that a second round of casino construction in Cotai cannot be benefi cial. But, un-like Cotai 1.0, the overall process needs to be more transparent, open to public participation and based on proper planning.

Even the gaming operators need a more pre-dictable framework, as the expiration date of their concessions looms.

The key to resolving most of these issues rests with the government. Unfortunately, few changes, if any, appear to have been implemented. But this time, inexperience is no longer a valid excuse.

Macau residents, a major stakeholder in the Cotai development, continue to be excluded from the development process. In a territory with an obsession for public consultation, here is a topic where the people are not heard. Strange

COTAI VERSION 2.0 IS TAKING SHAPE.The fi rst indication of an enhanced Cotai

came with Melco Crown Entertainment’s acquisi-tion of a majority stake in the Macau Studio City project. The deal restarted the stalled venture. Although government noise during and after the deal was done placed a question mark against gaming facilities at Studio City, very few people – if any – expect a project without a casino.

Last month, Wynn Macau announced it had formally accepted the terms and conditions of the government concession for a land plot of about 51 acres near City of Dreams.

Also last month, the Macau government made public it would restrict the rate of gaming tables growth to no more than 3 percent per year starting 2013. The restrictions will last at least 10 years, until the current gaming concessions expire.

The local authorities also stressed they would not authorise new casino projects besides those applications fi led up until 2008.

These are important developments, coming at a time when Cotai’s fi rst stage of development is ending. The cycle will be complete when Sands Cotai Central opens its doors next year.

At this transition point, we should look back so as to steer clear of past mistakes.

Cotai’s transport infrastructure was never properly planned to deal with the current volume of tourists. As new properties have continued to be built, it is expected that arrivals will surge again.

Some analysts and legislators argue that investing in transport is the responsibility of the gaming operators. After all, they will be the net winners if more people visit the area. Right? Wrong.

The Macau government and, by extension, the city’s residents rake in the biggest economic benefi ts from gambling. Just compare the revenue collected in gaming taxes with the overall profi ts posted by the six casino operators and see who is better off, bearing little – if any – risk.

Due to the huge volume of taxes they pay, concessionaires are entitled to expect the govern-ment will provide them with quality infrastruc-ture. That did not happen in Cotai Version 1.0. The gaming companies were obliged to become bus and ferry operators, areas far removed from their core business.

It is also true that when gaming was liber-alised in 2002 it was unthinkable that the sector, and by extension Cotai, would develop as fast as it did. One of the key contributors to that boom – the unexpected individual visa policy – was only

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HIGH HOPES

BANK OF CHINA MACAU TO REPATRIATE RENMINBIThe Macau subsidiary of Bank of China Ltd. has been allowed to send RMB3.5 billion (MOP4.4 billion) it has accumulated, back to the mainland. This is the fi rst such approval for the branch, a source familiar with the matter told the Wall Street Journal. Last month, the People’s Bank of China granted the Macau unit of Bank of China permission to trade on its interbank bond market. The 3.5 billion renminbi quota given to Bank of China’s Macau arm consists of renminbi built up from cross-border transactions, the source told the Wall Street Journal.

DELTA BRIDGE GETS COURT OKThe Hong Kong Court of Appeal last month overturned a sentence that caused a fi ve-month delay in the construction of the HK$83 billion Hong Kong-Macau-Zhuhai Bridge. The ruling means construction on the project can get underway again. The delays may push project costs up HK$6.5 billion. Hong Kong’s secretary for transport and housing Eva Cheng welcomed the decision, adding the government will resume construction works by the end of this year. Ms Cheng promised the bridge would open on schedule in 2016. A lower court had ruled in April that the bridge could not go forward because the government, in completing its environmental impact assessment of the project, had failed to include a stand-alone air quality assessment.

CORRECTIONSIn our September issue, the article “Beach games” on pages 78 to 81 misstated the name of the company behind Vietnam’s Ho Tram Strip project. The company’s name is Asian Coast Development Limited and not Asia Coast Development Limited.

In the same story, we stated that the United States casino company Pinnacle Entertainment Inc. agreed in May to purchase a 26 percent stake in Asian Coast Development for US$90 million (MOP720 million). The correct fi gure is US$95 million.

We offer sincere apologies to our readers and the companies involved.

Chui Sai On expects infl ation will stabilise

Chief executive Fernando Chui Sai On last month said his government would continue to adopt measures to control the infl ation rate in Macau. “We hope the infl ation will become stable or drop,” Mr Chui told reporters.

Mr Chui said that the government has been trying to open new sources of food supply in the mainland to stabilise prices, while also subsidizing public utilities.

Macau’s Composite Consumer Price Index (CPI), the city’s major indicator of infl ation, increased by 6.15 percent year-on-year in August. For the fi rst eight months of 2011, the index increased by 5.37 percent year-on-year.

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ECONOMY TO GROW 20 PERCENT IN 2011: FORECASTMacau’s economy is expected to grow 20 percent for overall 2011, says the latest report from the Economist Intelligence Unit, of the Economist group, which publishes The Economist magazine. The report predicts economic growth will slowdown to 15 percent in 2012, macauhub reported. For the fi rst half of 2011, Macau’s gross domestic product increased by 22.9 percent in real terms in comparison with a year ago, according to offi cial data.

BOOSTING TRANSPARENCY

NEW DEPUTY COMMISSIONER FOR MACAUZhang Jinfeng has been appointed by Beijing as the new deputy commissioner of the Ministry of Foreign Affairs in Macau. Ms Zhang will replace Mao Siwei, according to Macau Daily Times. The 59-year-old public servant was the Chinese ambassador to Cambodia until last year.

SOU TIM PENG HEADS HENGQIN INVESTMENT COMPANYSou Tim Peng has been offi cially appointed as chairman of the Macau Investment and Development Limited. The company was set up in June by the Macau government to coordinate the territory’s investment in the future industrial park in Hengqin Island, to be developed in cooperation with Guangdong authorities. Mr Sou is also the director of the Macau Economic Services. Echo Chan Keng Hong, executive director of the Macau Trade and Investment Promotion Institute, and Sam Kam San, advisor to the cabinet of the secretary for economy and fi nance, were appointed as directors of the company.

Macau gears up to sign more tax agreements

Macau is in negotiations with several countries and regions to sign tax information exchange agreements or double taxation conventions. The territory has already signed 12 such agreements that comply with the latest internationally agreed standards.

According to the Finance Services Bureau, Macau is negotiating more agreements with Ireland, New

Zealand, Germany and Argentina.Also, a new round of meetings with Vietnam and Hong Kong on double taxation conventions negotiation is expected to be held later this year.

Last month, a peer review panel of the Organisation for Economic

Cooperation and Development (OECD) “unanimously agreed that Macau SAR had the relevant legal and regulatory framework in place that could ensure the effective implementation of tax information exchange, and that Macau SAR complied with the internationally agreed standards,” according to the Finance Services Bureau.

In 2009, the OECD was close to labelling Macau as a fi scal haven.

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ANTÓNIO BARROS NEW AIRPORT DIRECTORAntónio Barros is the new director of ADA - Macau International Airport, replacing José Carlos Angeja. He was the former deputy director of the company. In August, the Macau International Airport Company Limited (CAM) acquired ADA, the airport management service provider. CAM had been in talks with ADA’s two shareholders – China National Aviation Corporation and Aeroportos de Portugal (ANA) – for several months.

The new disabled subsidy is expected to reach 10,000 Macau permanent residents. The Social Welfare Bureau is already receiving applications.

The government expects to spend MOP80 million (US$10 million) per year on this new subsidy. According to their degree of disability, eligible applicants can receive an annual grant of MOP6,000 or MOP12,000.

The subsidy will have retroactive effects to 2009 and 2010.

ELEVEN CONVICTED FOR ELECTORAL CORRUPTIONA total of 11 people were convicted last month in a case of electoral corruption regarding the 2009 election for the Legislative Assembly. One man was convicted to two years and three months in prison, while the remaining 10 people were sentenced to one year and three months in jail. They were found guilty of bribing electors to assist the number 3 electoral list, United Development Alliance, led by businessman Lai Cho Wai, to grab a seat in the election. Eventually the list was not able to elect any legislator. The case involved a total of 32 people. All the 11 people convicted appealed the sentence.

FOOD SAFETY CENTRE IN 2012The government is planning to create a food safety centre by next year. Currently, the authority to regulate and monitor food safety is dispersed throughout several bureaus. The centre will be under the Civic and Municipal Affairs Bureau. A law establishing the centre and new rules for food safety in Macau will be put up for public consultation next month.

NEW GRANT FOR DISABLEDGovernment estimates 10,000 to benefi t from subsidy

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WHO’S NEXT?Washington already looking for Chui Sai On successor: WikileaksSeveral Wikileaks cables show that the U.S. State Department is already trying to fi gure out who will be the successor of Fernando Chui Sai On as chief executive, and whether Mr Chui will serve two terms.

The cables go back at least to February 2010.The potential successors mentioned include

businessman Lionel Leong Vai Tac, legislator Chan Meng Kam and prosecutor general Ho Chio Meng.

While the fi rst two are said to have low chances of being chosen, Mr Ho is mentioned has being in the best position to succeed Mr Chui if a new corruption scandal similar to the one that disgraced former secretary for transport and public works Ao Man Long erupts.

However, Mr Ho is seen as being too old to take on the position if Mr Chui ends up serving two terms, until 2019.

A 2010 cable mentioned that choosing Macau’s next chief executive could pose a challenge even for Beijing because of the lack of clear front-runner.

GRAFT BUSTER FINDS PROBLEMS IN CEMETERY PROBEThe Commission Against Corruption concluded that the Provisional Municipal Council of Macau breached the law in the administrative procedure for the perpetual lease of 10 plots at the São Miguel Arcanjo Cemetery. The graft buster said the process seemed “tailor made” to benefi t a legal advisor of secretary for administration and justice, Florinda Chan. However, any criminal or disciplinary responsibility has already elapsed, since the events took place in December 2001. The leases were granted by the Provisional Municipal Council of Macau, which was under Ms Chan’s supervision and was dissolved two weeks later and replaced by the Civic and Municipal Affairs Bureau. The graft buster says there is no proof of any abuse of power by Ms Chan. Nevertheless, the graft buster criticises Ms Chan for not being able to prevent the wrongdoing from taking place and by not opening an investigation when the topic was brought to the public eye last year by TDM. In a short press release, the government said it was analysing the graft buster conclusions. Chief executive Fernando Chui Sai On appointed Ms Chan to follow up the issue.

MIF TO BE HELD THIS MONTHThe 15th Macau International Trade and Investment Fair (MIF) will be held at the Venetian Macao from October 20 to 23. The event is organised by the Macau Trade and Investment Promotion Institute (IPIM) and co-organised by several governmental entities, chambers of commerce and trade promotion agencies from Macau, the mainland and Hong Kong. As the largest annual trade and economic event in Macau, last year’s MIF attracted 760 exhibitors and 80,000 visitors.

HOT TICKETSThe 25th Macao International Music Festival is ready to bathe the city in sonic colours. The event starts on October 7 and lasts until November 5. It comprises 20 shows. For latecomers, there is a little good news: while most of the performances have been sold out for a long time already,

there are still some tickets available. This is the case with Carl Maria von Weber’s “Der Freischütz”, which brings the silver jubilee of the city’s biggest annual music event to a close. The opera runs for three nights. It is a production specially commissioned by the Macao International Music Festival. To check which shows still have seats available, head to a Kong Seng ticket offi ce or to www.macauticket.com.

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DEPOSITS GO UPTotal deposits with the banking sector grew 1.0 percent in July from a month earlier to MOP383.7 billion (US$47.96 billion), the monetary authority announced. At same time, domestic loans to the private sector grew 1.5 percent on a monthly basis to MOP159.1 billion, while external loans dropped slightly by 0.3 percent to MOP157.9 billion. That meant the overall loan-to-deposit ratio dropped 0.3 percentage points from the previous month to 82.6 percent.

UNEMPLOYMENT DOWNThe unemployment rate for June-August was 2.6 percent, down by 0.1 percentage points respectively over the previous period (May-July 2011), the Statistics and Census Service announced. Although the number of unemployed held stable at 9,000, the employed population increased by about 3,700 to 335,000, pushing the unemployment rate south. Of those looking for a job, 15.3 percent were fresh labour force entrants.

AIRPORT HANDLING MORE PASSENGERSFor the third month in a row, the number of passengers handled by the Macau International Airport increased on a year-on-year basis. In August, the airport handled 396,000 passengers, a year-on-year increase of 8.8 percent, according to data provided by the Macau International Airport Company. In August there was also an 11 percent jump in fl ight movements to over 3,400.

PUBLIC REVENUE FUELLED BY GAMINGIn the fi rst eight months of 2011, total public revenue rose by 44.9 percent in comparison with the same period last year, to a total of MOP70.17 billion (US$8.77 billion). This increment was due to noticeable increases in the revenue from direct taxes on gaming, up by 46.4 percent, according to the Financial Services Bureau. Total public expenditure up to August was MOP21.72 billion, a year-on-year increase of 4.8 percent. A fi scal surplus of MOP48.45 billion was recorded in the fi rst eight months of 2011, up by 74.8 percent from the same period last year.

SAME RICE BRAND PRICE CAN VARY 60 PERCENTThe Consumer Council’s quarterly specifi c price report on rice revealed that price variations of up to almost 60 percent can be found for the same rice brand sold in different shops. The council also indicated that prices of Thai rice brands had been stable during the past six months while an average price increase of 5 percent was recorded for most Japanese rice brands.

RESTAURANTS SEE REVENUE RISERevenue for Macau’s restaurants and similar establishments amounted to MOP5.49 billion (US$686 million) in 2010, up by 14.9 percent year-on-year. On the other hand, their total expenditure amounted to MOP5.16 billion, up by 16.7 percent. The gross value added by the sector rose by 13.9 percent year-on-year to MOP2.15 billion. However, the gross fi xed capital formation decreased by 13.2 percent to MOP217 million. Macau had 1,586 restaurants and similar establishments operating in 2010, up by 16 year-on-year. The sector engaged almost 22,100 people.

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It had big vessels and big plans, but low-cost ferry operator Macao Drag-on Co. Ltd. was short-lived. Without

warning, the company fi led for bank-ruptcy on September 14 and stopped services the next day.

Macao Dragon blamed the govern-ment for its failure, saying it had broken promises to the company by restricting the number of passengers it could carry between Macau and Hong Kong.

Authorities in Macau are taking legal action against the company because it halted its services without permission. The company already lost its license and the MOP2 million (US$250,000) deposit it handed the government.

Macao Dragon’s fate will be dis-cussed at a meeting of its creditors on October 12.

Macao Dragon began operating in July last year, sailing from Taipa to

Going underAfter just 14 months, low-cost ferry operator Macao Dragon has fi led for bankruptcy

Hong Kong and back four times a day. It used a fl eet of 65-metre catamarans, the biggest ferries in the Pearl River Delta. The fare was as low as MOP88, much less than its competitors charged.

The provisional liquidators, Derek Lai Kar Yan and Darach Haughey of Deloitte Touche Tohmatsu, initially es-timated Macao Dragon’s debts at over HK$10 million (US$1.28 million) but Mr Lai is now unwilling to put a fi gure on the loss.

The value of the company’s assets are still being calculated but Mr Lai has warned that not all creditors are likely to get what they are owed. Reports in other news media said Macao Dragon did not own its ferries but leased them from affi liates.

Mr Lai says the winding-up may be lengthy. “We need to have suffi cient money to pay preferential creditors fi rst

and, if you can fully pay the preferential claims, then the balance will go to unse-cured creditors,” he says.

Among the preferential creditors are the company’s 150 employees. Mr Lai says they are owed more than HK$1.5 million in wages for September.

Media reports said Macao Dragon owed the Hong Kong Marine Depart-ment HK$1.8 million in berth and pas-senger embarking fees.

Promises, promisesAt the end of last month, Deloitte was still receiving claims and had no com-plete list of creditors. “The creditors might be employees, people who bought tickets or coupons, the government and maybe the shipyard,” Mr Lai says.

For three days after Macao Dragon stopped operating, the other main ferry company sailing from Taipa, CotaiJet,

Transport

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honoured its rival’s tickets. More than 3,400 were redeemed.

Reports in the news media in Hong Kong said the police there were investi-gating Macao Dragon. There is a suspi-cion of fraud in the sale of at least 150,000 tickets in the months before the company collapsed. Of those tickets, 3,000 were sold over the counter and the rest through group buying websites such as Groupon and BeeCrazy. Mr Lai says the liquida-tors have found no sign of fraud.

Groupon and BeeCrazy were fast to announce they would refund affected customers.

Mr Lai says Groupon might even-tually be a Macao Dragon creditor, but BeeCrazy should not be. “The cheque BeeCrazy signed was never cashed in,” he says.

The clients with tickets in hand can also join the creditor list.

In announcing its bankruptcy, Ma-cao Dragon said the Macau govern-ment had originally promised to allow it to carry 1,152 passengers per trip, but that when it began operating, the Macau Maritime Administration had capped

STILL LOOKING GOODMacao Dragon is the second budget

transport company in Macau to go bust in less than two years. In March last year, low-cost airline Viva Macau was grounded and it declared bankruptcy shortly after.

The Macau Government Tourist Offi ce does not seem worried. It says maritime transport between Macau and Hong Kong will not be affected by Macao Dragon’s collapse.

“The government is putting the safety of passengers and shipping as a priority, which in turn shows the image of Macau as a safe and quality tourism destina-tion,” the offi ce says.

the number at 750 on sailings from Hong Kong to Macau and at 600 in the opposite direction, and had subsequently broken a promise to lift the caps. “The circumstances have made it impossible for us to continue operations,” the com-pany said in a press release.

The Macau Maritime Administra-tion denied these assertions, saying it introduced the cap taking into consid-eration the handling capacity of the Taipa Temporary Ferry Terminal. The administration also said the actual av-erage numbers of passengers per sail-ing on Macao Dragon were well below the caps.

The collapse of Macao Dragon has cleared the fi eld for new ferry opera-tors in Taipa. TurboJet, a subsidiary of Shun Tak Holdings Ltd, showed interest a couple of years ago, but its managing director, Pansy Ho Chiu King, had no comment on the ramifi cations of the de-mise of Macao Dragon.

There are now only three compa-nies operating ferries between Macau and Hong Kong: TurboJet, CotaiJet and Hong Kong North West Express Ltd.

26

OCTOBER 2011

26

Golden years

Social and economic cycles can seldom be contained within neat periods of time. However, in Macau’s recent history, there appear to be fi ve, fi ve-year development cycles in the past 25 years.The graphs presented here show real gross domestic product using series in chained volume, or real terms, that were published for the period from 1982 to last year. In this analysis, we have ignored the additive problems that grouping data can cause.

The fi rst graph suggests that the past 25 years have been an extraordinary period of sustained and, at times, rapid growth.All main components of GDP (measured by the expenditure approach) grew in real terms and, as a rule of thumb, grew continuously. One exception was investment (includes private and public investment), which contracted before the handover, only to explode more recently.Two periods deserve special mention.In the fi rst half of the 1990s, growth was mainly driven by investment and public expenditure. In the second peak period, from 2006 to last year, drivers of growth included private investment and net external trade.

The percentage contribution of private consumption and government expenditure towards GDP has declined over the past 25 years.Government spending has reached levels lower than most other developed economies.As Graph 2 shows, the weight of government expenditure in the economy, which has never been high by international standards, dropped below 10 percent in the last fi ve-year period.In relative terms, the investment effort in the early 1990s was signifi cant, representing a higher share of GDP than during the recent casino-led boom.The comparative fate of private consumption and net trade sum up the latest characteristic trends: a signifi cant relative decline in GDP share of private consumption and a notable rise in the weight of net trade, almost doubling its share of GDP over the past 20 years.

The third graph sums up dramatically the evolution in the balance of trade: a deteriorating balance of trade in goods, being eclipsed by an extraordinary growth of the balance in services.A growing economy and population has clearly led to increasing imports of goods. As exports have faltered, the deterioration of the goods balance of trade is inevitable and seems diffi cult to stabilise.

GRAPH 1

GRAPH 2

GRAPH 3

Economic Trends by José I. Duarte

GRAPH 1 - Major expenditure components of GDP

GRAPH 2 - Expenditure components expressed as a percentage share of GDP

GRAPH 3 - Trade balance for goods and services

0

0%

50,000

100,000

150,000

300,000

40%

250,000

35%

30%

25%

20%

15%

10%

5%

200,000

350,000

45%

600,000

500,000

400,000

300,000

200,000

100,000

0

-100,000

-200,000

-300,000

1986-90

1986-90

1986-90

1991-95

1991-95

1991-95

1996-00

1996-00

1996-00

2001-05

2001-05

2001-05

2006-10

2006-10

2006-10

Private consumption expenditure Total investment Government fi nal consumption expenditure Trade balance

Private consumption expenditure Total investment Government fi nal consumption expenditure Trade balance

Trade balance - goods Trade balance - services

Unit: MOP million (Chained 2008 prices)


(Chained 2008 prices)

27

OCTOBER 2011

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

1986-90 1991-95 1996-00 2001-05 2006-10

2001 20032002 2004 20062005 20092007

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2008 2010

GRAPH 5 - Major components of exports and main subcomponents of services exports

GRAPH 6 - Major components of imports and main subcomponents of services imports

GRAPH 4 - The relative change in external trade components Trade trends

As Macau’s trade imbalance grows wider, it is worth diving into its components and subcomponents to better understand what is driving the trend.

This graph refl ects the relative evolution of export and import fl ows, in both goods and services.Two fl ows have enjoyed explosive growth in the past decade: exports and imports of services. They increased by six and seven-fold factors, respectively. In relative terms, service imports have grown more rapidly than service exports. However, service imports have grown from a much smaller base.Combined, service imports and exports have led to the dramatic increase in the balance of trade in services mentioned previously.

The line chart in Graph 5 shows the evolution of the two major components of exports: goods and services. The area chart tracks the development of three of the subcomponents of services exports: fi nancial and insurance services, gaming services and accommodation services.At a fi rst glance, one may wonder why gaming and accommodation services are included in exports. Simply put, they refl ect expenditure made by non-residents in the domestic market and so are considered an export although the services are rendered in Macau.The main subcomponents of services exports shows that the role of gambling cannot be understated. The other main subcomponents, accommodation and fi nancial services, which have also grown signifi cantly in relative terms, are dwarfed by it.Comparatively, exports of goods are mostly declining.

Again, there are two graphs in this analysis. The line chart shows the evolution of the two major components of imports, while the area chart tracks the development of the main subcomponents of services imports.The most striking feature here is not the growth of service imports in the three traditional biggest components, fi nancial services and private and public consumption, but the extremely fast growth of the residual category “other services”.Given this trend, it is time for the Statistics and Census Service to start displaying the main activities brought together under this heading.The retraction in the imports of goods across the last three years is also worthy of note.

GRAPH 4

GRAPH 5

GRAPH 6

9

8

7

6

5

4

3

2

1

0

250,000

200,000

150,000

100,000

50,000

0

Exports - goods Exports - services Imports - goods Imports - services



1986-90=1

Services - Gaming Services - Accomodation Services - Financial and insurance services Goods Services

Services - Financial and insurance servicesServices - Government expenditure abroadServices - Others

Services - Household fi nal consumption expenditureGoods Services

28

OCTOBER 2011

28

SEPTEMBER 2011

28

GDP current (in MOP)

Consumption (in MOP)

Investment (in MOP)

Government (in MOP)

Trade balance: goods (in MOP)

Trade balance: services (in MOP)

GDP constant (2009) (in MOP)

217,324

17,496

27,727

17,496

- 42,676

164,086

207,194

34,721

243,247

130,677

237,627

104.25

0.50

69,782

14,360

8,639

4,461

-14,295

56,617

63,688

31.4

9.8

- 13.6

9.3

21.5

54.2

26.2

31.5

18.2

37.2

14.2

44.4

39.4

24.0

Output and expenditure2010 % var Latest % var

Notes

Notes

M1 (in MOP)

M2 (in MOP)

Credit (in MOP)

Deposits (in MOP)

IPC/Infl ation rate (*)

AMCM base rate

13.4

14.6

29.2

14.6

2.81

--

6.5

22.1

40

22.1

5.96

--

Money and prices % var Latest % var

June

June

June

June

July

July

Q2

Q2

Q2

Q2

Q2

Q2

Q2

Notes

Notes

Notes

Notes

Population

Labour force

Median wage rate (in MOP)

Unemployment

Started

Finished

Cement (Apparent consumption)

Transactions/Commercial (in MOP)

Transaction/Residential (in MOP)

Gross revenue (in MOP)

Casinos

Tables

Machines

Visitors

Average expenditure (in MOP)

Average stay

Hotel rooms

Occupation rate

Average hotel stay

522,300

330,900

9,000

3.0 %

1,835,174

1,271,509

214,166

6,580

45,939

189,588

33

4,791

14,050

24,965,000

1,812

0.90

20,091

79.8

1.54

2,551,000

1,482

0.90

21,676

82.49

1.42

24,319

34

5,237

15,098

-1.9

0.5

4.7

-0.1

- 19.8

- 9.6

- 22.6

117.0

113.0

57.0

2

0.4

2.2

15.0

0.3

- 0.2

4.3

8.43

0.04

18.0

3.2

--

10.8

6.74

-0.08

2.5

3.6

12.9

-0.2

3466.5

-79.1

28.0

200.0

-10.7

47.9

1

546

1,048

Population/Labour force

Construction

Gaming

Tourism

2010

2010

2010

2010

2010

% var

% var

% var

% var

Latest

Latest

Latest

Latest

% var

% var

% var

% var

Q2

Q2

Q2

June, var

July

July

July

July

July

July

Q2, var, ytd

Q2, ytd

Q2, ytd

July

Q2

Q2, var

June

June, var

June, var

558,100

338,200

9,600

2.7 %

82,171

5,771

20,647

1,294

6,114

So

urce

s: D

SE

C (S

tatis

tics

and

Cen

sus

Ser

vice

), A

MC

M (M

one

tary

Aut

hori

ty o

f Mac

au),

DIC

J (G

amin

g In

spec

tion

and

Co

ord

inat

ion

Bur

eau)

Ma

jor

sect

ors

Eco

nom

ic A

ctiv

ity

%var - % change on homologous period; var - absolute variation; ytd - % change, year-to-date; x - discontinuous series

million

million

million

million

million

million

million

million

million

million

million

base - 2008

%

million

million

million

million

base - 2008

%

million

million

million

million

million

million

million

36,667

271,289

156,962

265,068

110.85

0.50

m2

m2

tons

million

million

m2

m2

tons

million

million

million million

% nights

days

%nights

(*) Important note: The infl ation base period has changed ( New base: April 2008 to March 2009 = 100)

days

Economic Trends by José I. Duarte

29

OCTOBER 2011

Case studies in couplets MANAGEMENT-SPEAK IS NOT A SPEECH IMPEDIMENT BUT AN UNDERSTANDING IMPEDIMENT

We hear reports of mismanagement, or poor and inappropriate management behaviour in Macau. Managers may have all the academic credentials, newly polished

MBAs, certifi cates of merit and so on, yet still be poor managers. How can they be improved?

