mb 108 | april 2013

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Economy & Finance 25 Growth uncertainty Macau sees its slowest economic growth since 2009 28 Golden opportunities The recipe for success in breaking into the mainland market

Politics 33 Fourth time unlucky Lawmakers have again thrown out a bill on trade unions

Special 37 New leadership China’s new leadership dreams of China’s rise

Greater China 44 Time for the giants Hong Kong’s new cruise terminal is expected to open in June

Property 48 Waiting game Mortgage interest rates may rise sooner than expected

Gaming 54 Clearing the air Ventilation systems maker says the law on smoking has two important shortcomings

56 Uneasy rider Casino resorts in Cotai are not doing enough to cater to guests arriving on motorbikes 58 Overworked, outta here Casino workers are the least committed and least happy with their jobs, several surveys fi nd 62 Profi t sharing Four out of the six gaming operators in Macau will issue dividends for 2012 64 Experience counts A study links customer service experience to satisfaction and loyalty 66 Asia’s ‘only’ Vegas-style casino Solaire is the fi rst of four gaming resorts planned for a new casino strip at Manila Bay and is run by some familiar Macau faces 71 Philippine expansion Melco Crown signs a US$600 million Philippine casino deal 72 Beachside limbo Vietnam’s Ho Tram Strip developer has missed its opening target, but still remains confi dent of success 75 Pokies addicts Australia gambles on moves to tackle slot machine problem gamblers

MB Report 77 Snail’s pace The government is going too soft and slow on environmental protection

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Hospitality 88 Guiding principle The lifeblood of the city’s prosperity, tourists are increasingly angry about their treatment and tour guides are in the hot seat 94 Seeing stars Fine dining in Macau lags behind the world’s great cities because it cannot compete for skilled manpower, says a celebrity chef 98 Healthy appetites Future Bright hopes to command a 5 percent share of the market for food souvenirs

Business 103 Riches in rags More designers are heading here and making a go of the rag trade, perhaps heralding a new dawn for the fashion industry 107 Consuming passions The Richemont group’s chief executive in the Asia-Pacifi c region, Alain Li, is optimistic about growth despite slower-than-expected sales

Human Resources 110 A desirable home The more Portuguese who apply for residence in Macau, the longer they have to wait to get it

Society 112 Modern poverty Subsidised groceries help Macau’s working poor put food on the table, while charities tend to the scars

Corporate Social Responsibility 114 Shouldering the load The emerging practice of corporate social responsibility is all about burnishing brands and company reputations

Arts & Culture 117 Studio hunting Artist Konstantin Bessmertny is thinking of moving his studio to Hong Kong because Macau has become too expensive 122 Homemade triumph This year’s Macau Arts Festival features more than 30 acts, half of which have deep local roots

Opinion 12 From the publisher’s desk Paulo A. Azevedo 14 Editorial Alexandra Lages 36 Judicious reform Óscar Madureira 53 Straight talk José I. Duarte 87 Budding diplomats Keith Morrison 102 Games people play Gustavo Cavaliere 109 What is executive coaching? André Ribeiro 126 Debt-friendly stimulus Robert J. Shiller

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from the publisher’sdesk

PAULO A. AZEVEDOFOUNDER

AND PUBLISHER

I understand the diffi culty faced by the government in accepting that the Legislative Assembly might have something to say about urban planning.

Only someone ignorant of the assembly’s composition, or the sometimes unabashed advantage a business – or person – might gain when discussing policy at the mini-parliament, could believe members of the assembly bring balance to its legislative initiatives.

With the level of government input in urban planning, and taking into account the way relationships work in the city, it is hard not to feel that the public interest, and discussions extremely important to the population, are irrelevant.

As the norm, the less discussion there is, the greater the freedom to act arbitrarily. And since when did arbitrary behaviour become synonymous with upholding society’s rights and freedoms?

Utter hypocrisyThe hypocrisy of political speech is irritating and occasionally obscene.

In handling leases for land, there are two competing ideas. There is a demand that land should never be exempt from an open, transparent tender process, particularly where casino construction is involved.

Yet some exceptions are allowed, although the guidelines are opaque and there is no formula to prevent arbitrary abuses, which easily escape scrutiny – thanks in part to the silence of the masses.

Hong Kong is sometimes seen as an example for Macau to follow when legal experts have doubts. The controversial urban planning law

RANDOM

On sensitive issues, such as human rights and freedom

of expression, political naivety is irresponsible and

leads to a needless loss of credibility at global forums,

and damages international

reputations

APRIL 2013

CONSIDERATIONS

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is one example. However there is another opinion that Macau and Hong Kong are quite different and should not copy each other.

This hypocritical political debate has the tendency to validate some acts because they simply cannot be explained any other way.

It creates an ideal setting for those people looking to obscure questionable acts.

Systematic liesMacau’s offi cials have to wise up.

In politics, naivety is not just counter-productive, it is treacherous. On sensitive issues, such as human rights and freedom of expression, political naivety is irresponsible and leads to a needless loss of credibility at global forums, and damages international reputations.

The city’s reputation must be protected at all costs.

Standing before the United Nations Human Rights Committee during the presentations of treaties and offering the same old, fragile defence of the wrong options, is just asking to be mocked.

Macau has the right to deny entry to undesirable individuals if there is evidence they pose a threat to safety and order, but repeatedly denying entry to Hong Kong journalists without irrefutable proof is a clear attack on the rights Macau is sworn to uphold. A lack of justifi cation is serious enough, but when it happens in front of the Human Rights Committee it is without peer.

While Macau enjoys certain rights and a political climate the public can almost be proud of, there are cracks in the system. They exist because the public lacks the courage to accept mistakes will be made. Equally, there is not enough courage to correct them, either because there are conservative forces negatively infl uencing

security policy, or because it is just easier to plead ignorance, rather than holding our heads high, apologising and moving on.

Lying about government bodies, and quoting silly examples regarding the real protection of human rights, should be regarded as a case of lèse-majesté. Publicly saying the election for the chief executive is held in an open and democratic manner is just imbecilic.

Illusory compromiseThe criticisms regarding the annual fi nancial support provided by the Macau Foundation have switched to targeting their quantity, as if in denial that the foundation was created to fund projects that benefi t Macau’s social, economic and cultural development.

Criticising fi nancial donations is like throwing sand into the eyes of a less than attentive individual.

Critics should be examining the evaluation process that directs the funds, as well as the poor quality of some the projects and reputations of the associations that receive the money.

It is important to create an independent structure that investigates possible confl icts of interest in awarding grants and in assessing the outcomes.

Such a body would, more importantly, determine the compatibility of the people involved in the process, in the name of transparency, a cause the government is intent to publicise.

If an oversight body does not materialise, the temptation will be for the foundation to blindly start cutting funding to institutions with less social and politically relevant missions.

It would be an easy and unscientifi c way to justify the foundation’s claims that it is judicious with the public’s money.

IGNITION SWITCH

[email protected]

to increase recycling rates. It should create an integrated recycling scheme and invite waste management companies to bid for the right to run it. At the same time, it must foster awareness and promote public education.

Then the public will have access to a free waste collection service and be involved in a substantial recycling scheme that engages concerned citizens using more than just a fi stful of dollars.

The government has offered tax reductions for environmentally friendly vehicles and imposed curbs on some sources of greenhouse gases. Yet air quality here is getting worse.

There are more drivers on the roads because the number of licensed vehicles is increasing. It has been suggested that the government’s tax breaks and handouts are being used to fund the purchase of new cars.

The government has thrown its weight behind the importation of electric cars. They are free from any taxes, but importers say there are no other regulations to help boost their numbers on the road.

Electric cars and motorcycles are expensive and a consumer is likely to opt for the cheapest option: a vehicle powered by traditional fuels.

The government has to set an example. All of its fl eet should be electric or at least more environmentally friendly – including buses and taxis used in public transport.

The Transport Bureau announced last year that electric buses would run on six routes in Taipa. Progress on the initiative has stalled.

There are some regulations for operators running the city’s revamped public bus system. The government told operators to buy cleaner-running vehicles but there are many buses in bad shape still in use.

Cleaning up the environment cannot wait any longer. The city cannot rely solely on new areas of reclaimed land and the Light Rail Transit system – currently under construction – to improve the environment.

At last month’s exhibition, I realised there are a signifi cant number of enterprises here with much to offer. It is time that the government took the environment seriously.

It is time for more action and fewer words.

The environment and green technology were at the forefront of public discussion during last month’s Macao International Environmental

Cooperation Exhibition and Forum. It was the sixth edition of the annual fair and I wonder what has changed over those years.

Every year, the number of exhibitors increases. More agreements are signed and the outcome is always portrayed as more positive than the year before.

Does this mean Macau is a greener city that has changed for the better?

Unfortunately not. Some of the cornerstone policies of a considered plan to protect the environment are yet to be implemented.

There is still a long way to go, which frustrates me. In a city blessed with remarkable economic growth and with a European heritage, it is disappointing that there is not more political courage to introduce greener policies.

The city’s Environmental Protection Bureau was set up in 2009. Four years later, it is diffi cult to see any signifi cant progress.

The bureau has been too slow to act and has been ineffective when it has acted. And when it comes to matters of environmental protection, slow to act means too late.

The bureau is yet to release its 10-year plan for environmental protection from 2010 to 2020. The plan was meant to start in 2010 and establish targets for 2015. That it has not yet been launched is shameful.

Four years since the bureau’s inception and there are still no rules to assess the environmental impact of development. The government says it will complete the legislation this year.

Meanwhile, construction and development goes on, without specifi c rules to assess environmental impact. Construction is accelerating in Coloane, the part of Macau that enjoys the cleanest air, is relatively underdeveloped and should be protected.

The “reduce, re-use and recycle” mantra means practically nothing in Macau. The government implemented a recycling campaign last year that encouraged residents to collect recyclable materials.

The government must do more than give money to households and industry in an attempt

ALEXANDRA LAGESASSISTANT EDITOR-IN-CHIEF

APRIL 2013

Cleaning up the environment cannot wait any longer.

The city cannot rely solely on new areas of

reclaimed land and the Light

Rail Transit system –

currently under construction – to improve the

environment

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Editorial CouncilPaulo A. Azevedo, Emanuel Graça, Tiago Azevedo, Duncan Davidson, José I. Duarte

VOL.1 Nº107

Founder and PublisherPaulo A. [email protected]

Editor-in-ChiefEmanuel Graç[email protected]

Assistant Editor-in-ChiefAlexandra [email protected]

Executive Senior AnalystJosé I. [email protected]

Art DirectorsConnie Chong, Luis [email protected]

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

Events DirectorMargarida [email protected]

Special CorrespondentMuhammad [email protected]

Beijing CorrespondentMaria João [email protected]

Manila CorrespondentMax V. de [email protected]

Assistant to the PublisherLaurentina da [email protected]

Offi ce ManagerElsa [email protected]

PhotographyAntónio Mil-Homens, António Leong, Carmo Correia, Greg Mansfi eld, Gonçalo Lobo Pinheiro,John Si, Manuel Cardoso, MSP Agency, Naty Tôrres, Agencies

IllustrationG. Fox, Rui Rasquinho

Contributing EditorsChristina Yang Ting Yan, Dennis Ferreira, Derek Proctor (Bangkok), Filipa Queiroz, Helder Beja, Joana Freitas, João Ferreira da Silva, João Francisco Pinto, José Carlos Matias, Kahon Chan, Kim Lyon, Lois Iwase, Luciana Leitão, Mandy Kuok, Michael Grimes, Sara Farr, Sara Silva Moreira, Sofi a Jesus, Xi Chen, Yuci Tai

Regular Contributors André Ribeiro, 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

AdvertisingBina [email protected]é [email protected] Yu, [email protected]

Media Relations

GRIFFIN Consultoria de Media Limitada

TranslationsPROMPT Editorial Services, Poema Language Services Ltd,TLS Translation and Language Services

AgenciesAFP, Lusa

ExclusivesGambling Compliance, 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.

Letters to the [email protected]

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Address: Block C, Floor 9, Flat H, Edf. Ind. Nam Fong, No. 679 Av. do Dr. Francisco Vieira Machado, Macau Tel: (853) 2833 1258 / 2870 5909 Fax: (853) 2833 1487 Email: [email protected]

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XI JINPING WARNS MACAU

Newly-installed Chinese President Xi Jinping (R) said that Macau was going through a “good phase” but warned it of “adversities to come”.Mr Xi, who was also recently installed as head of the Chinese Communist Party, was speaking last month during a meeting in Beijing with the chief

OF ADVERSITY

INFLATION TO STABILISE AT AROUND 5-6 PERCENTSecretary for Economy and Finance Francis Tam Pak Yuen told media late last month that this year’s infl ation will remain at a high level, of around 5 to 6 percent, due to strong internal demand.However, Mr Tam said the evolution of the consumer price index would be “more stable” compared with last year. The offi cial expects infl ation to ease this month after reaching 6.16 percent in February, the highest level since August.Last month’s price hikes were fuelled by the Lunar New Year holidays, which are traditionally a peak season for tourism.

HUTCHISON FINED MOP370,000 FOR BLACKOUTLocal mobile operator Hutchison Telephone Co Ltd will be fi ned MOP370,000 (US$46,250) for two crashes on its network service last year. The Bureau of Telecommunications Regulation said that the operator is to be fi ned MOP150,000 and MOP220,000 for the two breakdowns in June and October respectively, affecting a total of 90,000 mobile phone users. The regulator added that the service failures were caused by a single wrong instruction keyed into the network.

TENDER FOR FERRY TERMINAL REVAMPThe Land, Public Works and Transport Bureau launched a tender process for the renovation works at the Outer Harbour Ferry Terminal. The proposals for the one-year contract will be opened on April 25.The works will mainly be carried out on the terminal’s fi rst and second fl oors, and will involve adding luggage facilities and a baggage carousel. The works were originally scheduled to begin last September, after the government resumed full control of the structure in December 2011.

China’s new president met with Chief Executive Fernando Chui Sai On for the fi rst time

executives of Hong Kong and Macau.He said he hoped Macau would learn how to overcome problems that restricted its development, without saying what those problems were.It was Mr Xi’s fi rst meeting with the leaders of China’s two special administrative regions since he became head of state.

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NEW HENGQIN LAND BLOCK OPEN TO FORTUNE 500 FIRMSHengqin Island development offi cials have put a block of land up for auction only for bidders from Macau, the mainland and overseas who are among Fortune magazine’s top 500 companies worldwide.The price of the 32,000-square metre block of land is set at 688 million yuan (MOP860 million) or about 3,580 yuan for each square metre of fl oor area.The auction will take place online this month. Joint bids and bids from individuals will not be accepted.At least 55 percent of the built area must be dedicated to offi ce space and hotels. The remaining area is set aside for fi nancial institutions and serviced apartments.

Macau’s retail sector continues to remain short on labour, the latest survey on manpower needs and wages by the Statistics and Census Service shows.At the end of last year, there were almost 3,100 vacancies in the sector. That represents a job vacancy rate of 13.4 percent, one of the highest in Macau.Aside from Macau’s manpower shortage, one of the possible reasons for the industry’s inability to fi ll positions is the below-average wages offered by retailers: in December, a salesperson earned on average MOP10,230 (US$1,279), while the overall median monthly wage in Macau during the fourth quarter of 2012 stood at MOP12,000.As of December-end, over 23,300 people were working in retail.

MACAU FREIGHT RATES HIGHERThe cost of bringing in imports from Hong Kong by sea will jump by 10 to 15 percent this month. The chairman of the board of supervisors of the Association of Macau Shipping Industry, Tou Man Kan, said that companies are increasing their rates to catch up with the surges in infl ation and operating costs. Mr Tou said the surge in operating costs was due to increases in the price of fuel, port fees and wages.

CIVIL SERVANTS TO GET PAY RISEThe government has raised civil service pay by 6.06 percent this year starting from May. The pay rise will cost the government an estimated MOP633 million (US$79.1 million) this year. The government will not backdate the increase to the beginning of the year.

The sector needs over 3,000 more staff but salaries offered are unattractive

RETAIL STILL SHORT ON LABOUR

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The government is to launch an interest free loan scheme for young entrepreneurs in the second quarter this year.Young residents aged 21 to 35 wanting to start their own companies will be eligible

INDIVIDUAL VISA NEEDS OPTIMISATION: LIAISON OFFICEThe director of the Central People’s Government Liaison Offi ce in Macau, Bai Zhijian, said that Macau should focus on how to optimise the individual visitor scheme for mainland Chinese tourists, but should not tighten the policy. Mr Bai said the city should “strive for a balance” in serving both residents and visitors.His comments came after the government’s think tank announced it will carry out a study to assess the effect of the mainland’s individual visa scheme on the city’s economic development.

LOANS FOR YOUNG ENTREPRENEURS BY JUNE

DELTA ASIA’S CHAIRMAN REBUFFS NORTH KOREA LINKSDelta Asia Bank Ltd’s chairman, Stanley Au Chong Kit, has strongly rebuffed statements from the chairman of the Foreign Affairs Committee of the U.S. House of Representatives, Ed Royce, who said that the North Korean regime was still using Delta Asia for illicit transactions.Mr Au said Mr Royce’s statements were “very irresponsible” and guaranteed that Delta Asia has not had any business relations with North Korea since 2005. Mr Royce suggested that Washington should impose further sanctions on Macau’s Delta Asia Bank.The United States accused Delta Asia of laundering money for the North Korean government in 2005 and froze about US$25 million (MOP200 million) in funds kept in the bank.The money was unfrozen two years later. Currently, the bank is still banned from doing business with U.S. fi nancial institutions, which in effect prevents it from dealing in foreign currency.

CTM CUTS OVERSEAS CALL TARIFFCompanhia de Telecomunicações de Macau SARL (CTM) announced an average reduction of 25 percent on charges for long distance calls. The tariff cut came into force last month and can be applied to users making calls to 89 jurisdictions. However for more popular destinations like Hong Kong, the United Kingdom and the United States, the rate of reduction was only 10 percent.

to apply for the special loan, the Economic Services Bureau said.The proposed upper limit of loans is MOP300,000 (US$37,500) and the maximum loan period will be eight years.

The plan for easy loans for young entrepreneurs was announced by Chief Executive Fernando Chui Sai On in his annual policy address in November.

Only residents aged 21 to 35 will be eligible to apply for the special loan

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AIRPORT WELCOMES 390,000 IN FEBRUARYThe Macau International Airport handled over 390,000 passengers in February, representing an increase of 25 percent in comparison with the same period one year before. According to the Macau International Airport Company Ltd (CAM), the airport benefi ted from the Lunar New Year celebrations. The airport also recorded a 21-percent increase in aircraft movements.

GOVERNMENT SURPLUS HITS MOP19.5 BILLION The government had a surplus of MOP19.5 billion (US$2.4 billion) in January and February this year, according to offi cial data. This is an increase of 15.4 percent compared to the same period last year. The amount is close to one-half of the MOP41.1 billion surplus estimated in the budget for the whole year.

BANKING OPERATING PROFITS DROPMacau’s banking sector saw its operating profi ts for January drop by 1.2 percent, data released by the monetary authority shows. The city’s banks achieved operating profi ts of MOP489.8 million (US$61.2 million). The banking sector witnessed an improvement in profi tability in 2012. Last year, the total operating profi ts of the sector increased 24.4 percent year-on-year to MOP6.3 billion, a new record.

More workers in casinosThe number of gaming employees increased last year.

A decrease in the employee turnover rate shows that human resources in this sector were more stable compared with 2011.

54,835The number of people that were working in the gaming sector

at the end of the fourth quarter of 2012, up by 9.2 percent year-on-year.

5.3%The employee recruitment rate in 2012,

down by 5.5 percentage points year-on-year.

23,895The number dealers working in the gaming sector in 2012,

an increase of 6.9 percent year-on-year.

MOP18,040The average earnings (excluding bonuses and allowances)

of full-time employees by December 2012, up by 7.9 percent year-on-year.

2,144The number of job vacancies at the end of the fourth quarter of 2012,

down by 130 year-on-year.

3.8%The employee turnover rate in December 2012,

which dropped by 0.6 percentage points year-on-year.

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BY SARA FARR

Growth uncertaintyMacau has seen its slowest economic growth since 2009. And things are not looking much brighter, with economists predicting single-digit growth for 2013

The debt crisis in Europe and the slow recovery in the United States following the global fi nancial crisis, will impact the growth of Macau’s gross

domestic product (GDP) this year. Economic growth slowed down to 9.9 percent in

2012. Last month the secretary for economy and fi -nance, Francis Tam Pak Yuen, said Macau could expect similar growth this year.

“We are paying close attention to the global econ-omy and we forecast a rebound, which means that Macau’s economy will remain stable and [GDP] growth will be single-digit [this year],” Mr Tam was quoted by local media as saying.

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Economy & Finance

There are a number of key factors that come into play here. These include the economic situation in Europe and the United States.

Local economist and professor at the University of Macau, Henry Lei Chun Kwok, says that there is some uncertainty on the global economic outlook, while the ‘yet to be fully recov-ered’ Chinese economy is also expecting a low GDP rate this year. The economist explains that this may ultimately affect China’s recovery process and the Chinese export market.

“It may be hard for the country to rely on export activities as its growth driving force,” Mr Lei told Macau Business.

In addition, he says, with the mainland having announced a lower growth target, it may be harder for China to achieve dou-ble-digit growth in the coming years. “All in all, it should affect the pace of growth of China as well as that of Macau which de-pends heavily on tourists expenditures from [mainland] China.”

Not all badAlthough the numbers are not as high as those in the last two consecutive years, with GDP growing 21.8 percent in 2011 and 27.5 percent in 2010, sin-gle-digit growth is not neces-sarily a bad thing.

“It may help to cool down the over-heated economy and its price level,” the scholar says. Lei also adds that given the global economic uncer-tainty, the enlarged base year GDP, the progress of the ongo-ing casino projects in the terri-tory, as well as the objective of achieving economic diversity, “it may be harder for Macau to have double digit economic growth of over 20 percent in the near future.”

As it stands now, Macau’s economy relies strongly on several external factors: the global economic outlook, the per-formance of the Chinese economy and the policies implement-ed by Mainland China’s central government.

This, according to Lei, makes it even harder to predict the numbers for this year. “A high single-digit or a double-digit rate of under 15 percent may be feasible given the current eco-nomic scale,” the economist says.

Other economists have suggested, just like Mr Tam, that growth will remain at single-digit levels this year. José Sales Marques, a local economist at the University of Macau, was quoted last month by our sister publication Business Daily as saying that GDP growth is not likely to go over the 10 percent mark due to the various external factors.

“The Chinese economy cooled down a bit, as well as the visitor arrivals and their expenditure, particularly shop-ping spending. This also shows we are vulnerable to external changes,” Mr Marques was quoted as saying.

Diversifi cation is keyOffi cial data shows that Macau’s GDP annual growth slowed down to 9.9 percent in real terms last year, reaching MOP348.2 billion (US$43.5 billion). It is the slowest growth rate Macau has recorded since 2009, when GDP grew a mere 1.7 percent.

Although it is the fi rst time that growth has fallen under 10 percent, both GDP and per-capita GDP reached new all-time

highs and surpassed numbers set the year before. Per-capita GDP amounted to MOP611,930 in 2012.

According to the Statistics and Census Service, the GDP growth of 9.9 percent was mainly fueled by gaming, tourism and domestic demand. Exports of gaming services increased by 6.9 percent, while visitor spending rose by 6.4 percent.

In regards to domestic demand, investment expanded by 19.1 percent due to the increasing number of public construc-tion projects. Private consumption also rose by 9.1 percent, while government spending rose by 6.9 percent. Exports jumped by 23.2 percent.

Offi cia data shows that in 2012 the main factors contrib-uting to Macau’s economic growth were an increase of 13.4 percent in gross gaming revenue, a 15 percent increase in total visitor spending, an increase of 10.8 percent in the number of hotel guests, an upsurge of 54.8 percent in public investment,

and an increase of 22 percent in the value of retail sales. Em-ployees’ salaries also increased by between 13.4 percent and 17 percent.

In the fourth quarter of 2012, GDP expanded by 8.5 percent, mainly due to a spur in exports and investment. Among the major compo-nents, exports of gaming serv-ices increased by 3.9 percent, gross fi xed capital formation expanded by 21.8 percent, pri-vate consumption expenditure rose by 7.2 percent, while that of the government rose by 7.8 percent. Merchandise exports went up by 17.4 percent.

Despite estimates by local economists that Macau’s GDP growth will remain in the sin-gle-digits this year, the Econ-omist Intelligence Unit (EIU) foresees otherwise. In their

latest report quoted by the news website MacauHub, analysts project growth rates of around 9.7 percent for this year and 13.7 percent in 2014. Overall this equates to average growth of 11.7 percent per year for the next two years.

In addition, the report also predicts that investment will grow 17.3 percent this year and 14 percent next year. This is mainly due to the number of development projects currently underway in Cotai. In 2012, investment grew by 54.8 percent.

The report suggests that not only will investment grow, but consumer spending will also increase in the next two years. Despite this, analysts expect infl ation to drop, with a rate of 5.8 percent predicted for 2013, and 6.4 percent for 2014.

The government has said time and time again that diversi-fi cation is the key to sustainable economic development. Last month, secretary Tam reiterated that same idea and further added that, “Macau needs to be ready for adversity.”

According to the secretary, Macau is already witnessing sustainable economic development: construction of large scale projects. In addition, the SAR is set to enhance regional inte-gration to further promote economic co-operation.

However, Mr Tam was also quick to add that regional co-operation should not be limited to the mainland. As such, the government plans to increase regional co-operation with countries in Southeast Asia, and continue to strengthen ties with Portuguese-speaking countries.

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BY MANDY WONG

Markets in the mainland are presented as both untapped opportunities and a series of

challenges for small and medium enter-prises. And although more companies here are investing across the border, there are opportunities yet to be taken, according to government offi cials.

The Exhibition and Trade Centre for Products from Macau and Portu-guese-Speaking Countries was set up by the Macau Importers and Exporters Association in Jiangmen, northeast of Macau. It was intended to be a one-year project to help small and medium-sized enterprises (SMEs) break into the main-land market, however it has so far been unsuccessful, so the association has ex-tended the project for another 12 months in the hope of getting results.

The number of investments by Macau companies in mainland ventures increased last year, but the amount they invested decreased sharply. The Minis-try of Commerce in Beijing approved 303 investments involving Macau com-panies last year, 7.1 percent more than in 2011. But the combined value of

One bakery believes it has the recipe for success in breaking into the mainland market

investments almost quintupled to US$50 million compared to one year before.

Macau Importers and Exporters As-sociation chairman Tsui Wai Kwan says mainland consumption and demand has been on the rise over the past few years, so many Macau businesses have become dealers in the vicinity of the city in for-eign products, including wine, coffee, and canned goods from Portuguese-speaking countries.

However, Mr Tsui says it is not easy for Macau businesses to get the products that they deal in into the mainland. Not only must they fi nd suitable buyers, but they must also struggle through time-consuming thickets of red tape.

Cultivated tastesMore than 40 Macau businesses are benefi tting from the trade centre’s pres-ence in Jiangmen, but Mr Tsui says they tend to give priority to their business in Macau. The scarcity of manpower in Macau also hampers these companies, making them hesitate to try to develop markets in the mainland. Some are content to stick with what they have in

Golden opportunities

these investments fell by 25.7 percent to US$510 million (MOP4.08 billion).

The number of investments in Janu-ary by Macau companies in the main-land was 23, half as many as a year earlier. The combined value of these

“The Exhibition and Trade Centre for Products from Macau and Portuguese-Speaking Countries” in Jiangmen

Tsui Wai Kwan

Economy & Finance

29

APRIL 2013

Macau and eventually miss golden op-portunities in the mainland.

One successful investment in the mainland by a Macau company is Octo-ber Fifth Bakery’s. Demand for bakery products is booming here but the market is incredibly competitive, and explor-ing opportunities on the mainland was a sensible choice.

“There are already several leading old brands in the local market and we have to go a long way before we can emerge profi tably on the local scene,” says company president Lao Ngai Leong.

“The only way to succeed is to adopt a different approach, to cultivate the mainland and international markets by blending Macau’s age-old pastry-making methods with modern technolo-gies, in order to provide authentically fl avoured Macau-style baked products.”

The company established a plant in Jiangmen in 2004 and is focused on expansion in the mainland, taking ad-vantage of its low prices in an otherwise unpromising market.

Newly-built facilities in Xinhui in Jiangmen started operating 2011, increasing production in response to higher demand. The company now has nearly 9,000 outlets in the mainland.

Mr Lao says the bakery puts the safety and quality of its products fi rst. It has set up a system for product recalls. In this way its brand has gained popular-ity among wary consumers in the vast mainland market. It has been accredited as a famous brand of Guangdong.

Mr Lao says his company faced many diffi culties in the early stages. To enter the mainland it had to pay a lot of money in slotting fees to have its prod-ucts on display in shops. As the brand grew, counterfeiters began copying its products. The police seized the fake products and arrested the counterfeiters, who were subsequently convicted.

Value propositionMr Lao says October Fifth Bakery has fi ve core values. They are essential for business development.

“Be confi dent about the market and the products, be determined to over-

come problems, be sincere to consum-ers, be genuine and be cautious in busi-ness,” he says.

The mainland economy is thriving, and income per head and consumption are increasing. The government there is taking measures to stimulate domestic demand. Mr Lao believes the mainland market is full of opportunities for Macau brands and products, and points out that the Macau government helps Macau en-terprises cultivate business there.

Many Macau enterprises would like to know about how to build brand reputation in the mainland. Mr Lao says they must make themselves familiar with investment conditions there and fi nd out how to position their products in the market. Only a prudent investment strategy will have satisfactory results in a completely new market, he says.

Mr Lao says enterprises should have a thorough grasp of policies, the law and regulations in the part of the mainland they intend to penetrate, and of how de-veloped it is, including the state of its in-frastructure and transport services.

He says enterprises should look out for market trends and be able to adapt to the ever-changing market conditions. They should also keep their manufactur-ing methods up to date, he says.

Lack of money and other resources may make Macau SMEs feel inadequate in the face of the enormous market in the mainland. Mr Lao advises such en-terprises to fi nd partners in Macau and avoid investing alone.

October Fifth Bakery in MacauOctober Fifth Bakery’s production plant in Jiangmen

Lao Ngai Leong

30M

OP m

illio

nM

OP m

illio

nM

OP m

illio

n

GDP slowdown

The publication of the gross domestic product fi gures for 2012 confi rmed the expected slowdown in economic growth. The growth rate, in current prices, came down from values in excess of 30 percent in the two previous years to just over 18 percent. In real terms, measured in chained prices based on the year 2010, last year’s growth was 9.9 percent. That was less than half of the 21.2 percent posted in the previous year and almost a third of the 27.5 percent registered in 2010. This slowdown was somehow, natural. First, as the economy grows its growth rates tend inevitably to go down. Secondly, the two previous years growth rates were anomalous.

The economy has been recovering from two world crisis years when it posted unusually low growth rates. Remember that in 2008 and 2009 those rates were just 3.4 percent and 1,7 percent. This year’s rate is, nonetheless, below the average from the last eight years that stands at 12.4 percent. The main driver of growth last year was, in absolute terms, exports. However, in relative terms the factor driving growth was investment in fi xed capital. (Note that the investment fi gures retained here only include physical capital, omitting the changes in inventory component.)

At current prices fi xed capital rose last year more than 27 percent, about ten percentage points above its average since 2008. Conversely, exports, the usual driving force in both absolute and relative terms, grew by 14.3 percent, almost 4 percentage points below the average for the same period. In terms of absolute annual variations, the interruption of growth is well visible in Chart 3. It was not more pronounced in 2009 due to a signifi cant contraction in imports, which is refl ected in the positive value the variation takes in that year. There it is clearly apparent that the period 2010-11 was one of recovery of the pre-crisis trend. It is that trend that this year’s fi gures seem to have reverted.

GRAPH 1

GRAPH 2

GRAPH 3

Economic Trends by José I. Duarte

GRAPH 1 - Gross Domestic Product

GRAPH 2 - GDP components

GRAPH 3 - GDP annual variation, by major components

0

250,000

0

100,000

200,000

400,000

300,000

750,000

160,000

120,000

80,000

0

40,000

-40,000

500,000

2004

2004

2005

2005

2005

2006

2006

2007

2007

2006 2007 2008

2009

2009

2008

2008

2009 2010

2010

2010

2012

2012

2011

2011

20122011

Government fi nal consumption expenditure

Government fi nal consumption expenditure

Exports

Exports

Imports

Imports

Private consumption expenditure

Private consumption expenditure

Gross fi xed capital formation

Gross fi xed capital formation

Current prices Chained prices

APRIL 2013

31

300,000

200,000

0

MOP

mill

ion

MOP

MOP

Let us look now into some fi gures at a lower level of aggregation, for private and public expenditure. These include household consumption, government purchases and employee compensation, and investment in construction and investment in machinery and equipment. The share of these components in GDP has declined over the last years. The combined share, in real terms, stood at more than 64 percent in 2008. It dropped to fi gures below 40 percent in the last two years. These changes refl ect the increasing weight of external trade in the creation of the regions’ wealth. Globally, these expenditure elements follow roughly the economic cycle. However, one component, investment in construction, rose last year well above the rate for total GDP. It jumped by 24.3 percent. The last two years indicate this element is rising again, both in absolute and relative terms. But it has not yet reached the values registered in between 2006 and 2008. Investment in machinery grew last year by a comparatively modest 2.5 percent, almost one fourth of the total GDP growth rate. This makes it one of the less dynamic elements of the regions’ economic activity. Government purchases are another component growing signifi cantly. The 9.4 percent growth measured, in real terms, last year, suggests both an extension of the government activity and a growing cost of that activity. Note that the fi gures do not include the compensation of employees, which rose at the lower rate of 5.1 percent.

The fi nal charts (Chart 5 and Chart 6) show de growth of the same components per capita, using the simple average population for each year. Private and public consumption per capita are risen throughout the period almost without disturbances. A slight slowdown in 2008 or 2009 does not alter the overall pattern. Investment per capita in construction follows the overall investment cycle with signifi cant oscillations in relative terms. The last chart adds also the data for imports of goods and services, which are closely related to the patterns of consumption and investment. Both display neatly the effects of the 2008-9 contraction and seem particularly sensitive to the changes in the overall growth rates.

GRAPH 5 - GDP per capita, private and public consumption (2010 chained prices)

GRAPH 6 - Incorporations by industry, 2001-2012

GRAPH 4 - Expenditure real variation, select components (2010 chained prices)

GRAPH 4

GRAPH 5 & 6

120,000

160,000

100,000

120,000

60,000

100,000

0

0

80,000

80,000

20,000

40,000

40,000

2005

2005

2005

2006

2006

2006

2007

2007

2007

2008

2008

2008

2009

2009

2009

2010 2011

2010

2010

2012

2012

2012

2011

2011

Government purchases

Machinery and equipment Imports of goods

Government Employees

Imports of services

Household consumption

Construction

Government purchases

Construction Machinery and equipment GDP

Household consumption Government Employees

APRIL 2013

32

APRIL 2013

GDP at current prices

GDP in chained prices

GDP per capita at current prices

GDP per capita in chained prices

Domestic loans to private sector

Resident deposits

Foreign exchange reserves*

Infl ation rate (full year 2012)

Exports

Imports

Trade balance

Total revenue

- Direct tax revenue from gaming

Total expenditure

Balance

Water

Electricity

Gasoline

Liquefi ed Petroleum Gas

Natural Gas

Licensed vehicles

- Automobiles

- Motorcycles

Mobile telephone users

Internet services subscribers

Unemployment rate

Median monthly employment earnings (Oct - Dec 2011)Employed population

Labour force participation

Non-resident workers (end-balance)

MOP 98.1MOP 83.5

-- --

MOP 197.0MOP 381.8MOP 137.0

6.2%

18.0 9.9

13.9 6.1

17.525.8

--0.3

14.9 13.7 15.8 14.1

6.79.06.61.5

-100

5.36.94.0

19.210.7

2.25.45.61.8

-100

5.57.43.8

14.310.8

23.7 19.0 56.119.7

17.1 13.9

--

62.0 31.0

-27.0

16.58.5

-- --

22.225.9

--0.4

Economic output

Money and prices

External merchandise trade

Public accounts

Utility consumption

Transport and communications

Employment

2012

2012-end

2012

2012

2012

2012-end

Oct - Dec 2012

Year-on-year change (%)














Latest

Latest

Latest

Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Notes

Notes

Notes

Q4 2012Q4 2012

-- --

Jan 2013Jan 2013Jan 2013Feb 2013

Jan 2013Jan 2013Jan 2013

Jan 2013Jan 2013Jan 2013Jan 2013

Jan 2013Jan 2013Jan 2013Jan 2013Jan 2013


MOP 348.2MOP 304.0

MOP 611,930MOP 534,141

MOP 190.0MOP 366.8MOP 132.5

6.1%

MOP 129.5MOP 107.0

MOP 56.7MOP 72.8

75.34,205

87.143,615

--

217,335101,712115,623

1,613,457231,582

5.92907.3

4,587--

218,909102,906116,003

1,579,672233,452

MOP 12.1 MOP 10.8

MOP 1.7MOP 10.4

MOP 8.2MOP 70.9

- MOP 62.8

MOP 1.0MOP 7.2

- MOP 6.2

1.9%

MOP 10,000

350,00072.4%

110,552

1.9%

MOP 12,000

350,60072.0%

113,276

-0.3

11.1

4.0-0.8

17.6

-0.2

16.5

1.3

-1.2

15.3

billionbillion

billionbillionbillion


billionbillionbillionbillion

million m3

million kWhmillion Ltonsmillion m3

million m3

million kWhmillion Ltons

billionbillionbillionbillion



billionbillion

So

urce

: Sta

tistic

s an

d C

ensu

s S

ervi

ce a

nd F

inan

cial

Ser

vice

s B

urea

u

percentage points

percentage points

percentage points

percentage points

percentage points

percentage points

Dec 2012 - Feb 2013

Oct-Dec 2012

Dec 2012 - Feb 2013

Dec2012 - Feb 2013

Feb 2013

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

Statistical Digest

33

APRIL 2013

Politics

Thirteen years after the establish-ment of the Macau Special Ad-ministrative Region, its labour

law still does not comply with Article 27 of its Basic Law. And it is unlikely to do so in the near future, as the Legislative Assembly rejected a bill on trade unions last month for the fourth time.

Article 27 of the Basic Law entitles Macau people to freedom of speech; freedom of the press and publication; freedom of association, assembly, pro-cession and demonstration; and the freedom to form and join trade unions, and to strike. However, there is no ena-bling legislation that allows trade un-ions to represent workers legally or to call strikes.

A directly elected member of the Legislative Assembly, José Pereira Coutinho, has been trying for years to correct this omission. Mr Coutinho is

BY CLÁUDIA ARANDA

Fourth time unluckyThe Legislative Assembly has again thrown out a bill that would have given trade unions the right to represent workers

president of the Macau Civil Servants Association, which is the main public sector union, although it also accepts members working in the private sector.

He submitted a bill on trade unions to the assembly last month. It was the third time he pushed such bill to the as-sembly. But his peers rejected it.

It vetoed the bill by 16 votes to eight. There were four abstentions.

The assembly threw out Mr Coutin-ho’s bill because its members are “pro-business”, he says. “Many assembly members are businessmen, which makes the introduction of such rules more dif-fi cult,” he says. Industry is the most powerful force in the assembly. Of its 29 members, only about one-third have no connections to the business world.

Legislators with business interests claimed the bill would damage the city’s image and economy. Some said the bill

would endanger the stability of Macau’s economy as it gives special rights to the workers.

Parliamentary tacticsThe assembly rejected bills on trade un-ions submitted by Mr Coutinho in 2007 and 2009. The fi rst member of the as-sembly to introduce a bill on trade un-ions after the handover was Jorge Fão, in 2 005. Mr Fão was head of the Macau Civil Servants Association at the time.

He told Macau Business that for such a bill to prosper, it requires the lob-bying of members to begin early on in the life of the assembly. “It should be presented at the beginning of the legisla-ture and not at the end of the legislature, close to the elections,” he says.

Mr Fão says that, just as in his day, members of the assembly still prefer to take a conservative approach, remaining

34

APRIL 2013

within their comfort zone and avoiding taking sides.

Mr Coutinho says he did all he could to enlist the support of other mem-bers. The timing of the bill’s submission – with only a few months to go before elections to the assembly – put pressure on the directly-elected members “to make them feel more responsible”, he said.

The business sector claimed the as-sembly is too busy reviewing important laws, including the urban planning bill and the land law revision before this year’s election.

Mr Coutinho is seeking re-election in September. Of the 12 directly elected seats in the assembly, four are held by representatives of business interests.