Stories are a powerful way of learning. The psychologist Jerome Bruner writes that we regard “lived time” as a story that has meaning for us, shaping our lives. We make meaning of our lives and think in terms of “storied text” which catches the human condition, our intentions, the vividness and reality of our daily lives.

Stories can be more persuasive and direct than any number of those turgid management texts that gather dust on the library shelves of business schools. In their prizewinning, withering critique, “The Witch Doctors”, John Micklethwait and Adrian Wooldridge suggest that management theory is “constitutionally incapable of self-criticism”; “confuses rather than educates”; states the “blindingly obvious”; is un-rigorous and lacks exacting standards; is little more than an indulgence or infl ation of its writers’ egos; and simply does not work.

Management theory, they contend, is “an apology for an academic subject, intellectually dead, methodologically sloppy and driven by little more than fashion” while management gurus (the “witch doctors” of the title) are charlatans who charge huge fees for “translating commonsense into grotesque jargon”. And yet

KEITH MORRISON AUTHOR AND EDUCATIONIST - [email protected]

business schools thrive on such texts.Now, would it not be wonderful if, instead, business and

management students were to read just a couple of plays by William Shakespeare.

Think of Shakespeare’s “Othello”, the Venetian leader who is naïvely blind to the schemes of his sidekick Iago, whom he has passed over for promotion. Othello is easily duped and unaware of the poisonous yet oh-so-believable words that this disgusting man drips into his ears as he insinuates himself so stealthily into his life.

Othello trusts Iago beyond all reason, and his susceptibility to Iago’s fl attering tone and manipulative behaviour, which allows Iago to prey on his weaknesses as a leader – his gullibility, suggestibility and inability to see his own faults – is a lesson to all managers.

Plainly spokenOr think of “King Lear”, a story of greed, thirst for power, deceit, immense cruelty, corruption, jealousy, betrayal, selfi shness, and blindness to the real world. Here we have an ageing king – a leader – who is out of touch with reality, unable to distinguish between the true and the artifi cial, and over-ready to believe the smooth words of those under him.

Lear tries to bargain for affection, succumbing to the insincere shoe-shining of his two scheming daughters and disinheriting the only daughter who is genuine. He behaves like the paternalistic leader of a kingdom that he regards as his own property, to manipulate at will, but it does not work.

His attempts at command-and-control leadership are thwarted by his own pig-headedness, blindness and the ploys of his entourage. He cannot see his own weaknesses or distinguish between genuine and disingenuous behaviour, and he puts his trust in those who deceive. He rejects the honest people around him and heeds only those that tell him what he wants to hear.

These two plays contain more lessons for management and leadership than piles of management texts. And why would I have managers study them? Because they are about people and principles, conveyed by that most potent medium of learning: a story.

Try remembering management-speak such as: “Our executive board is mission critical in being deeply committed to social responsibility and community service for the empowerment and inclusion of the poor and needy. We promote our corporate synergy policy to incentivise the local citizenry to create out-of-the-box, win-win solutions for the sustainable development of the local community.”

Blah, blah, blah: it is witch-doctor-speak. Now try to remember Lear’s penetrating lines, as he kneels in a tiny, moorland hut during a storm, for the fi rst time in his life thinking about others:

“Poor naked wretches, wheresoe’er you are,That bide the pelting of this pitiless storm,How shall your houseless heads and unfed sides,Your looped and windowed raggedness, defend youFrom seasons such as these?”

Oh yes, give me managers who have digested Shakespeare rather than regurgitate a diet of vapid management-speak.

This year an English Court of Appeals judge, Lady Justice Hallett, was reported as saying: “Management-speak is not a speech impediment but an understanding impediment.” It is often both.

Othello trusts Iago beyond all reason, and his susceptibility to Iago’s fl attering tone and manipulative behaviour, which allows Iago to prey on his weaknesses as a leader – his gullibility, suggestibility and inability to see his own faults – is a lesson to all managers

30

OCTOBER 2011

A bill amending the law on land grants and an urban planning bill are among the chief wishes

of lawmakers for the new session of the Legislative Assembly, which starts on October 15. They are also demanding more cooperation and better dialogue between the executive and legislative branches. Several members are unhap-py with the government’s relationship with the legislature.

In this year’s policy address, chief executive Fernando Chui Sai On in-cluded for the fi rst time a detailed legis-lative schedule. But offi cials have failed to follow the schedule, says legislator Kwan Tsui Hang, the most voted for legislator in the 2009 election.

Ms Kwan, a member of the infl u-ential Federation of Trade Unions, says the government introduced many bills very close to the summer break, giv-ing the assembly a busy agenda for the rest of this year. The rush will reduce the quality of the assembly’s work, she says.

In its last session the assembly worked on 20 bills, two of them held over from the previous session, and passed 12. The government has also submitted a bill to create a tax code, but the assembly has yet to start debating it.

Legislation still pending includes bills outlining how the city’s older dis-tricts should be rejuvenated; increasing the minimum age for admission to ca-sinos; amending the copyright law; and regulating real estate agencies and their brokers.

Three pieces of legislation that the government was supposed to introduce by the end of September have yet to ap-pear. These include bills amending the law on the declaration of assets by pub-

BY ALEXANDRA LAGES

Dialogue of the deafA new session of the Legislative Assembly starts this month, and members are demanding that the government speed up its programme of legislation and improve communication

lic offi cials; regulating the new central savings system; and amending the cul-tural heritage protection law.

Figure it outThe government schedule envisages the introduction this year of four further pieces of legislation. They are bills reg-ulating the sale of unfi nished premises; amending the penal code procedure; regulating the accreditation of urban planning and construction profession-als; and establishing a new legal frame-work for urban construction.

“Before bills are submitted to us, government departments must try to fi gure out citizens’ opinions, because in the latest proposals presented we had to make lots of changes,” says legislator Melinda Chan Mei Yi.

Pro-democracy legislator Ng Kuok Cheong blames the poor communica-tion between the executive and legis-lative branches on what he describes as an imbalance of power in the as-sembly. He calls for more directly elected members.

The assembly has 29 members: 12 directly elected, 10 indirectly elected by interest groups and seven appointed by the chief executive.

“The majority of lawmakers do not come from direct elections, so there is no balance between powers. There should be a change of structure or nothing will be improved,” Mr Ng says.

Political commentator Larry So Man Yum faults lawmakers for not be-ing critical enough of the government. “Most of the legislators do not speak negatively or against the government,” Mr So says.

He urges lawmakers to be more

open-minded and independent. “Some-times there might be a need for public hearings in order to enhance the public understanding of a particular issue.

“Legislators should be more open-minded in the sense that they should listen to the general public and gauge the movement of public opinion. That is to say, they should be more responsive to the people rather than to the govern-ment.”

In the previous session of the as-sembly, a group of pro-democracy legislators requested two public hear-ings: one on the controversial disman-tling of several shacks at Ilha Verde to make way for the construction of public housing; and the other on the spending levels by civil servants while on offi cial

Politics

31

OCTOBER 2011

travel outside of Macau. Both failed to gather enough support from fellow legislators.

Who’s the boss?Members of the assembly may intro-duce bills and propose amendments, but they rarely do. The last time it hap-pened was in December 2009, when legislators Tsui Wai Kwan and Lam Heong Sang proposed changes to the career regime of the Legislative As-sembly’s staff.

The president of the assembly, Lau Cheok Va, recently urged the govern-ment to improve the quality of the bills it submits and to furnish lawmakers all the information they need.

The vice-president, Ho Iat Seng,

has made similar calls. He also admit-ted legislators could do better.

Ms Kwan wants the assembly to improve its general supervision of the government. “Hearings and debates are still rare,” she says. “I expect that in the new legislative session internal regula-tions can be revised in order for the as-sembly to entirely carry out its role of supervising the government, which has not been fully executed.”

Mr So is critical of the government for responding slowly to enquiries from lawmakers. “If the answers are not overtaken by events, offi cials are beat-ing around the bush or might even bark up the wrong tree,” Mr So says.

The government is supposed to reply to a legislator’s written enquiry

Pro-democracy legislator Ng Kuok Cheong blames the poor communication between the executive and legislative branches on what he describes as an imbalance of power in the assembly. He calls for more directly elected members

32

OCTOBER 2011

within 30 days. However, there are still unanswered enquiries dating from 2010, according to the assembly’s website.

Public administration expert Eilo Yu Wing Yat says offi cials are ill-pre-pared to furnish lawmakers and the news media with answers. Political analyst Camões Tam Chi Keung says executive-legislative communication would be improved by new blood in Mr Chui’s cabinet, noting that four of his cabinet secretaries have been in offi ce for more than 10 years.

Two cheersChief executive-appointed members of the assembly have a more charitable view of its performance.

Responding to criticism from Mr Lau about executive-legislative cooper-ation, appointed legislator Tommy Lau Veng Seng admits there is room for im-provement but remarks: “We cannot ex-pect problems to be solved in one year.”

He is pleased with the assembly’s performance in its last session. “Com-munication between the government and the Legislative Assembly has im-

proved and we have done quite a good job in carrying out and passing some important bills, like the public housing, the fi nancial reserve and the smoking ban laws. Those are very benefi cial for the sustainable growth of Macau.”

Another appointed legislator, Gabriel Tong Io Cheng, acknowledges that the government could give bet-ter replies to enquiries but praises the amount of cooperation.

“The government has participated in Legislative Assembly meetings and I can see there is cooperation between both parties. This cooperation level is acceptable,” he says.

Mr Tong disagrees that government bills are poorly drafted. “It depends on each case,” he says. But he would like more focus on issues that directly affect residents.

“In the new policy address [in No-vember], I hope the government can come forward with another legislative schedule, but there should be a better understanding of how to cooperate with all departments in order to fulfi l the calendar,” says public administration expert Mr Yu.

Legislators like Ms Chan, Mr Tom-my Lau and Ms Kwan are eager to see a bill amending the land grant law, and an urban planning bill.

Mr So expects to see no great im-provements in the assembly’s perform-ance, although he thinks the fi scal reserve will give the assembly more clout, since the government must get its approval to use the funds.

“Though I can see improvement in the system, I am not very optimis-tic that the Legislative Assembly can control the administration in spending public money responsibly,” he says.

“The government has participated in Legislative Assembly meetings and I can see there is cooperation between both parties,” says legislator Tong Io Cheng

Politics

33

OCTOBER 2011

JOSÉ I. DUARTE ECONOMIST, MACAU BUSINESS SENIOR ANALYST - [email protected]

There is a perception among many of Macau’s residents that air quality is declining. The number of motor vehicles goes up every month, and trucks and buses persist in

belching black fumes in a mockery of all the inspections they are supposed to undergo.

Many construction sites appear to have dispensed with all the precautions they could take to reduce, if not eliminate, the production of dust – and that is quite apart from all the noise they make.

Days when that haze hangs over the city like a pall have become more common, while on hotter days the air seems to have a quasi-solid quality when it comes in contact with the skin. Suspended particles have become a hazard you must protect your eyes against.

That is how it feels. The offi cial version is not always so clear-cut.

Composite indexes of air quality appear to be indicative mainly of suspended particles and little else. Curiously, forecasts of air quality range, as a rule, from good to moderate. The haze – a mixture of dust, smoke and other particles originating mostly from traffi c, industry and construction – is quaintly called, in Portuguese, ‘bruma seca’, which could be translated as “dry mist” – a name you might give to an air freshener.

It would be interesting to know if, apart from collecting raw data, the government has studied properly the characteristics of the haze, where it comes from, what disperses it, and how it affects nature and human health. The authorities assure us that they are paying attention to air quality and that improving it has become a priority. But what that means exactly is a little ... hazy.

If transport needs to be cleaned up, I believe that Macau, compact and densely populated as it is, would be an ideal place to test and demonstrate greener ways of getting around.

HELL IS JUST ANOTHER KIND OF ENVIRONMENT AND THE ROAD TO IT IS PAVED WITH GOOD INTENTIONS

Not long ago the government said it would back electric vehicles, later promising incentives to buy them, raising expectations that the necessary infrastructure would be built and fl oating other ideas for cleaner transport. It seems most of these ideas are still fl oating, because the government has not properly thought through their ramifi cations.

Suck it and seeMore recently the government created an Environmental Protection and Energy Conservation Fund. We can infer the general objectives from the fund’s name, but the government has yet to tell us precisely what it is meant to do and how it is meant to do it.

Rules governing how the fund must disburse subsidies for green technology and hardware tell us little. All we know is that companies, associations and individuals can apply for subsidies for up to 80 percent of the cost of the green stuff they buy, up to a limit of MOP500,000 (US$62,500) per year.

Nothing is defi ned. Everything is left to the discretion of the authorities. So we could try claiming subsidies to replace our incandescent light bulbs with modern fl uorescent bulbs, or to buy new, less environmentally hostile cars. A cynic might say the fund is just a way of showering money on companies and associations on the pretext of taking care of the environment.

The lessons to be learned from all the talk about electric vehicles and the environmental protection fund are that fi ne words about the environment butter no parsnips, and that ad hoc measures will mostly be wasteful if not actually harmful.

If the government wishes to protect the environment, it must decide what it wants to do, how it wants to do it, and how much it is prepared to spend on doing it. That is how you make policy, which is what governments are supposed to do. All else is just paying lip service, which is something anybody can do.

Green fog

36

OCTOBER 2011

Property | Market Watch

BY CRIS JIANG

One year after the government said it would take steps to cool the residential real estate boom, the market seems to have stabilised

Cool, not yet frozen

One year since the government announced a fi rst set of meas-ures to rein in the residential

property market, insiders say the market has calmed down, but only since a new stamp duty was announced in April.

“Property prices are declining moderately and the condition of the property market is acceptable,” says Rose Lai Neng, a real estate expert at the University of Macau. “Relative to the gross domestic product per cap-

ita of Macau, the property prices in Macau are still reasonable.”

But Ms Lai – and others involved in the property market – advises against the government taking any further measures in the short term.

37

OCTOBER 2011

August was MOP39,271 (US$4,909), 2.2 percent higher than July, according to the Financial Services Bureau. The fi gure was well below the MOP50,512 peak reached in April. Even so, home prices in August were 34.4 percent higher than a year before.

The number of homes sold has also dropped sharply, by close to three quarters, after peaking at almost 3,500 in April.

Absorbent investorsRonald Cheung, chief executive of real estate company Midland Realty (Macau) Ltd., says residential property prices will not drop too much more.

The market here is still attractive to investors because the economic en-vironment in Asia is more stable than in Europe or the United States. For residents, property investment is too good an option for preserving value in the face of high infl ation and the depreciation of the pataca against the renminbi, he says.

“The property market next year depends on the economic conditions. Although investors are still cautious, they have enough capital to absorb the effect of the new policies.”

The analysts Macau Business spoke to say the arrival of thousands of public-sector homes onto the mar-ket in the not too distant future is the

* Notes: 1. The data includes transactions of residential units exempted from stamp duty.2. The data covers residential units with stamp duty paid during the reporting month.

Residential units sold as per record of stamp duty*

Number of Transactions1,2971,0841,5032,2021,6271,5431,204

9401,5051,3121,8181,9541,541

7882,2253,4852,4022,368

878

MonthJanuary

February

March

April

May

June

July

August

September

October

November

December

January

February

March

April

May

June

July

Year 2010

2011

Year 2010

2011

Value of residential units sold as per record of stamp duty*

Value (MOP million)

3,1401,9952,8066,1804,2813,3192,6421,8893,6873,4217,5695,0103,7901,9187,704

19,2447,9026,1142,359

Month January

February

March

April

May

June

July

August

September

October

November

December

January

February

March

April

May

June

July Sou

rce:

DS

EC

most important factor to bear in mind. The new homes will have the greatest effect on the prices and sales volume of smaller apartments and homes older than 20 years, they expect.

Of the measures announced by the government over the past year, real estate business insiders agree that the single most effective one was the in-troduction of the special stamp duty. Only after it was announced did prices and sales volumes fall signifi cantly.

It was fi rst imposed in June. A duty of 20 percent is now levied on the sale of residential property back on the market within a year of its purchase. The duty is reduced to 10 percent if the resale takes place between one and two years after purchase.

Fear of illiquidity“Macau has gained experience and lessons from Hong Kong but its new policy is even more strict,” says Mr Cheung.

Technically, the special stamp duty has succeeded in curbing specu-lation but he questions if it may have gone too far. “The market condition is not favourable now and the govern-ment should consider if the 20 per-cent special stamp duty is too high,” he says.

Jeff Wong, Jones Lang LaSalle’s head of residential property in Macau,

The offi ce of the secretary for transport and public works told Macau Business that the measures announced in September last year, followed by the stamp duty announced in April this year, were intended to stabilise prop-erty prices and curb speculation, not to damage the interests of homeowners.

“The government will keep a close eye on the effectiveness of those poli-cies and the general economic condi-tions and it will review them after two years,” the offi ce said.

After falling for three months in a row, home prices rose again last month, but only slightly. The average price for a square metre of residential space in

38

OCTOBER 2011

13%Residents87%Non-Residents


Total number of buyers in residential transactions in the fi rst seven months of 2011:

18,320

Non-Residents27%

Residents73%

Proportion of buyers

Total value of residential transactions in the fi rst seven months of 2011:

49.03 billion

Proportion of buyers

agrees that the authorities should con-stantly review the effectiveness and side-effects of the second wave of measures.

Mr Wong acknowledges that the new stamp duty has done some of what the government meant it to do. “Nev-ertheless, the special stamp duty may cause the property market to become inactive and illiquid in the long run,” he says.

Mr Wong advocates the govern-ment staying out of the residential property market for the time being.

Among the measures the govern-ment announced in September last year were tighter restrictions on mort-gages for residential property, which were imposed in December. Restric-tions on mortgages were tightened fur-ther in April.

The Legislative Assembly ap-proved a reduction in the property tax only in February. It reduced the tax on unoccupied homes from 10 percent to 6 percent, and the tax on homes with a tenant from 16 percent to 10 percent.

It took eight months for changes in the transfer duty to come into force. The duty increased to between 1 per-cent and 3 percent, depending on the value of the property, from 0.5 percent previously.

Fast fl owingThe changes announced in September last year were not as effective as the authorities had expected, and prices and sales continued to climb until the special stamp duty was introduced.

“As the property market in Macau is relatively small and the information fl ow is quick, investors can digest and evaluate the impacts of the new meas-ures quickly,” says Mr Cheung.

“Those measures [announced in September 2010] only had a psycho-logical impact on the home buyers, who entered the market again after they adapted.”

Another reason for the failure of the measures announced last year is that some have yet to come into effect.

One measure was even cancelled. The auction of two plots of land earmarked for private residential units never happened. The government says the land will instead be used for public housing.

A bill to regulate the sale of resi-dential apartments prior to construc-

tion will begin its passage through the Legislative Assembly only towards the end of this year. In the meantime, the government has introduced some guidelines. Another bill, regulating real estate agencies and their brokers, is now being reviewed by legislators.

Last year the government also

said it would work with developers to convert old industrial buildings into homes. So far, the only step in that di-rection has been to speed up the proc-ess of approving conversions. Both owners and developers have asked for more incentives before they go ahead with such conversions.

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Value (MOP thousand)

Average transaction value of residential properties as per record of stamp duty

6,000

5,000

4,000

3,000

2,000

1,000

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* Notes: 1. The data includes transactions of residential units exempted from stamp duty.2. The data covers residential units with stamp duty paid during the reporting month.

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60,00055,00050,00045,00040,00035,00030,00025,00020,00015,00010,0005,000

0

Average transaction price of residential units per square metre

* Notes: 1. The data includes transactions of residential units exempted from stamp duty.2. The data covers residential units with stamp duty bill issued during the reporting month.3. Some residential units may not be included in the data made available by the Financial Services Bureau for privacy reasons.

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MarJan Jan Feb Mar Apr JulJunMayApr May Jun Aug Sep Oct Nov DecJulFeb2010 2011

MarJan Jan Feb Mar Apr May Jun Jul AugApr May Jun Aug Sep Oct Nov DecJulFeb2010 2011

39

OCTOBER 2011For more information visit macaubusiness.com or write to [email protected]

40

OCTOBER 2011

4040

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

District Property Price per sq.ft. (HK$)Sale price (HK$)Floor area (sq. ft) Unit

Source: Centaline, Ricacorp and Midland

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


Notable residential property transactions - 16/08 to 15/09, 2011

Macau One Central Block 3, H/F, unit B 3,006 24,050,000 8,001Macau Villa de Mer Block 1, M/F, units A and B 3,398 16,900,000 4,974Macau Lake View Tower H/F, unit Q 2,517 16,600,000 6,595Macau One Central Block 2, H/F, unit A 2,299 16,528,000 7,189Taipa One Grantai Block 5, H/F, unit V 2,158 12,780,000 5,922Taipa One Grantai Block 3, M/F, unit N 2,167 11,500,000 5,307Taipa Nova City Block 9, H/F, unit A 2,500 8,700,000 3,480Macau Lake View Tower M/F, unit B 1,532 8,600,000 5,614Macau The Residencia Macau Block 5, H/F, unit A 1,690 8,380,000 4,959Taipa Nova City Block 7, M/F, unit B 1,981 7,600,000 3,836Macau One Central Block 7, M/F, unit D 1,176 7,450,000 6,335Taipa Nova City Block 11, M/F, unit C 1,974 7,280,000 3,688Taipa Nova City Block 5, M/F, unit B 1,981 7,100,000 3,584Taipa Nova City Block , M/F, unit B 1,983 7,090,000 3,575Taipa Prince Flower City Block 2, M/F, unit F 1,685 6,800,000 4,036Macau La Cite Block 2, H/F, unit E 1,719 6,800,000 3,956Taipa Edf. Nova Taipa Block 27, M/F, unit E 2,167 6,600,000 3,046Taipa Buckingham M/F, unit B 1,873 6,560,000 3,502Macau The Bayview Block 3, H/F, unit C 1,582 6,500,000 4,109Taipa Nova City Block 15, L/F, unit E 1,630 6,500,000 3,988Taipa Nova City Block 9, M/F, unit C 1,973 6,500,000 3,294Taipa Ville de Mer Block 4, H/F, unit A 1,475 6,280,000 4,258Taipa Nova City Block 15, H/F, unit D 1,561 6,200,000 3,972Taipa Nova City Block 15, M/F, unit B 1,520 6,180,000 4,066Macau The Praia Block 1, H/F, unit C 1,558 6,100,000 3,915Macau The Praia Block 3, H/F, unit N 1,558 6,100,000 3,915Macau La Cite Block 4, H/F, unit E 1,634 6,000,000 3,672Taipa Chun U Villa M/F, unit C 1,979 6,000,000 3,032Macau The Bayview Block 3, M/F, unit E 1,603 5,880,000 3,668Taipa Nova City Block 15, M/F, unit D 1,559 5,800,000 3,720Macau The Praia Block 3, H/F, unit P 1,426 5,600,000 3,927Macau La Cite Block 1, H/F, unit A 1,430 5,500,000 3,846Macau La Baie du Noble Block 5, H/F, unit W 1,597 5,380,000 3,369Macau La Cite Block 5, M/F, unit B 1,500 5,030,000 3,353Macau La Cite Block 5, L/F, unit C 1,626 5,000,000 3,075Macau One Central Block 1, M/F, unit D 654 4,980,000 7,615Macau The Praia Block 1, H/F, unit E 1,239 4,900,000 3,955Macau La Cite Block 5, M/F, unit B 1,500 4,700,000 3,133Macau The Riviera Block 1, M/F, unit N 1,188 4,650,000 3,914Macau The Riviera Block 2, H/F, unit N 1,188 4,650,000 3,914Macau The Residencia Macau M/F, unit C 1,209 4,600,000 3,805Macau Green Island Block 2, H/F, unit I 1,452 4,580,000 3,154Macau Sun Fung Court Block 2, M/F, unit A 1,582 4,300,000 2,718Macau The Praia Block 4, H/F, unit U 1,046 4,200,000 4,015

Source: Ricacorp and Midland

District Property Price per sq.ft. (HK$)Rent price (HK$)Floor area (sq. ft) Unit

Notable residential property rentals - 16/08 to 15/09, 2011

Macau L’Arc Macau H/F, unit A 2,261 35,000 15.48Macau L’Arc Macau H/F, unit K 2,261 30,000 13.27Macau L’Arc Macau H/F, unit A 2,261 30,000 13.27Macau L’Arc Macau M/F, unit C 1,821 22,000 12.08Macau The Residencia Macau Block 1, H/F, unit A 2,188 20,000 9.14Taipa Kings Ville Block 1, L/F, unit B 1,801 19,000 10.55Macau One Central Block 1, H/F, unit C 918 18,000 19.61Macau Lake View Tower M/F, unit G 1,567 18,000 11.49Taipa Pearl On The Lough Block 2, M/F, unit H 2,055 18,000 8.76Macau Lake View Tower L/F, unit G 1,565 17,000 10.86Taipa Nova City Block 7, M/F, unit C 1,983 17,000 8.57Taipa Supreme Flower City H/F, unit L 2,060 17,000 8.25Taipa Nova City Block 5, L/F, unit C 1,973 15,000 7.60Taipa Chun U Villa M/F, unit D 1,979 15,000 7.58Taipa Nova City Block 13, H/F, unit C 1,333 14,000 10.50Taipa Kings Ville Block 1, L/F, unit B 1,801 14,000 7.77Taipa Prince Flower City Block 3, H/F, unit L 1,820 13,000 7.14Taipa Nova City Block 14, M/F, unit B 1,314 12,800 9.74Taipa Nova City Block 14, H/F, unit F 1,339 12,000 8.96Macau Edf. Kam Yuen M/F, unit E 1,700 12,000 7.06Taipa Kings Ville Block 3, M/F, unit I 1,511 11,500 7.61Macau Macau Ginza Plaza L/F, unit B 1,977 11,500 5.82Macau The Residencia Macau Block 5, H/F, unit D 1,222 11,000 9.00Taipa Nova City Block 16, L/F, unit C 1,338 11,000 8.22Macau La Cite Block 1, M/F, unit B 1,805 10,500 5.82Taipa Edf. Nova Taipa Block 26, H/F, unit O 1,175 10,000 8.51Taipa Nova City Block 10, L/F, unit F 1,340 9,800 7.31Taipa Edf. Mei Keng Garden Block 2, M/F, unit H 1,647 9,800 5.95Taipa Nova City Block 10, M/F, unit F 1,339 9,500 7.09

41

OCTOBER 2011OCTOBER 2011

41

Anniversary of the establishment of the People’s Republic of

CHINA

42

OCTOBER 2011

This month marks the 62nd anniversary of the found-ing of the People’s Republic of China. Rather than just looking back, Beijing au-

thorities are preparing for the future.This is the fi rst year of China’s 12th

Five-Year Plan for National Economic and Social Development. New in this plan is China’s target to shift its model of growth to a greener, more sustaina-ble programme, based on internal con-sumption rather than on exports.