Workers’ rightsThe bill was meant to protect the rights of all workers, including civil servants and imported labour, to freedom of as-sociation. It would have exempted work-ers from court costs incurred during la-bour disputes.

It proposed that imported workers be allowed to form unions and be rep-resented in the Standing Committee

The assembly rejected bills on trade unions submitted by Pereira Coutinho in 2007 and 2009. The fi rst member of the assembly to introduce a bill on trade unions after the handover was Jorge Fão, in 2005

for the Coordination of Social Affairs, which brings together representatives of the government, employers and employ-ees.

It would have made an employer that sought to deny employees their right to trade union representation liable to a fi ne of up to MOP50,000 (US$6,250) per employee.

Mr Coutinho says that so far this year, the Macau Civil Servants Asso-ciation has received 50 reports of labour disputes. Last year the association gave its support to an average of 50 workers a day.

He thinks Macau “lacks legislation to put resident and non-resident workers on the same rung in respect to funda-mental rights, such as pay for overtime, for shift work and night work, and also other rights, such as access to non-man-datory welfare schemes, by engaging employers and making them responsible for paying a share of those schemes”.

Mr Coutinho says workers em-ployed by the casinos are more vulner-able because, acting individually, they have less power to negotiate employ-ment contracts with the gaming conces-sionaires.

Politics

36

APRIL 2013

Judicious reformAs Macau’s economy matures,

new challenges must be faced by this peculiar and highly profi table

special administrative region. The government’s main headache is no longer how to achieve pleasing rates of economic growth but how to keep what growth we have steady and sustainable.

One of the most important foundations of this endeavour is Macau’s legal system and its ability to adapt to new strains in society. The law’s “big codes” were all enacted in 1999, when the city could barely imagine the scale and speed of its subsequent development. Since then, society has undergone a transformation that most leaders of opinion here say is changing the unique characteristics of the city, and contributing to the loss of its identity.

The rise of the middle class, who are better educated and more insistent on greater order, on the observance of their rights and on a better quality of life, may endanger the competitiveness of Macau, especially its competitiveness against regional cities where gaming industries are sprouting.

But Macau’s relatively free market, which is one of the reasons it has the most profi table gaming industry in the world, is becoming ever more regulated. I doubt that the regulation wonks are truly contributing to improving the legal system and ultimately to making economic growth sustainable.

The law is certainly not without its faults, but it is nonetheless the result of an ancient and precise legislative tradition imported from Portugal, Germany, Italy and France. There, making law was not a task monopolised by a group of respectable businessmen and women seated in a legislative chamber, but a task for highly skilled academics and experienced politicians.

Competitive advantagePreliminary work on the “big codes” took several years and the fi nal versions were the result of thousands of hours of discussion among the most brilliant brains teaching in those countries. Furthermore, because of its European origin, certain aspects of the legal system in Macau were tried and tested for decades elsewhere, such as in

Germany and Portugal, where they were substantially amended and improved before being instituted here.

The uniqueness of Macau’s legal system in the Pearl River Delta should not be regarded as a barrier to cohesion within the region, but as a competitive advantage. A legal regime different from those of its neighbours gives Macau what it takes to maintain a second system within one country. Copying juridical concepts from Hong Kong or the mainland may make the delta more uniform, but would also mean a loss of Macau’s individuality, and ultimately of an identity built up over more than 400 years.

These are some of the reasons for the government to resist the temptation, and the pressure from lobby groups, to make or import new and unsuitable laws. These new and unsuitable laws may be

ÓSCAR ALBERTO MADUREIRA LAWYER

GO AHEAD AND CHANGE THE LAW, BUT DO IT WISELY AND ONLY WHERE CHANGE IS NECESSARY

meant to fi ll gaps or rectify failures in the present legal system, but they add to uncertainty surrounding the legal system.

There is certainly room for improvement in the law and in the years to come, as the city matures, the public will demand improvements and adaptations to meet their high standards.

The law should not be excluded from an improvement process.

More important than simply making new laws however, is the necessity to make new laws that properly serve the needs of the people. The standards of excellence required by the government as a means to make Macau count for something in the Pearl River Delta should be applied in all endeavours, and especially in building or altering the foundations of a developed society – those foundations being the law.

XI’S DREAM OF CHINA’S RISE

THE NEW PRESIDENT’S SPEECH AIMS TO BOOST THE PARTY: ANALYSTS

SPECIAL NEW LEADERSHIP

38

APRIL 2013

ew leader Xi Jinping has urged China to pursue the “Chinese dream” but experts say behind the grandiose words, he is single-minded in his aim to bolster Communist Party rule.

The president faces myriad challenges from pollution and graft to territorial spats, unsteady growth in the world’s number two economy,

and widespread inequality bringing with it the threat of social unrest.

In his fi rst speech as head of state, broadcast live on almost every major television channel, Mr Xi called for “the continued realisation of the great renaissance of the Chi-nese nation and the Chinese dream”, laying out a vision of a stronger military and ever-higher living standards.

After ten years of interminable and sometimes incom-prehensible speeches from Hu Jintao, the 59-year-old Mr Xi struck a far more confi dent, relaxed and refl ective tone, keep-ing with his desire to drop the jargon traditionally sprinkled through offi cial speeches and text.

The 25-minute address last month closed a parlia-ment meeting which named Mr Xi as head of state and Li Keqiang as premier, four months after the pair took the top two posts in the ruling Communist Party – the real source of their power.

Mr Xi’s “Chinese dream” concept is itself an effort to “redefi ne the purpose of the party, so that there is a greater sense of the party being united with the people”, says David Zweig, a professor at Hong Kong University of Science and Technology.

Like all leaders since Deng Xiaoping, Mr Xi agrees with the need for China to press ahead with economic reforms pursued since the old command-style communist system began to be disbanded in 1978, spurring an historic economic boom.

Since November, when he took over the reins as party chief from Hu Jintao, Mr Xi has proclaimed the need to fi ght growing corruption which threatens, in his own words, to “kill the party” that has ruled China since 1949.

But despite the threat of corruption and protests about social and environmental issues, the Communist Party ap-pears unwilling to countenance political reforms.

The show must go onMr Xi’s over-riding priority, says Steve Tsang, an expert in Chinese politics at Britain’s University of Nottingham, is “whatever it takes to keep the show on, the party in power and [make] China more powerful and infl uential”.

“They will be trying to project a clear image and message to the country in China that they are tackling the big issues like corruption, like government abuse of power.”

Scott Harold, a China expert at the Rand Corporation in the United States, says: “If you look at Xi Jinping there are reasons to think that he believes that now China is a great power, and China has to act like a great power.”

But the outlook for social reforms, for which a con-sensus apparently has yet to be reached among top leaders, remains unclear.

Hints appeared in state media after Mr Xi took over as party chief that signifi cant changes could be in the offi ng, such as an end to China’s notorious “re-education” labour camps, but the message was later rolled back and in the event no fi rm announcements were made.

“He’s got to work within the realities of the Chinese system,” says John Delury, a Chinese history expert at Yonsei University in Seoul.

The lack of any such major initiatives at the NPC illus-trates the party’s diffi culty in achieving the required internal agreement beforehand.

Paring state roleBoth Mr Xi and Mr Li stuck to the party’s long-held consen-sus on the need for economic reforms to ensure growth, while increasing military power and avoiding political change that could threaten its grip on power.

Analysts said Mr Xi’s concept of a “great renaissance” was a slogan designed to have broad appeal, without any fi rm commitments to specifi c reforms.

Mr Li, the newly appointed premier, pledged to open the economy to more market forces and strip power from the government to achieve 7.5 percent annual growth through 2020 and spread the benefi ts of the nation’s expansion.

Mr Li, now in charge of the day-to-day running of the government, said that “maintaining sustainable economic growth” would be his administration’s top priority.

But ensuring such a performance would be diffi cult, he said. China recorded its slowest growth for more than a dec-ade last year amid weakened demand in key export markets.

“What the market can do, we should release more to the market”, he said without giving details of specifi c economic reforms.

Both leaders reiterated the party’s repeated pledges to fi ght corruption, with Mr Li saying that the government had an “unshakable resolve” to do so.

“Since we have chosen public service we should give up all thought of making money,” the premier said.

He also vowed stronger support for migrant workers in cities, as the Communist Party pushes urbanisation to fuel growth constrained by a shrinking labour force and limits on a property market where new home prices posted the broad-est advance since December 2011.

Mr Li’s economic team retained People’s Bank of China Governor Zhou Xiaochuan and added sovereign wealth fund chief Lou Jiwei as fi nance minister. Mr Zhou, 65, and Mr Lou, 62, will be joined by new Commerce Minister Gao Hucheng, 61, and Xu Shaoshi, 61, the new head of the Na-tional Development and Reform Commission, the economic planning agency.

Mr Xi’s “Chinese dream” concept is itself an effort to redefi ne the purpose of the party, so that there is a greatersense of the party being united with the people, says David Zweig


SEEKING TO BOOST EFFICIENCYChina unveiled a government

restructuring plan last month, cutting cabinet-level entities by two and dissolving its powerful Railways Ministry, as the country’s new leaders look to boost effi ciency and combat corruption.

The reforms mark the biggest re-duction in ministries since 1998 when then-premier Zhu Rongji oversaw the overhaul of the State Council, and coincide with growing public concern over transparency and overlapping bureaucracies.

The government will join the Fam-ily Planning Commission – the agency that controls the controversial one-child policy – with the Health Ministry, and strengthen the powers of the food and drug regulators, it said in a report released during the ongoing annual meeting of parliament.

“Currently, numerous operational, organisational and division of labour problems exist in State Council minis-tries,” State Council Secretary-Gener-al Ma Kai said in a speech on the plan to the National People’s Congress.

The restructuring plan, which will cut cabinet-level agencies to 25, will also boost the role of the food and drug regulators, placing it within the cabinet in response to an almost never-ending series of scandals over product safety.AFP

40

APRIL 2013

our years ago in Mexico, China’s new president provided a rare glimpse of a leader who was born into a revolutionary aristocracy and came of age in the tumult of Mao

Zedong’s Cultural Revolution.In a steely defence of his country

against criticism from abroad, Xi Jinping said: “In the midst of international fi nan-cial turmoil, China was still able to solve

the problem of feeding its 1.3 billion people, and that was already our greatest contribution to humankind.”

“Some foreigners with full bellies and nothing better to do engage in fi nger-pointing at us,” he went on. “First, China does not export revolution; second, it does not export famine and poverty; and third, it does not mess around with you. So what else is there to say?”

Last month, Mr Xi sported the dark suit and cautious public mask that is the uniform of the party leadership as he took his place as the head of state.

Mr Xi assumed the role of Communist Party and military chief from Hu Jintao in November at a key party congress, and last month completed his rise to the top, replacing the departing president.

The new president of China’s 1.35 billion people is a relaxed, af-fable contrast to his stiff predecessors – but whether there will be an accompanying change of substance remains to be seen.

Mr Xi’s fi rst months in power as head of the ruling Communist Party have shown a “new style, but short on delivery so far”, Jean-Pierre Cabestan of Baptist University of Hong Kong told AFP, describ-ing him as “old wine in a new bottle”.

The 59-year-old is the fi rst Chinese leader to have been born after the Communists took power in 1949, and is one of the party’s “princelings” – the privileged offspring of those who played key roles in the revolution.

He rose to the top of the secretive party by serving as a compro-mise pick, able to navigate between competing factions, including those of departing leader Hu Jintao and the infl uential former president Jiang Zemin.

Mr Xi has an impeccable political pedigree as the son of a revo-lutionary hero, and has a pop star wife, Peng Liyuan, who holds the rank of army general and has starred in state broadcaster CCTV New Year’s gala for years.

But his father Xi Zhongxun, a respected Communist elder, was purged during the 1966-76 Cultural Revolution, and Mr Xi himself was sent to the Chinese countryside to live and work alongside peasants, as were many educated youths.

Xi joined the Communist Party while labouring in the poor northern province of Shaanxi and in 1975 moved to Beijing to study at the prestigious Tsinghua University, earning a degree in chemical engineering.

He went on to oversee some of China’s most economically dynamic areas, including Fujian and Zhejiang provinces and Shanghai, earning himself a reputation as a proponent of economic reforms and an effec-tive manager.

In March 2007, the tall and portly Mr Xi secured the top job in China’s commercial capital. Seven months later, he was promoted to the party’s Standing Committee – the ruling inner-circle.

As of last month, Mr Xi fulfi lled his destiny. But like all incom-ing Chinese leaders, he will need to consolidate power, and whatever his personal beliefs, few expect him to stray far from the Communist template of gradually opening the economy while maintaining tight political control.

i Keqiang has had a colourful career, rising from manual labourer on a rural commune to the number two leader of the world’s most populous nation, but he could

struggle to enforce his will.The 57-year-old has developed a repu-

tation as a man who cares about the less well-off in society, perhaps as a result of his humble roots.

A career bureaucrat who speaks fl uent English, Mr Li has a more youthful bearing than his stiff party peers, and has voiced support for the kind of economic reforms many experts say China sorely needs for continued growth.

Like his predecessor Wen Jiabao, Mr Li’s real power comes from his position as number two in China’s ruling Communist Party, where he is seen as having ties to a more populist faction associated with former President Hu Jintao.

Mr Li was born in 1955 in Anhui province, the son of a local offi cial.

He reportedly rejected his father’s offer to groom him for the local party leadership, enrolling instead at Beijing’s prestigious Peking University to study law after time spent at a commune.

He joined the party in 1976 and became involved in student poli-tics as head of the university’s student federation from 1978 to 1982.

After graduation, he slowly worked his way up the party ladder. In the meantime, the politician also completed his PhD in economics.

He joined the upper echelons of the party’s youth league in the 1980s, when Mr Hu was in charge of the organisation.

Mr Li was chosen as deputy secretary of the party in Henan prov-ince in 1998 and became party secretary of Liaoning province in 2004.

He became China’s youngest provincial governor when he was tasked to run Henan.

But his tenure in the rural and heavily populated province was marked by a series of unfortunate events – including fi res and the spread of HIV through contaminated blood – that led to him to earn a reputation for having “bad luck”.

Fortunately he found success in boosting Henan’s economy. He then impressed many by his efforts to revitalise Liaoning, an industrial province that suffered following China’s economic reforms.

But Mr Li’s lack of allies in the party’s top decision-making body, the Politburo Standing Committee, leaves him lacking “political heft”, says Patrick Chovanec, a China analyst and chief strategist at Silver-crest Asset Management in New York.

In order to exert infl uence, Mr Li will need to secure the support of new president Xi Jinping, who has more personal allies and ties to retired offi cials as a “princeling”, he adds.

Since becoming the Communist Party’s number-two last year, Mr Li’s biggest move has been a government restructuring announced last week, which saw the abolition of China’s powerful and often corrupt railways ministry.

But analysts say the scale of the restructuring achieved so far points to the challenges ahead.

“We have seen minimal cosmetic changes, he was not able to pull off a major restructuring,” Willy Lam from the Chinese University of Hong Kong told AFP.

Some fear parallels between Mr Li and his predecessor, who struggled to force through policies as he battled with factions in the upper reaches of the party, and offi cialdom in the provinces and ministries.

RAISED BY ELITE, STEELED BY TURMOIL

PREMIER’S UPHILL BATTLE


41

APRIL 2013

hinese fi lmmakers must fi ght censorship even if it means removing their name from their own work, one-time banned Chinese director Lou Ye argued during an interview with AFP.

His crime thriller “Mystery” won the best picture at the Asian Film Awards last

month. The event is organised by the Hong Kong Interna-tional Film Festival.

Lou’s fi lm, his second since he was banned from fi lming in China for fi ve years in 2006, tackles the subject of a new breed of wealthy and middle income men in post-socialist China, for whom taking a mistress is the norm, in a practice that harks back to imperial China. It was also nominated for best director and best actress for Hao Lei’s portrayal of a betrayed wife.

“The fi lm is about a very small group of people. It is about what happens between two women, the double life that this man leads, but through this I get to talk about things that happen in wider society,” he said in Paris where the fi lm was shown as part of a China programme at the city’s Forum des Images in February.

“What is important to me is the way in which we see that all the protagonists are linked to the death of this young girl, the way that no-one can say this has nothing to do with me,” he said.

According to Lou, having a mistress is now common-place in China for anyone with suffi cient means.

“Currently we see this way of life in particular among people who have money,” he said, adding that it was seen as a status symbol for men, while a woman acting in the same way would be stigmatised.

Secret shotsThe fi lm is his second since the end of the ban imposed after he took his love story “Summer Palace”, set around the taboo subject of the 1989 pro-democracy Tiananmen Square protests, to Cannes without offi cial approval. Lou responded by continuing to work, fi lming his next feature “Spring Fever” in secret using a handheld camera as well as “Love and Bruises” which came out after the ban expired.

Although now able to fi lm in China again, Lou remains the subject of unwanted attention from censors. After submit-ting the script for “Mystery”, Lou waited for fi ve months for a response.

Authorisation was given but demands for last minute changes followed. Although described as “minimal” by Lou, he still regards them as unacceptable.

“I used social networks in China to tell everyone that they were demanding modifi cations, and I entered into a dialogue with the censors, and in the end came up with some-thing that was satisfactory,” he said.

“The very existence of censors is a worry for all fi lm directors. In China it is a reality,” he said.

Lou urges all fi lmmakers to play their part in ensuring an end to the power of the censor.

“All directors have a responsibility for the fact that cen-sorship continues today in China,” he said, adding that there had been some progress in recent years “considering the situation before”.

In the meantime, his next fi lm is an adaptation of a novel by Bi Feiyu about blind masseurs, which he hopes to fi nish this year.

“I hope that for my next fi lm my name will be on the screen,” he said.

UNWANTED

BY HELEN ROWE*

NEW TARGETSChina’s top media regulator will expand pre-broadcast censor-

ship to cover television documentaries, in an apparent boost to an already formidable control apparatus.

China’s State Administration of Radio, Film and Television (SARFT) told TV stations and producers that all documentaries would have to be approved in advance of being shown, the Beijing Morning Post reported.

The notice would bring censorship of TV documentaries into line with requirements on non-fi ction fi lms, it said.

A notice posted on SARFT’s website on Monday said that TV production companies, including joint Chinese-foreign co-pro-ductions, should report documentary topics in advance.

The notice did not detail topics which would be censored, but said the move would “promote the healthy development of televi-sion documentaries”.

Previous censorship guidelines released by SARFT have outlawed fi lms which “distort” China’s history, or contain “murder, violence, horror, evil spirits and devils and excessively terrifying scenes”.

“The very existence of censors is a worry for all fi lm directors. In China it is a reality,” Chinese director Lou Ye

KEEP UP THE CENSORSHIP FIGHT, URGES AN ACCLAIMED CHINESE FILMMAKER

AFP NEWS AGENCY

ATTENTION



Attendants place tea cups for the top Chinese leaders at the closing session of NPC in the Great Hall of the People in Beijing

Smog envelopes Tiananmen Square at the closing session of the NPC

Ethnic minority delegates cast their votes during the election of the new premier

MOMENTS

Newly elected President Xi Jinping walks to the podium to address the closing session of the NPC

New Premier Li Keqiang holds a rare press conference for foreign and non-offi cial media

Xi Jinping signs an autograph for an ethnic minority delegate during the election of the new president of China

Former Chinese President Hu Jintao (L) follows newly elected President Xi Jinping as they arrive at the closing session of the NPC

Delegates review the voting paperwork at the fi fth plenary session of the NPC

44

APRIL 2013

Where before airplanes fl ew in and out of Kai Tak, cruise ships will now sail in and out

of the tip of the old runway from June. Hong Kong’s latest showcase will soon open to the world’s giant cruise ships at the Kai Tak Cruise Terminal, more than a decade after the idea was fi rst broached.

About 37,000 passengers on 16 ships will be among the fi rst to use the terminal between its opening in June and April next year. Its second berth is set to open by 2014. The site had lain vacant for 15 years since Kai Tak air-port closed in 1998 and was replaced by the Hong Kong International Airport in Chek Lap Kok.

Work on the long-awaited terminal, which was designed by Foster + Part-ners, began in 2009, however the govern-ment failed to fi nd a suitable candidate to build the terminal, and eventually de-cided to build it itself at a cost of HK$7.2

billion (US$928 million). Hong Kong’s cruise terminal will provide “effi cient services for embarking and disembark-ing cruise passengers, and enjoyable rooftop garden and dining experiences for locals and visitors alike.’’