In other words, Beijing is trying to transform its development from quan-tity to quality.

GOING STRONG AT 62While celebrating one more anniversary, the People’s Republic of China is gearing up for signifi cant changes

The government set a gross domes-tic product growth target of 7 percent a year until 2015, instead of the double-digit growth seen over the past three decades.

The corner stone of the plan is to emphasise domestic consumption and services and allow for a broader distri-bution of wealth, thereby lessening the country’s dependence on exports.

Creating a balanced economy with a strong domestic market is a long way off. Beijing wants to rearrange invest-ment, consumption and exports to ex-tend development to the mainland’s ru-ral areas, where increasing purchasing

power would help to build the country’s domestic market.

The biggest threat to Beijing’s plans is galloping infl ation. China’s annual infl ation rate dropped to 6.2 percent in August. That was after a three-year high of 6.5 percent was reached in July.

The government has vowed several times to maintain general price stability, as well as to implement policies for regu-lating the real estate market and plans for building government-subsidized housing.

China’s political leadership is also amid a shuffl e. Next year, the country will offi cially know who its leaders for the next decade are.

62nd CHINAAnniversary of the establishment

of the People’s Republic of

43

OCTOBER 2011

THE SPACE LEAPThe choices seem to have been made quite a while ago already. Hu Jin-tao’s posts of president, party chief and military commander are expected to be taken over by vice-president Xi Jinping, who is in charge of Macau and Hong Kong affairs. Wen Jiabao’s job as prime minister is likely to go to Li Keqiang, his senior deputy.

They are the men expected to pre-side over the country’s rise from the number two spot to the top of the global economy, a landmark some forecasts say will take place in less than 10 years.

Over the last couple of months, both Mr Xi and Mr Li have gradually in-creased their presence in the spotlight, giving the world a chance to size up the future leaders of China. According to analysts, the aim is to ensure a smooth transition from a public relations point of view.

Offi cials say Xi Jinping, whose daughter is studying at Harvard Uni-versity, is genuinely committed to good relations with the United States. But analysts are also concerned about the increasing infl uence of the People’s Lib-eration Army over foreign policy.

China is putting itself in the front seat to lead space research in

the years to come. While the United States cuts its space programme budget, Chinese offi cials are doing the opposite.

Just last month, China launched an experimental space lab into orbit. The fi nal goal is to have a 30-ton space sta-tion up and running by 2022.

Beijing gave a high political signifi -cance to the launch. All the members of the ruling Communist Party Polit-buro standing committee witnessed the blastoff either at the launchpad or from mission control in the country’s capital.

This is just the latest step in the country’s space programme: China became the third country to put a man in space by its own efforts in 2003.

China has so far staged a space walk and launched two lunar probes. It is on the way to becoming only the sec-ond country to put a man on the moon.

Beijing is still, however, many years behind the United States and other countries that are partners in the Inter-national Space Station, in which China does not participate, Isabelle Sourbes-Verger, an expert on the Chinese space program at the French National Centre for Scientifi c Research in Paris told the Christian Science Monitor.

OCTOBER 2011

A long march with ChinaWENRAN JIANG SENIOR FELLOW AT THE ASIA PACIFIC FOUNDATION OF CANADA

superpower using economic, military, and diplomatic means in an unrelenting effort to prevent China’s rise. Talk of human rights and democracy is nothing but a smoke screen for demonizing China. Arms sales to Taiwan, Tibetan activism, and “colour revolutions” of various kinds are all sponsored by the U.S. and other Western powers and are aimed at weakening China.

Despite decades of close interaction, with millions of Americans, Europeans and Japanese visiting China every year and similar numbers of Chinese now visiting the U.S. and other advanced countries, both sides see each other through a glass darkly. Increased interdependence has not led to better understandings on even some of the most basic issues.

Friend or foeChina’s Vice Minister of Foreign Affairs Fu Ying expressed her country’s anxiety about this state of affairs in a recent interview. “The most important thing is the question of whether China and the U.S. are enemies. Are we going to be in a war? Are we preparing for a war against each other?”

Mr Biden, while reaffi rming that the U.S. does not view China as an enemy, implied that Ms Fu’s worries are not fanciful, saying that the worst scenario is a misunderstanding that leads to an unintended confl ict.

So the key issue for China, its neighbours, the U.S., and rest of the world is not how many aircraft carriers, missiles, submarines, and next-generation fi ghters China may produce and deploy in the coming years and decades. Rather, it is how China intends to use its newly acquired economic and military strength in pursuing its domestic and foreign-policy goals – and how the world’s leading powers can ensure that they do not end up harming each other by accident or misunderstanding.

To meet these challenges successfully, there is no viable alternative to a positive, continuous, and frank engagement between China and the rest of the world. The Chinese economy will continue to grow; the Chinese military will continue to modernize; and the Chinese people will remain united in their Great Power aspirations. A Cold War-style confrontation and containment policy from the West will be met with strong resistance from the Chinese, whose global leverage, particularly in fi nance, cannot be ignored.

Only a patient, creative, and consistent engagement strategy will mitigate fears on both sides. China’s rise is a fact; the enduring peacefulness of that rise must be a priority for China, its neighbours, the West, and, most importantly, the United States.

U.S. Vice President Joe Biden’s recent four-day visit to China ended on a high note. He assured Chinese leaders that the United States is committed to honouring

all its debts, despite its recent credit downgrade; he talked enthusiastically about U.S.-China interdependence; and he showcased his granddaughter, who has studied Chinese for several years, as a future bridge between the two countries.

But, behind all the smiles and banquet toasts, serious issues and perception gaps continue to divide the world’s two great powers.

For starters, there is always an attitude problem. To those who view China’s rise in a negative light, the country is simply becoming ever more arrogant. It is getting tough in its territorial disputes with Japan in the East China Sea; it is becoming assertive in the South China Sea with its neighbours, also over disputed islands; it put its own stealth fi ghter on display during the U.S. defence secretary’s visit to China; it is sending its fi rst aircraft carrier out to sea for trials, indicating the possibility of establishing naval bases in the Indian Ocean. Even a brawl between the Chinese and a visiting American basketball team is viewed as evidence of China’s aggressive behaviour.

Trust issuesMany Chinese, on the other hand, tend to think that the U.S. is suffering from severe case of conceited superpower syndrome. As these Chinese see it, the U.S. has a rather dysfunctional government, but nevertheless insists that its political and economic system is the best in the world and that everyone should emulate it. It is heavily in debt, but cannot stop spending and borrowing. It is no longer competitive in manufacturing, but blames others for its huge trade defi cit. And the world’s only military superpower is often seen within China as trigger-happy when intervening in other countries’ internal affairs.

Then, there is the issue of trust. China’s critics argue that its claims to a peaceful rise are not credible, given the country’s non-democratic, one-party system. Coupled with this is a zero-sum view of the world, in which any Chinese gain in the share of the global economy, or any increased presence in many parts of the world, must be at the expense of the U.S. or other powers. Any Chinese military move is portrayed as an expansionary and aggressive act that must be contained. Any attempts at engagement by Western politicians, such as Mr Biden’s August trip, are automatically met with doubt and criticism for cosying up to dictators.

Likewise, for those Chinese who are suspicious of U.S. intentions, conspiracy is always in play. They see a declining

THERE IS NO VIABLE ALTERNATIVE TO A POSITIVE, CONTINUOUS AND FRANK ENGAGEMENT BETWEEN CHINA AND THE REST OF THE WORLD



44

45

OCTOBER 2011

OCTOBER 2011

October will always mark two important anniversa-ries for China’s history. While 1949 exists in the collective memory of the

nation as the foundation of what was called “New China”, 1911 represents the beginning of the end of the impe-rial Qing dynasty with Puyi as the last emperor.

If the Bernardo Bertolucci movie “The Last Emperor” portrays a roman-tic image of the last days of young Puyi running free in the corridors of the For-bidden City, for the memory of China the last days of the imperial rule are con-nected with corruption, occupation by the foreign forces and a court of eunuchs fi ghting to have infl uence and power.

Commemorating 100 years of the 1911 revolution

This year marks the 100th anni-versary of the 1911 revolution. It was back in October 1911 that protests and armed uprisings took place across China against the monarchy of the Qing dy-nasty.

These events had far reaching conse-quences for the fate of the Chinese peo-ple. It brought an end to imperial rule in China and also represented the birth of Asia’s fi rst republic in January 1912.

Changing timesThe fi rst decade of the 20th century was a time of great upheaval in China. Revo-lutionary currents were never far from the surface as reformists and reactionar-ies struggled to gain the upper hand in the Qing government.

After the Boxer War with several Western powers, the Empress Dowager Cixi was fi nally persuaded to launch a series of political, economic, military and educational reforms. However, two policies announced by the Qing court in May 1911 – the formation of a new imperial cabinet and the nation-alisation of the railways – caused huge public resentment and drove many people to the revolutionary cause.

The success of the Wuchang Up-rising, a coup against local authorities in the city of Wuchang (Hubei) on 10 October 1911 started a chain reaction, and in less than two months 14 out of the 18 provinces within China’s main borders had declared independence. The imperial regime had been over-

BY MARIA JOÃO BELCHIOR IN BEIJING



CENTENARY MEMORIES

46

OCTOBER 2011

THE POWER OF CINEMA

thrown and replaced by a republican system, signifying a new era of mod-ern China.

With it came the country’s fi rst president, a man whose picture still hangs in Tiananmen Square in Bei-jing for May Day and the National Day, one century later – Sun Yat Sen.

Considered the “father of the na-tion”, Dr Sun’s thoughts are still today studied. His “Three principles of the people” – nationalism, democracy and the people’s welfare – written while in exile were a conceptual basis for a re-bellion prepared together with Huang Xing, his fi rst commander-in-chief.

For many Chinese historians, 100 years time is still early to make con-clusions. With a millenary history, China has faced some of its biggest changes just in the last three decades.

Nevertheless, the ideals that in-spired the revolutionary fi gures at the beginning of the 20th century are, in some way, still praised today. But the fi rst years of republican China were marked by counter-revolutions, a civil war and Japanese occupation.

To commemorate the 100th anniver-sary of the 1911 revolution, a mega

cinema production was prepared, appro-priately called “1911”. With Jackie Chan as co-director and actor, the fi lm portrays Huang Xing, a revolutionary leader who worked alongside Sun Yat Sen to over-throw the Qing power.

Performed by Jackie Chan, the renowned Hong Kong actor, the military Huang Xing is being presented to a new audience of urban Chinese who want to learn more about this recent history.

The movie is said to Jackie Chan’s 100th. This month, the movie will be shown in the United States and at the Tokyo International Film Festival.

Besides Huang as the commander of the Wuchang uprising, the movie portrays other historical fi gures such as Sun Yat Sen and the Empress Dowager Longyu.

Taiwanese actor Winston Chao, who has played Dr Sun four times in TV dramas and fi lms, once again portrays the statesman.

47

OCTOBER 2011

GROOMING A REVOLUTIONARYThe Cultural Affairs Bureau is organising a series of activities highlighting the ties between Macau and Sun Yat Sen – the father of the 1911 Revolution

The celebration of the centenary of the 1911 Revolution has come to Macau, with the Cultural Affairs Bureau putting together a series of

activities to highlight the role played by the city in the life of Sun Yat Sen, the father of modern China.

In 1911, protests and armed upris-ings took place across the mainland against the Qing Dynasty. These events, which began with the Wuchang Uprising on October 10, led to the overthrow of the emperor and the founding of the Republic of China the following year.

As 1911 was called Xinhai in the Chinese way of number-ing years, the revolution is also called the Xinhai Revolution.

Macau, although under Portuguese administration, was an important base for the leader of the insurgents, Dr Sun, in his early revolutionary years. He would later become the provi-sional president of the Republic of China.

Putting the 1911 Revolution into historical context, an ex-hibition called “For the People – Sun Yat Sen and Macao” is being held at the Macao Museum until December 11. It seeks to illustrate Macau’s connections with Dr Sun and his family through the display of memorabilia.



Macau, although under Portuguese administration, was an important base for Sun Yat Sen, in his early revolutionary years

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OCTOBER 2011

This is the fi rst time many of the items have been shown together in public. Lent by cultural organisations and individual collectors in Macau, Shanghai, Shenzhen, Guangzhou, Taipei and Hong Kong, some of the exhibits are very valuable.

To help visitors and locals alike to better understand Dr Sun’s years in Macau, the Cultural Affairs Bureau

and the Macao Heritage Ambassadors Association are jointly offering their “Tour of Dr Sun Yat Sen’s

Macau Revolutionary Trail”. The tour will take participants to places that were once familiar to

Dr Sun, such as the Lou Kau Mansion and the headquarters of the now defunct newspaper

“Echo Macaense”.The tour is free and will take place

every Saturday afternoon until Oc-tober 29. The commentary is in Cantonese, except on the last day, when it will be in English. Pro-spective participants can register at the Cultural Affairs Bureau.

History notesTwo events during the 25th

Macao International Music Festival commemorate the centenary of the

revolution.Running from October 9 to 16 at the

Mandarin’s House is “Rising Sun – The Musical”, giving a fresh view of Dr Sun’s

younger, more frivolous years. The show, with subtitles in Chinese and synopsis in Portuguese,

portrays him from his rebellious youth until the crucial moment when the buds of revolutionary thought began to blossom.

The “Xinhai Revolution Commemorative Con-cert” will be held on October 15 at the Macau Cul-tural Centre. The Macao Chinese Orchestra under the baton of maestro Pang Ka Pang has specially commissioned new music from four Chinese composers of contemporary folk music, who will have their new works premiered.

A variety of commemorative souvenirs will be on sale at the Mandarin’s House and in other places.

49

“It is our task to reform and develop China until the end of times. If we die one day, the will should be carried on. If we fail, we should draw lessons from the failure and not be daunted by diffi culties. As long as we are dedicated to following the trend of the world’s progress and our principle, we will see success one day”

Sun Yat Sen

OCTOBER 2011

Can China rescue Europe?MINXIN PEI PROFESSOR OF GOVERNMENT AT CLAREMONT MCKENNA COLLEGE

Indeed, to do so would be in China’s own interest as a key stakeholder in Europe’s economic stability. The European Union is China’s largest trading partner, accounting for US$383 billion in merchandise exports in 2010. So a recession in Europe would cause a slowdown in China’s export-dependent economy as well.

The fi nancial fallout from the debt crisis could also result in huge losses for China. About US$800 billion of China’s foreign-exchange reserves are invested in euro-denominated assets. A disorderly default, and the resulting downward pressure on the euro, would unavoidably cause Chinese investments to lose value.

Trust neededChina can take three measures to help Europe, but, if they are to succeed, the European Union must set aside some of its long-standing suspicions about China. First, China can help boost the European Union’s exports by lowering its administrative trade barriers to products from the European Union. In the short term, this might dampen China’s own growth, but, given China’s mammoth trade surplus with the European Union (US$230 billion in 2010), this is both long overdue and reasonable. A 10 percent increase in the European Union’s exports to China (a net increase of US$15 billion a year) would help create at least 300,000 jobs and boost Europe’s growth prospects.

Second, China can participate in bank recapitalization in Europe. At the moment, Europe’s banks desperately need to shore up their balance sheets. China’s sovereign wealth fund and non-bank fi nancial institutions have been eager to invest in well-established Western banks. This is a good time to do so, as these banks’ valuations have plunged.

Finally, Europe’s crisis presents an attractive opportunity for China to expand its direct investment there. In 2010, Chinese direct investment in the European Union totalled only US$1.3 billion. Today, when governments and companies in Europe are opening their arms to foreign investors, Chinese companies eager for markets, technologies, and diversifi cation should fi nd rich pickings.

But Chinese money has been viewed with suspicion in Europe, refl ecting fears that China has a hidden political agenda. Such bias has discouraged Chinese capital from making bigger bets on Europe. It is now time for Europe to gamble on China.

Such measures are likely to boost Europe’s medium-term growth prospects. While they would most likely have no immediate calming effect on today’s panic-stricken fi nancial markets, they are far superior to watching with folded hands as Europe descends into a fi nancial abyss.

The debt crisis in Europe is no longer a European affair. Coupled with fears of a double-dip recession in the United States, the European debt crisis is dragging the global

economy into another cycle of fi nancial panic and economic recession.

Sitting on the sidelines, emerging-market economies in general, and the so-called BRIC countries (Brazil, Russia, India and China) in particular, may feel fortunate to be spared this fi nancial maelstrom. But they should think again. With closely integrated global fi nancial markets and trading networks, fi nancial crises and economic contractions in the developed economies, which still account for nearly 60 percent of the world’s gross domestic product, will inevitably undermine emerging-market countries’ prosperity.

Some have thus called upon major emerging countries to step up and use their huge foreign-exchange reserves to purchase the debt of crisis-ravaged countries, such as Greece, Italy and Spain. In particular, China, with its US$3.2 trillion (MOP25.6 trillion) in foreign-exchange reserves, is seen as a potential white knight coming to the rescue of debt-ridden European nations.

Playing upon such hopes, China has been both coy and demanding. Without committing itself to any substantive assistance, the Chinese government has publicly demanded that the European Union grant China the coveted status of “market economy” if it expects China to loosen its purse strings. That status matters, because achieving it will make it more diffi cult for Chinese fi rms to be found guilty of dumping goods on overseas markets.

Get realUnfortunately, those who expect China to play a direct role in calming the fi nancial panic in Europe are being unrealistic. Chinese leaders have been extremely risk-averse in their forays into international fi nancial affairs and, on the eve of a leadership transition (expected to take place a year from now), no senior offi cial dares to risk his political prospects by advocating bold and controversial action. Even assuming China’s willingness to help Europe’s troubled economies, it would be able to contribute only a modest portion of the huge amount of fi nancing required to restore confi dence in European sovereign debt.

But this does not mean that China can do nothing to help Europe. While the attempt by Chinese offi cials to extract a huge concession – market-economy status – is ill-timed and in poor taste, China’s government needs to weigh the signifi cant benefi ts that it could receive by providing limited but meaningful assistance to Europe in its hour of need.

CHINA CAN TAKE THREE MEASURES TO HELP EUROPE, BUT, IF THEY ARE TO SUCCEED, THE EUROPEAN UNION MUST SET ASIDE SOME OF ITS LONG-STANDING SUSPICIONS ABOUT CHINA



50

51

OCTOBER 2011

OCTOBER 2011

t will take many years for the feel-ing of protection from chairman Mao Zedong to fade away from Chinese popular beliefs. China’s foremost politician is even some-

times adored as a godlike fi gure.Still today, it is common to get

REMEMBERING MAOBY MARIA JOÃO BELCHIOR IN BEIJING

into a taxi in Beijing and see a little portrait of him on the trim.

This year marks the 35th anniver-sary of Mao’s death in September 1976, at the age of 83. Hailed as the “Red Sun”, he remains an infl uential fi gure among the country’s 1.3 billion people.

OTHER LANDMARKSThis year has been fi lled with celebrations of China’s recent story.

In July, the country marked the 90th anniversary of the founding of the Communist Party of China, in 1921.

Since it arrived to power in 1949, and especially after the introduction of the opening-up policies in 1978, it has led the nation to a remarkable boom. More recently, corruption scandals have impacted its image.

“We must not turn our power into an instrument for making personal gain for a handful of individuals. It is more urgent than ever for the party to impose discipline on its mem-bers,” president Hu Jintao said in his speech marking the anniversary. “If corruption does not get solved effectively, the party will lose the people’s trust and support,” he added.

Also this year, the People’s Republic of China is celebrating the 40th anniversary of gaining admission to the United Nations as China’s representative, replacing Taiwan’s delegates, that since then has had no permanent representative in the organisation.



Mao is mostly remembered as the leader who ended civil war in the country, and as being the found-ing father of the People’s Republic of China.

The changes in the nation since his passing away haven’t overshad-owed his importance.

There are groups of middle-aged Chinese who gather to discuss the principles of Mao, in a revival of his ideology. There is no confl ict between development and Maoism, they claim.

An icon for thousands of tourists who still get emotional when seeing copies of his ‘red book’ being sold in markets, Mao is more than just a na-tional fi gure.

Politically, his legacy is not so cut clear.

Chinese analysts have noted that China’s current leaders are invoking Mao and his ideology — known here as “Mao Zedong Thought” — less and less.

“Mao Zedong Thought is a po-litical buzzword already belonging to the past,” Qian Gang, a Chinese journalist and fellow at the Hong Kong University-based China Media Project, wrote recently.

China’s offi cial verdict on Mao, given by his successor Deng Xiaop-ing and often repeated since, is that he was 70 percent right.

Among his failures was the dis-astrous Great Leap Forward indus-trialisation programme from 1958 to 1960, and the Cultural Revolution from 1966 until his death, aimed at purifying the party. Millions are thought to have died due to these two programmes.

The fi nal judgment on Mao’s ac-tions comes from the Chinese popula-tion. Thirty-fi ve years since his death, common people don’t measure him in terms of how much of what he did was right or wrong.

For many, there is no nostalgia for the old times, but respect is shown in the details, like the Mao Zedong med-als hanging from the rear-view mir-rors of cars.

This year marks the 35th anniversary of his death

52

53

OCTOBER 2011

OCTOBER 2011

This year will most likely be remembered as a landmark in the cooperation between Macau and the mainland. An historic agreement has

been signed between local authorities and their Guangdong province counter-parts, which is expected to improve ties between both sides.

At the same time, the regional trans-port infrastructure is being upgraded, in a move to further promote regional co-operation.

In the framework agreement inked between Macau and Guangdong in March, is to be found the skeleton on which the parties hope to build coopera-tion in the economic, social, welfare and cultural fi elds until 2020.

The goal of the agreement is noth-ing short of “creating the most dynamic and internationally competitive megapo-lis in the Asia-Pacifi c region”.

CLOSER TIESMacau and Guangdong to boost cooperation and regional integration

There are some immediate aims, like the establishment of a Chinese medicine industrial park and the joint development of cultural and creative in-dustries on Hengqin Island.

Hengqin, three times the size of Macau, is to be used as the pilot area for cooperation. For that, a string of poli-cies to tempt regional companies to in-vest there have already been announced. Among these are several tax exemptions.

No traffi c jamsTo improve mobility between Guang-dong and Macau, Chinese authorities are also upgrading the surrounding transport network.

Currently, the Zhuhai government is expanding the Gongbei immigration checkpoint. In Macau, a similar venture was completed in April 2010.