Costing about HK$8.15 billion to build, the Cruise Terminal is expected to bring in between HK$1.5 billion and HK$2.6 billion a year by 2023 and will create 5,300 to 8,900 jobs. At 2,789 feet long, the terminal will have the world’s largest gangways, or passenger boarding bridges. The main building is three-sto-reys high, topped by a rooftop garden of 30,000 square feet.

The ground level will have the bag-gage handling area, customs hall, back offi ce functions and the passenger ar-rival area. On the level above is the passenger drop-off area. The second fl oor has check-in and waiting areas as well as a public colonnade, shops and cafes. The large public roof garden has

spaces for informal picnics and outdoor dining.

Cruise hubIn 2002, a “Cruise Market Study for Hong Kong” commissioned by the Hong Kong Tourism Board confi rmed that Hong Kong, with its world-class infra-structure and tourism facilities, is “well placed to become a regional cruise hub for North China, South China Sea and the Far East.’’

It was estimated in the market study that the total spending from the passen-ger cruise sector could reach between HK$1.3 billion HK$3.3 billion per an-num in 2010. Hong Kong should be well-placed to benefi t from the growth in the industry, as “many international cruise operators consider Hong Kong as a ‘must’ for their trans-Pacifi c destination”.

The existing berthing facilities at Ocean Terminal have become inade-quate to accommodate the mega cruise

Time for the giantsBY MARY ANN BENITEZ*

Hong Kong’s new cruise terminal is expected to open in June

Greater China44

45

APRIL 2013

ships. The Ocean Terminal in Tsim Sha Tsui, which has served the cruise indus-try for more than fi ve decades, will also embark on improvements.

Bill Flora, director – USA of the Hong Kong Tourism Board was quoted in Travel Agent magazine as saying that the total number of Asian cruise passengers could reach seven million by 2020, based on projected China cruise market growth.

Around that time Asia could rep-resent 20 percent of the global cruise market.

Hong Kong welcomed nearly 1.4 million cruise passengers in 2012, Flo-ra said.

The new Kai Tak Cruise Terminal will be able to handle ships of up to 220,000 gross registered tonnage. It will also be able to process 3,000 passengers an hour.

The fi rst new cruise berth will open this year; it can accommodate ships of up to 1,492 feet in length. A second berth opening in summer 2014 will ac-commodate ships up to 1,295 feet.

Commissioner for Tourism Philip Yung sees the new Cruise Terminal as an “important part of its strategy to de-velop Hong Kong into a leading cruise hub in the region.

“This new terminal’s iconic design renders it not only a landmark in our beautiful Victoria Harbour, but also

* ASSISTANT NEWS EDITOR OF THE STANDARD NEWSPAPER HONG KONG

a premier functional facility that will hopefully take cruise travel to a whole new level. The terminal can berth the world’s largest cruise vessels, and its highly effi cient passenger clearance and baggage handling facilities aim to pro-vide the greatest possible extent of con-venience and effi ciency for passengers,’’ he adds.

All aboard!Mr Yung also noted the announcement by the Chinese government in Beijing in June last year that mainland tour groups would be allowed to take cruises from Hong Kong to Taiwan, and then visit Ja-pan or Korea in the same journey before returning to the mainland.

“This is really good news for both Hong Kong and cruise operators, as the measure allows us to tap the grow-ing mainland market and organise more interesting itineraries in the East Asian region,’’ he said.

In March this year, the new Cruise

Terminal welcomed its fi rst ship, a 965-foot luxury vessel, Celebrity Millen-nium, before the formal opening. The ship carried more than 2,000 passengers berthed at the Kai Tak Cruise Terminal as it headed to Hong Kong from Halong Bay in Vietnam.

Worldwide Cruise Terminals Con-sortium won the right to operate and manage the terminal. The grouping is made up of Worldwide Flight Services, Royal Caribbean Cruises and Neo Crown, which is owned by Shun Tak Holdings.

The consortium is required to pay the government a fi xed rent for the 10-year operation of about HK$13 million.

In addition, the government will receive a percentage of the operator’s gross receipts as variable rent, with the percentage increasing from 7.3percent to 34percent as gross receipts rise.

The government also plans to install on-shore power supply at the Kai Tak Cruise Terminal, so that cruise vessels with such facilities will benefi t.

“The government will also work to legislate the requirement for ocean-going vessels at berth to switch to low-sulphur diesel after consultation with the maritime sector will also develop new shore excursion programs to lure over-seas visitors,” the tourism commissioner Yung said.

The new Kai Tak Cruise Terminal will be able to handle ships of up to 220,000 gross registered tonnage

46

APRIL 2013

The Venetian Macao hosts a memorable boxing event featuring one of the most famous Chinese athletes

Fighting hubhe CotaiArena staged another fantastic night of entertainment on April 6 featuring the professional debut of Zou Shiming, headlining a brilliant

boxing card. The night was memorable for both the public and for Zou, who made his worldwide debut as a pro boxer at The Venetian Macao.

The two-time Olympic Gold Medalist and three-time World Amateur Champion, signed with legendary Hall of Fame boxing promoter Bob Arum’s Top Rank in Beijing, in January.

Zou, 31, had trained at The Venetian and The Palazzo in Las Vegas, with Hall of Fame trainer Freddie Roach and Miguel Diaz in the lead up to the event. He made his pro debut as a fl yweight with Roach and Diaz working his corner.

One of the most popular Olympic athletes in China, Zou was also the world’s greatest amateur light fl yweight, capturing gold medals at the World Amateur Championships in 2005, 2007 and 2011, along with gold medals at the 2008 and 2012 Summer Olympic Games. He has an Olympic bronze medal from the 2004 games, a result that made him his nation’s fi rst Olympic medalist in boxing. He is also China’s fi rst boxing gold medalist in the World Amateur Championships and the Olympics.

Champions and legends

Zou’s contender at the 15,000-seat CotaiArena was Mexican boxer Eleazar Valenzuela in a 4-round matchup. Eleazar has been fi ghting as a professional for 11 months.

The nine-bout event also featured World Boxing Association (WBA) / World Boxing Organization (WBO) fl yweight champion and Filipino-American Brian “Hawaiian Punch” Viloria, defending his

Zou Shiming

47

APRIL 2013

unifi ed titles against Top-10-contender Juan Francisco Estrada, in addition to two-time WBO junior lightweight champion Roman “Rocky” Martinez, defending his title against undefeated No. 1 contender Diego Magdaleno.

The undercard featured former WBO junior featherweight champion and current No. 1 contender Wilfredo Vazquez Jr., of Puerto Rico, who battled Yasutako Ishimoto, of Japan, in a 10-round junior featherweight bout; and WBO fl yweight mandatory challenger Milan “El Metodico” Melindo, of the Philippines against Tommy Seran from India.

Thai fi ghter Cheroenchai Sithsaithong battled Filipino David Penalosa in a 6-round super bantamweight fi ght, while Japanese Rysei Yoshida challenged Australian Paul Fleming in an 8-round super featherweight bout. The undercard also featured Ngaotawan Sithsaithong from Thailand against Filipino Dodie Boy Penalosa in an 8-round featherweight battle.

Legendary two-time world heavyweight champion “Big George” Foreman was ringside at the event, providing blow-by-blow commentary for HBO2, who televised the event in the U.S.

The Venetian Macao launched a special accommodation and event ticket package for sports fans. The Zou Shiming “Fists of Gold” Package started at just HK$2,988 for stays on fi ght night, and came with the following exclusive advantages: Two tickets to the Zou Shiming “Fists of Gold” event, accommodation for two in a Royale Suite, and breakfast for two.

For all the fi ght results see www.toprank.com.

Varied off erings

The Top Rank event at The Venetian Macao was another way Sands China is implementing its entertainment strategy, part of its eff ort to help diversify Macau’s tourism economy through the varied off erings of its integrated resort city on Cotai. It recently hosted the highly-successful greater China debut of Ultimate Fighting Championship (UFC) in November, and has held numerous sporting events with some of the world’s most well-known athletes – from basketball greats Kobe Bryant and Scottie Pippen to tennis legends Pete Sampras and Roger Federer, and golf sensations like Rory McElroy andLee Westwood.

“Sands China was proud to host Zou’s professional debut, and we look forward to opportunities to bring many more Top Rank events to Macau in the future,” said Edward Tracy, President and Chief Executive Offi cer, Sands China Ltd.

“The company is glad to contribute to the city becoming one of Asia’s top entertainment hubs and a world centre of tourism and leisure.”

(Bouts and times subject to change)

Sponsored Feature

Roman Martinez

Eleazar Valenzuela Diego Magdaleno

Brian Viloria

Juan Francisco Estrada

48

APRIL 2013

Property

A would-be homebuyer says he has the money to buy his fi rst fl at in Macau. However, after looking

around for something suitable, he has decided to sit it out for another year.

“I gave up. The speculation in the market is huge, especially in the Areia Preta district and Taipa,” says the buyer, who declined to give his full name.

His budget is about MOP6 million (US$750,000). Having heard that Hong Kong banks are increasing their mort-gage interest rates, he feels it is too risky to buy a home right now. “I heard the news of Hong Kong increasing interest rates and, for sure, the same will hap-

pen in Macau. But what I fear the most is that the real estate bubble could burst this year, so that’s why I’ve decided to wait and see,” he says.

At the same time, the buyer fears that instead of falling, home prices in Macau will continue to climb to levels equivalent to those in Hong Kong. He is trapped.

He would like to pay about MOP12,000 a month to service a mort-gage, but if mortgage interest rates here rose, he could pay another MOP2,000 a month.

“I can afford to pay MOP14,000 tops but I would lose some quality of life,” he says.

People in the real estate business think banks here will follow Hong Kong’s lead, meaning homebuyers will face greater fi nancial diffi culty. Hong Kong’s two biggest mortgage lenders, HSBC Holdings Plc and Standard Char-tered Plc, raised their prime mortgage rates last month for the fi rst time since 2011, by 0.25 percentage points, in re-sponse to tighter regulatory restrictions.

Twin speedCentaline (Macau) Property Agency Ltd sales director Noelle Cheung says: “The same may happen here”.

Century 21 Realty Macau’s sales

BY ALEXANDRA LAGES

Waiting gameMortgage interest rates may rise sooner than expected leading some buyers to sit on the sidelines

49

APRIL 2013

manager, Patrick Chiu, says: “His-torically, Macau always follows Hong Kong. So mortgage rates are likely to increase.”

Both estate agents expect the number of homes sold, and the prices they fetch to ease slightly if banks here raise inter-est rates. “Even today, with the new rules for mortgage loans, it’s already diffi cult for new buyers to buy a home, even if they sell a unit to buy a new one. An in-crease in the interest rates will cool the market, because people cannot afford to pay the monthly instalments,” says Mrs Cheung.

In contrast, Jones Lang LaSalle (Macau) Ltd’s head of residential prop-erty, Jeff Wong Chi Wai, sees no need for banks here to increase interest rates. He says Hong Kong’s circumstances are different, as banks there are subject to tighter regulatory restrictions.

The Hong Kong Monetary Author-ity told Hong Kong’s banks in Febru-ary to limit their risk weighting for new mortgage lending for homes to 15 per-cent, just in case residential property values dropped. This was after the gov-ernment there took further measures to cool the property market, doubling the stamp duty on purchases of property costing more than HK$2 million.

Monetary Authority of Macau chairman Anselmo Teng Lin Seng says the circumstances in Hong Kong are dif-ferent from those in Macau. The Macau government will leave it up to the banks to decide whether to follow HSBC and Standard Chartered in Hong Kong.

Economic comebackBank of China Ltd Macau branch depu-ty general manager Ip Sio Kai said last month that Macau’s banks would not necessarily follow Hong Kong’s, but that homebuyers should be prepared for higher interest rates, just in case. Mr Ip remarked that the United States econo-my was recovering, and that there was a slight chance of an increase in US inter-est rates next year – which would mean higher interest rates here, as the pataca is pegged indirectly to the US dollar.

American billionaire fi nancier George Soros told CNBC in January that US interest rates would jump as soon as there were clear signs that the US econ-omy was picking up. Mr Soros expects US interest rates to rise this year.

The Portuguese news agency Lusa last month quoted Midland Re-alty Macau’s managing director, Ronald

Cheung Yat Fai, as saying that if inter-est rates here rose, many property buy-ers would be unable to afford to service their mortgages. Mr Cheung said the reason why Macau people had three times more purchasing power now than in the late 1990s, was that interest rates were low and they did not worry about the future.

Conjecture is rife in the property market that Macau’s government will follow Hong Kong’s in taking new meas-ures to cool the market. Some people in the real estate business say the govern-ment here is about to double the stamp duty on purchases of fl ats by buyers that already own more than one home.

Before a fallBloomberg news agency quoted Buggle Lau, chief analyst of Hong Kong real estate agency Midland Holdings Ltd, as saying that he expected the number of homes sold in Hong Kong last month to fall below 3,000 because of the new curbs. Housing prices there are forecast to fall by up to 10 percent this year.

If Mr Lau’s prediction is correct, the number of homes sold last month would be the lowest since 2003, near the end of a six-year slump in Hong Kong’s prop-erty market.

In Macau, the value of new mort-gage lending for homes was MOP3 bil-lion in January, 13.7 percent more than the month before, rising for the fi rst time in four months. But January’s total was far below the peak last September, when homebuyers rushed to take out loans before the government introduced new curbs on the overheating property market.

In October, the government made yet another attempt to cool the property market, reducing the maximum propor-tion of the value of a home that a bank is allowed to lend, for homes worth more than MOP6 million. With the new rules, Macau residents who want to buy a com-pleted home priced between MOP6 mil-lion and MOP8 million are only able to borrow up to 60 percent of that amount from the bank. For non-residents, the ra-tio is even lower – 50 percent.

Housing prices were 5.8 percent higher in January than the month before, data from the Financial Services Bureau shows. The average price per square me-tre of residential space was MOP74,524. Altogether, 1,144 homes were sold in January, 310 more than the month before.

Conjecture is rife in the property market that Macau’s government will follow Hong Kong’s in taking new measures to cool the market

Building units completed

- Residential

- Commercial and offi ces

- Industrial and others

Building units started

- Residential



Macau

- Macau Peninsula

- Taipa

- Coloane

Under MOP1 million

MOP1 million to MOP1.9 million



MOP4 million or above

Total units transacted

- Residential

- New building

- Old building

Resident buyers (as percentage of total buyers)


Resident buyers (as percentage of total buyers)

- Parking spaces


Total value of total units transacted (2)

- Residential

- New building

- Old building


- Parking spaces


45

34

10

1

132

125

5

2

84.4

122.3

-56.7

-73.7

-26.3

-25.7

-43.0

-15.0

6.88.4

-0.5-5.0

-45.5-27.1

-4.817.842.0

-8.0-1.5-7.83.7

3.2-5.0

n/a-26.619.0

32.326.117.845.949.722.8

120.6

109.4113.9148.1

92.0

7.128.0

3.3168.8

38.7

170.3221.0234.7195.1

89.1311.7

-9.6

28.6

41.7

0.0

0.0

1,785.7

2,400.0

400.0

100.0

-5.6-4.6-9.08.6

1.131.125.777.3

448.2

Construction - private sector

Average transaction price of residential units (3)

Transaction price of residential units (1)

Transactions (1)

2012

2012

Dec 2012

2012







Month-on-month change (%)


Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Jan 2013

Jan 2013

Jan 2013

Jan 2013

Jan 2013

Jan 2013

Jan 2013

Jan 2013

Feb 2013Feb 2013Feb 2013Feb 2013


Jan-Dec 2012Jan-Dec 2012Jan-Dec 2012Jan-Dec 2012

Jan-Dec 2012Jan-Dec 2012

Jan-Dec 2012Jan-Dec 2012Jan-Dec 2012

Jan-Dec 2012Jan-Dec 2012Jan-Dec 2012Jan-Dec 2012Jan-Dec 2012Jan-Dec 2012Jan-Dec 2012

2,558

2,443

100

15

1,592

1,526

49

17

25,41916,917

7,1759,742

90.32,972

n/a5,122

408

MOP100.9 MOP74.2MOP48.8 MOP25.5MOP19.0

MOP3.4MOP4.3

MOP70,407MOP71,159MOP64,138MOP79,008

1,4663,3723,0112,1416,927

MOP70,385MOP71,116

MOP62,766MOP89,615

96173176133603

1,866 1,181

536 645

98.8 169

93.4 473

43

MOP7.7MOP5.9MOP4.0MOP1.9MOP1.2MOP0.4MOP0.3

billionbillionbillionbillionbillionbillionbillion

billionbillionbillionbillionbillionbillionbillion

/m2

/m2

/m2

/m2

/m2

/m2

/m2

/m2

So

urce

: Sta

tistic

s an

d C

ensu

s S

ervi

ce a

nd F

inan

cial

Ser

vice

s B

urea

u

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

percentage points

percentage points

percentage points

Property Statistics 50

APRIL 2013

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

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

Source: Midland Realty (Macau) Ltd

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

Notable residential property rentals - 01/02 to 28/02, 2013

Macau One Central Block 5, H/F, unit A 2,287 44,000 19.24

Macau One Central Block 1, H/F, unit E 1,842 38,000 20.63

Macau Lake View Tower H/F, unit Q 2,517 35,000 13.91


Macau One Central Block 7, M/F, unit C 1,173 27,000 23.02


Macau One Central Block 7, M/F, unit D 1,176 26,000 22.11

Taipa Nova City Block 7, H/F, unit D 2,505 21,000 8.38

Taipa Nova City Block 14, M/F, unit B 1,314 14,800 11.26

Taipa Flower City Edf. Lei Hong, H/F, unit E 1,268 12,000 9.46

Taipa Edf. Hung Fat Garden Block 2, M/F, unit N 1,280 12,000 9.38

Taipa Edf. Hung Fat Garden Block 2, L/F, unit J 1,280 12,000 9.38

Macau Villa de Mer Block 3, M/F, unit E 785 8,000 10.19

Notable residential property transactions - 01/02 to 28/02, 2013

Coloane One Oasis Cotai South Block 12, M/F, units A-E and I, J 7,054 49,699,000 7,046

Coloane One Oasis Cotai South Block 12, M/F, units F-H 3,404 24,761,000 7,274

Macau Pearl Horizon Block 4, H/F, unit C 1,746 12,729,000 7,290

Taipa Windsor Arch Block 9, H/F, unit B 1,468 12,000,000 8,174

Macau Pearl Horizon Block 3, M/F, unit C 1,652 11,883,000 7,193



Macau Pearl Horizon Block 4, H/F, unit D 1,399 11,055,000 7,902


Macau Pearl Horizon Block 4, L/F, unit C 1,746 10,475,000 5,999

Macau Pearl Horizon Block 4, M/F, unit E 1,650 10,210,000 6,188

Macau The Residencia Block 5, M/F, unit B 1,696 10,200,000 6,014

Macau Pearl Horizon Block 8, H/F, unit A 1,248 9,944,000 7,968

Macau Pearl Horizon Block 3, M/F, unit E 1,393 9,815,000 7,046

Macau Pearl Horizon Block 3, M/F, unit D 1,382 9,495,000 6,870

Macau Pearl Horizon Block 17, M/F, unit D 1,302 9,018,000 6,926

Macau Pearl Horizon Block 4, H/F, unit A 1,274 8,479,000 6,655

Macau Pearl Horizon Block 4, M/F, unit B 1,260 8,234,000 6,535

Macau Pearl Horizon Block 3, M/F, unit F 1,177 7,701,000 6,543

Macau Pearl Horizon Block 4, M/F, unit A 1,267 7,633,000 6,024

Macau Pearl Horizon Block 4, M/F, unit F 1,169 7,498,000 6,414

Macau Pearl Horizon Block 17, H/F, unit E 938 7,035,000 7,500

Macau Pearl Horizon Block 17, H/F, unit F 952 6,988,000 7,340

Macau Pearl Horizon Block 17, H/F, unit E 938 6,895,000 7,351

Macau Pearl Horizon Block 17, M/F, unit F 952 6,783,000 7,125

Macau Pearl Horizon Block 17, M/F, unit E 938 6,690,000 7,132

Macau Pearl Horizon Block 4, M/F, unit G 1,051 6,145,000 5,847

Macau Pearl Horizon Block 17, H/F, unit H 767 5,160,000 6,728



Macau Pearl Horizon Block 17, M/F, unit H 797 4,755,000 5,966

Coloane One Oasis Cotai South Block 5, L/F, unit D 877 4,648,100 5,300

Taipa Jardim Dragão Precioso L/F, unit AA 1,067 4,280,000 4,011

Source: Midland Realty (Macau) Ltd

51Property | Market Watch

APRIL 2013

52

APRIL 2013

The trial of Chinese Estates Holdings Ltd boss Joseph Lau Luen Hun and BMA Investment chairman Steven Lo Kit Sing regarding the land where luxury residential project La Scala is being built, will resume on April 29.The trial’s original January start date was postponed because six of the accused were absent,

LA SCALA TRIAL ON APRIL 29including Mr Lau, the head of property developer Chinese Estates Holdings Ltd, who was said to be unwell at the time.The Public Prosecutions Offi ce has accused Mr Lau, Mr Lo and six others of being part of the web of corruption woven by Ao Man Long when he was secretary for transport and public works.