When fi nished, it will raise daily ca-pacity at Gongbei to 350,000, more than

double the current capacity, according to a report for Union Gaming Research Macau. Media reports had previously said Zhuhai authorities were hoping to have works completed by December, for Macau’s handover anniversary, but Union Gaming says the opening is more likely to happen in the fi rst quarter of 2012.

The border expansion will be matched by the arrival of the high-speed train to Gongbei. The terminal station of the project, immediately adjacent to the expansion site of the Gongbei immigra-tion building, is expected to be ready by the end of 2012, says Union Gaming.

This terminal will complete the rail link between Gongbei and the Guangzhou South high-speed rail termi-nal, reducing the travel time from almost three hours to about 45 minutes.

It will also create a direct link be-tween Macau the mainland’s extensive rail network.



54

55

OCTOBER 2011

56

OCTOBER 2011

Gaming | Billions Race

Gaming Results: Gross Revenue In Million MOP (1HKD:1.03MOP)

Mar 2011 Apr 2011 May 2011 Jun 2011 Aug 2011 Sep 2011Jul 2011Sep 2010 Oct 2010 Nov 2010 Dec 2010 Jan 2011 Feb 2011

26,000

24,000

22,000

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

15,302

18,86917,354

18,883 18,571 19,863 20,087 20,507

24,306

20,792

24,21224,769

21,244

Against the backdrop of the eco-nomic mess in Southern Europe and the United States, there are

few businesses where a year-on-year increase of 38.8 percent would be a concern. Unfortunately, that is not the case with Macau’s gambling sector.

The city’s casinos took MOP21.24 billion (US$2.66 billion) last month, compared to MOP15.3 billion one year ago, according to data from the Gaming Inspection and Coordination Bureau. That was below analyst estimates of 40 percent or more. September’s result was the slowest year-on-year rate of growth

Mixed messagesGaming revenues remain high but growth slows while mainland worries mount

since January’s 33.2 percent fi gure.The slowdown is ill-timed, com-

ing as fears mount that a potential slowdown in the mainland could lead to a credit squeeze for VIP junkets. So far, no casino operator has admitted seeing any dips in business.

“When you’re on the ground and see what is happening, it’s very, very hard to be pessimistic,” Michael Leven, president of Las Vegas Sands Corp., said at a Las Vegas conference, quoted by the Wall Street Journal. “We haven’t seen any problems and we continue to be very, very, very bullish

on the Chinese situation.”This month will be essential to

understanding how the market is per-forming. The mainland’s National Day Golden Week at the beginning of Oc-tober allows thousands of mainland punters to head to the city’s casinos. It is typically one of Macau’s strongest months.

Deutsche Bank gaming analysts Carlo Santarelli and Kelly Knybel said in an investors note issued on Sep-tember 27 that they were expecting a new record for monthly casino gross gaming revenue this month. The

57

OCTOBER 2011

SJM

Sands China

Galaxy

Wynn

MPEL

MGM

TOTAL

Feb

31%

18%

9%

15%

15%

12%

100%

Mar

34%

16%

11%

14%

14%

11%

100%

Apr

30%

17%

9%

17%

17%

11%

100%

May

32%

16%

13%

13%

14%

11%

100%

Jun

29%

16%

15%

15%

14%

11%

100%

Jul

28%

15%

19%

15%

16%

8%

100%

Aug

27%

14%

20%

13%

15%

11%

100%

Sep

29%

14%

19%

11%

18%

10%

100%

Sep

30%

20%

12%

12%

17%

10%

100%

Oct

32%

19%

10%

14%

14%

11%

100%

Nov

31%

15%

10%

17%

15%

11%

100%

Dec

30%

17%

10%

17%

15%

12%

100%

Jan

31%

18%

11%

14%

15%

11%

100%

2010 2011

Gaming Results: Market Share Per Operator

*

SJM Sands China Galaxy Wynn MPEL MGM

Mar 2011 Apr 2011 May 2011 Jun 2011 Jul 2011 Aug 2011 Sep 2011Sep 2010 Oct 2010 Nov 2010 Dec 2010 Jan 2011 Feb 2011

40

30

20

10

0

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

*

This month will be essential to understanding how the market is performing. The mainland’s National Day Golden Week at the beginning of October allows thousands of mainland punters to head to the city’s casinos

current high stands MOP24.77 billion and was set in August.

“In the fi rst few days [of October] we see that the trend is keeping up, despite the fact that people are talking about a slowdown in China and in this region. But we haven’t felt the impact yet,” SJM Holdings Ltd. chief executive offi cer Ambrose So Shu Fai told reporters.

Total casino gross gaming revenue for the fi rst nine months of the year is up 45.9 percent in year-on-year terms to MOP194.35 billion, exceeding the record MOP188.34 billion the industry posted for the overall 2010.

CLSA’s head of consumer and gaming research, Aaron Fischer, is forecasting an average revenue growth of 17 percent over the next nine years. He estimates Macau will surpass the U.S. as the biggest gaming market in the world in terms of gross gaming revenue by 2015.

Punters’ preferenceTwo new surveys have confi rmed Sands China Ltd. is the undisputed leader of mass-market gaming.

The gaming operator led the segment during August and the fi rst three

weeks of September, with a weighted share of customers of 35.4 percent, ac-cording to a report from Union Gam-ing Research Macau.

SJM Holdings followed with 30.9 percent, and Galaxy Entertainment Group with 17.3 percent. Wynn Macau (6.3 percent), MGM China (5.1 per-cent) and Melco Crown (4.9 percent) all had mass market customer shares below 10 percent.

By property, the top three shares belonged to the Venetian Macao (22.2 percent), the combination of SJM’s Grand Lisboa and Lisboa (15.0 per-cent) and Sands Macao (13.2 percent).

A customer survey involving 2,200 people for Macquarie Equities Research also concluded Sands China trumps in the mass market and that the Venetian is the most preferred casino for visitors.

The property also “has a better customer demographic, attracting a younger ‘white collar’ crowd, whose spending is among the highest on gam-ing and non-gaming services of all de-mographics,” the research house said.

Macquarie Equities Research put Sands China’s slice of the mass-mar-ket revenue pie at 24.4 percent.

The survey points out that 70 per-cent of gamblers do not visit more than two properties per visit to Macau, with 35 percent visiting only one casino.

When questioned on their itiner-ary, 14 percent of respondents said they would visit Cotai only, with 44 percent stating they would visit Cotai and the peninsula. About 32 percent said they would just visit the peninsula.

58

OCTOBER 2011

Gaming | Stock Watch

September 2011 is a month inves-tors in Macau gaming shares will not forget in a hurry. All the

major casino-related stocks listed on the Hong Kong Stock Exchange posted double-digit drops last month, fuelled by concerns a credit squeeze would take li-quidity out of the market and on renewed rumours Beijing may tighten entry rules for gamblers bound for Macau.

By Friday, September 30, gaming stocks had tumbled by more than 10 percent, as concerns intensifi ed. SJM Holdings Ltd. (0880.HK) was the sole exception, posting a drop of just 8.7 per-cent on what may well become known as gaming stocks’ “Black Friday”.

Worst affected were Wynn Macau Ltd. (1128.HK) and Sands China Ltd. (1928.HK), with their shares losing 16.9 percent and 14.1 percent.

Investors have become increasingly nervous about the impact of a slowdown on the mainland economy, a factor that had already caused a volatile month for gaming stocks. “Investors were spooked by slowing growth in China and they wanted to lock in profi ts after strong gains by stocks such as Wynn Macau and Sands China over the past year,” said Philip Tulk, analyst at the Royal Bank of Scotland.

Junkets squeezedThere were reports some junket opera-tors were fi nding it increasingly hard to get fi nancing. That would have an

What next?Slowdown fears, a credit squeeze, visa rumours and a typhoon scare nervy investors in casino stocks

obvious impact on their capacity to ex-tend credit to high rollers, which are responsible for almost three-quarters of Macau’s gross gaming revenue.

“There seems to be an awful lot of concern that a slowdown in the Asian economies will reduce the funding that’s available for the corporate junket busi-ness, which is really the engine of these businesses’ growth in Macau,” said Dav-id Katz, an analyst at Jefferies.

It is apparently common for wealthy businessmen from Guangdong to lend money to junkets for them to extend credit to VIP players. In return, the busi-nessmen charge between 1 and 1.5 per-cent a month in interest.

“Some of them are in need of cash at home and have trouble borrowing from banks. So they are cashing out from Macau,” an unnamed junket operator told the Financial Times. So far, there has only been a limited impact on junket operations, he said, and most operators were still seeing strong growth.

Credit Suisse analysts warned that sectors exposed to the informal funding arrangements in the mainland included Macau’s gaming industry.

“The VIP liquidity issue is a factor if China’s economy goes sour but most of these junkets who are working with the big casinos have ample liquidity for now,” an unnamed casino executive in Macau told Reuters.

Carlo Santarelli, a gaming analyst at Deutsche Bank, agrees.

Name Share price performance (HK$) Change (%)

52-week high 9/30/201152-week low One month Year-to-date

SJM Holdings Ltd.

Galaxy Entertainment Group

Wynn Macau Ltd.

Sands China Ltd.

Melco International Develop.

MGM China Holdings Ltd.

Hang Seng Index

21.0

22.5

29.1

26.6

10.8

18.2

24,988.6

9.0

6.4

13.4

14.0

3.9

10.3

16,999.5

14.1

11.6

18.8

18.6

5.2

10.3

17,592.4

-17.5

-34.8

-23.8

-22.7

-36.2

-28.2

-13.0

10.8

24.3

1.4

6.9

11.3

N/A

-24.9As of September 30, 2011

“I’m not seeing anything funda-mental out of Macau to make me believe there is anything changing in the VIP market.”

Scares, more scaresRenewed rumours of possible visa re-strictions also resurfaced last month. “Rumours that some Chinese local gov-ernments have tightened the approval of visas for Macau also affected the stocks,” Alfred Chan, chief dealer at Cheer Pearl Investment Ltd. told Reuters.

So far, there has been no evidence to suggest a clampdown.

With investors so jumpy, even the passage of typhoon Nesat nearby Macau seemed to have had a negative impact on

59

OCTOBER 2011

MELCO CROWN PREPARES PUNT ON MANILAMelco Crown

Entertainment hopes to open a casino in the Philippines and is in negotiations with the gaming regulator.

“Discussions are still ongoing,” Cristi-no Naguiat, the chairman of the Philippine Amusement and Gaming Corp., the state-owned casino operator and regulator, told Bloomberg. “I think they’re serious.”

If awarded a license, Melco Crown will have to invest at least US$1 billion (MOP8 billion) in Manila over fi ve years.

casino stocks. Analysts at Union Gam-ing Research said that the typhoon may have slowed last month’s growth in ca-sino revenue.

Although casinos stayed open dur-ing the typhoon, the suspension of bus and ferry services, plus the cancellation of several fl ights, meant punters were not able to reach the gaming tables.

Amid the current sell off, several Macau gaming stocks are now present-ing a more compelling risk-reward op-portunity, according to some analysts.

Were it not for the “Black Friday”, the highlight of September would most likely have been the symbolic sale by Stanley Ho Hung Sun of his remaining stake in SJM Holdings.

Mr Ho sold his 0.09 percent hold-ing in the company last month, in an off-exchange transaction, according to a dis-closure from the Hong Kong exchange.

At the same time, according to an-other disclosure, Angela Leong On Kei acquired a 0.09 percent stake in SJM Holdings also in an off-exchange trans-action. That raised her participation in SJM Holdings to 8.29 percent.

Mr Ho refers to Ms Leong as his fourth wife.

Elsewhere, Sands China entered into a US$3.7 billion (MOP29.6 billion) loan agreement. Among the local banks in-volved are Bank of China (Macau), In-dustrial and Commercial Bank of China Macau Ltd., BNU and Wing Lung Bank.

60

OCTOBER 2011

Gaming

SLOW BOILTHE GOVERNMENT WILL LIMIT ANNUAL GROWTH IN THE NUMBER OF GAMING TABLES TO 3 PERCENT FROM 2013

61

OCTOBER 2011

Once the 5,500-table cap on the number of live gaming tables expires in 2013, growth in the

number of tables will be limited to 3 per-cent per year.

This was announced last month by the secretary for economy and fi nance, Francis Tam Pak Yuen. The growth limit will last for 10 years. This means that by the end of 2021 there could be almost 7,200 gaming tables in Macau.

In March last year, in announcing the 5,500-table cap for the following three years, Mr Tam said the government’s long-term goal was to promote a growth rate of around 3 to 4 percent a year. This latest announcement did not catch anyone off guard.

SJM Holdings Ltd. director Angela Leong On Kei says the growth limit is “reasonable” but wonders if it will pre-vent Macau’s biggest industry from meet-ing demand.

The growth limit may delay govern-ment approval for the pending casino projects in Cotai, which have been in the pipeline at least since 2008. At the end of June, Macau had 5,237 gaming tables, meaning just 263 new ones may be added before 2013.

It is likely that most will be in Sands China Ltd. developments. The company aims to open the fi rst phase of its Sands Cotai Central development in March. It will include a 9,850 square-metre casino and VIP gaming areas. Sands China ex-pects to open a second casino there by the third quarter of next year.

Next in line should be Wynn Macau Ltd. The company announced last month that it had agreed to pay the government a land premium of MOP1.55 billion (US$193 million) for the use of about 206,000 square metres of land near the City of Dreams in Cotai, for 25 years ini-tially. Wynn Macau wants to build a re-

sort containing a fi ve-star hotel, gaming areas, shops, food and beverage outlets, and entertainment, spa and convention facilities. The government says it is “still studying” Wynn Macau’s application, but analysts interpret the company’s an-nouncement as a sign that the deal is al-most in the bag.

Although it is widely expected that the Macao Studio City project, in which Melco Crown Entertainment Ltd. re-cently acquired the controlling stake, will include gaming facilities, Mr Tam has said the company will have to apply for a casino licence and then wait and see. The chairman of MGM China Holdings Ltd, Pansy Ho Chiu King, says she “fi rmly” believes it is possible that her company will be granted land in Cotai this year.

Live with itSJM Holdings Ltd. has made two appli-cations for land in Cotai for gaming. And Galaxy Entertainment Group Ltd. still has enough land available around Galaxy Macau to put up three buildings of the same size.

Shortly before the government an-nounced the new table growth limit, Las Vegas Sands Corp. president and chief operating offi cer Michael Leven warned that approving casino projects too quickly in Cotai would be “an unfor-givable mistake for the government to be part of”. Las Vegas Sands is the parent of Sands China.

Will the growth limit hinder the expansion of the market? Although the 5,500-table cap in effect limited growth to 15 percent between 2010 and 2013, this year alone gaming revenue has increased at three times that rate. One reason is that VIP gaming is the main growth driver, accounting for three-quarters of gross gaming revenue.

Since government restrictions do not distinguish between VIP and mass-mar-ket tables, casinos may try to turn mass-market tables into VIP tables.

However, the government is keen on expanding the mass market.

There are no offi cial fi gures for the proportion of gaming tables that are for high rollers.

The regulator has said there are no plans to limit growth in the number of electronic gaming tables and slot ma-chines. These now account for less than 5 percent of gross gaming revenue.

Either way, the growth limit is likely to encourage casinos to make better use of the live tables they already have.

SJM Holdings Ltd. director Angela Leong says the growth limit is “reasonable” but wonders if it will prevent Macau’s biggest industry from meeting demand

62

OCTOBER 2011

CITY OF DREAMS STAGES FASHION AND MARTIAL ARTS EVENTSCity of Dreams will present this month “Glam Slam 2011”, a three-day fashion event. From October 13 to 15, seven top fashion designers from across Asia will showcase their productions in Macau, along with a solo session presented by Butani Jewellery. Also this month, City of Dreams will host the Legend Fighting Championship 6, scheduled for October 30. The mixed martial arts competition featuring nine fi ghts will be broadcast to several countries in Asia-Pacifi c and North America. The event is part of a quarterly Legend tournament series at City of Dreams, with last July’s event completely selling out, according to the organisation.

The chairman and chief executive offi cer of Las Vegas Sands, Sheldon Adelson, is among the top 10 of Forbes Richest People in America. According to the magazine, his net worth grew by some US$7 billion (MOP56 billion) this year to US$21.5 billion, moving him up fi ve places on the annual list, to the eight spot.

Part of that boost was due to the good performance of Las Vegas Sands’ Macau subsidiary, Sands China.

Mr Adelson, alongside Facebook CEO Mark Zuckerberg and investor George Soros, racked up the biggest dollar gains on this year’s list of the 400 richest Americans.

MGM Resorts International’s largest shareholder Kirk Kerkorian was 117th on the list, with a net worth of US$3 billion. MGM Resorts is the majority shareholder of MGM China Holdings.

ADELSON GETS RICHERBoss of Las Vegas Sands is the eighth richest man in America, according to Forbes magazine

WYNN OFFERS MILLIONAIRE AWARD TO RETAIN LINDA CHEN

Wynn Resorts is offering Linda Chen a US$10 million (MOP80 million) bonus if

she stays with the company for the next 10 years. Ms Chen is the chief operating offi cer of Wynn Macau and also a director of its parent company Wynn

Resorts. In August, Worldwide Wynn, a subsidiary of Wynn Resorts, entered into

a retention agreement with Ms Chen whereby she will be granted a US$10 million bonus if she remains with the company until July 2021, according to Wynn Macau’s 2011 interim report. In May 2010, Worldwide Wynn already entered into a new 10-year employment agreement with Ms Chen, which included the purchase of a house in Macau for her use. Earlier this year, Wynn Resorts chief executive offi cer Steve Wynn hinted Ms Chen could be his successor when he decides to retire.

CASINOS NOT GETTING MORE IMPORTED LABOURThe number of imported workers in Macau rose by more than 1,600 in August, but the gaming industry didn’t receive any more quotas. According to fi gures from local authorities, Macau had 88,740 imported workers by the end of August, up 1.9 percent month-on-month. In the gaming industry, the fi gure of non-resident labour stood at around 7,100 people in August, slightly below the previous month. Of those imported workers in the gaming sector, roughly 3,400 were construction workers directly hired by casino operators.

Wynn Resorts Ltd. chairman Steve Wynn was 130th on the list with net worth of US$2.8 billion. His ex-wife, Elaine Wynn, was 263rd with US$1.7 billion. They both benefi ted from the strong results from Wynn Resorts’ local subsidiary, Wynn Macau.

Microsoft founder Bill Gates topped the list for the 18th straight year with US$59 billion. Number 2 was Warren Buffett, whose net worth is US$39 billion, Forbes said. Oracle CEO Larry Ellison rounds out the top three richest Americans with a net worth of US$33 billion.

Gaming

63

OCTOBER 2011

Macau’s gaming regulator held a landmark meeting with elec-tronic gaming and systems

manufacturers late last month and is-sued draft technical standards for this segment of the industry that are expect-ed to be in force from early next year.

Industry sources and copies of Gaming Inspection and Coordination Bureau documents presented at the meeting obtained by GamblingCompli-ance confi rmed media reports that the closed-door meeting between the Gam-ing Inspection and Coordination Bureau and company delegates took place.

Sources said that based on the material presented, the standards will * EXCLUSIVE GAMBLINGCOMPLIANCE/MACAU BUSINESS

Play by the rulesMacau regulator issues draft standard for slots, electronic gamesBY MARTIN JOHN WILLIAMS*

in December, sources said.The meeting was deliberately brief

– between 10 and 15 minutes – but out-lined some of the changes that are being considered, sources said.

The Gaming Inspection and Coor-dination Bureau did not fi eld questions at the meeting.

Quoting an unnamed source, Inside Asian Gaming reported that the standards resemble the GLI-11 regimen for gaming devices in casinos developed by Gaming Laboratories International, LLC (GLI). The GLI-11 guidelines for slot machine and other electronic gaming software and hardware have acted as a default standard in Macau for some years.

Legislated regulation of slot ma-chines is a long promised but slowly evolving goal, with promises to issue rules in 2008 coming to nothing.

While the introduction of a new technical regime carries a degree of uncertainty for operators and manufac-turers and points to wider regulatory reform, one company offi cial said the release of draft standards is a welcome development. The offi cial, who was rep-resented at the meeting and later briefed on its contents, told GamblingCompli-ance that, “I’m not expecting anything too restrictive”.

The draft was consistent with the Gaming Inspection and Coordination Bureau’s “fairly open-type policy” in that it is “not excluding anyone” from the market, the offi cial said.

“It’s always good to have regula-tions. Then you know the rules you play to,” the manager said.

The Gaming Inspection and Coordi-nation Bureau did not respond to requests for comment by publication time.

be straightforward and should not overly concern the industry.

The draft standards have been sub-mitted to manufacturers and gaming laboratories for review and comment by October 31, a source told Gambling-Compliance.

Welcome developmentSources said the Gaming Inspection and Coordination Bureau has worked on drafting the technical standards for around a year and that an offi cial an-nouncement on the results is expected in January after a further consultation pe-riod ends. An instruction on the stand-ards will be issued to gaming operators

64

OCTOBER 2011

Macau Tower is one of the city’s most conspicuous tourist spots, a prime reason why Mocha Clubs de-cided to open its newest gaming parlour there.

The parlour offers machine gaming in a café-style setting. The ninth Mocha outlet was opened last month. It has 260 slot machines and electronic table games, some of them being test-ed in Macau for the fi rst time. The parlour covers 2,000 square metres of the ground and second fl oors of the building.

“Macau Tower has a wide range of entertainment choices. We hope that every visitor coming to Macau Tower will be able to venture into the experience and excitement of our com-prehensive 24-hour entertainment,” says Mocha Clubs presi-dent Constance Hsu.

Ms Hsu says one of her company’s main aims is to be where the tourists are.

Until last year Macau Tower was home to SJM Holdings Ltd.’s Tiger Slot Lounge. This parlour has since closed.

With the opening of its latest venue, Mocha Clubs has about 1,800 slot machines and electronic table games in opera-tion, spread throughout the peninsula and Taipa. At the end of June, Macau had around 15,100 electronic gaming machines.

BY JOANA FREITAS

Parlour gamesMocha Clubs follows the tourist money trail, opening a new slot-machine parlour at Macau Tower

The company, a subsidiary of Melco Crown Entertainment Ltd., runs one of the largest non-casino gaming operations in the city.

“We are very positive that Mocha will continue doing well and have sustainable growth in 2011,” Ms Hsu says.

She is unforthcoming about whether Mocha Clubs intends to open yet more parlours or to expand into Cotai. But she does say that the company will improve and increase the choice of electronic machines it offers, and enhance premium services.

The company’s second-quarter net revenue rose to US$32.4 million (MOP259 million) this year from US$26.9

“We are very positive that Mocha will continue doing well and have sustainable growth in 2011,” says Mocha Clubs president Constance Hsu

Gaming

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OCTOBER 2011

million a year before. Its adjusted earnings before interest, tax-es, depreciation and amortisation (EBITDA) increased by 42 percent to US$10.1 million. Daily net winnings per machine rose by 23 percent to US$226.

Very important secretMocha Clubs has high rollers to thank for part of this good performance.

Given that Macau’s gaming market is VIP-driven, the company has been betting on this segment. “We have a VIP lounge at the Mocha Marina Plaza for our top-tier members, where they can enjoy more privacy and exclusive jackpots. We also have two VIP rooms at Mocha Taipa Square,” says Ms Hsu.

The company is preparing to offer VIPs even more. Ms Hsu says a new development is on the way, “which will be innovative, exclusive and [the] most luxurious experience in Macau”.

“Approximately 67 percent of Mocha’s mix is pure slot players, while 25 percent are pure multi-terminal players and the remaining 8 percent shift between the two,” Ms Hsu says. She stresses one advantage Mocha Clubs has over casinos is that its parlours are more private, without croupiers or crowds surrounding players.

Machine gaming currently accounts for less than fi ve per-cent of gross gaming revenue in Macau. Could it ever take a bigger slice of the gaming market, as it does in Las Vegas and elsewhere?

Ms Hsu thinks slot machine gaming will continue to grow strongly, but she prefers not to predict whether this will mean a bigger share of the gaming pie.

Second-quarter revenue from slot machines in Macau was MOP2.83 billion this year, 39 percent more than a year before. In contrast, revenue from gaming of all kinds (tables and slots) rose by 46 percent.

UNWELCOME NEIGHBOURSThe secretary for economy and

fi nance, Francis Tam Pak Yuen, says the government still intends to ban

slot-machine parlours from residential districts. The government fi rst proposed

the ban in 2007.Mr Tam told reporters last month that a bylaw should be ready

by next March. In the meantime, the government will allow no more new parlours in residential areas.

He said that once the ban comes into effect, parlours operat-ing in residential areas will be removed. It would happen gradu-ally, but he gave no schedule.

The government says there are only two slot machine parlours in residential areas: the SJM Yat Yuen Canidrome Slot Lounge in Fai Chi Kei and the Mocha Marina Plaza parlour in Rua de Pequim.

In 2009, the government announced that Mocha Clubs would close the Mocha Marina Plaza parlour after its lease expired this June. The establishment is still open.

Asked whether Mocha Clubs is worried by the prospect of a ban, company president Constance Hsu was laconic. “We are always supportive and cooperative to the government’s policy, and any plan in the near future shall be in line with the measures by the government,” she said.

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OCTOBER 2011

Once you step inside a casino, anywhere in the world, you are surrounded by gadgetry. From

gaming devices to surveillance systems and customer data mining, everything runs on information technology. Macau is no different, except in one respect: here the casino industry is much bigger and is growing faster than elsewhere.

Andre Ong has been urging on the IT revolution in Macau since the liberalisation of gaming in 2002. Mr Ong joined the start-up team for Wynn Macau in 2003 as chief information of-fi cer. Today he is also its vice-president for information technology.

He was one of the speakers at last month’s Macau CIO Leadership Forum 2011, organised by Computerworld Hong Kong magazine and held at Macau Tower.

Constant changeTechnology is revolutionising Macau’s gaming sector at breakneck speed

Mr Ong says the biggest challenge for casinos here in the fi eld of IT is the rate of growth in its use. Having previ-ously worked for Shangri-La Hotels and Resorts, he knows from experience that in IT, change happens more swiftly in the gaming industry than in the hospi-tality industry. “In a casino, things get done in weeks. Decisions are made in days,” he says.

One of the reasons gaming indus-try executives are willing to invest in IT is they see the fi nancial value of, say, speeding up play or introducing new se-curity measures.

Wynn Macau has not stopped ex-panding since it opened in 2006, Mr Ong says. More gaming tables have gradually been added and the layout of the fl oor has been changed several times – always

while the casino continued to operate.The IT job entails more than just

re-arranging cables. For example, only one of Wynn Macau’s casino cages, which Mr Ong describes as small banks, remains unaltered since 2006. In some cases, the IT infrastructure for new cag-es had to be built from scratch.

Wynn Macau has turned some of its hotel accommodation over to gam-ing, which presented an extra problem because it was not built for the purpose. It had to be fi tted with gaming devices, surveillance systems and all the other necessary infrastructure, which had to be connected to the central systems.

Waste notThe story is similar at Galaxy Macau, says Ian Farnsworth, Galaxy Entertainment

Gaming

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OCTOBER 2011

“There are actually IT people out there. They just are not actually our type of IT people,” says Mr Ong. So rather than looking for people that already have the required expertise, casinos make an ef-fort to fi nd people that have potential and are eager to learn. “The situation has kind of solved itself,” Mr Ong says.

Mr Farnsworth says that the turno-ver of casino IT staff is high, but that this cloud has a silver lining. The more jobs an IT worker has, the more he or she learns. “The depth of the fabric is a

lot thicker now,” he says.Mr Farnsworth says he does not go

looking for computer geeks. Rather, he seeks to recruit people with the ability to innovate.

Mr Ong says casino IT staff can-not work in isolation, focusing only on their own fi eld of expertise, but must play their part in running the business as a whole.

For Wynn Macau, the aim is there-fore to create “business-savvy IT peo-ple,” he says.

For Wynn Macau, the aim is to create “business-savvy IT people,” says the company’s CIO, Andre Ong

“The IT structure [in a casino] needs to be fl exible,” says Galaxy’s director of technology,Ian Farnsworth

Group Ltd.’s director of information services and technology. Galaxy Macau only opened in May, but there has al-ready been much fi ne-tuning of the mass gaming fl oor, and new VIP rooms have been opened.

“The business demand is such that the opportunity [it presents] cannot be wasted,” says Mr Farnsworth, who was also at the Macau CIO Leadership Forum 2011. “The IT structure needs therefore to be fl exible.”

He says the opening of such a huge hotel-casino was a new challenge for the IT staff at Galaxy Entertainment Group, who previously catered mainly to the needs of smaller and more VIP-focused StarWorld. When Mr Farns-worth started in 2008, Galaxy Enter-tainment had about 30 IT staff. It now has 110.

He says casino IT work in Macau is more demanding than in Australia, where he worked before. Here, gaming fl oors function round the clock, all year round, with no breaks to allow shut-downs. Modifi cations must be done while the casino is still running.

Typical tasks for a casino’s IT staff are choosing, installing and integrating data and voice networks, security sys-tems and myriad gaming applications. They are usually also in charge of the hotel and back-offi ce IT systems.

In view of Macau’s shortage of qualifi ed labour in other fi elds, you would expect there to be a shortage of qualifi ed IT staff. You would be both right and wrong.

“We’ve now all realised that it is not about going out to look for gaming IT people. They just don’t exist,” says Wynn Macau’s Mr Ong. “We need to create them.”

And that is what the casinos do.

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68

OCTOBER 2011

BY ALEXANDRA LAGES

Poker is a game of skill, but one also needs luck when the cards are dealt. Danny McDonagh’s

career as a poker tournament director in the Asia-Pacifi c region is a bit like that. It started with a lucky opportunity in 1994 but he used his skill to build it up from there.

Today, Mr McDonagh is the direc-tor of live operations for the Asia-Pacifi c region for poker operator PokerStars. His job not only puts him in charge of live operations in Macau, but also makes him president of the Asia-Pacifi c Poker Tour and commissioner of the Australia-New Zealand Poker Tour.

Organising poker tournaments is now part of his make-up. His passion has earned him a place in the Austral-ian Poker Hall of Fame – its fi rst non-player. He now stands side-by-side with the likes of Joe Hachem, the winner of the main event at the 2005 World Series of Poker – the equivalent to the game’s world championship. “It’s a thrill and an honour,” says Mr McDonagh.

He will be inducted into the hall of fame in January in Crown casino in his home town of Melbourne. It was there that it all started for him.

With his bachelor’s degree in ac-countancy, Mr McDonagh had been working in the banking sector, but de-cided to take a break and go for a long vacation. When he returned, he saw a job advertisement for croupiers at Crown. “It was by chance I started in a casino,” he says.

After three years as a croupier, in 1997, he learned there was an opening for a poker manager at the casino, which was getting ready to introduce the game to the gaming fl oor.

“I had no awareness of poker and

Unbeatable handThe fi rst non-player inducted into the Australian Poker Hall of Fame, tournament director Danny McDonagh faces a bigger challenge winning over Chinese players

knew nothing about Texas Hold ’em, but another fellow staff said, ‘You should go for that’. And I went for it. After a cou-ple of months I became the tournament director,” Mr McDonagh says. Again, “it was completely by chance”.

His banking and accounting back-ground benefi tted him. “My math-ematical skills helped because, behind a tournament, there is arranging all the structures and fi nances, money coming in and out.”

Real passionHe says he is keener on organising poker tournaments than on the game itself. To be a good administrator, one needs to be a little removed from the love of playing poker, he admits. That is not to say Mr McDonagh does not play.

“I like playing poker, but it’s more like a hobby. It’s not a real passion. Running poker tournaments is my passion,” he says.

Mr McDonagh climbed up the lad-der swiftly. He was at the helm of every big poker tournament at Crown until 2007. He was also director of two tel-evised series of poker tournaments in Australia, and established poker tours to Austria, Russia, New Zealand and Slov-enia, all with live Internet coverage.

After more than 10 years mostly devoted to poker in Australia, Mr Mc-Donagh made his move to Asia. “I thought: ‘That’s something different, a challenge.’ It was a great way to travel, meet new cultures and I thought it was fantastic,” he says.

He started with the debut of the PokerStars Asia-Pacifi c Poker Tour in Manila, in August 2007. Seoul came next, the following month. In Novem-ber 2007, Mr McDonagh organised the Macau leg of the competition.

Gaming

“I like playing poker, but it’s more like a hobby. It’s not a real passion. Running poker tournaments is my passion,” says Danny McDonagh

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OCTOBER 2011

HELPFUL BETSPokerStars is preparing to host a charity event in support of the

Macau Child Development Association. Part of the entry fee will be donated to the association.

PokerStars has already pledged MOP192,000 (US$24,000) to support a special project by the association to subsidise 10 families with children with learning diffi culties, providing them with professional individual help.

The charity event is included in the Macau Poker Cup Cham-pionship, to take place at the PokerStars room at Grand Lisboa from October 7 to 16. “It is the fourth of the Macau series for the year. The buy-in will be HK$20,000 [US$2,565] for the main event,” says the PokerStars director of live operations for the Asia-Pacifi c region, Danny McDonagh.

PokerStars is expecting more than 300 players to join the main event, compared with 254 last year. Ten side-events will be run dur-ing the competition. “We have a ladies-only event. We are expect-ing around 40 players to join,” Mr McDonagh says.

Next month is the Macau stage of the Asia-Pacifi c Poker Tour. “That’s what we call a major event. We expect over 400 players for the main event,” says Mr McDonagh, who is the president of the tour.

PokerStars wants to attract high-rollers to its tournaments. The Macau Poker Cup Championship will have an event dedicated to such players, with a HK$50,000 buy-in, while the Macau leg of the Asia-Pacifi c Poker Tour will have a HK$100,000 buy-in event.

PokerStars is considering creating a tournament dedicated to the top end of town. “One thing that is missing in our calendar is a main event for a very big buy-in,” says Mr McDonagh.

High-stakes poker in Macau made the headlines last year, with reports of games with MOP320 million on the table. Industry insid-ers say wealthy Chinese businessmen that have moved over from VIP baccarat lead the heavy betting.

Texas Hold ’em eventually became legal in Macau in 2008 and PokerStars opened a room at Grand Waldo, which was moved into Grand Lisboa the following year. He has been based here ever since.

Front-row viewMr McDonagh says there is still a lot for him to achieve. He wants to promote Texas Hold ’em in the mainland, using Macau as bait.

“In the Chinese culture, people are very methodical [and that is] suited to the game. There’s the element of bluffi ng, math-ematical skills and reading the other player. That suits the Asian player. Poker will become a popular game here,” he says.

Hong Kong, Japan and India are his other targets in Asia, as one of his tasks as president of the Asia-Pacifi c Poker Tour is to bring the competition to new markets.

He still fi nds time to oversee the day-to-day operations at the PokerStars 33-table live poker room at Grand Lisboa. “It’s been great this year. We have had an increase of 50 to 60 percent in tournament numbers. Most players are coming from China, Japan, and Taiwan. My goal is to make this the number one venue,” he says.

Mr McDonagh has had a front-row view of the develop-ment of poker in the Asia-Pacifi c region. “Originally, poker was just cash game operations. Tournaments came once a year and then twice a year,” he says. Now, some places can hold 10 or more events per year.

Retirement is not an idea that enters Mr McDonagh’s mind. “The passion hasn’t gone, for sure. When I come down to the fl oor amongst the people, it doesn’t feel like work,” he says.

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ISSUE 4 ON SALE

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OCTOBER 2011

DAVID GREEN GAMING CONSULTANT, NEWPAGE CONSULTING

Here we go... again!Much has been made of the recently leaked U.S. diplomatic

cables, which perpetuate the line that Macau is essentially an ineffectively regulated casino jurisdiction, and a

goldmine of opportunity for money laundering, via junket operations.

I had cause in this column several months ago to refl ect on what I perceive to be ill-informed and downright xenophobic derogatory comments about the regulation of junket operations in Macau. Let me try again, this time with specifi c reference to the allegations of there being serious weaknesses in Macau’s anti-money laundering laws and their enforcement.

By defi nition, money laundering can only occur if the proceeds of criminal activity are converted to “clean” funds by utilizing some form of legitimate mechanism.

Take an everyday example; drug money could be used to purchase an apartment for cash, with the apartment then sold on to a bona fi de purchaser. The sale proceeds would not bear the stain of the funds originally used to buy the apartment. Simple, effective, and perhaps cost neutral, or even profi table in a rising market.

What is the obligation of the purchaser in such a situation? None. They are entitled to rely on the fact that they have purchased in good faith, without notice of any taint of the transaction.

The original vendor is in the same position; there is no obligation upon the vendor to perform due diligence as to the origin of the settlement funds, unless they are put on notice that those funds have been obtained unlawfully.

The key point is not that the sale and purchase was able to occur, but that there is a documentary trail supporting the entire chain of transactions, which can be investigated at any time should circumstances warrant.

Paper trailNow, let’s look at what might happen in a casino. A patron may present at a cage wanting to buy-in for HK$2 million (US$260,000), which they have with them, in cash.

The fi rst decision point: should an inquiry be required as to the provenance of those funds at the time of their presentation?

There may be circumstances where that would be justifi ed, for example if the currency was stained with the dye used by banks to thwart bank robberies. Realistically, though, that would be a rare situation; the cage is entitled to accept the origin of funds as “clean”.

However, unlike the property vendor referred to above, the cage has an immediate obligation to prepare a high value transaction report, which involves obtaining the identity details of the patron, and fi ling the report with the Gaming Inspection and Coordination Bureau within three business days. The documentary trail is thereby established, and can be investigated at any time.

The complication with junkets is that they are sometimes reluctant to fi le reports of high value, or suspicious transactions, but not necessarily because they are on notice that their customers’ funds may have been obtained illegally.

Those reports must be fi led through the concessionaire in whose premises such transactions occur, so there is a concern by junkets that the information reported may not be held confi dential by the concessionaire, as it would be if reported direct to either the gaming regulator, or, in the case of suspicious transactions, the Financial Intelligence Offi ce. Ultimately, of course, the compliance responsibility rests with the concessionaire, since

they contract with the junkets, and are jointly responsible for their activities within the concessionaire’s casino premises.

But wait, there’s more. All concessionaires are subject to external audit, in accordance with Law 16/2001, which regulates the legal framework for the operations of casino games of fortune.

The external auditors are obliged to immediately report to the Gaming Inspection and Coordination Bureau and the Financial Services Bureau any matter detected in the course of an audit that might point to money laundering occurring on the concessionaire’s premises. To my knowledge, no such report has ever been fi led.

Get realIn truth, much of what is written about the state of casino regulation in Macau is driven by perception, rather than a real understanding of what is happening.

I have had countless discussions with foreign regulators who can’t understand why Macau has such a high transaction reporting threshold (MOP500,000 or about US$62,500), when compared with the US$3,000 and US$10,000 commonly in place elsewhere. Simple, really. Macau’s betting turnover, which is what is tracked, is currently running somewhere in the region of HK$10 trillion from baccarat alone, four to fi ve times greater than the next largest gaming jurisdiction, Nevada.

As it is, more than 300,000 high value transactions are being reported to the Gaming Inspection and Coordination Bureau annually. What value would there be adopting a lower reporting threshold and fi ling, say, fi ve million such reports annually? It certainly would not enhance the operation of Macau’s anti-money laundering laws and it would impose a crushing burden on the concessionaires.

In fact it would be counter-productive, a triumph of process over substance.

Perhaps the real concern is to do with how money fl ows into Macau for gaming purposes, especially from the mainland? The question I would ask is: whose responsibility is it to monitor and control such fl ows? This is not a money laundering issue, it is an exchange control issue.

For example, suppose a mainland customer uses his Union Pay card to acquire goods in Macau, which he then requests a refund for. The money is refunded, less a percentage withheld for processing the transaction, and is used to gamble. Is that money-laundering?

That depends on the origins of the funds that settle the debit to the Union Pay card, in the mainland; the transaction by which cash has been acquired is not itself illegal in Macau. Surely no one is suggesting that there should be a tracing of those funds to establish their provenance? Perhaps not so surely...

What if the funds were to be used to acquire property in Macau, and not for gaming at all, what would be the interpretation placed on that by Macau’s critics? That the city improperly regulates its property market?

Adopting the moral high ground is fi ne if your position is unimpeachable. Money laundering occurs in many day-to-day situations and is a universal issue. Macau has adopted a contemporary regime for addressing the issues, but it happens to host by far the world’s largest gaming industry. It is therefore considered a fair target for those who might fi nd its success diffi cult to swallow.

Well, suck it up. There has been a change in the global gaming order.

MUCH OF WHAT IS WRITTEN ABOUT THE STATE OF CASINO REGULATION IN MACAU IS DRIVEN BY PERCEPTION, RATHER THAN A REAL UNDERSTANDING OF WHAT IS HAPPENING

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Gaming

Opponents of government plans to legalise casinos in Taiwan have mounted a new campaign

to stop the reform, claiming it will turn the country into the “republic of casino”. An alliance of anti-gambling groups, including a major teachers’ un-ion, launched the crusade after claiming the government was too one-sided in its support for gaming resorts and that evi-dence of its positive economic impact on the country had yet to be proved.

The Anti-Gambling Legislation Al-liance staged a protest at the Ministry of Transportation and Communications last month amid fears that politicians plan to pass more pro-casino legislation dur-ing the current parliamentary session. The protesters handed a list of demands

He also condemned the use of Macau-based consultants Ocean Tech-nology, which operates training courses for staff working at casinos, to oversee the legislation related to integrated re-sorts, adding it was like “asking a fox to guard the hen house”.

Balance debate neededOpponents claim the consultation proc-ess was fl awed because most experts who attended the meetings supported the development of the gambling indus-try and tended to discuss the issue from the perspective of investors. They claim no comprehensive evaluation of the environment, infrastructure and culture of offshore islands had been conducted before it was decided that integrated

BY DAN TOWNEND*

No fair gameCasino opponents in Taiwan launch new campaign

to the ministry, which they have dubbed “the Ministry of Gambling”.

During a public meeting, Anti-Gambling Legislation Alliance spokes-man Ho Tsung-hsuen criticised the con-sultation process which had happened in the country’s outlying islands.

“Though the ministry emphasised that it held seminars on the outlying is-lands to hear from residents and explain the gambling act to them, the seminars focused on the introduction of gambling tourism and only presented the general ideas of the gambling act,” he said. “One really has to question the true purpose of those seminars.”

“The real question is: Can gambling really boost the economy of the offshore islands?” Mr Ho questioned.

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OCTOBER 2011

* EXCLUSIVE GAMBLINGCOMPLIANCE/MACAU BUSINESS

It’s your daily

business

dents on the island cast their ballots in their upcoming referendum, they add.

One concern is whether Taiwan can mirror the economic experience of Sin-gapore, with critics saying there is still a serious doubt that running gambling operations can boost the economic de-velopment of Taiwan’s outlying islands.

Chang Hung-lin, chief executive of the Citizen Congress Watch Alliance, criticised the government for pushing the casino project with the pretence of giving people “a false hope”. He said the biased emphasis on the benefi ts of casi-nos to the people would twist social val-ues in Taiwan and mislead the residents to believe that gambling can make them rich overnight.

Wrong messageLee Jui-ming, director of the Taipei Of-fi ce of the Taiwan Teachers Alliance, said all teachers in Taiwan should op-pose the casino act because it sent the message to students that gambling was acceptable.

Chang Shi-tsung, chief secretary of the Tourism Bureau at the Ministry of Transportation and Communications, received the alliance’s protest statement and its list of demands. He explained that the government was simply performing its duties in accordance with the law of the land.

The drafted casino act and rules for building recreational resorts are all based on a new amendment to the Off-shore Islands Development Act rati-fi ed by the legislators to allow outlying islands to construct casino resorts if a majority of residents in an area support casinos in a referendum.

Mr Chang said residents, not the government, would decide whether to hold a referendum on the issue, and even where a referendum approved a casino plan, there should still be strong regula-tion of projects. “Whether such a resort can be built needs to be decided through referendums,” he noted, adding that lo-cal governments could decide if such referendums were necessary.

Penghu County held the nation’s fi rst referendum on gambling two years ago, with 56 percent of the residents vot-ing against allowing a casino. The devel-opment of casino legislation in Taiwan has been dogged with controversy, with even members of the government voic-ing opposition to the plans.

resorts would be built there.Objectors to casinos in Taiwan also

want experts who are against gambling and can give an appraisal of the negative sides of gambling operations to receive the same amount of funding as Ocean Technology.

Mr Ho also said there was an issue about whether the ministry had suffi -cient authority to regulate the gambling industry.

Protesters have demanded the ruling Kuomintang and the opposition Demo-cratic Progressive Party hold more pub-lic hearings on the issue on the islands of Kinmen, Matsu and Penghu to gather the full spectrum of public opinion. In addition, there should be at least three public debates held in Matsu before resi-

It’s your daily

business

74

OCTOBER 2011

Caesars Entertainment Corp. last month announced its mainland debut with the

groundbreaking at Caesars Pal-ace Longmu Bay on the southern island of Hainan. After fi nding itself shut-out out of both Macau and Singapore’s casino markets, it is the company’s latest step to expand into Asia.

The fl agship fi ve-star luxury resort represents the fi rst major venture of Caesars Global Life, a non-gaming division created to develop and manage hospital-ity and entertainment properties around the world. Caesars’ goal is to develop 25 hotels and resorts in China over the next fi ve years.

“Caesars Palace Longmu Bay will set a global luxury standard in China and build a foundation for Caesars’ expansion through-out the Asia-Pacifi c region, where our brands and reputation are already our most valuable as-sets,” says chief executive offi cer Gary Loveman.

Caesars Palace Longmu Bay will include a 1,000-room ho-tel and several restaurants led by Michelin-rated and celebrity chefs. The property is likely to feature two entertainment ven-ues, a 36-hole championship golf course, golf school, marina, spa and shops. The resort is designed by Australia-based PTW Archi-tects and is expected to open in 2014. The cost is forecast at more than RMB3 billion (MOP3.77 billion).

Second lifeCaesars – previously known as Harrah’s Entertainment – has tried to gain a foothold in Asia but has found it increasingly dif-fi cult to enter the casino market. In August, the company already

Plan BExcluded from gaming in Macau and Singapore, Caesars Entertainment is focusing on hospitality in Hainan to further expand in Asia

announced plans to expand into India’s hospitality sector.

“Gaming is only legal in a small number of places in the world,” Mr Loveman told Associ-ated Press. “This brings the Cae-sars brand to places where gam-bling is not permitted but where the brand is held in high regard.”

Caesars has had a presence in Macau since September 2007, when it paid US$577.7 million (MOP4.6 billion) for the 70-hec-tare Macau Orient Golf Course and the rights to the land.

The course was renamed Caesars Golf Macau in December 2008 to match a US$26 million redevelopment of the property, which was followed by a second upgrade last year.

Gaming analysts say the ac-quisition was initially part of the company’s strategy for entering Macau’s casino market. But Cae-sars was left dangling, caught by the freeze on gaming licences. One year ago, Mr Loveman, ad-mitted his 2006 refusal to bid on a US$900 million gambling sub-concession in Macau had been his worse decision ever as a chief executive.

In Hainan, Caesars will part-ner with Guoxin Longmu Bay Investment Holding Co. Ltd., a subsidiary of investment and development company Jiangsu Guoxin Investment Group Ltd. In the fi rst phase, the subsidiary is spending about RMB36 billion to develop an area of about fi ve square kilometres.

“Caesars Entertainment brings extensive experience in worldwide tourism, entertain-ment, hospitality and manage-ment,” said Jiang Xushen, vice-president of Jiangsu Guoxin Investment Group.

Gaming 74

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OCTOBER 2011

The director of the Macau Gaming Inspection and Coordination Bureau, Manuel Joaquim das Neves, has been honoured by the International Masters of Gaming Law as the “Gaming regulator of the year – evolving jurisdictions”.

According to sources contacted by Portuguese news agency Lusa, Mr Neves was selected because of Macau’s legislative developments in the gaming industry and regulation work with operators.

Mr Neves will receive the award this month, during an International Masters of Gaming Law reception at the G2E exhibition, in Las Vegas.

The International Masters of Gaming Law is a non-profi t association of gaming attorneys, regulators, educators, executives and consultants from around the world who are dedicated to education and the exchange of professional information concerning all aspects of gaming law. The organisation membership consists of over 200 members and represents over 38 countries.

WEIKE APPOINTS SENIOR SALES MANAGERSingapore-based casino gaming company Weike Gaming has appointed Gus Noble as its senior sales manager. Mr Noble joined Weike Gaming after serving as the company’s sales agent in Macau for the last 15 months. Headquartered in Singapore, Weike Gaming was established in 1998 and supplies gaming machines, electronic table games, gaming management and jackpot systems to markets that include Singapore, Malaysia, Cambodia, Vietnam, Macau, Laos and the Philippines.

VIP JUNKET ANNOUNCES ADDITIONAL CREDIT LINEVIP room operator Asia Entertainment & Resources Ltd. (AERL) announced that it has received an additional HK$100 million (US$12.83 million) interest-free line of credit for its VIP room at the StarWorld. Overall, the company now has total lines of credit for its VIP rooms of HK$430 million - HK$200 million each at the StarWorld and Galaxy Macau, and HK$30 million at the Venetian Macao. With the increase in cage capital from the new line of credit, AERL is reiterating its rolling chip turnover 2011 guidance for its three existing VIP rooms of US$1.7 billion per month and now expects to be at the higher-end of its 2011 non-GAAP income guidance of between US$70 million and US$77 million.

NEVES GETS Macau gaming regulator director praised for work with operators

AWARD

MACAU EYES MOZAMBIQUEA group of businessmen from Macau is considering building a casino 30 kilometres north of Maputo, in Mozambique. The news

was broken by the chairman of the Mozambican Export Promotion Institute, Joao Macaringue, who

didn’t provide more details. “There are some Macau businessmen based in South Africa who came here, and they are interested in setting up a casino,” he said, quoted by Agência de Informação de Moçambique news agency.

VENETIAN HOSTS BADMINTON OPENThe 2011 Kumpoo Macau Open Badminton Grand Prix Gold is set to bring some world-class badminton talent to Venetian Macao’s CotaiArena from November 29 to December 4. Offi cially sanctioned by the Badminton World Federation, this year’s tournament will award around MOP1.6 million (US$200,000) in total prize money. The competition’s sponsors are Japanese badminton manufacturing company Kumpoo and the Macau Sport Development Board.