CHINA STATE CONSTRUCTION TRIPLES REVENUEState-owned China State Construction International Holdings Ltd reported revenues of over HK$859.5 million (US$110.7 million) last year in Macau, more than three-times higher than the HK$243 million posted a year before.However its gross profi ts in Macau dropped by 16.2 percent to HK$59.6 million last year. The company is involved in several projects in Macau, of which the biggest is the Nova Park residential project in Taipa, owned by conglomerate Shun Tak Holdings Ltd.

DEVELOPER TO GET RECLAIMED LANDHong Kong developer Kerry Properties Ltd is set to get a plot in one of Macau’s fi ve new reclaimed areas in return for giving up part of the land granted for the Galaxy Macau resort in 2009.Although the exchange procedure is still “under discussion”, the fi rm expects the new site “to be within one of Macau’s new land reclamation projects”, the developer told in a fi ling.The government pledged to grant the developer another piece of land with a value of at least MOP69.8 million (US$8.7 million), the money Kerry originally paid for the Cotai plot.Kerry received the Cotai plot in 1996 for the construction of an exhibition and convention centre.

Estate agencies and property brokers will have from April 3 until June 30 to apply to the Housing Bureau for three-year temporary licences.The law regulating real estate activities, passed last October, requires all estate agencies and property brokers to obtain temporary licences allowing them to operate until they pass examinations held by the Labour Affairs Bureau, which will entitle them to permanent licences.The law will come into effect on July 1.

THREE MONTHS TO GET LICENCEThe law regulating real estate activities comes into effect on July 1

Property

53

APRIL 2013

Language is possibly humanity’s most amazing invention. Its immense plasticity and variety never ceases to awe. I do not want to offer a column about the wonders, or horrors,

of imagination that language can elicit.I would be happy if we could agree on a simple proposition

that, sometimes, some accuracy in words is necessary. At certain levels and in certain circumstances, a dose of vagueness may be needed to smooth out some of the rougher sides of human affairs. But when people try to communicate rationally, with objectivity, there must be some kind of agreement between the speakers about what words mean, or the specifi c context in which they are being used.

We must be confi dent that people mean what they say, and that what they say means the same for them as it does for us, otherwise communication breaks down. That clarity or precision, is especially desirable when we talk about the legal norms that frame economic relations, contracts and policies.

At this point, you may be asking “What is all this about?”This discussion was triggered by the publication in the

Offi cial Gazette of a dispatch by the chief executive that fi xes the prices for natural gas distribution; and, in particular, by the explanations provided to the media by the Offi ce for the Development of the Energy Sector, which bears the Portuguese acronym GDSE.

Great emphasis was given to the free and open operations of the market. The dispatch fi xed prices charged to each type of user. The price is the result of adding two elements: an acquisition cost and a distribution cost. The fi rst cost is the same for all users and the second varies according to the class of user.

In addition, a maintenance charge will be determined by the operators and levied on residential users. We are told the market will set that charge but it cannot exceed MOP20 per user. Just as an aside, who determines that charge?

Moreover, the offi cial notice alerts consumers that additional price rises “cannot be ruled out” as international prices are increasing.

Curly proseLet us set this straight. Both the importation and distribution of natural gas are considered a public service.

The operation of this industry is granted to a single operator under a public concession regime. The activity is regulated by a contract signed between the administration and operator. The cost to the end-user is fi xed by the authority of the chief executive.

In principle, the government could change the cost of importing gas, and consequently the fi nal price, at any time, as gas prices overseas evolved.

To sum up, this is an economic activity classifi ed as a public service, provided by a single company holding a legal monopoly for 25 years, with prices that are set administratively.

There is nothing in this arrangement even remotely related to the operation of a market, much less a free one.

The only competition, if there is to be some, that can be possible in this market is for the provision of gas, and installation and maintenance of the infrastructure inside buildings, including gas meters and pipes.

The public was not told if and how that activity will be regulated, or how the providers will compete among themselves. Will they bid for market share inside buildings, or building by building? In blocks or chunks of blocks? By neighbourhoods?

The offi cial release reassures us that operators will have to show the government “statistical data about usage and charges”. The exact purpose of this obligation or how it deviates from the typical reporting obligations that companies face, is unclear.

The companies are free to set the value of the maintenance fee, as long as it does not exceed MOP20, which is competition of a sort, right?

Timely questionsTo set the example, the government’s release says prices have already been fi xed for the public housing buildings in Seac Pai Van. Unfortunately, my sources could not tell me who the providers were or how they got the job.

The price arrived at, and you could not have guessed incorrectly, was MOP20 per user.

It is unclear how the “market”, free or otherwise, is going to function. Should the public take this as a demonstration of the market at work?

When it was introduced, natural gas was hailed as a cheaper and more environmentally friendly alternative to other sources of energy. The price advantage of using LPG has reduced signifi cantly since then, and we are on notice for possible future price increases.

It seems business and household consumers are being prepared to focus on the environmental advantages.

The public was also informed in the past that the entire city would be ready to use natural gas. It seems the service currently covers just the public housing estate mentioned earlier and about one-third of Cotai (what this fi gure means is not completely clear in the media reports). The network will be extended to the University of Macau campus on Hengqin Island later in the year.

So, the gas network supplies just the easy bits so far.The infrastructure is being built from scratch, far from the

main corridors of traffi c or the city’s more densely built-up and populated areas. What are the plans to install natural gas infrastructure on the peninsula? How much will that impact city traffi c and the daily life of residents?

Can anyone come forward with a clarifi cation? The earlier, the better.

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

WHAT ARE THE PLANS TO INSTALL NATURAL GAS INFRASTRUCTURE IN MACAU? HOW MUCH WILL THAT IMPACT CITY TRAFFIC AND THE DAILY LIFE OF RESIDENTS?

54

APRIL 2013

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The law on smoking refers to only six indoor air quality parameters when it should refer to eight – by

including parameters for ozone and bac-teria – according to Vesa Makipaa, the president of a Finnish ventilation system company, Lifa Air Ltd. Most casinos in Macau use ventilation systems made by Lifa.

Mr Makipaa spoke to Macau Busi-ness after a conference at the Macao In-ternational Environmental Cooperation Forum and Exhibition. The conference was about air quality in casinos now that the law requires them to have separate smoking and non-smoking areas.

Mr Makipaa says concentrations of ozone and bacteria in indoor areas should not be neglected. The law on smoking sets limits on the permissible amounts of carbon monoxide, carbon dioxide, respirable suspended particu-late (PM10), respirable suspended par-ticulate (PM2.5), Benzo(a)pyrene and volatile organic compounds in the air in casino smoking areas. But it says noth-ing about ozone and bacteria.

Ozone at sea level is hazardous to humans. But Mr Makipaa says there are companies in Macau offering ways to get rid of the smell of tobacco smoke by using ozone.

“It’s very good technology, no doubt. But the concentration of ozone must be very high so you get the chemical reac-tion. But if it is high enough, it is very hazardous for human beings,” he says.

Mr Makipaa also says he cannot un-derstand why so little attention is paid to bacteria in this part of the world. “If you think of how many people are com-ing from the south of mainland China, it is the area where some of the pandem-ics are coming from. We should be very concerned about that,” he says.

Now, all concentrate…The law says smoking areas should take up no more than half of the space in casinos meant for public use. But trade unions say some casinos are concen-

BY LUCIANA LEITÃO

Clearing the airThe law on smoking has two important shortcomings, says a maker of ventilation systems

trating the tables for the most popular games in their smoking areas, meaning more croupiers and other employees on the gaming fl oor are exposed to tobacco smoke than would otherwise be neces-sary.

Mr Makipaa says he understands the concern of the unions for their mem-bers’ health.

“We saw this experience in the USA, but there, gamblers don’t smoke as much as here. Here, 80 percent of gam-blers smoke,” he says.

Where there are non-smoking areas and smoking areas, smokers will obvi-ously just crowd into the smoking areas, making the air in the smoking areas worse than it would be otherwise. “The density of people is higher and the con-centration of smoking pollutant contam-inants will be higher,” Mr Makipaa says.

He says Lifa has a different ap-proach, which has been tried in Europe and the United States. “We have an in-tegrated fi ltration system on the table,” he says.

The problem is that in Macau ca-sinos are not allowed to fi x anything to their tables.

So Mr Makipaa is trying to work out

how such a system can be installed here.Lifa Air is proposing a system that

can recycle the air in a casino. “Roughly about 80 percent of air will be re-circu-lated, so only 10 to 20 percent will be fresh air from outdoors. Therefore it’s critical to fi lter the air, otherwise if you don’t fi lter it properly you have a con-centration of the six parameters,” Mr Makipaa says.

He says some premises have ventila-tion systems that use air drawn in from outside. “Some have used a lot of fresh air from outdoors and then they have achieved a reasonable level of contami-nant levels by doing like this,” he says.

But these systems cannot cool the hot air they draw in from outside in the summer. “In practice, either it is ex-tremely warm inside the casino or they just have to clean the air and rotate the existing air and reduce the fresh air from outdoors,” Mr Makipaa says.

He says Lifa’s technology is de-signed not for casinos but for premises where air quality is especially impor-tant, such as hospitals and public trans-port terminals. Even so, the company’s biggest customers here are casinos, along with the government and hotels.

Gaming

55

APRIL 2013

BID FOR COTAI CENTRAL COMPLETION EXTENSIONLas Vegas Sands Corp says it “expects to apply” to the Macau government for an extension of the May 2014 deadline it was set by the government for completing Sands Cotai Central casino resort on Cotai.The company has not said how much of an extension it is likely to seek. This will be the third time it has asked for more time for its Cotai project. The government originally gave the company a May 2014 deadline to complete Sands Cotai Central.

MGM CHINA NOT EYEING PHILIPPINES FOR NOWMGM China’s Chief Executive Offi cer Grand Bowie says the fi rm is “unlikely” to invest in the Philippines “at this time” and prefers to stay focused on the construction of its Cotai project.The company’s Cotai project broke ground earlier this year. The property will cost US$2.6 billion (MOP20.8 billion) to build. It will include as many as 500 gaming tables. Mr Bowie was referring to the Philippines reportedly wanting to take over as the world’s gaming capital by 2017.

AERL ROLLING CHIP TURNOVER DOWN IN 2012VIP room gaming promoter Asia Entertainment & Resources Ltd (AERL) announced that its unaudited rolling chip turnover for 2012 dropped by 9 percent year-on-year to US$18.1 billion (MOP145 billion). The Nasdaq-listed company’s net income also decreased by 9 percent to US$70.1 million last year from US$77.3 million. Asia Entertainment & Resources promotes four VIP gaming rooms in Macau, at StarWorld, Galaxy Macau, Cotai Sands Central and City of Dreams.

Wynn Macau Ltd was fi ned MOP20,000 (US$2,500) for breaching the privacy law by publicly disclosing the personal information of hotel guests.The Personal Data Protection Offi ce said that the gaming operator has already paid two MOP10,000 fi nes for breaching two principles regarding the handling of personal data.Wynn Macau disclosed “sensitive data” of its hotel customers to a third party, which was “already beyond the reasonable

WYNN MACAU FINED FOR PRIVACY BREACHexpectation of the hotel customers”, the offi ce said.The gaming operator also failed to get the regulator’s approval before transferring data outside Macau, to the United States where its parent company Wynn Resorts Ltd is based, the offi ce added.The case refers to an investigation launched by Wynn Resorts in late 2011 into its former shareholder Kazuo Okada.

The case refers to an investigation into former shareholder Kazuo Okada

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56

APRIL 2013

BY LUCIANA LEITÃO

Gaming

More than half the vehicles on Macau’s roads are motorcycles, but few casino resorts on the

Cotai Strip cater to riders, providing little in the way of parking.

There are about 116,000 motorbikes on the road and about 88,000 private cars here. At Galaxy Macau there are about 1,200 parking spaces, with just 184 set aside for motorbikes ridden by guests.

The casino resort’s vice-president of hotel operations, Paul Town, says motor-cyclists are welcome. “We’ve had places available for over a year,” he says. But he concedes there is no signage alerting rid-ers to where they are.

Mr Town says Galaxy Macau has enough parking for all vehicles. The sec-ond phase of the casino resort, due to be ready by 2015, will include more parking spaces and more room for motorbikes. “We’ll have more spaces for all types of vehicles,” he says.

Motorcyclists not only have to cope with a scarcity of parking for motorbikes at Cotai’s casino resorts, but also with a scarcity of nearby public parking spaces. Many riders park illegally and a substan-tial proportion of motorcycles outside casino resorts on the strip belong to the resorts’ staff.

City of Dreams has 240 parking spaces for motorbikes. All are reserved for staff. “So far we’ve found the spaces have satisfi ed the demand,” the casino resort told Macau Business in a written statement.

City of Dreams said it had found that demand from patrons for parking for motorbikes was low. It said its ratio of parking spaces assigned to cars versus motorbikes was in line with requirements under the law.

Bus alternativeThe contracts that underpin the lease of land to Cotai’s casino resorts do not spec-ify how much motorcycle parking should be provided. Instead, the contracts have a generic clause that says parking for “motor vehicles” must be provided. The

Uneasy riderCasino resorts in Cotai are not doing enough to cater to guests arriving on motorbikes

contracts do not say how many spaces should be provided for any type of mo-tor vehicle.

The Transport Bureau says the number of parking spaces for motor-bikes in Cotai is adequate. It told Macau Business that Cotai had a large number of parking spaces and that the area was served by buses.

The bureau says there are 666 spaces for light vehicles and a further 1,212 for motorcycles at the Estrada Flor de Lótus car park, near the border checkpoint, and at two public parking lots at the Centre for Driving Lessons and Exams. There is additional park-ing at sports facilities nearby that offer

spaces for 1,600 light vehicles and 1,040 motorcycles.

“Various private developments in the area also provide car parks open to the public, providing about 5,000 spaces for light vehicles and around 3,000 for motorcycles,” it says.

The bureau says the law requires hotels and casinos to offer parking for light vehicles, motorcycles and coaches; pick up and drop off zones for coaches and taxis; and short-stay waiting zones for vehicles.

Macau Business asked Sands China Ltd for details of its arrangements for motorbike parking, but had not received a response before going to print.

57

APRIL 2013

Gross gaming revenue (2012)

Gaming tables

Slot machines

Number of casinos

SJM Holdings Ltd

Galaxy Entertainment Group Ltd

Sands China Ltd

Wynn Macau Ltd

Melco Crown Entertainment Ltd

MGM China Holdings Ltd

Greyhound Racing

Horse Racing

Chinese Lottery

Instant Lottery

Sports Betting - Football

Sports Betting - Basketball

Roulette

Blackjack

VIP Baccarat

Baccarat

Fantan

Cussec

Paikao

Mahjong

Slot machines

3-Card Poker

Fish-Prawn-Crab

3-Card Baccarat Game

Craps

Texas Holdem Poker

Lucky Wheel

Live Multi Game

Stud Poker

Casino War

Fortune 3 Card Poker

13.5 10.714.3

1

-233

-2-1--

-31.0-19.1

---61.115.529.1

13.98.87.5

36.118.016.2

-23.7190.0

15.910.5

-56.923.5-9.34.30.0

187.812.5

8.846.1

-8.23.12.9

34.626.312.6

-29.659.315.212.5

-25.016.7

-38.98.5

12.5175.4

12.9-9.9

89.2

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1

Casino gaming

Market share per casino operator*

Gross revenue from other gaming activities

Gross revenue from casino games

2011

2012

2012

2012






Month-on-month change (%)



Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Mar 2013Dec 2012Dec 2012Dec 2012

Mar 2013Mar 2013Mar 2013Mar 2013Mar 2013Mar 2013

Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012

Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012Oct-Dec 2012

MOP 304.15,302

16,056 34

27%19%19%12%14%10%

MOP205MOP356

MOP6MOP0.0014

MOP418MOP111

MOP55MOP96

MOP1MOP0.0005

MOP99MOP36

MOP892MOP2,950

MOP210,850MOP66,251

MOP249MOP5,546

MOP87MOP203

MOP13,244MOP211

MOP22MOP347MOP137MOP289

MOP35MOP895

MOP1,472MOP246MOP206

MOP234MOP773

MOP54,831MOP18,763

MOP72MOP1,466

MOP19MOP43

MOP3,504MOP54

MOP6MOP84MOP33MOP77

MOP9MOP314MOP410

MOP64MOP70

27%18%21%11%14%

9%

MOP 31.35,485

16,58535

billion

casinos

millionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillion

millionmillionmillionmillionmillionmillion

millionmillionmillionmillionmillionmillion

millionmillionmillionmillionmillionmillionmillionmillionbillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillion

billion

casinoscasino casino

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: Gam

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

percentage pointspercentage pointspercentage points

percentage point

percentage point

percentage point

percentage point

percentage pointpercentage point

58

APRIL 2013

Overworked, outta hereWorkers in tourism-related jobs are the city’s least satisfi ed when it comes to their work and casino workers are the least committed, a survey fi nds

Gaming

They are the workers that move the economy relentlessly forward, but they do not seem to be happy playing

the game.Recent research has found employees

in industries that depend mainly on tourists are the least satisfi ed with their jobs, and the most likely to move on. Among them are gaming industry employees, who are the least committed to their jobs.

The fi rst edition of the Macau Hu-man Resource Monitoring Survey found that most of the workforce says they are “moderately satisfi ed with their jobs”. But of the workers in 16 different categories of jobs, only leisure and entertainment staff, and food and beverage industry employees feel worse about their jobs than workers in gaming.

The survey by the Institute of Tourism Studies research centre found that gaming workers’ satisfaction with their pay, job security, social environment and the way they are recognised, treated and super-vised in the workplace, is below the city-wide average.

Gaming industry employees are also the least committed to their employers, scoring 2.63 on a scale of one to fi ve, with fi ve indicating complete commitment. They scored 3.11 on a scale of one to fi ve regard-ing their intention to stick with their jobs, less than the average score of 3.18.

The institute interviewed a randomly selected sample of 525 people for the sur-vey and about 16 percent worked in gam-ing. The survey found lower levels of job satisfaction and commitment not only among gaming industry employees, but also among employees of several other in-dustries that rely on tourism spending.

Checking outHandling about 28 million tourists a year seems to be at the heart of the headaches for Macau’s workforce. Of the surveyed partic-ipants, 56 percent worked in tourism related industries, including gaming and casinos, wholesale and retail, food and beverage,

hotels and resorts, travel companies, lei-sure, entertainment and business meetings.

In general, the results showed these workers were “signifi cantly” less satisfi ed with their jobs than the average. In areas such as job security, supervision and how they perceive they are treated, the scores were signifi cantly less than the average.

Workers in tourism-related industries “perceived themselves as signifi cantly under-compensated” and were also “more likely to quit their organisations”. However, they reported lower levels of job related stress – a 2.64 score on a scale of 1 to 5 – than the survey’s average of 2.7.

Workers in tourism-related jobs con-sidered their jobs to be “low in autonomy, task identity and skill variety” and the amount of feedback on their performance “was inadequate on average”.

In jobs other than tourism, construc-tion workers were the most satisfi ed with their jobs, followed by civil servants and social security employees, all with above average scores.

The survey interviewed both Macau residents and non-residents employed full time. Overall, non-resident work permit holders were less satisfi ed with their jobs than residents. They were mostly unhappy with their salaries and social environment.

They felt they earned less than resident workers, and had lower scores for commit-ment to their employers, and showed less intention to continue working at their jobs.

Non-resident employees also felt that their work impacted on their social life more.

Overall, work-family confl icts (the in-terference of work issues in family life) and family-work confl icts (the interference of family issues in work) were more notice-able among married employees, who pre-sented “signifi cantly higher-than-average” levels of such problems. Single parents were particularly affected by the interfer-ence of work issues in their family life.