76

OCTOBER 2011

Pleasant headache

Hospitality76 Hospitality

BY EMANUEL GRAÇAPHOTOS BY CARMO CORREIA

Pleasant headache

Plenty of guests but not enough workers makes running a fi ve-star hotel in Macau a challenge, says Grand Hyatt’s general managerPaul Kwok

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Too much business can be hard to manage – especially when you do not have enough manpower, says

Grand Hyatt Macau’s general manager, Paul Kwok Sai Kit.

That is the main problem the city’s hospitality sector is facing, he says. With fi ve-star hotels having occupancy rates av-eraging more than 80 percent but lacking suffi cient staff, they must overcome obsta-cles every day to give quality service.

“That is not only us. Every hotel in town has to work on that,” Mr Kwok says.

Hotel guests stay in Macau for an aver-age of 1.5 days and want to make the most of their time in town and this puts extra pressure on hotel operations. Staff need to be quick to clean the rooms when one lot of guests check out so that the next group is not kept waiting.

“The room turnover is every hotel’s headache in town because the volume is too big,” says Mr Kwok, although he con-cedes that managing a busy hotel is a good headache to have.

He says staff need to know how to han-dle frustrated guests when hold-ups occur. That is why two months ago the Grand Hy-att held training courses in communication skills for front-line employees.

OBSTACLE COURSE FOR MICEMacau’s inadequate infrastructure is pre-

venting the expansion of the meetings, incentives, conventions and exhibitions (MICE) industry, says Grand Hyatt Macau’s general manager, Paul Kwok Sai Kit.

He says it is diffi cult to get to Macau, to get through the border controls and, once in the city, to get around and to fi nd what you need. Even people coming from Hong Kong fi nd that it takes a long time to get to the hotel lobby, Mr Kuok says.

Grand Hyatt is aiming to attract medium-size MICE events. Participants in MICE events now make up 15 to 20 percent of the hotel guests, on average. Mr Kwok says he wants to increase that percentage.

Although the number of MICE events in Macau dropped in the fi rst half of this year, Grand Hyatt has been able to slightly increase the amount of MICE business it gets, Mr Kwok says. Last year, it hosted more than 200 MICE events.

Mr Kwok says the future of Macau’s MICE industry lies across the border. “I can foresee that China’s MICE will continue increasing over time,” he says.

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HAPPY BIRTHDAYGrand Hyatt Macau celebrated its fi rst two years in operation last month. The fi ve-star

hotel has progressed “very well,” says its general manager, Paul Kwok Sai Kit.“We have established and sustained our position in terms of a gaming and non-gaming

hotel,” he says.Of the hotel’s guests, 60 percent are gamblers, Mr Kwok says. The performance of the

casino at City of Dreams has certainly helped Grand Hyatt, he adds.Another lure for guests is the “The House of Dancing Water” show, which opened a year

ago. “The whole City of Dreams has leveraged from this well-designed and one-of-a-kind entertainment show,” says Mr Kwok. It helps that the most direct way to get to the show is through the Grand Hyatt’s lobby.

Mr Kwok is pleased by the way the three hotels in City of Dreams – Hard Rock Hotel, Crown Towers and Grand Hyatt – have worked together. “We have a lot of synergies in terms of packaging and selling us as a destination,” he says. “We don’t really compete with each other. It is more like complementing.”

Grand Hyatt occupies two towers at City of Dreams. It has 791 rooms and 15 function areas covering almost 9,000 square metres, a 40-metre outdoor pool and a spa.

The hotel has two restaurants: mezza9 Macau, serving international cuisine, and Beijing Kitchen, specialising in northern Chinese. Mr Kwok says each is individually profi table unlike some food and beverage outlets in Macau, which lose money but are supported by casinos.

Mr Kwok says the supply of manpower is “a little bit better” now. He says the authorities have recently allowed hotels a slightly bigger quo-ta for imported labour. The Grand Hyatt hotel has been understaffed by up to 30 percent in the peak seasons.

The hotel has a “three-R” strat-egy: recruit new employees, and re-train and retain old ones. New staff are not put to work straight away.

“Normally, all hotels will put them right away into operations, after four days’ orientation. It is killing them. They are like not-well-trained soldiers put into the bat-tlefi eld,” says Mr Kwok. “We give them three more weeks of internal operational training.”

Spoilt for choiceThis approach is bearing fruit. Mr Kwok says that recently Grand Hy-att’s employee turnover has fallen by 30 percent.

Mr Kwok is not worried by the advent of new hotel-casinos in Co-tai. He says the opening of Galaxy Macau has had no direct effect on City of Dreams. Galaxy Macau opened in May and includes three hotels: its own, Hotel Okura Macau and Banyan Tree Macau.

Grand Hyatt will soon have more new neighbours, this time just across the street. Sands China Ltd is expecting to open the fi rst phase of its Sands Cotai Central development by March, with 600 fi ve-star Con-rad Hotel rooms and 1,200 four-star Holiday Inn rooms.

By the third quarter of next year, Sands China plans to add 2,000 more Sheraton Hotel rooms and suites to the development. The second phase is due to open in early 2013.

This will only increase the mo-tivation for people to visit and return to Cotai, says Mr Kwok. “As a guest, I will be able to have several experi-ences.”

He says service is what makes all the difference in hotels. For in-stance, Grand Hyatt has been giving special attention to VIPs recently.

“We are doing a lot of touches to let the guests know they have rec-ognition. That is the key. It is impor-tant to keep the guests coming back and back again,” says Mr Kwok.

Hospitality

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FOUR SEASONS ORGANISES CHARITY RUNFour Seasons Hotel Macao will again organise the “Run of Hope Macau”. The 2011 edition is to take place on November 6. The organisation hopes to attract 200 runners. Events include a 5.1 km individual run and 3.2 km family walk, plus pre and post event fundraising activities to support the cancer program at Kiang Wu Hospital and the Evangelize China Fellowship Orphanage in Macau. This is the third “Run of Hope” in Macau since the hotel opened in 2008. In the two previous editions, the event raised MOP160,000 (US$20,000).

A group of experts from the Pacifi c Asia Travel Association (PATA) was in Macau last month for a fi eld visit as the starting point for a task force project to provide insights and recommendations for the positioning of the city.

The Macau Government Tourist Offi ce has requested PATA to establish a task force to provide expert opinions in determining the future tourism policies and plans required to achieve the positioning of Macau as a world centre of tourism and leisure.

To integrate the task force project PATA appointed seven experts from the academic and consultancy fi elds covering areas of expertise ranging from aviation to destination management and branding. The task force is expected to submit a report to the Tourist Offi ce by beginning of 2012.

MORE TOURISTS DURING MID-AUTUMN FESTIVALA total of 387,000 tourist arrivals were recorded in Macau during this year’s Mid-Autumn Festival holidays, lasting from September 10 to 13, according to offi cial data quoted by Xinhua. The fi gures showed that the number of tourist arrivals increased by 29.7 percent year-on-year. During the period, some 1.41 million border-crossings were recorded.

TRAVEL AGENCY BUSINESS UP IN 2010The business performance of travel agencies in Macau saw remarkable growth in 2010, according to information from the Statistics and Census Service. Sales and other proceeds soared by 33 percent year-on-year to MOP4.74 billion (US$593 million), including revenue of MOP51.1 million (1 percent of the total) from on-line business. On the other hand, expenditure of travel agencies totalled MOP4.55 billion, up by 34 percent. Last year, there were 177 travel agencies operating in Macau, up by eight from 2009.

A PLACE PATA experts to conduct study on Macau’s positioning

IN THE SUN

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TOURISM CENTRE OPENS DOORSThe Macau government last month inaugurated the new Macau Tourism and Cultural Activities Centre, offering tourists information, snacks and Portuguese products. Situated near the Ruins of St Paul’s, foreign exchange services and “Made-in-Macau” brand products are also available. Visitors can enjoy Portuguese snacks and tasting activities at a Portuguese style café. A selection of arts and crafts, wine, coffee and food products showing Portuguese culture are also on display and for sale. The centre hosts a tearoom, showcasing the art of tea through tea tasting, tea products promotion and exchange. Handicrafts of tea are also available for sale.

NON-STOPNew record for visitor arrivals

TOURS SURGEVisitor arrivals on package tours soared by 46.1 percent year-on-year to 671,000 in July. Visitors from the mainland (490,000); Taiwan (47,000) and South Korea surged by 51.2 percent, 90.8 percent, 151.1 percent respectively. In the fi rst seven months of 2011, visitor arrivals on package tours went up by 7.7 percent year-on-year to 3.8 million.

HOTEL GUESTS HIT NEW ALL-TIME HIGHHotels and guest-houses received 796,000 guests in July 2011, a new all time record. The fi gure was up by 21.5 percent year-on-year, with the majority coming from the mainland (54.2 percent of total) and Hong Kong (21.5 percent). The average length of stay of guests decreased by 0.07 nights to 1.4 nights. The average occupancy rate of hotels and guest-houses notched up a record high of 88.2 percent, up by 8.2 percentage points year-on-year. At the end of July, Macau had 21,804 rooms, with that of 5-star hotels accounting for 62.8 percent of the total.

The total visitor arrivals for August marked a new monthly record of 2.7 million, up 14.4 percent over 2010. The previous record was set just one month before, in July, when Macau welcomed 2.55 million visitors.

Same-day visitors accounted for 52.3 percent of total visitor arrivals, with 839,000 coming from the mainland.

Analyzed by place of residence, visitors from the mainland surged by 24.3 percent year-on-year to 1.57 million, mostly coming from Guangdong province (821,000), Fujian province (93,000) and Zhejiang province (61,000).

Total visitor arrivals reached 18.5 million in the fi rst eight months of 2011, up by 10.4 percent year-on-year.

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October

Date: 3rd - 6th

Event: G2E Las VegasVenue: Sands Expo & Convention Center, Las VegasOrganiser: AGA | Reed ExpoAddress: 1299 Pennsylvania Ave., NW, Suite 1175, Washington, D.C. 20004, USATel: (1) 888 314 1378Fax: (1) 203 840 9626Website: www.g2e.comE-mail: [email protected]

Date: 12th - 14th

Event: ENADA RomeVenue: Fiera di Roma, Rome, Italy Organiser: Rimini FieraAddress: Via emilia, 155 - 47921 - Rimini (RN), ItalyTel: (39) 0541 744111Fax: (39) 0541 744200Website: en.enada.itE-mail: centralino@riminifi era.it

Date: 20th - 23th

Event: 16th MIF | Macau International Trade & Investment FairVenue: The Venetian Macao-Resort-HotelOrganiser: IPIMAddress: Alameda Dr. Carlos d’Assumpção No 263, Edif. China Civil Plaza, 20˚ andar, MacauTel: (853) 2882 8711Fax: (853) 2882 8722 Website: www.mif.com.mo E-mail: [email protected]

Date: 23rd - 27th

Event: International Association of Gaming Regulators ConferenceVenue: Cape Town International Convention Centre, South Africa,Organiser: IAGRAddress: State Gaming Control Board, 555 East Washington Avenue, Las Vegas, NV 89101 Fax: (1) 702 486 2045Website: www.iagr.orgE-mail: [email protected]

Date: 31 Oct - 2 Nov Event: APAC Alternative Investments SummitVenue: The Venetian Macao Resort HotelOrganiser: marcus evansAddress: 9 Demostheni Severi Avenue, Nicosia 1080, CyprusTel: (357) 22 849 300 Fax: (357) 22 849 307Website: www.apacaisummit.comE-mail: [email protected]

November

Date: 3rd - 5th

Event: 4th China (Zhongshan) International Games & Amusement FairVenue: Complex Hall of Zhongshan Expo Center, Zhongshan, ChinaOrganiser: China Zhongshan Municipal Government/ Guangzhou GrandeurAddress: 2nd Floor, No.318 Chebei Road, Guangzhou, 510660, ChinaTel: (86) 20 2210 6418Fax: (86) 20 82579220Website: www.zsgaf.com E-mail: [email protected]

Date: 9th - 11th Event: SAGSE – South American Gaming Suppliers Expo & CongressVenue: Centro Costa Salguiero, Av. Costanera and J. SalgueroOrganiser: Monografi e S. A.Address: Av. Alvear 1883 Loc. 21, (C1129AAA) Cdad. Aut. de Buenos Aires, Argentina. Tel: (54) 11 4805 4623Fax: (54) 11 48054791Website: www.monografi e.comE-mail: info@monografi e.com

Date: 9th - 10th

Event: Asian Casino and Gaming CongressVenue: Marina Bay Sands, SingaporeOrganiser: Beacon EventsAddress: 20/F Siu On Ctr, 188 Lockhart Rd, Wanchai, Hong KongTel: (852) 2531 6107Fax: (852) 2586 1999Website: www.beaconevents.comE-mail: [email protected]

Date: 11th

Event: Asian Sports and Welfare Lottery SummitVenue: Marina Bay Sands, SingaporeOrganiser: Beacon EventsAddress: 20/F Siu On Ctr, 188 Lockhart Rd, Wanchai, Hong KongTel: (852) 2531 6107Fax: (852) 2586 1999Website: www.beaconevents.comE-mail: [email protected]

TBA : To be advised | : A Macau Business partner event

If you know of an event that you believe should be listed with Macau Business, please drop us an e-mail: [email protected]. In the subject bar, type in “List me as an event”.

Date: 14th - 16th

Event: 2nd Annual Integrated ResortsVenue: Resorts World Sentosa, SingaporeOrganiser: marcus evansAddress: CP21, Suite 2101, Level 21, Central Plaza, 34, Jalan Sultan Ismail, 50250 Kuala Lumpur, MalaysiaTel: (603) 2723 6736 Fax: (603) 2723 6699Website: www.integratedresorts-lse.comE-mail: [email protected]

Date: 29th - 30th

Event: C5 International Gaming Law Summit Venue: Le Meridien Picadilly Hotel, LondonOrganiser: American Conference InstituteAddress: 45 West 25th Street, 11th Floor, New York, NY 10010Tel: (1) 212 352-3220Fax: (1) 212 352-3231Website: www.c5-online.com/gamblingE-mail: [email protected]

December

Date: 5th - 6th

Event: DGLP – Digital Gaming and Lottery Policy SummitVenue: Hilton Alexandria Mark Center, Washington D.C. Address: P.O. Box 16899, Clayton, MO, USA 63105Tel: (1) 314 685 8965Website: www.bvmediagroup.com/E-mail: [email protected]

Date: 7th Event: Social Gaming and Virtual Goods WorldVenue: The Grange Hotel, Tower Hill, LondonOrganiser: Terrapinn LtdAddress: Wren House, 43 Hatton Garden, London, EC1N 8ELTel: (44) 20 7092 1000Fax: (44) 20 7242 1508E-mail: [email protected]

January

Date: 24th - 26th

Event: ICE Totally GamingVenue: Earls Court Exhibition CentreOrganiser: Clarion EventsAddress: Warwick Road, London, SW5 9TA, UKTel: (44) 20 7370 8200Fax: (44) 20 7370 8344Website: www.icetotallygaming.comE-mail: [email protected]

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The gaming and retailing boom is boosting the market for advertis-ing space at Macau International

Airport. An increasing number of high-end brands are keen on advertising there, says JCDecaux Transport’s Hong Kong and Macau general manager, Shirley Chan. Ms Chan says that to keep up with demand her company plans to offer more ad spots there next year.

JCDecaux Transport recently intro-duced an advertising format new to Macau,

putting up large light-boxes just before passport control in the airport departures area. Chanel was the fi rst customer.

The airport has around 100 fi xed indoor advertising spots, ranging from scrolling panels to giant ceiling banners. The 700 baggage trolleys can also carry advertisements.

During peak seasons such as Lunar New Year and Christmas, up to 90 per-cent of ad space at the airport is usually booked. But since there are strong fl ows

Signs of growthA strong increase in sales of advertising space at the airport obliges JCDecaux Transport to expand its offeringBY EMANUEL GRAÇA

of tourists in and out of Macau all year round, advertisers are looking for space at other times of the year, Ms Chan says.

JCDecaux Transport has about 20 long-term advertisers at the airport. Among them are The Swatch Group Ltd., LVMH (purveyor of Louis Vuit-ton handbags, Celine suits and Moët & Chandon champagne), and Galaxy En-tertainment Group Ltd.

JCDecaux Transport has operated the airport advertising concession since

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number of international high-end brands such as Hugo Boss, Guerlain, Shiseido, IWC and Roger Dubuis have advertised at the airport to catch the eye of the in-creasing numbers of wealthy Asian tour-ists.

She says some advertisers are “re-ally concerned” about the quality of the space they buy, so JCDecaux Transport has been increasing the number of prime spots at the airport.

The company has also exploited modern technology. For a special cam-paign to promote the mobile phone roaming service provided by Companhia de Telecomunicações de Macau SARL (CTM) to visitors, tourists could receive ads on their phones via Bluetooth when passing close-by the advertisements.

JCDecaux began selling outdoor spots at the airport last year, on bill-boards furnished by a joint venture with HN Group Ltd. The joint venture has three billboards, all fully booked until the end of December. “We are discuss-ing increasing the number of sites,” Ms Chan says.

Indoors, the most sought-after spots are in the arrivals area. But Ms Chan says more and more advertisers, espe-cially high-end brands, are interested in the revamped duty-free shopping area.

It may not be immediately obvious why advertisers should be so keen on the airport, where passenger numbers dropped 4 percent last year to 4.08 mil-lion. “The airport brings a lot of quality passengers,” says Ms Chan.

A survey of passengers by the air-port found that 45 percent were profes-sionals, executives, managers or busi-nessmen, and that more than half have annual incomes of at least MOP240,000. Besides, not all last year’s passenger fi g-ures were negative: the number of tour-ists among the arrivals rose 1.7 percent to 1.61 million, and the number of main-land visitors rose by more than a quarter to 511,000.

Ms Chan says JCDecaux Trans-port’s next venture in Macau may well be in the light rail transit system. “We are really interested to invest,” she says.

The JCDecaux group has had a presence here for 10 years through JC-Decaux Macau, a joint venture with HN Group, which has had a street furniture advertising contract since 2001. It is now the city’s biggest street furniture adver-tising business, with more than 300 spots. Recently the company added bus body spots to its portfolio.

2003. The license was offi cially granted to its sister company JCDecaux Macau and the current contract lasts until 2018.

The company, an arm of France’s JCDecaux SA, sells ad space on more than 300 transport networks and at 184 airports around the world.

Ms Chan says revenue from adver-tising space at Macau airport has been growing strongly for several years. She declines to give exact fi gures but says revenue at least doubled in each of the fi rst two years of JCDecaux Transport’s concession, mainly because of improve-ments in its offerings. Since then, annual growth in revenue has been in double digits every year except 2009, according to Ms Chan.

Sell phonesMs Chan says one of her company’s strengths is its ability to fi nd advertis-ers from around the world. A growing

JCDecaux Transport plans to offer more ad spots at the airport next year, says the company’s general manager Shirley Chan

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Ms Lao is in her 50s. She has been unem-ployed for seven months, having been fi red by the kindergarten where she had

worked as a cleaner for 18 years. She is now look-ing for part-time work, because she needs to take care of her two children, aged 18 and 19, both of whom have learning diffi culties.

“They are full-time students. I have to do the cleaning and look after them, so they continue to study,” she says.

Ms Lao has spent the past seven months re-plying to job ads in newspapers. She says her age and health problems make it is more diffi cult to fi nd work. “My legs are very swollen because I used to clean non-stop and had no time to sit down,” she says.

Her search is made more diffi cult by the scar-city of part-time jobs, she complains.

“I had one offer. It is to clean a bank and I get MOP1,500 [US$187.50] per month.”

She is awaiting the government’s response to an application for fi nancial assistance. In the meantime, Ms Lao has been using her savings and unemployment benefi ts to meet her day-to-day expenses.

Caritas Macau is a charity that helps the needy and its secretary-general, Paul Pun Chi Meng, does not believe unemployment is a big problem. “The unemployed [in Macau] are peo-ple who can’t cope with the demands of society or who have to meet the demands of their families,” he says. Mr Pun adds some people cannot get a job because they do not have suffi cient skills or because they are unable to socialise and are in-secure.

According to the Statistics and Census Serv-ice, the unemployment rate is now 2.6 percent – about 9,000 people. The Monetary Authority says Macau has reached full employment, in an eco-nomic sense of the expression.

The latest fi gures indicate that long-term un-employment is not a problem here. At the end of June fewer than 10 percent of the unemployed had been searching for job for more than one year.

About one-quarter of the unemployed at the end of June were looking for work in gaming and about one-fi fth for work in the hospitality industry.

BY LUCIANA LEITÃO

Out there, somewhere

Sixty percent were men and about one-third were 45 or older.

However, in the second quarter the unem-ployment rate among those aged 16 to 24 rose to 6.7 percent.

Of the total unemployed, 92.6 percent had already been previously working. Half stated per-sonal or family motives as their reasons for quit-ting. Only 13.7 percent had been dismissed.

Easy to quitU I Man is in her 20s and recently graduated from the Institute for Tourism Studies.

She found a job two weeks after getting her degree. “I didn’t like that job, so I quit half a month later,” Ms Cheong says. Three weeks after that, she found a new job. In between, she even declined a position as VIP host at a casino.

“Macau people can easily fi nd a job,” she says. “It’s always easy to quit when we don’t like it.”

Portuguese João Silva (not his real name) lived in Macau for several years but went back to Portugal before the handover in 1999, afraid of what it might entail. Unable to adjust to life in Portugal, he returned to Macau 13 months ago, hoping to fi nd a good job, with his qualifi cations in statistics and electronics and his Macau identity card.

But Mr Silva – now in his 50s, married and with a daughter – could fi nd only odds and ends of work. “I did sales, served at tables. I was doing a little bit of everything – things that had nothing to do with my qualifi cations,” he says.

He does not fully understand why he could not get a job rapidly. “The doors didn’t open,” he says. Eventually, after a year, the engineering de-partment of a hotel-casino took him on.

The Labour Affairs Bureau endeavours to help people to fi nd jobs. At the end of August around 8,000 job seekers were registered there, with 7,700 of them claiming they were unem-ployed.

The Social Welfare Bureau helps people who cannot fi nd jobs to get by. In the fi rst eight months of this year 1,269 households in diffi culty because of unemployment, or close to 2,750 people, re-ceived fi nancial assistance from the bureau.

Human Resources

In a city with full employment, who are the jobless? Macau Business went in search of them

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UNEMPLOYED AND UNACCOUNTEDAlthough non-resident workers account for one

quarter of the city’s workforce, they are not re-fl ected in the city’s unemployment fi gures.

The reason is simple. If non-residents lose their jobs, they have 10 days to leave before they are kicked out. Also, non-resident workers that are fi red or quit their jobs without a valid reason are barred from obtaining another work permit, or blue card, for six months.

Even so, many unemployed non-residents opt to stay here illegally or on tourist visas while looking for a new job. They are among Macau’s unemployed but they are not counted.

Filipo Jimenez (not his real name) was forced to go home to the Philippines after a 14-year career in Macau. Having quit his job in a bar after disputes about his pay, the 45-year-old lost his work permit and had to leave.

Life was not easy at home. “I’m more than 40 years old and it’s diffi cult to fi nd a job in the Philippines,” Mr Jimenez says.

A year after he left Macau, he returned on a tourist visa to fi nd work. He has since found a job in a bar and is applying for his blue card.

Mr Jimenez says some Filipinos kicked out of Macau have managed to return but others have simply given up.

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OCTOBER 2011

In the United States or Europe, job cuts make the headlines daily. Macau has the opposite problem: it lacks enough people of the quality required to fi ll job openings.That makes it easier for local talent just to hop around

from one employer to another, looking for the best short-term benefi ts. But experts warn that a poor strategy can be harmful in the long run. They advise young people to draw up career plans and stick to them.

Doris Ip Ka I, assistant professor and student counsellor at the Institute for Tourism Studies, says a career plan makes eminent sense, regardless of the industry, especially in Macau, where there are “so many opportunities now”.

When choosing a job, young people “may look at the salary and the job title,” she says. “Personal interest may become sec-ondary. However, it should be the life goal they need to consider.”

The latest fi gures show 12.1 percent of employees changed jobs in 2008. More than half said better pay was the main rea-

Get a lifeWith the labour market fl ooded with job offers, career planning makes more sense now than ever beforeBY SARA SILVA MOREIRA

son. Among those in employment under the age of 24, more than one quarter changed jobs.

In the gaming industry, Macau’s biggest employer, the rate of employee turnover in the second quarter of 2011 was 4.9 percent, 0.8 percentage points more than a year before. The second-quarter job vacancy rate was 4.6 percent, 3.1 percent-age points higher, indicating an increase in demand for labour.

Ms Ip says a career plan is a powerful tool for keeping you focused on long-term goals and avoiding the distraction of shorter-term gains. “A job may be a means for making a living but a career makes a life,” she says.

Sniff aroundTo pursue a planned career you must know your personal tar-gets and values as well as your work goals, the experts say. You must continuously acquire and apply new knowledge, take opportunities and take risks.

Human Resources

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OCTOBER 2011

Dino Couto, a lecturer and another student counsellor at the Institute for Tourism Studies, says it is important to draft a career plan as soon as possible in an employment market as dynamic as Macau’s.

“It makes sense to start by sniffi ng around what’s hap-pening in Macau,” Mr Couto says. “Which sectors within this booming economy are looking for high-calibre can-didates? Next, study yourself. Can [you] match all the re-quirements?”

A career strategy should give you a clearer idea of your interests, your strengths and weaknesses – and how to over-come the weaknesses. You should also learn about opportuni-ties for further studies or research in the fi eld of your choice, and about the jobs available.

Jiji Tu, the managing director of human resources com-pany MSS Recruitment and job portal hello-jobs.com, says following a career strategy is a four-stage process: draw up a career plan, fi nd a career mentor, execute the plan and review the plan annually, adjusting it if necessary.

Talking to other people, learning about their experiences and listening to their advice may be important. Discussing ca-reer options with others may also be useful in your search for the right career mentor.

A career mentor should be able to assess accurately your skills and abilities, knowledge and experience. They should also help you stay focused on what is relevant and give feed-back and advice at every stage of the plan.

Goal attackCareer planning includes measuring progress along the path planned. This means it is important to write down goals. Putting pen to paper keeps your focus sharp.

A career plan must serve as a personal route map. It should contain short-term (fi ve-year), medium-term (10-year) and long-term (15-year) objectives reached via annual goals.

The annual goals should be steps on the way to the more distant objectives, including learning the skills needed to progress as planned. Acquiring these skills may require fur-ther studies, such as doing a master’s of business administra-tion course.

Jacky Hong Fok Loi, coordinator of the University of Macau MBA programme, says many people enrol to improve themselves and develop their careers, and that most keep working in Macau after they graduate.

The university has its own Further Studies and Placement Centre, which offers counselling and workshops, and fi nds in-ternship placements.

“The biggest challenge is executing the career plan and ensuring one has the passion, perseverance and positive mind-set to focus on the goals,” says Ms Tu.

Pursuit of short-term gains can lead you astray, she says. To stay on track, it may be necessary to turn down offers

of better-paid positions, more important-sounding titles and bigger offi ces, she warns. You must “be absolutely clear on what decisions to take”.

But Ms Tu says that a career plan should be fl exible. It is important to review it regularly and decide if any changes need to be made to reach the next goal.

Adjustments must also be made if you encounter setbacks or unexpected successes, or if market conditions change.

While career planning is often recommended to fresh grad-uates, experts say anybody of any age can benefi t from it.

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OCTOBER 2011

The era of solar energy has dawned in Macau and the private sector is keen to stake a place in the sun.

China Singyes Solar Technologies Holdings Ltd. is one such company. It is based in Zhuhai and listed on the Hong Kong Stock Exchange. It designs, makes and installs in-buildings systems to har-ness the energy of the sun to generate electricity or heat water.

The company is now negotiating a deal to install its fi rst centralised water heating system in Macau, says senior business manager Anna Zou. The cus-tomer for this project is a factory.

“They need hot water, so we will use solar energy and air-source heat pumps,” she told Macau Business last month on the sidelines of the fi fth Delta Inter-Chamber Event, which took a look at renewable energy in the Pearl River Delta. Organised by Macau Business and Delta Bridges, the event was held at Macau Tower.

Ms Zou says the sun and air-source heat pumps can together provide 80 per-

Sunny days

cent of the energy needed to heat water. Air source heat pumps take warmth from the air and use compressors to in-crease the temperature.

By the end of the year, Singyes Solar also expects to install its fi rst system in Macau that uses sunlight to generate electricity. This entails putting photovoltaic panels on buildings. The customer for this project is a school, Ms Zou says.

Singyes Solar has around 1,500 em-ployees. It is building a plant in Zhuhai to make systems for export. It opened a factory in the southern province of Hu-nan in July.

Electrifying investmentAlso seeking a slice of Macau’s so-lar energy market is Solar Cities Asia. The company designs, makes and in-stalls photovoltaic panels on rooftops in South China.

Solar Cities Asia’s chief executive, Valdis Dunis, says some solar panels have already been installed in Macau

but on a small scale. His company’s aim is to introduce bigger systems that can cover the roofs of casinos or ferry terminals.

Mr Dunis envisages systems with a capacity of at least 100 kilowatts, which can provide 10 percent to 40 percent of a building’s power needs. This would re-quire a roof of about 700 square meters.

Solar Cities Asia is now design-ing systems for hotels and schools here. Why schools and casinos? “Both are in-terested in becoming green, a lot of them have roofs that are suitable and they have a lot of air-conditioning requirements,” Mr Dunis says.

With the cost of solar panels going down and all the fi nancing available, so-lar energy is a worthwhile investment, he says. The investment pays for itself in fi ve to 10 years.

Mr Dunis says the city’s 1,300 hours of sunshine per year is quite suffi cient for power generation. “That is very close to Spain and Portugal in terms of solar intensity,” he says.

Private enterprise is eyeing the city’s renewable energy market, following the government’s lead

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Still this year, Singyes Solar expects to install its fi rst system in Macau. Also seeking a slice of Macau’s solar energy market is Solar Cities Asia

The government’s Offi ce for the De-velopment of the Energy Sector has pro-moted renewable energy use since 2008.

The offi ce has led by example, co-operating with the Institute for Tourism Studies to set up a system to re-use heat generated by the institute’s air condi-tioning to warm water for its hot water

supply. The experiment began in Janu-ary last year. The government expects to recoup its investment in about eight years.

The offi ce has also set up solar pan-els on the main building of the Housing Bureau and the roof of the Institute of Tourism Studies. In both cases, the pow-

er generated is used for lighting. Solar-powered water-heating systems have also been installed at the D. Bosco and Tamagnini Barbosa swimming pools.

The offi ce is planning to install solar panels in social housing develop-ments and will issue rules for using solar energy by the end of the year.

The fi fth Delta Inter-Chamber Event Anna Zou and Valdis DunisPh

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92

OCTOBER 2011

JEAN PISANI-FERRY MEMBER OF THE ECONOMIC ANALYSIS COMMITTEE UNDER FRANCE’S PRIME MINISTER

SINCE THE INTERNATIONAL MONETARY SYSTEM HAS EXPERIENCED FEW CHANGES HISTORICALLY, THE EFFORT TO REVAMP IT IS BOUND TO BE A LONG MARCH

France, which now holds the presidency of the G-20, has chosen reform of the international monetary system as its main priority for the Cannes summit in November. But

is the issue worth the time and energy offi cials will devote to it? And where can such discussions lead?

When French President Nicolas Sarkozy announced his G-20 agenda a year ago, most expected that at end-2011 the world economy would be cruising at a comfortable speed. At the same time, burgeoning concerns about “currency wars” suggested that Mr Sarkozy’s priorities were correct.

Unfortunately, other matters now call for more urgent attention: with the fl agging global recovery and the mounting debt crisis on everybody’s mind, focusing on longer-term monetary reform might look like a distraction.

A case can be made, however, for keeping discussion of the issue alive. Indeed, defi ciencies in the global monetary system contributed to several economic failings in recent years: excess global liquidity; over-accumulation of dollar-denominated reserve assets; uneven policy responses to current-account surpluses and defi cits; resistance to necessary exchange-rate adjustments in the emerging world; and coexistence of infl ation and defl ation at a global level.

All of these shortcomings are in some way manifestations of the same international monetary defi ciencies. Addressing them might not solve today’s economic woes, but it would help limit the build-up of new problems and provide guidance for alleviating today’s concerns.

Connecting the dotsThis is where the second question – where can such discussions lead? – comes into play. France, paradoxically, has neither made clear which problems global monetary reform is expected to solve, nor proposed a grand plan for such reform. Rather, it has taken topics one at a time, seeking to reach consensus separately on each: the completion of efforts undertaken by the 2010 South Korean presidency to strengthen multilateral liquidity-provision schemes; the strengthening of multilateral surveillance; the appropriate use of capital controls; and a change in the composition of the basket of currencies that comprise the International Monetary Fund’s Special Drawing Rights, a unit of account that was once expected to evolve into a global store of value.

This piecemeal approach is politically savvy but analytically perplexing, as it provides no clues regarding the big picture. The dots are there, but it is hard to see how to connect them. Since the international monetary system has experienced few changes historically, the effort to revamp it is bound to be a long march. As a result, the appropriateness of small steps should be assessed from a perspective covering at least the next 10-15 years.

The most likely scenario at that time horizon is a multi-polar system of one or several key international currencies,

with the euro (assuming its survival) and China’s renminbi being prime candidates to second the U.S. dollar in this role. To be sure, both currently have severe shortcomings, and only one might attain international-currency status – or other currencies could emerge, though at a signifi cantly longer time horizon. But the economic logic points unambiguously in the direction of multi-polarity.

Multi-polarity promises capital mobility and exchange-rate fl exibility between the poles, as well as the development of a liquid market for benchmark bonds in each region. But the stability of a genuinely multi-polar system cannot be taken for granted, for it will require each of the monetary poles to agree to depart from purely domestic priorities and stand ready to fulfi l its international duties, both in normal times and during crises.

Moving towards multi-polarityThe main economic and currency blocs clearly do not meet such preconditions today, albeit for different reasons. China has taken signifi cant steps in the direction of currency internationalization, but its policy system remains very domestically oriented. The eurozone, now under severe stress, could emerge stronger from its current crisis, but it would have to depart from its traditionally neutral stance towards internationalization. And the United States is not yet willing to accept full responsibility for the global repercussions of its macroeconomic policies.

As the international monetary system moves towards multi-polarity, then, the role of international coordination is to reap the full benefi ts of this market-based movement and attenuate the risks involved. The discussions surrounding the enlargement of the Special Drawing Rights basket (by including the renminbi) and coordination of bilateral swap arrangements should be understood from this perspective.

A truly multilateral system, organized around a quasi-global currency and centralized management of global liquidity, remains a possible outcome, but not the most likely one. In the short run, the necessary conditions will not be met, not least because no large country is ready to deviate from domestic priorities. In the future, however (say, in the event of another global crisis), such a scenario might return to the fore.

These broad perspectives are unlikely to be discussed in Cannes. This is perhaps unavoidable, because leaders must focus on what they can actually deliver. Even so, it would be preferable to leave the technicalities of the Special Drawing Rights basket and liquidity-provision schemes to fi nance ministers, and to let heads of state and government discuss the issue for which they are indispensable: the politics of global currency reform.

This commentary draws on a recent co-authored report, Global Currencies for Tomorrow: A European Perspective (Bruegel and CEPII, 2011).

Big reform in small packages

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SEPTEMBER 2011

COMING SOON

For more information visit macaubusiness.com or write to [email protected]

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OCTOBER 2011

To take advantage of the grow-ing number of smart phones and tablet computers in the market,

3Macau is hoping to boost its third-gen-eration business. The Macau mobile tel-ecommunications division of Hutchison Telecommunications Hong Kong Hold-ings Ltd. is investing in both hardware and fresh content.

3Macau became the second-largest mobile network in the city last year. “In terms of smart phones, we are leading,” says the company’s chief executive, Ho Wai Ming, without disclosing fi gures.

The company’s revenue was HK$507 million (US$65.1 million) last year, 27 percent higher than the year before. Mr Ho says turnover will keep on expanding at a double-digit rate this year, with data fees continuing to be one of the growth drivers.

“We are really optimistic,” he says. “We still have a lot of opportunities.”

Macau has four 3G mobile networks. In July it had 415,000 post-paid 3G sub-scribers and 650,000 prepaid 3G subscrib-ers, four times the number of 2G users.

To increase its share of the 3G market, 3Macau launched 3Books last month, which it calls Macau’s fi rst mobile multimedia e-book platform. A monthly fee of MOP38 (US$4.75), gets users unlimited access to a library of books and magazines with nearly 2,000 titles. The service is available for iPhones, iPads and smart phones that use the Android operating system, as well as personal computers.

Getting smart3Macau bets on mobile content to increase revenue

Last year 3Macau spent more than MOP100 million on improving its net-work. This year it plans to enhance cov-erage, installing more than 100 new cell sites. It also has plans to increase its data transmission speeds soon.

With faster transmission speeds, 3Macau is eyeing mobile content as a new source of revenue, with e-books the pioneer. “The fast-growing smart phone and tablet trend has had the direct effect of boosting e-reading development,” says Mr Ho.

Reading tea leavesMr Ho cites a forecast made in July by International Data Corp, an internation-al research institute, that the number of tablets shipped to the Asia-Pacifi c re-gion in 2015 will be 10 times the number shipped last year. This “will add impe-tus to the growing popularity and fur-ther development of e-reading”, he says.

The 3Books service is not new to Hutchison Telecommunications sub-

scribers in Hong Kong, where it has been available for more than a year. This means little investment was needed to extend it to Macau.

Mr Ho has not forecast how popu-lar the service will be here, saying only that the company really sees the market demand.

3Macau partnered with 24Reader in Hong Kong to set up the 3Books service. 24Reader offers close to 4,000 e-books and a variety of e-magazines from the mainland, Hong Kong, Taiwan and Ja-pan. 24Reader chairman and chief ex-ecutive Carlos Cheng says the content “is refreshed on a daily basis, while elec-tronic availability of some magazines is synchronous with that of paper versions”.

3Macau’s Mr Ho says 3Books offers no Macau publications at the moment but that will change.

“In the future, we plan to partner with more e-book providers, publishers and magazines to provide a greater depth and breadth of content,” he says.

WAITING GAMECompanhia de Telecomunicações de

Macau SARL (CTM) loses its mo-nopoly on fi xed-line telecommunications at the end of the year. One likely new competitor could be the parent company of 3Macau.

Hutchison Telecommunications Hong Kong Holdings Ltd. is a big player in Hong Kong’s fi xed-line market. “We are always looking for telecom opportunities”, says 3Macau chief executive Ho Wai Ming.

But Mr Ho says no fi rm decision has been reached. “We are still studying and we are waiting for more information from the government,” he says.

Telecommunications

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OCTOBER 2011

aia”, Cirque du Soleil’s permanent show at the Venetian Macao, is performing better at the box offi ce. On average, 60 percent of the seats are now fi lled, although the show has not yet broken even, three years after its opening.

“Zaia” mixes acrobatics, street-style enter-tainment and music in telling the story of a young girl who journeys into space on a voyage of self-discovery.

Cirque du Soleil’s senior vice-president for resident shows, Jerry Nadal, says demand for seats for “Zaia” was at fi rst more seasonal. “Around the Golden Weeks and the Chinese New Year we had big attendance that would then drop off,” he says.

There now seems to be a steadier fl ow of people to see the show. “It is a little bit more consistent,” Mr Nadal says.

He explains the biggest demand for tickets is from tour-ists from Taiwan, who buy almost one third of all that are sold. Visitors from Hong Kong are the next most enthusiastic,

followed by visitors from the mainland.There is growing interest among people of other nation-

alities lured to the Venetian for conventions and exhibitions or pure leisure. “We’ve seen the Indian market grow tremen-dously since the hotel hosted the International Indian Film Academy Awards” in 2009, Mr Nadal says. Other examples are the Japanese and South Koreans.

The growth in audience numbers has, obviously, im-proved the box-offi ce takings for “Zaia”. But the revenue it generates is below that generated by a similar Cirque du Soleil resident show in Las Vegas.

Earning a name“Zaia” is presented in a custom-built 1,800-seat theatre. The combined cost of building the venue and creating the 90-minute show exceeded US$150 million (MOP1.2 billion).

When the show opened, in August 2008, it was the fi rst permanent Cirque du Soleil production in Asia and, with its

BY LUCIANA LEITÃO

SHOW OF FORCE

Audiences for “Zaia” are up, Cirque du Soleil says, dispelling any threat of being upstaged by “The House of Dancing Water”

Entertainment96

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OCTOBER 2011

ADAPT TO SURVIVEThe “Zaia” show currently on display at the

Venetian Macao is not the same that premiered there in August 2008. Over the last three years, Cirque du Soleil has introduced new elements to the show.

Cirque du Soleil’s senior vice-president for resident shows, Jerry Nadal, says the changes are meant both to attract new kinds of audience members and to give those

that have already seen the show a reason to come back. He notes making such adjustments

is normal practice. Mr Nadal says some of the changes – like the lion dance choreography – are meant

to make the show more appealing to Asians. Further changes will be made in the future. Next year, says

Mr Nadal, the fi nal act will have slight adjustments, while new performers will be brought in from Tokyo’s “Zed” show, which is to close at the end of this year because of the drop in the number of spectators after the earthquake and tsunami in Japan in March.

75 performers, the fi rst big resident show in Macau.Mr Nadal says Cirque du Soleil was prepared for a slow

start for the show. “We knew when we came here that this would be a challenge,” he says. The company predicted that it could take up to four years before the public response measured up to expectations.

Last year, word went around that “Zaia” could close before the end of the 10-year contract between the Venetian and Cirque du Soleil. Mr Nadal says it was a rumour and that the show is here to stay.

“The rumours started at the height of the economic crisis, and the Venetian was going through a diffi cult time. Worldwide it was diffi cult,” he says. The Venetian is “in a much stronger position”, Mr Nadal adds, and Cirque du Soleil has changed parts of “Zaia” to adapt to tastes on this side of the world (see box).

At the same time, the number of visitors to Macau interested in more than just gambling has grown. “We’ve got a lot of tourists coming in and not just gamblers but people that are taking advantage of the whole resort,” Mr Nadal says.

This means the mixture of visitors to Macau is more similar to the mixture that Cirque du Soleil is used to in Las Vegas, where the company has seven resident shows.

Since 1984, Cirque du Soleil has performed in more than 300 cities on six continents in front of a cumulative audience of more than 100 million. It estimates that this year alone close to 15 million people will see one of its performances.

However, the company is still fi nding its feet in Asia. “Zaia” is crucial for the establishment of its reputation in the region in general and in the mainland in particular.

“We hope to have three permanent shows in Macau one day, and I see a day where we can have a permanent show in big Chinese cities like Shanghai and Beijing,” president and chief executive offi cer Daniel Lamarre told Reuters last month.

Entertaining choicesIn September last year, “Zaia” got a competitor: “The House of Dancing Water”, a HK$2 billion (US$260 million) show by Franco Dragone at Melco Crown Entertainment’s City of Dreams. So far, its box offi ce takings have been far better than those of “Zaia”.

According to the co-chairman and chief executive of Melco Crown Entertainment, Lawrence Ho, “The House of Dancing Water” has entertained more than 700,000 people, with an average of more than 90 percent of seats fi lled.

Mr Nadal says Mr Dragone’s show is “healthy com-petition”. And, taken together, the shows, along with wider choices for shoppers, diners and revellers, help “cement Macau more as a resort destination, not just a gaming desti-nation.”

“Now there’s not only one show but two shows. I hope there’s a couple more coming in, because then it really will be like Las Vegas,” he says.

“The House of Dancing Water” has not eaten into audi-ence numbers for “Zaia”, Mr Nadal stresses.

“There are more people coming in here that want to see shows as opposed to people who are just coming in to game. They’re selling tickets and we’re selling tickets. I would call it friendly competition.”

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Entertainment

or partygoers that have been in Macau for more than four years, the name Sky 21 would ring a bell. The stylish nightclub on the top fl oors of the AIA

Tower was arguably the trendiest place in town back in 2006 and 2007, when the big hotel-casinos in Cotai and their discos were still in the making.

Sky 21 is returning in December but in a different garb and with more emphasis on the restaurant side of the business. The superb views of Nam Van Lake and Macau Tower remain the same.

The nightclub did not have an easy fi rst incarnation. After its offi cial open-ing, Sky 21 was closed down by the authorities, only to reopen and then be closed again – until now. The trouble centred around operating without a license, which has now arrived – after four years – the owners say. The wait has resulted in about HK$30 million

(US$3.84 million) in losses.Sky 21 is a sideline of Alvin Chau’s

Suncity Group. The company focuses mainly on junkets but has other busi-nesses, including Club Lotus, a night-club opened last year in the Venetian Macao.

Having initially invested about HK$30 million in Sky 21, Suncity is pouring an additional HK$25 million into in an extensive refurbishment. The challenges have not cooled the com-pany’s enthusiasm for the project.

“We want to bring new things to the Macau entertainment industry,” says spokesman Joe Saree Xongmixay. The goal is to offer a one-stop entertainment venue, mixing dining and partying.

The refurbished premises, covering 1,860 square metres, will be different from the original Sky 21 in several re-spects. What was once a nightclub with a restaurant will become a restaurant and bar, open until 1am on weekdays and 4am on weekends. It will serve lunch and afternoon tea as well as din-ner. But there will be a dance fl oor and a bar on the second fl oor, as before.

Why the shift of focus to food?“Before, not that many tour-

ists wanted to come up because they thought of it as a nightclub. When we change it into a restaurant, everybody will want to go up, even with kids,” says Mr Saree.

The new Sky 21 will have a pan-Asian mid-range restaurant, a VIP room and a sushi bar, which can hold up to 110 people. It will also have a lounge serving high-end dishes and a high-end boutique. One of its previous highlights, the terrace, will be retained.

“We will have themed dining par-ties, maybe invite some live bands,” says Mr Saree.

If the project is successful, Suncity Group will consider opening similar places abroad. “Our idea is to glo-balise,” he says. Taiwan, Korea and Japan are options.

LOFTY REINCARNATION

Sky 21 nightclub is making a comeback in a different guise after a four-year hiatusBY LUCIANA LEITÃO

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The “old” Sky 21 Joe Saree Xongmixay

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GUSTAVO CAVALIERE HOSPITALITY INDUSTRY EXPERT - [email protected]

If you are a foreigner thinking of opening a small business in Macau, think twice because you may end up in

a Catch-22 situation.It is a sad fact that Macau is in

desperate need of qualifi ed people, particularly in the hospitality and restaurant businesses, where customer service is close to non-existent. To fi nd a good waiter or waitress in any of the so-called fi ve-star hotels or high-end restaurants is a miracle.

But if you, as a non-resident, try to open your own business, it is quite likely you will run into irrational laws and regulations that make it (almost) a mission impossible.

The initial steps in opening a business are not very diffi cult. You can resort to the Macao Trade and Investment Promotion Institute, which has the knowledge and expertise to

assist people with all the paperwork.Once you have presented all the

documentation, you have to wait between four and six weeks for the government to approve it and to get the proper permits. It then takes two more weeks for the trade institute to give you the fi nal nod.

Now that you have got your paperwork done, your company is a reality – at least on paper. Unfortunately, you, as the owner, cannot be employed by it. Yes, that is right: owners cannot work for their own company. That means they cannot develop their business, fi nd customers or do any management work. As ridiculous as it sounds, this is the rule.

To solve this problem means no end of trouble. For you to be legally employed by your own company, your company needs to apply for a work permit – a blue card – for you.

Fly me to the moonMACAU DOES JUSTICE TO MARK TWAIN’S FAMOUS APHORISM: IT IS A CITY “WHERE COMMON SENSE IS THE LEAST COMMON OF SENSES”

The problem is that if you are the sole owner of the company, you cannot hire yourself. So, you need to get a partner, who will sign the paperwork and apply to import you as qualifi ed, managerial-level personnel.

Greetings, earthlingThen a new problem emerges: to get an imported labour quota, you must hire a certain number of locals and hope that your imported labour request is approved. Otherwise, you will end up with a handful of employees and a useless registered company.

For the sake of argument, let us say your application is approved and you get a work permit. You can now start running and developing your business, hobbled by several employees on the payroll and not one cent in revenue.

Remember that from step one, you have been racing against the clock. An entry visa in many cases allows you to stay in Macau for a maximum of 30 days; after that you have to apply for an extension, which is likely to be for only 90 days, and it is hard to get all the necessary approvals within that time. If you spend 60 to 70 days registering your company, that leaves very little time for all the rest.

I did not make all this up. It happened to me.

I am now trying to set up my own company in Macau, to provide training, coaching seminars and other services to the tourism industry. It is a complete waste of time and money.

In a speech to Congress in May 1961, U.S. President John Kennedy challenged his nation to put a man on the moon before the end of the decade. Eight years later, in July 1969, Neil Armstrong put his toe into the moondust, uttering the historic words: “That’s one small step for a man, one giant leap for mankind.”

We are now in the year 2011. More than 40 years ago, a man walked on the moon for the fi rst time. Yet getting a foothold in Macau to do business is still beyond human ingenuity.

How long will it take for the government to realise that some of Macau’s laws and regulations severely hinder the city’s efforts to keep up with a fast-changing universe?

We are now in the year 2011. More than 40 years ago, a man walked on the moon for the fi rst time. Yet getting a foothold in Macau to do business is still beyond human ingenuity

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OCTOBER 2011

he Macao International Music Festival begins this month and will put on 20 shows. The city’s biggest annual music event has a budget of MOP34 million (US$4.25 million), accord-ing to the Cultural Affairs Bureau, which is in charge of the music festival.

The bureau also puts on the annual Macao Arts Festival. This year’s arts festival, in May, had a budget of MOP22 million.

The fi gures look fat but is the government spending enough on culture?

This year’s budget includes MOP623.09 million for cul-ture, less than 1.2 percent of overall expenditure.

The Macau Foundation is another vehicle through which the government sponsors and organises cultural events. Ca-sinos must pay a tax of 1.6 percent on gross gaming revenue to the foundation for “cultural, social, economic, educational, scientifi c, academic or philanthropic actions” in Macau.

Last year, the foundation organised or co-organised more than 30 cultural events, according to its annual report. It approved MOP37.59 million in grants for cultural activities, 6.47 percent of all grants it handed out.

BY LUCIANA LEITÃO

The government is investing heavily in culture but artists want the money spent more wisely, and on education

OUT OF FOCUSSome artists contacted by Macau Business say the gov-

ernment does not spend enough and that what it does spend, is not spent wisely.

Christopher Kelen, a poet and associate professor at the University of Macau, says there should be more investment in “community initiatives, in Macau literature, music and the visual arts and in education in all these areas”. He suggests the creation of a university for arts and culture in Macau.