Work-induced confl ict at home was also “signifi cantly” higher among workers

59

APRIL 2013

MICE

Leisure and entertainment

Travel agencies and tours companies

Hotels and resorts

Food and beverage

Gaming and casinos

Wholesale and retail

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

JOB STRESS OF TOURISM RELATED INDUSTRY WORKERS

Scale of 1 to 5

MICE



Hotels and resorts

Food and beverage

Gaming and casinos


0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

WORKERS’ INTENTION TO STAY IN THE JOB

Scale of 1 to 5

MICE



Hotels and resorts

Food and beverage

Gaming and casinos


0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

GENERAL JOB SATISFACTION OF TOURISM RELATED INDUSTRY WORKERS

Scale of 1 to 5

60

APRIL 2013

who occupied senior positions in their or-ganisations. Middle or supervisory level employees, as well as top-level staff, all reported above average levels of confl ict.

Shifted thinkingEmployees with irregular working hours were also more affected by problems of balancing work and family commitments. They were less satisfi ed with their jobs than those who did not have to work shifts, and they also had satisfaction levels that were below average.

These workers also felt less compen-sated in their jobs than those with regular working hours. They presented a lower intention to stay with their companies and higher levels of job-related stress.

In general, salaries and supervision at work were the two main factors workers in Macau were most unhappy with. However, overall, workers who earned more than MOP10,000 a month were “signifi cantly” happier about their jobs than those who did not. The same trend was observed among those who held at least a bachelor’s degree.

“Workers not likely to stay for long in their organisations tend to be young (aged 18 to 27), single and earn less than MOP10,000 monthly,” the study said.

The survey also showed that the more senior the role, the greater the level of commitment and the more positive the per-ception of the organisation’s climate.

The survey’s authors say the fi ndings “should be cause for long-term concern”. Their recommendations include a revi-sion of the nature of jobs, especially at the supervisory and management level. They suggest, for instance, that middle manag-ers should be relieved from “unnecessary operation tasks”, in order to have more time to concentrate on “leadership tasks”.

Pay structures also need to be revised, with benefi ts and compensation “up to par with rising living standards and infl ation”.

These measures may help improve the loyalty of employees to some extent, but improving the work environment, reduc-ing stress and helping balance work and family life were “more likely to increase organisational commitment and long-term intention to stay”.

The authors advised employers to be “open and transparent”, particularly in terms of career management planning. They also recommended organisations “provide employee-care or counselling services”.

As for the problems faced by those working on shifts, the researchers sug-gested the schedules should be redesigned so less rotation is required. Stabilising shifts allowed staff more time for their personal lives.

The most recent edition of the Macau Employee Confi dence

and Satisfaction Index, released in March, found that gaming employ-ees are unhappier than those who do not work in the sector.

The fi ndings show happiness had deteriorated from the same time last year.

Croupiers were less confi dent about their work, scoring 3.05 on a one to fi ve scale where fi ve was considered highly satisfi ed. Re-muneration helped raise a smile, with croupiers happier about their pays than workers from non-casino industries, the Macau Post Daily reported.

The Institute for Sustainable Development at the Macau Uni-versity of Science and Technology conducted the annual survey in February. Based on more than 1,000 interviews, the survey showed the confi dence and satisfaction indices for resident workers dropped slight-ly, by 0.3 of a percentage point, compared to last year’s results. The

Raw deal Gaming employees are unhappy with their lot at work, blaming pressure, shift work and threats from gamblers

Gaming

authors considered these values as “stable”.

A survey by the Macau Gam-ing Enterprises Staff Associa-tion found that almost 4 percent of gaming workers in its survey were at risk of attempting suicide. The association polled 491 casino workers and asked them to score their experiences across a range of workplace scenarios on a scale of one to four – with four being the most stressful.

The group says that any score averaging above three overall sug-gests the person might be prone to suicidal thoughts or at risk from self-harm. A total of 3.7 percent registered more than three points. About 26 percent of the survey sample scored 2.5 points or above, which represented a “high suicidal tendency”.

The report suggests insults and threats directed at staff from casino players when they lose are a fac-tor, negatively affecting workers’ mental health.

61

APRIL 2013

U.S. WANTS “ROBUST OVERSIGHT” OF MACAU’S JUNKETSThe U.S. Department of State has called for Macau to “continue to strengthen interagency coordination” to prevent money laundering in the gaming industry.The State Department’s latest annual International Narcotics Control Strategy Report says the priority should be to introduce “robust oversight of junket operators, mandating due diligence over non-regulated gaming collaborators, and implementing cross-border currency reporting”.Macau also should enhance its ability to support international investigations of money laundering or terrorism fi nancing, the State Department says.

The secretary for Economy and Finance Francis Tam Pak Yuen is confi dent that the local gaming industry has created competitive advantages in the leisure and tourism sector to compete against its rivals in region.

JUDGE REJECTS SANDS’ MOVE TO THROW OUT MACAU CASE

Nevada’s Judge Rob Bare ruled against Las Vegas Sands Corp’s effort to throw out a case against it by Hong Kong businessman Richard Suen who says he

is owed millions of dollars for helping the operator get a gaming license in Macau.The trial will take place at Clark County District Court in Las Vegas and will bring Sands Chairman and CEO Sheldon Adelson to the witness stand on April 4.This will be the second trial in the breach-of-contract case brought against the casino operator by Mr Suen, principal of a company called Round Square Ltd.Las Vegas Sands is the parent company of Macau-based gaming operator Sands China Ltd.

TYCOON PROBE MAY HAVE MACAU LINKSLiu Han, the head of one of China’s largest private-sector conglomerates Hanlong (Group) Co Ltd, has been detained in a money-laundering probe related to Macau casinos, according to media reports. Mr Liu’s detention is related to investigations over money laundering in Macau casinos, the reports say, citing unidentifi ed people familiar with the matter.

MACAU WILL NOT FALL

Speaking to reporters on the sidelines of a public event, Mr Tam said that Macau’s casino sector was developing into an international leisure tourism centre and has already built a solid foundation, the Macau Post Daily reported.

He was commenting on the possible impact of the newly opened Solaire mega-casino in Manila, after it was reported that it would be paying higher commissions than local operators to attract local junket operators.

BEHIND ITS RIVALSFrancis Tam says Macau casinos have created competitive advantages

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The city’s casino industry hit an all-time record high last year, reaching total gross gaming rev-

enues of MOP304 billion (US$38.1 bil-lion). Of the six local gaming operators, only Galaxy Entertainment Group and Melco Crown Entertainment Ltd did not announce a special dividend for 2012.

SJM Holdings Ltd generated an an-nual net profi t of HK$6.75 billion last year, an increase of 27.1 percent, thanks to its leading share of the Macau gam-ing market. In February, the company of gaming tycoon Stanley Ho Hung Sung announced a fi nal dividend of HK$0.50 per share and a special dividend of HK$0.30, up by 16.3 percent and 36.4 percent respectively from a year before.

SJM’s gaming revenue rose by 4.5 percent to HK$78.88 billion, while its

BY SARA FARR

Profi t sharingFour out of the six gaming operators in Macau will issue dividends for 2012

earnings before interest, taxes, deprecia-tion and amortisation (EBITDA) grew by 10.1 percent to HK$7.63 billion. The company said it maintained its lead in the market with an overall share of 26.7 percent in 2012.

Galaxy Entertainment just an-nounced its 2012 results late last month. The operator’s net profi t attributable to shareholders jumped a staggering 146 percent to HK$7.4 billion in 2012.

The operator’s full year revenue grew by 38 percent to almost HK$56.7 billion, and adjusted EBITDA was up 71 percent to just under HK$9.8 billion in 2012. However, Francis Lui Yiu Tung, the company’s vice chairman, said it would not be issuing a dividend, think-ing it best to offer investors long-term value by reinvesting its strong cash bal-

ances into phase three and four of Gal-axy Macau, its casino resort on Cotai.

He said that for the time being, he does not believe that returning capital in dividends is the best approach. With phase two of the project barely started, Galaxy Entertainment is planning to start construction of phases three and four at the end of this year.

Last month, Sands China Ltd also recommended the payment of a fi nal dividend of HK$0.66 per share for the year ended December 31, 2012, after it posted a profi t of HK$3.7 billion in the fourth quarter of last year, up by 52.3 percent compared to the same period in 2011. The payment of the fi nal dividend is subject to the approval of the compa-ny’s shareholders at the upcoming annual general meeting scheduled for May 31.

Gaming

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EYES WIDE OPEN After a new gaming revenue record

in 2012, analysts and experts are bullish on Macau´s casino business for this year. Analysts at Las Vegas-based research centre Galaviz and Company LLC estimate Macau’s gross gaming revenues will grow by nine percent “with a month-on-month banded growth range of one percent to 12 percent.”

Deutche Bank expects gross gam-ing revenues to go up by 15.2 percent this year to US$13.5 billion (HK$104.8 billion), while the VIP sector will in-crease by 4.1 percent to US$27.4 billion.

N onetheless, Galaviz and Co’s analysts say that with the mainland having announced greater emphasis on stomping out corruption throughout the whole country including Macau, this could mean that the central government is “becoming serious about enhanced regulatory oversight of Macau.”

“This has tremendous implications for what the future of Macau will be, from an operational perspective,” they say.

So far Macau handles oversight of regulatory issues on its own, but Galaviz and Co warn that “2013 could be the year that (the Chinese) central government asserts itself in Macau in a more aggressive manner than it has in the past 10 years.” In addition, the state of Nevada in the United States is likely to pay closer attention to activities here in Macau.

This could mean bad news for the gaming industry, because with the Chinese central government keeping a close eye on Macau’s gaming industry, media scrutiny is expected to increase with a particular focus on the negative perceptions of the industry. Analysts are of the opinion that neither the main-land nor Macau are prepared to handle such scrutiny.

“There is high likelihood that the central government of China will com-mission a special committee (internal) to look at the activity of junket op-erators that operate in Macau, and to determine if a greater level of regulatory law enforcement oversight is required,” Galaviz and Co says. If scrutiny of junket operators increases, it could impact revenue fl ow into Macau, perhaps not immediately, but certainly in the long run.

Analysts worry that regulation violations occur on a day-to-day basis in Macau. These include incidents of loan-sharking, illegal debt collection and money laundering.

Sands’ total net revenues increased 48.1 percent to HK$15.3 billion, while EBITDA rose 4.1 percent to HK$4.8 bil-lion in the fourth quarter of 2012. For the whole of 2012, Sands China alone generated practically 60 percent of Las Vegas Sands’ overall revenue.

Bad luckFollowing a stunning success in 2012, MGM China Holdings Ltd declared a dividend for the fi rst time in the com-pany’s history in February. The op-erator’s net profi t rose by 38 percent to HK$4.5 billion in 2012. Total revenue was HK$21.8 billion, up by 7.4 percent from HK$20.3 billion in 2011.

This was mainly due to growth in table games and slot machine opera-tions. The company’s special dividend is HK$1.02 per share.

The good luck was not knocking on Wynn Macau Ltd’s door, though. Wynn Resorts Ltd’s net revenues for 2012 dropped 2.2 percent to US$5.2 billion, compared to US$5.3 billion in 2011. Ac-cording to a company statement, this was primarily driven by a decline in its Macau operations of 3.2 percent.

Wynn Macau Ltd’s net revenues reached US$3.7 billion in 2012, a 3.4 percent drop from US$3.8 billion in 2011. This was mainly caused by lower VIP segment turnover last year. None-theless, the company also announced that its net profi t increased by nine per-cent to HK$6.4 million in 2012.

The operator has recommended the payment of a fi nal dividend of HK$1.24 per share for 2012 late last month. However, it is subject to share-holders’ approval.

Melco Crown Entertainment is also on a winning streak, but it will not pay a dividend for 2012. The operator reported strong fi nancial performance with profi t increasing to HK$1.12 billion, compared to HK$280 million last year.

Melco Crown’s net profi t rose by as much as 41.6 percent last year. It re-ported net income of US$71.4 million in 2012 and net revenue of US$415.8 million.

Its co-parent company Melco Inter-national Development Ltd recommend-ed the payment of a fi nal dividend of HK1.5 cents per share, late last month. The pre-tax profi t contribution from Melco Crown to Melco International was HK$1.18 billion due to “the con-tinuing growth in [the] Macau gaming market,” the company said in a fi ling.

Of the six local gaming operators, only Galaxy Entertainment Group and Melco Crown Entertainment did not announce a special dividend for 2012

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Casino operators in Macau of-ten face the complaint that their customer service fails to reach

the heights of the opulent resorts they have created. Questions also linger about whether the Las Vegas-style big box re-sorts that each Macau gaming company plans to open in Cotai over the next few years are the optimal model for Macau’s tourism development.

A new study on customer percep-tions of service brings Macau’s casino operators positive results on both fronts. Findings in a new paper by Institute for

BY MUHAMMAD COHEN

Experience countsThere is good news for Macau in a newly published paper that links customer service experience to satisfaction and loyalty

Tourism Studies (IFT) faculty mem-ber Ip Kin Anthony Wong indicate that megaresorts are the right choice for the Macau market and that, even in terms of customer service, hardware can be more important than software.

Mr Wong’s article, “Exploring cus-tomer equity and the role of service ex-perience in the casino service”, published in the International Journal of Hospitality Management last month, examines both the practical and emotional aspects of customer service experience, backed by hard data gathered though surveys of pa-

trons at Macau casino complexes. “Understanding customer experience

is especially important for the casino in-dustry,” Mr Wong writes, “because it is becoming more experience-driven.” The article aims to plug a gap in the existing academic literature by creating a compre-hensive theoretical framework, supported with empirical data, to better understand the customer service experience in the hospitality industry.

SEE for serviceThe paper compiles its fi ndings from

Gaming

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should also rely on an empathic serving staff and offering hedonic services (for example, streetmosphere and live per-formance) in order to create a favourable experience via interactions at each touch point throughout the service delivery.”

Mr Wong equates the experience customers seek with that found in a theme park such as Disneyland, which, he notes, puts customer experience at the centre of its business philosophy.

“In the casino industry, customers demand more than hardcore gaming services,” Mr Wong tells Macau Busi-ness in an interview.

“My fi ndings also show that the Venetian ranks top in service experi-ence. It is also the most frequently men-tioned casino in Macau. People enjoy the Las Vegas experience even though it is artifi cial.”

Go bigMegaresorts provide the best platform for delivering unique and memorable experiences, Mr Wong contends.

“The megaresorts as well as the newly built casinos offer far better ex-periences than the traditional casinos. Many casino patrons are looking beyond hardcore gambling,” he says.

“Casinos offer tourists and residents a theme-park like experience. Mainland Chinese are especially attracted by these casinos, for example, for photo shooting and sightseeing.”

In his paper, Mr Wong observes that customers are increasingly demanding more “thrills and perks” from their hos-pitality experiences. He writes, “Serving customers with enticing themes may be the next frontier as it goes beyond the predominant value framework which focuses on price, quality, and conven-ience.” But he warns that not every theme concept succeeds.

Perhaps most controversially, the article suggests that customers may be willing to pay a premium for an en-hanced customer experience. It cites Disney theme parks, Starbucks, Singa-pore Airlines, the Forum Shop at Cae-sars Palace in Las Vegas, and Wynn Re-sorts as examples of charging more for a unique experience.

Mr Wong suggests that traditional value propositions still matter. “Howev-er, what truly can differentiate one serv-ice provider from another is the experi-ence customers receive from the service encounter because every experience is unique”.

tionship equity (“a blend of customers’ perceived fi nancial and recognition ben-efi ts that are offered by a service pro-vider,” Mr Wong says) and brand equity. The overall goal is to determine how those factors relate to customer loyalty.

The survey results reveal that SEE and relationship equity are key factors in delivering customer satisfaction, which, in turn, builds brand equity and cus-tomer loyalty. In other words, customers who feel well served and properly appre-ciated for their patronage will harbour positive feelings toward the property and its brand.

Scanning the servicescapeDigging deeper into the fi ndings, cus-tomers ranked the service environment as the most important factor in building SEE. Employee service trailed, followed by hedonic services and service conven-ience. Elements of the service environ-ment – also known as the servicescape – are the casino resort’s physical com-ponents, including architectural design, layout, equipment and signage.

The top rating for the servicescape is a positive fi nding for Macau, accord-ing to Mr Wong. “Given that the indus-try constantly faces problems with lack of human resources, casino operators should strive to utilise the service envi-ronment to increase the service experi-ence, and hence mitigate the problem in employee services.”

The article’s fi ndings on Macau casi-nos are based on results from 274 surveys. Among the respondents, 56 percent were men and 44 percent were women; 66 per-cent were between the ages of 20 and 39; 60 percent were from mainland China and 14 percent were from Hong Kong; 73 percent had an individual monthly in-come of US$1,250 (MOP10,000) or less; and 26 percent spent less than US$65 in the casino, while 21 percent spent more than US$500.

In the section dealing with the study’s implications for management, Mr Wong writes, “[F]indings of this study suggest that casino managers should prioritise their effort in crafting the service environment, turning it from a mundane place into a fabulous show-room for an indulgence, as the service environment is the most critical dimen-sion of customers’ service experience. Yet, a memorable service experience does not arise merely with bricks and mortar. To excite and delight the cus-tomers, hospitality service providers

customer surveys into a measure known as “Service Experience Equity” (SEE) that combines service environment, em-ployee service, service convenience and hedonic services, defi ned as those that provide pleasure, excitement or fun.

“SEE arises as a result of the in-teractions of a service provider’s physi-cal and affective offerings, such as the service environment, employee service, value – [defi ned as] service convenience, price, complementary services – he-donic service, such as entertainment op-tions, both free and paid, brand image and novelty, and others, such as surprise and perceived luck,” Mr Wong, an as-sistant professor at IFT’s Tourism Col-lege, explains.

“I didn’t present all of these in this particular study. But my other studies do fi nd these as important experience cri-teria.”

The paper attempts to link SEE fi ndings to customer satisfaction, rela-

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Asia’s ‘only’ Vegas-style casino

BY MICHAEL GRIMES

That’s the bold claim of Solaire, the fi rst of four gaming resorts planned for a new casino strip at Manila Bay in the Philippines and run by some familiar Macau faces

Gaming

Solaire’s VIP area upstairs

Macau has been called ‘Asia’s Las Vegas’ but the operators of

the Philippines’ newest gam-ing property –Solaire Resort & Casino in the fl edgling Enter-tainment City at Manila Bay – don’t think it ever will be. They believe it’s possible there will be two casino gaming hubs in East Asia. The predominant one will be Macau but with a uniquely Chinese fl avour. The other one could be Entertain-ment City with a much more Las Vegas feel to it.

“We believe we are the only Las Vegas-style casino in Asia today,” says Michael French, Solaire’s chief operat-ing offi cer. “The rest of them are casinos that have roots in Las Vegas but are not Las Ve-gas style. The Venetian Macao is not the Vegas experience,” he asserts.

“The Filipino culture is more like American culture

from an entertainment point of view etc. We realised we shouldn’t try and implant a Chinese-style gaming experi-ence and hope the Filipinos will like it,” states Michael French. “All of our research told us Fili-pinos see gaming as entertain-ment, they want to have fun, they like to see pretty girls, they like complimentary drinks etc. Chinese people like to have fun, but they compartmentalise their gaming and entertainment experiences. For Chinese peo-ple the gaming is serious. And when that’s done, it’s time to party. Vegas made its fortune by people going partying and gam-ing at the same time.”

Michael French is a six-year veteran of gaming resort management in Macau so has seen life from both sides of the South China Sea as well as from the United States. He is a former senior vice president, and general manager of Melco

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“Nothing is going to be the next Macau –

unless we see gaming in Shanghai or

somewhere like that. We’re not trying to be

the next Macau”Bradley Stone,

president, Global Gaming Asset Management

Crown Entertainment Ltd’s VIP-focused Taipa property Altira Macau, and a former senior vice president of its sister Cotai property City of Dreams. Dennis Andreaci, his senior vice president for gaming at Solaire, has served in several senior Macau roles including SVP of gaming operations at Galaxy Entertain-ment Group Ltd’s Galaxy Macau.

VIP offerWhere the ‘fun’ stops – in casino man-agement terms – and the serious busi-ness of trying to generate big casino rev-enue for Solaire begins, is in the upstairs VIP area with its 95 tables. Mr French says rolling chip commission and rev-enue share incentives are both available to junket operators to encourage them to bring international high rollers over.