Mr Kelen says that only if the government invests more in grassroots projects and education can the community be-come better equipped to undertake a wider range of creative ventures. “Activities of this kind will generate tourism and other income for Macau in the long term,” he says.

Top billingOthers acknowledge that the government is putting plenty of money into culture but, like Mr Kelen, they complain the money is spent injudiciously, and not enough is expended on education in culture and the arts.

Five years ago James Chu Cheok Son, a painter and president of the Art for All Society did some research on gov-

Arts & Culture

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As the city’s wealthiest enterprises, gaming companies can also play

a role in the world of art. But are they doing anything beyond just paying their taxes?

Macau Business asked all the casino operators what they are doing to support culture in Macau, but few replied and none disclosed how much money they spent.

Sands China Ltd’s Cotai Arena has staged performances by artists of international renown such as Lady Gaga, Sarah Brightman and the Black Eyed Peas, and dozens of best-selling artists from Hong Kong, Taiwan and the mainland. Sands China has also opened the stage doors of its Sands Theatre to local groups.

“Many years ago, people requested for Cantonese opera, but now it has evolved into promoting cultural herit-age or creative culture,” says Sands China’s vice-president for community relations, Melina Leong.

The company’s Venetian Macao is home to Cirque du Soleil’s “Zaia” show.

Senior vice-president for public relations at Galaxy Entertainment Group Ltd Buddy Lam Chi Seng says the company sponsors a range of events, from concerts to exhibitions to competitions.

“As one of the biggest companies in Macau, we have to turn into the community. That actually goes with the idea that when we sponsor something, we want the largest group of people possible to enjoy it,” Mr Lam says.

Galaxy Entertainment is due to open its nine-screen 3D cineplex at the Galaxy Macau this year.

At Melco Crown Entertainment Ltd, the cultural highlight is its show “The House of the Dancing Water” at City of Dreams. City of Dreams also has a permanent collection of more than 150 pieces of modern art.

MGM Macau has a Salvador Dali sculpture in the lobby and glass installations by American artist Dale Chihuly. Until October 16 it is holding an exhibition of the work of European artist Charles Chauderlot, who lives in Macau.

SJM Holdings Ltd. has a long record of sponsoring the arts. It will bring the National Ballet of China to Macau in November, for two shows. The company’s Lisboa hotel-casino has several antiques on display.

Wynn Macau and Encore dis-play some European art pieces and antiques.

ernment spending on culture in Hong Kong, Taiwan, Macau and Singapore, and found that Macau spent most per head of population.

“Macau is still spending a lot every year, because it is also targeting tourists. Especially, we have the Macau Foun-dation that can fund everything and anything, which means our cultural expenses are actually unlimited,” he says.

But Mr Chu agrees with Mr Kelen that the money is not spent wisely. And he complains that the government does not properly acknowledge full-time artists. “They never do anything to help artists to improve their artistic life or social recognition, not even insurance and social welfare.”

Bianca Lei Sio Chong, a visual artist and lecturer at the Macao Polytechnic Institute’s School of Arts, believes that more spending does not mean better spending. She says education is crucial for people’s appreciation of the arts. If the government wishes to make a lasting difference, it should promote art and culture in education from primary school onwards, she says.

Director Rui Borges criticises the way the government subsidises fi lm productions. “People who want to make mov-ies that have nothing to do with the usual topics of the melt-ing pot may not have any funding,” Mr Borges says. He says the government supports a production only if it encourages tourism, and that this stifl es creativity.

The Centre for Creative Industries is one of the bodies that help artists by offering them places where they can work or exhibit. The centre’s director, photographer Lúcia Lemos, acknowledges the government’s investment in culture, but thinks its approach is parochial. “All the cultural activity seems to be more suited for people from a small village than an international city,” she says.

THE ART OF GAMING

This year’s government budget includes MOP623 million for culture, less than 1.2 percent of overall expenditure

Local artists say the government does not spend enough in culture and that what it does spend, is not spent wisely

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OCTOBER 2011

MASTER CLASS

The debut by the Czech Philharmonic Orchestra promises an evening of favourite pieces, accompanied by a world-class violin virtuoso

Arts & Culture102

Akiko Suwanai

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f you are among those who were too late to grab a ticket for the concert of the Vienna Philharmonic Orchestra at the International Music Festival, worry no more. Anoth-er chance to see one of the world’s truly great orchestras awaits when the Czech Philharmonic Orchestra makes its fi rst appearance in Macau, at the Macao Cultural

Centre on December 9.Now into its 116th concert season, the Czech Philhar-

monic Orchestra enjoys one of the most storied histories in Europe. The orchestra’s fi rst concert took place on January 4, 1896, under the baton of Antonín Dvořák.

Given the historical link, it is little surprise The Guardi-an has praised the orchestra as “playing Dvořák the way most people breathe oxygen”. The baton for the orchestra’s most recent incarnation has passed to German Claus Peter Flor but the passion remains.

The orchestra has since evolved into one of the world’s greatest. Critics and audiences alike have been impressed by one of the few orchestras recognised as producing a distinc-tive timbre that has come to be known as the Czech sound.

Well loved, the orchestra is also one of the most respect-ed. In 2008, it was voted into the top 20 best orchestras in the world by Gramophone magazine. In 2005, it was a Grammy Award nominee. Its recordings are regular.

Dvořák is regarded as one of the Czech Republic’s great-est musical exports. An all-rounder, he wrote nine sympho-nies and countless other pieces for choirs, orchestras and soloists.

This concert will feature one of his best-known pieces, Symphony No 9 “From the New World”. A second piece, Bedrich Smetana’s “Vltava” from “My Country” is a Czech favourite. It is a 12-minute poetic piece to the river that runs through Prague. It was also the Czech Philharmonic’s fi rst recording in 1929.

Widely lovedPart of the orchestra’s accessibility comes from its relentless touring and appearances at pre-eminent musical festivals. The orchestra has also collaborated with leading musicians

throughout the 19th and 20th centuries, adding star power to its reputation.

At its December’s debut, the audience will have the chance to see Japanese violin virtuoso Akiko Suwanai, who will play Johannes Brahms’ Violin Concerto in D major, which is considered a technically formidable piece.

Britain’s The Independent said of her style in November last year that it was “so very present that all those dramatic contrasts between the expensively lyrical and the astringently impulsive seemed that much more fantastical”.

Ms Suwanai won worldwide acclaim in 1990 when she became the youngest-ever winner of the International Tchaikovsky Competition. It catapulted her into international attention, an extensive discography with Universal Music, a life of touring and a home in Paris. Ms Suwanai performs on the Antonio Stradivarius 1714 violin “Dolphin”, one of the world’s most famous violins.

In our immediate neighbourhood, she is arguably most widely remembered for her 2009 performance, opening the Shanghai Spring International Music Festival. She became the fi rst Japanese violinist to open the event – a major coup that led to her televised performance at Expo 2010 Shanghai.

It is undoubtedly one of the highlights in a reel that must be one of the most comprehensive on earth. The Proms in Lon-don, studies in Berlin and with the Juilliard School of Music, and international prizes that include the International Paganini Competition, are among the acclaims she has gathered.

From the topClaus Peter Flor is scheduled to lead the orchestra’s one night in Macau, a conductor respected for his instinctive musician-ship.

He is currently the music director of the Malaysian Phil-harmonic Orchestra but has returned to the Russian National Orchestra, Warsaw Philharmonic, Guangzhou Symphony and Shanghai Symphony Orchestra in the past two seasons.

During his stints with the Dallas Symphony, Mr Flor was described by the Dallas Morning News as making “music a physical experience”. “One feels its sinews tensing and relax-ing, sometimes pressing against obstacles that yield only with immense effort,” the reviewer wrote.

The maestro has a large discography, including an ac-claimed series of Mendelssohn recordings with the Bamberg Symphony, which have recently been re-issued by Sony/BMG. Most recently he has made two recordings with the Malaysian Philharmonic for BIS label; Suk’s Asrael Sym-phony released in 2009 and Dvorak’s Symphonies No.7 and 8 which will be released this year.

Born in Leipzig in 1953, Mr Flor began his musical career with violin tuition in Weimar and Leipzig, before fo-cusing on conducting. By the age of 31, he was general music director of the Konzerthausorchester Berlin, which led to regular associations with the other major German orchestras: the Leipzig Gewandhaus and Dresden Staatskapelle.

Prior to his position as music director of the Malaysian Philharmonic Orchestra, Mr Flor held the position of prin-cipal guest conductor of the Orchestra Sinfonica di Milano Giuseppe Verdi.

His outstanding leadership of a world-class orchestra, scheduled to play a selection of classics, with the accompani-ment of one of the most acclaimed violinists today, promises a very special evening.

DATE: Friday, December 9TIME: 8pmVENUE: Grand Auditorium, Macao Cultural CentreTICKETS: Between MOP120 and MOP480, with discounts for seniors, students, group buys, early birds and friends of the cultural centre. Available at the box offi ce and Kong Seng outletsMore information: email [email protected] or visit www.ccm.gov.mo

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WORLD PRESS PHOTO OF THE YEAR 2010JODI BIEBER, SOUTH AFRICA, INSTITUTE FOR ARTIST MANAGEMENT/GOODMAN, GALLERY FOR TIME MAGAZINEBibi Aisha, disfi gured as punishment for fl eeing her husband’s house, Kabul, Afghanistan.

Arts & Culture

t is a powerful and controversial portrait: a young, mutilated Afghan girl looks at the camera with her dark and mysterious eyes. Her name is Bibi Aisha and South African photojournalist Jodi Bieber took the picture. It won Ms Bieber the 2010 World Press Photo of

the Year award.The image and another 160 that won World

Press Photo accolades are displayed at Casa Garden until October 9. There is no entry fee.

This is the fourth time Casa de Portugal has brought the world’s biggest photojournalism event to Macau. Apart from Taipei, this is the only city in Greater China this year to host the annual exhibi-tion of the winning pictures, which will tour about 100 places around the world.

The 2010 World Press Photo jury gave awards in nine categories to 55 photographers, including two from the mainland and one from Hong Kong. A record 108,000 images were submitted. The number of participating photographers was almost 5,700, representing 125 nationalities.

The jury gave a special mention to a series of 12 photographs taken by the miners trapped in the San José mine in Chile, who endured 69 days 700 meters underground before they were rescued on October 13 last year. The pictures show the condi-tions inside the mine in general and one miner in particular, Edison Peña, a keen runner who kept up his exercise regime underground. The jury decided that the images played an essential part in the news reporting of the event, even though they were not taken by a professional photographer – hence the special mention.

Aisha’s portrait was shot for Time magazine and appeared on the cover of the August 9 issue last year.

At the age of 12, Aisha and her younger sister were given to the family of a Taliban fi ghter to set-tle a dispute in accordance with Pashtun tribal cus-tom. When Aisha reached puberty she was married to the fi ghter but she later returned to her parents, complaining of violent treatment by her in-laws.

Men arrived one night demanding that she be handed over to be punished for running away. Aisha was taken to a mountain clearing, held down and had her ears sliced off and then her nose. In local culture, a man who has been shamed by his wife is said to have lost his nose.

Aisha was abandoned but later rescued and tak-en to a shelter in Kabul run by the aid organisation Women for Afghan Women, where she was given medical and psychological treatment. Later she was taken to the United States, where she received coun-selling and is now awaiting reconstructive surgery.

David Burnett, a founding member of Contact Press Images and chairman of the 2010 World Press Photo jury, said: “This could become one of those pictures, and we have maybe just 10 in our lifetime, where if somebody says, ‘You know that picture of a girl...’, you know exactly which one they’re talking about.”

An opportunity to see the images that won the World Press Photo awards

THAT PICTURE OF A GIRL

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1ST PRIZE, GENERAL NEWS, SINGLERICCARDO VENTURI, ITALY, CONTRASTOThe historic Iron Market burns, Port-au-Prince, Haiti, January 18.

1ST PRIZE, PEOPLE-IN-THE-NEWS STORIESDANIEL BEREHULAK, AUSTRALIA, GETTY IMAGESPakistan fl oods, August-September: Flood victims scramble for food as they battle the downdraft from a Pakistan army helicopter during relief operations, Dadu, Pakistan.

1ST PRIZE, SPORT STORIESADAM PRETTY, AUSTRALIA, GETTY IMAGESPortfolio about the fi rst Youth Olympic Games, Singapore, August: Ioran Etchechury of Brazil trips and falls head fi rst during the boys’ 2,000-metre steeplechase at Bishan Stadium.

1ST PRIZE, SPORT, SINGLEMIKE HUTCHINGS, SOUTH AFRICA, FOR REUTERSThe Netherlands’ Demy de Zeeuw is kicked in the face by Uruguay’s Martin Cáceres during the World Cup semi-fi nal, Cape Town, July 6.

1ST PRIZE, GENERAL NEWS STORIESOlivier Laban-Mattei, France, Agence France-PresseHaiti earthquake aftermath, January 15-26: A man throws a dead body at the mortuary of the general hospital, Port-au-Prince.

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1ST PRIZE, CONTEMPORARY ISSUES STORIESED OU, CANADA, REPORTAGE BY GETTY IMAGESEscape from Somalia, March: Four Somali refugees en route to Yemen sleep in the desert after travelling all night on muddy roads and in pouring rain, Somaliland.

1ST PRIZE, DAILY LIFE STORIESMARTIN ROEMERS, THE NETHERLANDS, PANOS PICTURESMetropolis: Mumbai, India, January 9.

1ST PRIZE, NATURE, SINGLETHOMAS P. PESCHAK, GERMANY/SOUTH AFRICA, SAVE OUR SEAS FOUNDATIONA Cape gannet comes in to land, Malgas Island, South Africa.

2ND PRIZE, PEOPLE-IN-THE-NEWS, SINGLESEAMUS MURPHY, IRELAND, VII PHOTO AGENCYJulian Assange, founder of WikiLeaks, London, 30 September

1ST PRIZE, DAILY LIFE, SINGLEFEISAL OMAR, SOMALIA, FOR REUTERSA man carries a shark through the streets of Mogadishu, Somalia, September 23. Shark is not commonly eaten in Somalia but shark meat is dried and salted for export.

1ST PRIZE, ARTS AND ENTERTAINMENT, SINGLEANDREW MCCONNELL, IRELAND, PANOS PICTURES FOR DER SPIEGELJoséphine Nsimba Mpongo practises the cello, Kinshasa, Democratic Republic of Congo. She is a member of Central Africa’s only symphony orchestra. Most of the players are self-taught amateurs who hold day jobs.

Arts & Culture

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GEORGE SOROS CHAIRMAN OF SOROS FUND MANAGEMENT

Thinking the unthinkable in EuropeTHE EUROPEAN UNION’S MEMBER COUNTRIES, AND NOT ONLY THOSE IN THE EUROZONE, MUST ACCEPT THAT A NEW TREATY IS NEEDED TO SAVE THE EURO

To resolve a crisis in which the impossible has become possible, it is necessary to think the unthinkable. So, to resolve Europe’s sovereign-debt crisis, it is now

imperative to prepare for the possibility of default and defection from the eurozone by Greece, Portugal and perhaps Ireland.

In such a scenario, measures will have to be taken to prevent a fi nancial meltdown in the eurozone as a whole. First, bank deposits must be protected. If a euro deposited in a Greek bank would be lost through default and defection, a euro deposited in an Italian bank would immediately be worth less than one in a German or Dutch bank, resulting in a run on the defi cit countries’ banks.

Moreover, some banks in the defaulting countries would have to be kept functioning in order to prevent economic collapse. At the same time, the European banking system would have to be recapitalized and put under European, as distinct from national, supervision. Finally, government bonds issued by the eurozone’s other defi cit countries would have to be protected from contagion. (The last two requirements would apply even if no country defaulted.)

All of this would cost money, but, under the existing arrangements agreed by the eurozone’s national leaders, no more money is to be found. So there is no alternative but to create the missing component: a European treasury with the power to tax and, therefore, to borrow. This would require a new treaty, transforming the European Financial Stability Facility into a full-fl edged treasury.

No choiceBut this presupposes a radical change of heart, particularly in Germany. The German public still thinks that it has a choice about whether to support the euro. That is a grave mistake. The euro exists, and the global fi nancial system’s assets and liabilities are so intermingled on the basis of the common currency that its collapse would cause a meltdown beyond the capacity of the German authorities – or any other – to contain. The longer it takes for the German public to realize this cold fact, the higher the price that they, and the rest of the world, will have to pay.

The question is whether the German public can be convinced of this argument. Chancellor Angela Merkel may not be able to persuade her entire coalition of its merits, but she could rely on the opposition to build a new majority in support of doing what is necessary to preserve the euro. Having resolved the euro crisis, she would have less to fear from the next election.

Preparing for the possible default or defection of three small countries from the euro does not mean that those countries would necessarily be abandoned. On the contrary, the possibility of an orderly default – fi nanced by the other eurozone countries and the International Monetary Fund – would offer Greece and Portugal policy choices. Moreover, it would end the vicious cycle – now threatening all of the eurozone’s defi cit countries – whereby austerity weakens their growth prospects, leading investors to demand

prohibitively high interest rates and thus forcing their governments to cut spending further.

New treaty neededLeaving the eurozone would make it easier for the most distressed countries to regain competitiveness. But, if they are willing to make the necessary sacrifi ces, they could also remain: the European Financial Stability Facility would protect their domestic bank deposits, and the International Monetary Fund would help to recapitalize their banking systems, which would help these countries escape from their current trap. Either way, it is not in the European Union’s interest to allow these countries to collapse and drag down the entire global banking system with them.

The European Union’s member countries, and not only those in the eurozone, must accept that a new treaty is needed to save the euro. That logic is clear. So the discussions about what to include in such a new treaty ought to begin immediately, because, even with European leaders under extreme pressure to agree quickly, negotiations will necessarily be a prolonged affair. Once the principle is agreed, however, the European Council could authorize the European Central Bank to step into the breach, indemnifying it from solvency risks in advance.

Having in sight a solution to the eurozone’s sovereign-debt crisis would be a source of relief for fi nancial markets. Even so, because any new treaty’s terms will inevitably be dictated by Germany, a severe economic slowdown would be almost certain. That might induce a further change of attitude in Germany, in turn allowing the adoption of counter-cyclical policies. At that point, growth in much of the eurozone could resume.

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It is a record: a total of 33 teams answered to the corporate social responsibility call and joined the fi fth edition of the Annual Macau Business Charity Golf Tournament. With the

fi rst round completed, philanthropy is already the real winner.The initial leg took place on the fairways of Caesars Golf

Macau on September 25. There, the golf was more about en-tertainment and having fun. Challenges such teeing off with a tennis racket and putting with an umbrella kept things lively.

The second round of the tournament and the Gala Dinner were initially set to take place on September 30. With Typhoon

FUN, FRIENDS, PHILANTHROPY

Nesat in the neighbourhood, organisers decided to follow the advice of two-time PGA Championship winner Dave Stockton: “When the ducks are walking, you know it is too windy to be playing golf.”

Both events were postponed to October 21.The second round of the tournament will take place at the

Macau Golf and Country Club, while the Gala Dinner will be held at the Westin Resort. It includes a charity auction of memorabilia from the fi elds of sport, music and other kinds of entertainment.

The fi rst round of the Annual Macau Business Charity Golf Tournament was a success, but typhoon Nesat forced organisers to postpone the fi nal leg and the gala dinner

A near miss by Egis Rail team

Grand Lisboa team members having a break

Ruby Wang, from Aruze Gaming team Galaxy Entertainment Team II ready for action

Harold Tsakmaklis, from Galaxy Entertainment Team I

Corporate Social Responsibility

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As usual, the tournament prize money total of HK$200,000 is to be split between the two teams that fi nish the tournament with the best net and gross scores respectively. Each winning team will have the right to choose the charity or social project that they would like to forward their winnings to.

Special awards and trophies include one each for long-est drive (men and ladies), the stroke nearest to the pin, the straightest drive, the putting challenge and the best performing team, among others.

While long-term partner Melco Crown Entertainment

continues its support as the event main partner in this year’s tournament, they are joined by Australian casino The Star, Caesars Golf Macau and the Westin Resort.

Other leading sponsors include: Sands China Ltd, Galaxy Entertainment Group Ltd, MGM China Holdings Ltd, SJM Holdings Ltd and Wynn Macau Ltd.

Aristocrat, Silver Heritage, Morton’s The Steakhouse and YES! Golf are among the other event patrons.

Fine wines and spirits distributor Seapower Trading and lux-ury cigar brand Davidoff are the special Gala Dinner sponsors.

Getting readyDo you think it is easy to putt using an umbrella?Andre Hong, from Egis Rail team

Gunther Hatt, from Sands China Team 1, tees off with a tennis racket

TH Fine Wines team

Chris Connell, from Greatest Caesars team, putts with an umbrella

Alice Tang, from Winning Asia team, putts with a tennis ball

The Shuffl ers team

Luis Pereira, from Macau Business SK Events

Full steam ahead

Photos: Gonçalo Lobo Pinheiro

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110110

Macau Business together with Delta Bridges hosted the fi fth edition of its Delta Inter Chamber Event last month. The series was this time devoted to renewable energy in the Pearl River Delta.

Guests from Macau, Hong Kong and Guangdong province gathered at Macau Tower for a conference on this topic (read more in our Environment section), followed by a networking cocktail reception.

Once again the Delta Inter Chamber Event could count on the support and presence of the European Chamber of Commerce in Hong Kong, the American Chamber of Commerce in Macau, the British Business Association of Macau, the Canadian Chamber of Commerce in Macau, the German Chamber of Commerce in China (South and Southwest China), the Portuguese-Chinese Chamber of Commerce (Macau), the Zhuhai Chamber of Commerce of Importers and Exporters, the Australian Chamber of Commerce (Hong Kong and Macau), the France Macau Business Association, the New Zealand Chamber of Commerce in Hong Kong and the British Chamber of Commerce in Hong Kong.

Special thanks to venue patron Macau Tower and event sponsors Seapower Trading Co. Ltd and The Westin Resort Macau.

ENERGETIC NETWORKING

Moments110

Pierre Michael Dubourg and Max Zenglein Simon Lo Shing Hing

Tracy Leing and Zhong Wanling

Jill Rigg K. Y. Lee and Steve Wong

Valdis Dunis

Xiaolong Peng, Meinrad Heinitz and Amélie Lu

Andrew Taylor, Jorene Liu and Stefan Mueller

Priscilla Hageman, Chan Shek Kiu and Jan Hageman

Spencer Christensen

Kiran Lei and Annie L.M. Chan

Brian Cheng, Ada Chan, Luis Pereira and Andrea Mansfi eld

Frederico Conde Luis Quental and Stella Lau

JJ Verdun and Maria José de Freitas

Photos: Gonçalo Lobo Pinheiro

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CATCHING UPChief Executive Fernando Chui Sai On visited Macau Prison last month on a mission to better understand how the city’s jailhouse works and get an update on the construction of its new building.

According to a press release from the government, Mr Chui used his time at the prison to tour the facilities, including the inmate areas.

The press release did not mention whether the chief executive bumped into his former colleague Ao Man Long. The ex-secretary for transport and public works has been locked up since December 2006 for his role in a corruption case.

Frozen Spy strongly suggests Mr Chui pay a visit to Mr Ao. Mr Chui could get some tips on improving the city’s traffi c fl ow and how to solve the stalemates that are stalling public works from going ahead.

Like the late Brazilian professional politician Ademar de Barros, known as “the one who stole but got things done”, Mr Ao at least kept momentum up while he sat in the cabinet.

Frozen Spy strongly opposes corruption but it is clear that Macau misses a “doer” in charge of the transport and public works portfolio.

NOT QUITE A WOMAN’S WORLDThe boy’s club had better beware; women are rising through the ranks in the gaming industry.

On one hand, Angela Leong On Kei has strengthened her role at SJM Holdings. The businesswoman dubbed “fourth wife” by Stanley Ho Hung Sun, now controls an 8.29-percent stake in the company.

On the other, there are hints that Wynn Macau chief operating offi cer Linda Chen could be Steve Wynn’s successor. So important is her role that the gaming operator is offering to pay her a US$10 million (MOP80 million) bonus if she stays with Wynn for the next 10 years.

The third powerbroker is MGM China Holdings chairperson Pansy Ho Chiu King.

Unfortunately for equality of the sexes, this is as far as women have come. There is still an obvious gender imbalance at the C-suite level among the gaming operators.

RATTLING THE WRONG CAGEA gambler in the United States twice confused a Nebraskan police station with a casino, according to the Associated Press. The police, tired of being mistaken for croupiers, “invited” him to spend the night sobering up.

The man’s blood alcohol concentration registered 0.273 percent – more than triple the legal driving limit.

Frozen Spy wonders what would have happened if the Nebraska punter had tried his luck in Macau. Would he have hit the jackpot?

CRYSTAL CLEAROne plus about the United States’ political system is the straightforward nature of lobbyists. For example, we know that the American Gaming Association spent more than US$640,000 (MOP5.12 million) between April and June on lobbying in Washington.

Most of the money was spent on issues such as Internet gambling and online poker.

It would be great if things were that clear in Macau. Unfortunately, lobbying here takes place behind closed doors.

Sometimes, it creates awkward situations. Last month, Wynn Macau disclosed in a stock fi ling that it was close to offi cially holding its land in Cotai. The government said publically that the formal procedures had not yet fi nished.

It would be much easier if offi cials kept people updated throughout the negotiation process and avoided embarrassment. It is called transparency.

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SJM Page 47 www.sjmholdings.com

Wynn Macau Page 55 www.wynnmacau.com

MB 90 | October 2011

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