Ben Lee of iGamiX Management & Consulting Ltd tells Macau Business following Solaire’s opening on March 16 that six junkets had been signed up initially – three Chinese junkets, two Korean ones and a single junket from Taiwan. The consultancy reported they were being offered either a 1.5 percent rolling chip commission or a 52.5 per-cent revenue share. In the Macau market the government expects operators to cap chip commission at 1.25 percent, though it hasn’t given any offi cial guidelines on revenue share levels as far as Macau Business is aware. Ben Lee of iGamiX adds that one of Solaire’s junkets said there was an additional incentive avail-able there on revenue share of 3.5 per-cent – taking it to 56 percent – if the jun-ket exceeded by 35 percent a minimum monthly roll of HK$80 million. “On the straight [rolling chip] commission side, the breakdown is 1.4 percent plus 0.1 percent for expenses and a bonus of 0.1 percent if they again exceeded their tar-get by 35 percent,” adds iGamiX.

Michael French declines to go into the details of Solaire’s offer to junkets, but concedes the importance of VIPs to the US$1.2 billion project.

“Eighty percent of the gaming rev-enue in the casino industry comes from 20 percent of the gaming customers. That’s not unusual,” he explains.

“Overall the tax rate here in the Philippines is 27 percent [of the gross] for mass and 15 percent for rolling chip/VIP/international junket players. That compares to Macau’s 40 percent. The thinking is of course that if we have a lower tax rate, that allows us more fl ex-ibility in commissions paid to the jun-ket operators, thus incentivising them to bring their customers here.”

Macau connectionA 9.5 percent equity partner in Solaire Resort is Global Gaming Asset Man-agement (GGAM), a company chaired by William Weidner, a former president

and chief operating offi cer of Las Vegas Sands Corp and the man who led the development of Sands Macao and The Venetian Macao. Also on the GGAM management team are Bradley Stone as president, and Garry W. Saunders as executive vice president. Mr Stone is a former executive vice president of LVS who oversaw the construction of its Marina Bay Sands casino resort prop-erty in Singapore. Mr Saunders is also chairman of SHFL entertainment Inc., a supplier of casino slots, electronic tables and card shuffl ers in major casino mar-kets including Macau and Singapore.

Gaming tax rates “absolutely do make a difference” when it comes to offering gaming jurisdictions a com-petitive edge, Bradley Stone tells Macau Business.

“We believe we are the only Las Vegas-style casino in Asia today.

The rest of them are casinos that have roots in Las Vegas

but are not Las Vegas-style” Michael French, Solaire’s chief

operating offi cer

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“Nothing is going to be the next Macau – unless we see gaming in Shanghai or somewhere like that. We’re not trying to be the next Macau. Peo-ple in Hong Kong will continue to go to Macau, but we hope once in a while they’ll come over here to do something different and experience something different. We do have the advantage of a lower [gaming] tax rate. We’ll use that in terms of our [junket] commis-sions, but it’s not necessarily [in order] to go right at Macau. It’s to encourage people and give them more reasons to come to the Philippines once in a while and try out our resort,” states |Mr Stone.

“We will have some junket rooms that are full time junket rooms like Macau has. But we’ll have a lot of what we call casual junkets, where they come in for a couple of days and we give them a temporary space,” ex-plains Bradley Stone. “They’re not go-ing to be able to come every day like they do in Macau. In Macau those junket rooms are operating 24-7. The people are either coming from some part of China or Hong Kong or what-ever. We will have a limited amount of that. We will have a lot more junkets coming in that are smaller and will come for a couple of days. I think we’ll get some foreign business that Macau doesn’t get so much of, because you can’t fl y directly to Macau. You have to go through Hong Kong,” says the GGAM executive.

“As a country – by 2017 – the Philippines doesn’t need to be doing 35 percent of Macau [current] VIP

Solaire – which cost US$750 million for the fi rst phase and so far has 500 hotel rooms – compares strongly to the best of Macau and Las Vegas. A ‘Phase 1a’ is currently under way at a cost of US$400 million and management says it will double the total resort area

Gaming

People power – 50,000 applied for Solaire’s 4,500 posts

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‘Phase 1a’ is currently under way at a cost of US$400 million and manage-ment says it will double the total resort area. Such a big investment requires a stable political and regulatory environ-ment. Bradley Stone dismisses sugges-tions that the Philippines might not be a robust jurisdiction when it comes to anti-money laundering rules and fi ght-ing corruption.

“As a regulated industry, the Phil-ippines [casino industry] is up there,” he tells Macau Business. “There are lot of places that are a lot less regulated. So we feel very comfortable about the regulatory regime here. And so do the [fi nancial] markets. There are only two things that stop you going into another market. One is that the regulators are uncomfortable about you going in. The other is the markets are uncom-fortable about it. The markets clearly aren’t uncomfortable because we were seven times oversubscribed on our IPO [initial public offering] by the biggest [investment] fi rms in the world – the Fidelities, the Capital Researches, the Singapore sovereign fund – etc., etc.,” explains Mr Stone.

“In this property here we own nine and a half percent of the public shares. We would have liked to own more, but we couldn’t. That’s what Ricky [Ra-zon, chairman of Solaire’s majority Philippines-listed owner Bloomberry Resorts Corp.] was willing to do with us. Here, we’re a manager and part owner. And as I say to the sharehold-ers, ‘You should feel good about that’ because we own more than the public owns in terms of shares. So our inter-ests are aligned as a management com-pany. We’re not just sitting there trying to earn a fee,” states Mr Stone.

“There are other projects that we might announce shortly that are more management fee based. And Bill Wei-dner [GGAM chairman] has been working on Matsu [a casino proposal for Taiwan]. That would be something we would own and maybe fi nd partners for. It’s a question of whatever fi ts. But the key for us and anything we get in-volved in – even if it’s just managing – is ‘Can we bring a value add?’

“We prefer to be selective about our projects in order to keep our good reputation and get a good return for whoever the owner is – whether it’s us or someone else. And by managing a better return for all the investors, we also make more,” says Mr Stone.

[revenue]; we don’t need to be 25 per-cent; we don’t need to be 15; we don’t even need to be ten. If we do seven or eight percent [equivalent VIP GGR] of what Macau does today – which is in total say roughly US$30 billion [annu-ally in VIP] – then we’ll do very well,” adds Mr Stone.

Aspirational mass fl oorHe describes the mass-market fl oor at Solaire – which has 200 tables and 1,200 slots – as “aspirational” and aimed at the upper segment of the mass market. On opening day, mini-mum bets on the mass live dealer ta-bles appeared to be mostly 500 pesos – that’s below HK$100. It is several years since Macau Business recalls seeing HK$100 minimum bets avail-able in the major Macau casinos. But it’s probably appropriate to the Philip-pines, were gross domestic product per capita was US$4,295 (HK$33,339) last year on a purchasing power parity ba-sis, according to the country’s National Statistical Coordination Board.

“People aspire to move up in life,” says Bradley Stone, referring to Solaire’s mass fl oor. “You can’t make a venue intimidating, so that people feel uncomfortable. In this space they’ll feel very comfortable – whether they’re betting 500 pesos a hand, or 5,000 pe-sos a hand in the mass area. The mass doesn’t want to be in a crummy place.”

Solaire certainly isn’t. The prop-erty – which cost US$750 million for the fi rst phase and so far has 500 hotel rooms – compares strongly to the best of Macau and Las Vegas. A

On opening day, minimum bets on the mass live dealer tables appeared to be mostly 500 pesos – that’s below HK$100. It is several years since Macau Business recalls seeing HK$100 minimum bets available in the major Macau casinos

MACAU DESIGNS ON AND IN MANILAConde Group, an in-

ternational design consultancy with operations in Macau and clients in the local gaming industry, has been involved in the creation of branding and marketing materials for the new Solaire Re-sort & Casino in Manila.

“We fi rst developed the look and feel of the brand, its market positioning and the elements of distinction and differentiation,” says Rebecca Choi, one of the fi rm’s directors.

“Then we worked on the development of the applications to all ‘collaterals’ of the hotel, resort and gaming,” she adds. “Col-laterals are pretty much anything a guest can feel or touch – from printed materials to packaging and the paper napkins used to serve drinks. We also worked together with Solaire on the development of the restau-rants’ branding.”

The main branding for Solaire featuring a half sun with rays fl owing from it, was the idea of Las Vegas-based fi rm SK+G. The Solaire property, which has 500 rooms in its fi rst phase, opened on March 16 with a cer-emony attended by the country’s president, Benigno Aquino III.

Conde Group’s gaming industry custom-ers in Macau include: Sociedade de Jogos de Macau; Galaxy Entertainment Group Ltd’s Galaxy Macau; Mocha slot clubs; and Sands China Ltd.

Conde Group was invited to bid for the Solaire contract because an executive who approved some of its work for Sands China Ltd in Macau then moved to the new Manila project. M.G.

Solaire snack pack

designs

Computer tablet case with casino branding

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APRIL 2013

Macau mogul Lawrence Ho’s gaming fi rm signed an agree-ment last month to invest

US$600 million (HK$4.7 billion) in a giant casino project in Manila, boosting the Philippines’ bid to join the world’s gambling big league.

The investment in the Belle Grande integrated gaming resort is Melco Crown Entertainment Ltd’s fi rst venture in the casino business outside its Macau base, Mr Ho told a news conference. “We’re very excited about our project. We think that the Philip-pines is one of the fastest-growing and most exciting countries around,” Mr

Philippine expansionMelco Crown signs a US$600 million Philippine casino deal

Ho said before overseeing the signing of the deal with Philippine billionaire Henry Sy.

Mr Ho’s Melco Crown partner James Packer, an Australian billionaire, was also in Manila for the signing of the joint venture agreement with Sy-control-led Belle Corp, which is building the ca-sino. It is set to open by mid-2014 inside a giant complex on Manila Bay called Entertainment City.

Belle Corp was one of four fi rms given licences by the Philippine govern-ment to build gaming resorts worth at least US$1 billion each on the 100-hec-tare site. The fi rst of the four casinos,

US$1.2 billion Solaire, opened for busi-ness in March.

After Solaire and Belle Grande, two other casinos - one controlled by Japanese tycoon Kazuo Okada and the other by Malaysia’s Genting Group -are set to open between 2015 and 2017. The Philippine government is hoping Entertainment City can draw millions of newly wealthy Asians, boosting tourism and eventually gen-erating up to US$10 billion in annual revenues.

“For the next probably 30 to 50 years the main growth in entertainment and gaming is going to be in Asia,” said Mr Ho, co-chairman and chief executive of Melco Crown.

“We think our Philippine venture is going to be a key contributor to our busi-ness,” he added. “This is defi nitely a city where people love to enjoy and live life.”

Clustering of rivalsMr Ho said he was impressed by

Solaire’s offerings during a visit on the eve of its launch, adding the clustering of rivals in a single hub would help all draw more customers. He expects gam-ing revenues in the Philippines to triple to US$3 billion by 2015, from about US$1 billion annually.

“If you project that and extrapo-late it even further down the road, the Philippines in fi ve, six years could be effectively the size of Las Vegas or Sin-gapore,” he said, referring to the world’s other major gaming hubs.

As the only one among the planned or existing Manila casinos with a Macau connection, Mr Ho said Belle Grande would draw more Chinese tourists to the Philippines.

“Ultimately, we do have one of the largest databases in terms of Chinese and also Asian visitors. I think that’s go-ing to be a signifi cant contributor to our success,” he said.

Ho said he was not worried about potential fallout from a tense territorial dispute between China and the Philip-pines over islands and waters in the South China Sea.

“Hopefully these issues will resolve themselves in the near future,” he said.

* AFP NEWS AGENCY

The investment in the Belle Grande integrated gaming resort is Melco Crown’s fi rst venture in the casino business outside its Macau base

Macau casino tycoon Lawrence Ho (L), Australian billionaire James Packer (C) and Philippine partner Henry Sy (R) attend the Manila launch of the joint venture project

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Gaming

Asian Coast Development Limited (ACDL) expected to be celebrat-ing the opening of its fi rst Ho

Tram Strip beachfront casino resort in Vietnam last month with 541 fi ve-star rooms, 90 live tables and 500 electronic gaming machines. The property, to be managed by MGM International Re-sorts, showed it was ready with several successful trials for hundreds of guests. Staff of 2,000 were trained and ready to serve, while construction continued on a second tower to bring the key count to 1,100 and a golf course designed by Greg Norman.

Instead of a grand opening, March brought news that MGM had pulled out of its agreement to operate the resort, and minority partner Pinnacle Enter-

BY MUHAMMAD COHEN

Beachside limboVietnam’s Ho Tram Strip developer has missed its opening target, but still remains confi dent of success

tainment had written down US$25 mil-lion (MOP200 million) of its US$110.6 million Ho Tram investment. Earlier, bankers froze lines of credit to ACDL while the company awaited key govern-ment approvals. (The Vietnamese gov-ernment has meanwhile announced its formal approval of all ACDL’s requested amendments to its investment certifi cate early this month.)

ACDL remains confi dent in the project, and even sceptics concede the Ho Tram Strip, 130 kilometres south of Ho Chi Minh City’s airport, with a ca-sino off-limits to Vietnamese, has long term potential.

“We have believed in our success from day one,” ACDL chief executive offi ce Lloyd Nathan tells Macau Busi-

ness. “Like every project, particularly one in a new gaming jurisdiction, we have had our fair share of challenges. But so far we have surmounted every one of them and remain confi dent that we will continue to do so.”

No MGM, no cryMGM agreed in November 2008 to manage the fi rst of up to fi ve resorts on the 168 hectare site that includes a two kilometre beachfront, and the erstwhile MGM Grand Ho Tram remained fea-tured on the MGM website weeks after its withdrawal announcement.

“At the project or micro level we enjoyed a close working relationship with MGM and together have built a dy-namic energised team at the resort, all

Gaming

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of whom are our employees, who were being managed on our behalf by MGM,” Mr Nathan, who served as MGM Re-sorts International’s global gaming unit president when it negotiated the deal to manage the Ho Tram before joining ACDL in 2010, says. “At a macro level, I am sure MGM has strategic objectives that go far beyond any one relationship, however close.”

Even though MGM had no capital investment in the project, Gaming Mar-ket Advisors principal Andrew Kleba-now warns the project carried risks for the Las Vegas giant that also controls MGM Macau. “With 2,000 employees, a host program with satellite offi ces in other countries and the general costs of operating a seaside resort, expenses will be high,” Mr Klebanow says. “Given the government’s fi rm decision not to allow Vietnamese citizens to wager in the ca-sino, the overall gaming market will for-ever be very limited. MGM leadership probably came to the decision that the risks associated with operating a casino resort under such a constraint were sim-ply too great.”

MGM, as well as Pinnacle and ACDL’s principal investor Harbinger Capital, declined requests from Macau Business to comment for this article.

“In my opinion, MGM considered the prospect of further delays and made the decision to deploy management re-sources on other projects,” Mr McK-night says. “Note that MGM is in the process of bidding for opportunities in at least three cities in North America and is undertaking an additional project in Las Vegas.”

“From an MGM perspective, we think the announcement is a modest positive,” Union Gaming Group analyst Bill Lerner wrote in a note to clients fol-lowing the withdrawal. “The project has had a number of issues from the start and we don’t believe current forecasts or valuation contemplated this exposure for MGM. It has been our view that MGM would have been structurally/economi-cally disincentivised to redirect VIP play to Ho Tram that it could capture on a fully consolidated basis in Macau.”

Think PNK?Union put a sell rating on Pinnacle, which trades on the New York Stock Ex-change under the symbol PNK, in Octo-ber after estimating Ho Tram EBITDA (earnings before interest, taxes, depre-ciation and amortisation) at US$55 mil-

lion. ACDL says it has already spent “in excess of $500 million” on the project.

ACDL is currently evaluating can-didates to manage the resort. “We are considering all options,” Mr Nathan says. “We have received renewed inter-est from a number of parties who were previously not interested in participating in the project due to the fi rst resort al-ready having an identifi ed manager.”

“The property does not need a US or Macau casino operator to succeed,” Mr Klebanow, a veteran Las Vegas ex-ecutive, says. “It does need an interna-tionally recognised hotel brand to fi ll the hotel, but a regional gaming operator can operate the casino.”

WAITING FOR THE HO TRAMWith the fi rst tower of its initial

Ho Tram resort completed and its second tower rising, developer Atlantic Coast Development Limited (ACDL) was awaiting amendment of its Investment Certifi cate from Vietnam’s government to open. The amendment is required because ACDL missed its development dead-line on the Investment Certifi cate. The amendment only came early this month.

“As you know, any gaming project from Singapore to Macau requires a multitude of approvals, from the gaming entitlement itself to a liquor license,” ACDL chief execu-tive Lloyd Nathan explains to Macau Business. “There is a process to be followed relating to each approval and some are interlinked. We are comfortable that all required approv-als to open the resort will result from that process.”

“Certainly, the political and policy dimension in Vietnam has always appeared to us to be very complex – just as it is in Macau, China, Japan and other emerging jurisdictions,” Wells Fargo Securities senior analyst Cameron McKnight observes.

Due to delays in the Investment Certifi cate amendment, Vietnam-ese banks cut off a US$175 million line of credit to ACDL in November with about US$96 million remain-ing. Those funds were earmarked to complete construction and provide US$35 million in working capital for the opening. Principal investor Har-binger Capital has committed an ad-ditional US$30 million to the project.

Delays in opening may have prompted MGM Resorts Interna-tional to withdraw from its agreement to manage the fi rst of Ho Tram’s planned fi ve casino resorts.

MGM’s general manager John Shigley will stay on at Ho Tram until June 2 to assist with the transition. ACDL has 2,000 resort staff trained and drawing pay.

“We have received renewed interest from a number

of parties who werepreviously not interested

in participating in the project due to the fi rst resort already having an identifi ed manager,”

says Lloyd Nathan

Pinnacle took a 26 percent owner-ship stake in ACDL in 2011 for US$95 million, and last year invested another US$15.6 million, though its stake now stands at 24 percent. The company, which traces its roots back to Califor-nia’s legendary Hollywood Park race course, also operates casinos and raci-nos in several US states. Pinnacle plans to manage Ho Tram’s second resort un-der a new “Asia facing brand” developed with ACDL, Nathan said in a 2011 in-terview.

So far there’s no indication that Pinnacle will operate the fi rst resort. Pinnacle is currently fi nalising its US$2.8 billion Ameristar Casinos ac-quisition – which led Union to raise its M.C.

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stock rating to hold when announced in December – expected to close late this year. In its annual report released last month, Pinnacle cautioned that further Ho Tram opening setbacks could lead to additional write downs.

On the horizonDespite delays in the fi nalisation of

Vietnam’s gaming law and licensing, Mr Nathan still envisions Ho Tram as a suc-cessful gaming destination. “We see that demand far exceeds supply in Asia. We also see a demand for propositions be-yond the pure Macau model. Macau has been an incredible success story, but at its heart it has a particular type of offer-ing, a particular type of customer, and draws primarily from a relatively nar-row geographic base. We have an offer-ing that is differentiated, broader and, at the same time, has a cross-appeal with Macau customers seeking an alternative offering.”

Once Ho Tram’s fi rst resort is cleared for launch, ACDL believes the destination will sell itself. “Upon open-ing, among other things, we will be the only large scale integrated resort in Vi-etnam, in an exclusive location within two hours of a metropolis of over 10 mil-lion people, and with access from mul-tiple modalities of transport including VIP helicopter transfer directly to the site, road, ferries and private jets. The

demand for such facilities within Asia is high and growing but the existence of them is limited,” Mr Nathan declares. “So yes, we believe we have something unique and of high value and interest.”

Analysts remain divided about Ho Tram’s prospects. “At this point, we think further development [of Ho Tram] is likely contingent on the success of Phase One,” Mr McKnight, who follows both Pinnacle and MGM shares in the US, says. “Ultimately, we think Ho Tram has the ingredients to be successful and we see plenty of long term potential. In the near term, fi nal regulatory approvals are the hurdle and, after that, developing a loyal client base within the region is the next step.”

Union Gaming’s Bill Lerner cites several challenges for Ho Tram, includ-ing a 10 percent withholding tax on casino winnings, Vietnam’s plan to use Nevada gaming regulations as an in-

terim measure in the absence of a fi nal Gaming Decree, questions about suffi -cient electrical power for the resort, and the ban on Vietnamese casino players. “For Pinnacle, the lack of a management partner creates yet another issue for their signifi cant investment in Vietnam,” he wrote last month.

“Given Ho Tram’s location two and a half hours from Ho Chi Minh City’s airport, it will be diffi cult to attract over-night gamers,” Mr Klebanow says. “For a gamer, there are an awful lot of casino destinations that are far more conven-ient. As for family vacationers, there are a lot of vacation options in Southeast Asia that offer luxurious beachside ac-commodations and many are also more convenient.”

Mr Klebanow believes Vietnam’s decision not to allow its nationals, ex-cept those also holding foreign pass-ports, to play in its casinos limits its potential. “Ho Tram may be modestly profi table but it will never generate any-thing close to the revenues enjoyed by casinos in Macau and Singapore. The Vietnamese casino industry will never attract the billions of dollars in capital investment like Singapore and Macau; it will never create the tens of thousands of jobs and it will not have the tremendous positive economic impact those other ju-risdictions enjoy. That is the price of the government’s decision.”

Union Gaming’s Bill Lerner cites several challenges for Ho Tram, including a 10 percent withholding tax on casino winnings

Gaming

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It’s just after morning opening at Sydney’s Randwick Labor Club and already a few regulars are at the slot

machines (or “pokies” as they are better known) for a quiet fl utter.

Electronic poker machines are the most popular form of betting in Aus-tralia, but concerns about problem gamblers have prompted the govern-ment to introduce reforms to help keep their spending under control. “The big picture is we’re becoming a nanny state,” says Peter Bell, a retiree who likes playing the machines, just like he enjoys betting on horse races. He insists he is not a problem gambler.

“I spend a lot more money at the racetrack than I ever do at a poker ma-chine,” the 70-year-old jokes.

There are about 200,000 electronic gaming machines in Australia, with about 600,000 Australians playing them

BY MADELEINE COOREY*

Pokies addictsAustralia gambles on moves to tackle slot machine problem gamblers

at least weekly, according to a Produc-tivity Commission report released in 2010. However, concerned that 15 per-cent of these players are problem gam-blers whose money accounts for about 40 percent of spending, the government has moved to encourage all players to “pre-commit” to a fi nancial limit be-fore they start so they don’t over-spend.

Under legislation passed late in 2012, while the scheme will remain voluntary, poker machine manufactur-ers must put the new pre-commitment technology on all new machines by the end of 2014. Warnings will also fl ash up on players’ screens with messages questioning them along the lines of, “How long have you been playing?” and “Have you spent beyond your limits?”

The biggest clubs will also limit daily cash withdrawals from auto-matic teller machines to AUD$250

(MOP2,075) although this will not apply to casinos. Anti-gambling cam-paigners say the scheme does not go far enough, since played at high intensity, it is easy to lose AUD$1,500 (US$1,550) or more an hour on a poker machine.

“We think it’s next to useless,” says Erin McMallum, whose Getup! organi-sation has been pushing for maximum bets to be dropped to one dollar, a move that would limit losses to about AUD$120 an hour.

“People don’t voluntarily restrict themselves. Half the time they don’t even realise they have a problem.”

Love to gambleMcMallum says problem gambling is widespread in Australia, with many sto-ries of people losing their homes, their relationships and even family members to suicide.

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“Australia does have quite a unique problem in relation to problem gam-bling addiction, especially to poker ma-chines,” she says.

“The machines here are prolifi c, they are exceptionally high loss, and you can fi nd them almost anywhere - every club, pub, bar, casino. They are hard to avoid if you do happen to have an addiction.”

The clubs industry, which derives revenue from the pokies, is also non-plussed by voluntary pre-commitment,

“the race that stops a nation” and the national day to commemorate fallen soldiers, Anzac Day, known for its “two-up” betting on the toss of a coin. “The punt is engrained in Australian culture,” explains Ball.

Club membership is around 11.6 million people out of a population of around 23 million, and the industry says it employs 96,000, making an economic contribution of some AUD$7.2 billion each year. What concerns Ball is that the national government has for the fi rst time ever, with the voluntary pre-com-mitment legislation, “involved itself in the regulation of poker machines”.

Ball says the technology would not be a “silver bullet” for problem gam-bling, and the government’s plan for pre-commitment to be mandatory in the Canberra region as part of a trial will fail dismally.

“We think that mandatory pre-commitment will not help people - you don’t give a problem gambler a gam-bling card, that doesn’t work. It’s like giving an alcoholic drinking tickets. It’s a crazy thing to do,” he says.

“We say you need to get to those peo-ple and take them away from the gam-bling environment and into an effective treatment regime.” * AFP NEWS AGENCY

Gaming

with the executive director of Clubs Australia, Anthony Ball, saying players would be reluctant to use it.

“Let’s remember, people are play-ing a poker machine for the same rea-son they might bet on a horse or play the lotteries - they want to win. It’s a feeling of freedom, it’s their recrea-tion,” he says.

“To get a card, to register brings a whole different feel to it.”

Australians love a gamble, with the Melbourne Cup horse race known as

APRIL 2013

BY LUCIANA LEITÃO

The Environmental Protection Bureau is pressing on with its work but strong headwinds are

hindering its progress. Observers are unanimous in applauding the bureau’s creation. Its performance, however, is hampered by the division of responsi-bility for environmental matters among various government departments.

The government set up the Envi-ronmental Protection Bureau in 2009, giving it the task of formulating en-vironmental policy, making environ-mental plans, drafting environmental legislation, enforcing environmental law, arranging environmental educa-tion and publicity, enhancing environ-mental awareness and expediting the advent of impact assessments.

SAVE

The Environmental Protection Bureau seems to be doing a good job, but too slowly

THE SNAILS

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Macau Ecological Society chairman Ho Wai Tim congratulates the bureau on completing the tasks the government gave it last year: to make an environ-mental protection plan for 2010 to 2020, to propose arrangements for environ-mental impact assessments and to begin trials of electric bus services.

Mr Ho says the bureau has done good work on solid waste management policy and food waste management pol-icy. “That’s a great job for Macau sus-tainability,” he says.

The 2010-2020 Environmental Pro-tection Plan is a good one. “They have pointed out the essential points for fu-ture development,” he says.

But Mr Ho criticises the bureau for having outside institutions do most of the work on the environmental plan, rather than Macau groups. For example, the South China Institute of Environ-mental Sciences in Guangzhou edited the Environmental Protection Plan and the draft arrangements for environmen-tal impact assessments.

He also regrets the failure to apply the law on environmental impact assess-ments, a law he regards as essential for Macau’s development. “We hope it can be all set in place in 2013,” Mr Ho says.

Loads of rubbishThe law requires developers to make im-pact assessments but there is no subsidiary legislation governing how they should go about it. Secretary for Transport and Pub-lic Works Lau Si Io said in January that the government would issue guidelines for environmental impact assessments of de-velopment projects this year.

Mr Ho says Macau is under a lot of environmental pressure, in view of the number of people – residents and visi-tors – crammed into its small area. “It causes big pressure in the solid waste department. There is no more space to solve the solid waste problem,” he says.

He says rubbish is one of the most pressing threats to the environment that the bureau must avert. Mr Ho proposes that the government solve the rubbish problem in cooperation with Guang-dong, using the province’s recycling ca-pabilities.

The Environmental Protection Bu-reau replaced the Environment Council of Macau. Unlike its predecessor, the bureau has the power to enforce the law.

The president of the Environmental Industry Association is António Trin-dade, the chief executive of CESL Asia,

which runs the rubbish incinerator on the peninsula and the sewage treatment plants on the peninsula and Taipa. Mr Trindade believes the bureau answers the need for an environmental protec-tion body that is more than just advisory.

However, he says that because the government took its time allocating responsibilities for environmental pro-tection, it was slow to shoulder those responsibilities. “I’m not only talking about the bureau – that has a more ge-neric role – but also the Offi ce for the Development of the Energy Sector and the Maritime Administration. There is

also a fourth entity, the Civic and Mu-nicipal Affairs Bureau, which has cer-tain responsibilities in urban infrastruc-ture, urban cleaning and sewage,” he says.

Lacking authorityMr Trindade thinks the advent of the Environmental Protection Bureau meant a change for the better. He says the ar-rangements for environmental impact assessments are an example of this. But he complains that improvement is ham-pered by various government depart-ments, under different secretaries, still

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THROW MONEY AT ITThe purpose of the government’s

MOP200 million (US$25 million) environmental protection fund is to sub-sidise the acquisition of environment-friendly technology, products or equip-ment by companies and associations.

The fund had made 580 grants, together worth about MOP58 million, by last October. The median amount of each grant was about MOP35,000.

The Environmental Protection Bu-reau said in a written reply to questions from Macau Business that the compa-nies given grants were in the retailing, food and beverage, construction and engineering, entertainment, education and culture, telecommunications, real estate, fi nancial services, tourism and transport industries.

The bureau said the companies had requested the money to buy energy-saving lighting, induction ovens, equip-ment for treating oily fumes, effi cient air conditioning systems, equipment for purifying the air and water-warming systems.

Successful applicants are granted up to 80 percent of the cost, to a maxi-mum of MOP500,000. Only one grant per applicant per year is given. The fund has pushed back the deadline for ap-plications for grants from the end of last year to the end of this year.

having various environmental responsi-bilities.

Mr Trindade is ambivalent about whether the Environmental Protection Bureau should take charge of all envi-ronmental matters. “It makes sense to have an entity dedicated to the energy issue, as Macau must probably be one of the places in the world with higher con-sumption per person,” he says.

But he says environmental problems beyond the ambit of the bureau need to be solved. “There should be more inter-vention in searching for changes to the transportation system of Macau,” Mr

Trindade says. So he thinks one body should coordinate the various govern-ment departments.

The head of the Macau Green Stu-dent Union, Joe Chan, gives the Envi-ronmental Protection Bureau a passing mark. Mr Chan praises the bureau for its work in the fi eld of environmental edu-cation. But he thinks the bureau lacks real authority. “It has no right to inter-fere with governmental or private con-struction projects. It can only give out advice, or suggestions to compromise or to reduce the impact on the environ-ment,” he says.

Macau Ecological Society chairman Ho Wai Tim says Macau is under a lot of environmental pressure, in view of the number of people crammed into its small area

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Mr Chan believes the bureau is in-effi cient because many environmental matters are the responsibility of other government departments. ”Many natu-ral resources (except for the wetlands in Cotai) are governed by the Civic and Municipal Affairs Bureau. Power-saving projects are mainly handled by the Of-fi ce for the Development of the Energy Sector. Water-saving projects are han-dled by the Maritime Administration,” he says.

Too longMr Chan says some matters are within the scope of more than one depart-ment, such as waste recycling in general, and food waste recycling in particular. “These are under both the Civic and Municipal Affairs Bureau and the En-vironmental Protection Bureau, but they do not closely cooperate on them. They use different advertisements and recy-cling bins, which makes many citizens confused,” he says.

But most of all he thinks the bureau should speed up the introduction of en-vironmental impact assessments. “At present, it still has too passive a role in

many environmental issues. People ex-pect a more responsible and determined department to fi ght for them,” he says.

The Environmental Protection Bu-reau said in a written reply to questions from Macau Business that, having con-sulted the public about its draft arrange-ments for environmental impact assess-ments, it will issue a list of the sort of projects that must adhere to them.

Chan Shek Kiu is a professor at the University of Saint Joseph and a mem-ber of the Environmental Consultative Committee. Mr Chan says the Environ-mental Protection Bureau often takes too long to do its work and is not open enough to public scrutiny. “For instance, in the eighties I was involved in the pro-tection of the environment in Macau as an appointed member of the Environ-ment Council. At the time I was involved in drafting the noise pollution law. Even now, I know the bureau is doing some-thing, but it is still not fi nished. It really takes too long,” he says.

Polluters payMr Chan says that, other than this, the bureau has been doing a good job, and

has made a difference to the city. “For instance, in front of our building, people from the Environmental Protection Bu-reau and the police stop cars to measure the exhaust fumes coming from the ve-hicles,” he says.

But he says the bureau could do bet-ter. In particular, he thinks the govern-ment should do a deal with restaurants and casino resorts on the treatment of food waste.

Mr Chan thinks the principle that polluters should pay for the pollution they cause should be applied in a place as rich as Macau. “For example, you don’t have to pay for sewage. Other countries add a percentage to the water bill to pay for sewage,” he says.

He suggests that the government should engage the casinos in talks about how to reduce the air pollution that their courtesy coaches cause. More generally, the government should limit the number of motor vehicles powered by internal combustion engines and promote the use of electric vehicles, he says.

Mr Chan sees signs of progress, such as the recycling of water by some hotels, but thinks Macau could do more to protect its environment. “It has mon-ey. Why not use sea water instead of po-table water to fl ush the toilet?” he says.

He believes the bureau lacks author-ity. “Even the Environmental Protection Department in Hong Kong has more power. It can fi ne you,” he says.

Reorganisation hintMr Chan says the division of responsi-bility for environmental matters among various departments hinders the Envi-ronmental Protection Bureau in its work. “For certain aspects, you still need other departments, but the Environmental Protection Bureau should be at the cen-tre of power. Air pollution, for instance, should be brought under the bureau, not done simply by the Macau Meteorologi-cal and Geophysical Bureau,” he says.

He thinks the Environmental Pro-tection Bureau could be more open. “We give advice to them and we don’t know much about what they are doing,” he says.

The Environmental Protection Bu-reau told Macau Business that one de-partment could not be responsible for all aspects of environmental protection. But it said the government would “continue to improve the working methods of its different organs, rationalising the divi-sion of functions in each department”.

BIG CITY, DIM LIGHTSA movement to observe Earth Hour every month instead of every year has the

support of 15 hotels in Macau, which together have almost 14,000 rooms.Earth Hour is observed every March, when households and businesses around

the world are encouraged to turn off non-essential lights for one hour on a specifi c day, to remind the public about the perils of climate change.

Conrad Macao at Sands Cotai Central casino resort began the movement for a monthly Earth Hour after dousing its lights on January 17.

The aim is to get casinos and hotels to switch off all their exterior lights and any non-essential indoor lights from 8.30pm to 9.30pm on the fi rst Tuesday of every month.

Conrad Macao has pledged to douse its lights twice a month if 10 other Macau hotels agree to do so just once a month.

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BY ALEXANDRA LAGES

Electric vehicles (EVs) are tax-free in Macau. Pundits say EVs are a signifi cant part of the solution

to the problem of air pollution here. But how many electric cars or motorcycles have you actually seen in the streets lately?

Tax breaks are clearly not enough to persuade motorists to go electric, how-ever a study by the University of Macau has found that motorists can save signifi -cant money in the longer term by using vehicles powered by electricity, rather than traditional internal combustion en-gines.

Herman Ching Tze Wood, the lead researcher in the study, urges the gov-ernment to be more vociferous in tell-ing the public about the advantages of

Electric jolt requiredMotorists are shunning electric cars out of ignorance, an advocate of green vehicles says

electric vehicles, otherwise motorists will continue driving conventional mo-tor vehicles. “Gasoline will run out very soon, maybe in the next 30 or 50 years. We need to have some solutions for the future,” Mr Ching says.

His study found that on average, an electric vehicle cost up to MOP440,000 after tax, while a conventional motor vehicle costs about MOP140,000 on av-erage. Despite this, he says buyers need to see beyond the initial price difference and look at the bigger picture.

Buying an electric vehicle has one major advantage. “The cost savings on monthly fuel consumption and various maintenance expenditures will compen-sate for the higher up-front initial cost,” the report says.

Taking into account these savings, the report indicates that it would take eight years to recoup the initial extra outlay on an electric vehicle.

During those eight years, powering an electric vehicle would displace over six tonnes less carbon dioxide than a conventional vehicle. “Additional re-ductions could be achieved when more renewable energy sources or non-coal electricity is used for generation of elec-tricity,” the report says.

Two wheelsThe University of Macau researchers did road tests of electric and conventional vehicles, and found that the power bill for electric vehicles was 70.4 percent cheap-er than the fuel bill for conventional

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vehicles. They also found that charging the electric vehicle resulted in 51.9 per-cent less carbon dioxide being emitted from the process of generating electric-ity it charge them only.

The study found the cost of main-taining an electric vehicle is one-fi fth of the cost of maintaining a conventional vehicle.

After any motor vehicle clocks up 60,000 km, the owner should have it serviced regularly. But while owners of a conventional vehicles pay MOP5,000 on average for a service every subsequent 12,000 km, owners of an electric vehi-cles would only need to pay MOP1,000. The study also points out that an electric vehicle is exempt from the annual road tax of MOP850.

Another study by the University of Macau suggests that two-wheelers rather than four-wheelers should be used to open up the market for electric vehi-cles here. More than half of the licensed vehicles in Macau are motorcycles, ac-cording to offi cial fi gures. “Motorcycles are not only widely used by private us-ers, but also business users,” the report points out.

It suggests that charging stations for electric vehicles be set up to work only during off-peak hours, to avoid overbur-dening the power supply. It takes six to seven hours to recharge an electric ve-hicle completely, but only three hours to recharge it so its battery is 75 percent full. The off-peak period for electricity demand is from 8pm to 9am.

Mr Ching believes there is great potential for electric vehicles in Macau because the city’s compact size means motor vehicles do not need a great dis-tance range. But he says the government should do more to promote electric vehi-cles than just offering tax breaks. “Tax incentives were announced in 2010, but you cannot see electric vehicles on the streets. This means the incentives are not attractive,” he says.

“The government faces a problem,” Mr Ching says. Electric vehicles are ex-pensive, and most people would like to have a subsidy in their hands before they buy, he says. “If they do not see the big picture, it will be very diffi cult for citi-zens to buy a green car.”

Minority of oneMr Ching says the government should make it clear to the public how much cheaper electric vehicles are in the long run. He also says the government should overcome the reluctance of private mo-torists and operators of public transport to go electric by setting an example.

“The government should try fi rst,” Mr Ching says. He says that in other cit-ies, governments use considerable num-bers of electric vehicles, but that here the government has just one. “There are other green vehicles in the government, but none of them are electric,” he says.

Macau has imported three battery-powered electric vehicles. In April 2010, Companhia de Electricidade de Macau SA acquired one, and a car hire company

NICE COOL SUNSHINEanother, and ran them for nearly for two years. The Environmental Protection Bu-reau bought the third last September.

Give ’em a breakMr Ching estimates that more than half of Macau’s motor vehicles were bought after 2005, in a buying spree caused by the expansion of the casino industry. He is critical of government policy on conventional vehicles, and laments that buses and casino coaches here are only required to meet the Euro IV emission standard, while Europe has moved on to the higher Euro V standard.

Mr Ching complains that road-worthiness inspections only become compulsory for vehicles here when they are 10 years old, while inspections be-come compulsory for vehicles in Hong Kong when they are just six years old.

He says vehicles here are not pro-perly maintained. “Most users start


Hong Kong’s Green Power Industry Ltd (GPI) intends to invite logis-

tics and transport companies to take part in a pilot scheme in Macau to test solar-powered air conditioning in motor vehicles, says a director of the com-pany, Jacky Lau Yun-hong.

GPI has been collaborating with the Hong Kong Polytechnic Institute in fi tting solar panels on the roofs of vehicles.

GPI says that using solar power to run the air conditioning cuts a vehicle’s fuel consumption by up to 25 percent.

Mr Lau says the system has been tried out in Hong Kong in taxis, peo-ple carriers, minibuses, buses, utility

vehicles and trucks.The government here has approved

the system as an energy-saving meas-ure, so buyers are eligible for govern-ment subsidies.

The price of a system ranges from MOP40,000 (US$5,000) to MOP150,000, depending on the sort of vehicle it will be fi tted to.

GPI says a system will pay for itself in about two years, and that the solar panels will last for over 20 years.

Mr Lau says his company intends to apply similar technology in ships and homes.

He has given no schedule for the pilot scheme in Macau.

APRIL 2013

BAD AIR DAYThe quality of Macau’s air is

getting worse as the number of vehicles on the road increases.

The number of motor vehicles in Macau is rising, despite govern-ment efforts to curb the growth. At the same time, the quality of the air is deteriorating.

Air pollution worsened in Janu-ary, particularly near main roads and in residential areas of the peninsula, and began improving again only in February, the Macau Meteorological and Geophysical Bureau says.

The peninsula has had at least seven days of bad air quality so far this year. It had eight days of bad air quality in the whole of last year. The bureau said the poorer air on these days was due to the accumu-lation of air pollutants caused by dry weather and weak wind.

In January the daily index of air quality on the roadside averaged 112.1 points, and the daily index of air quality on the peninsula aver-aged 96.1. Air quality is considered bad when the index exceeds 100.

The government has been try-ing to control the number of new vehicles, but without success. In the fi rst 11 months of last year, 12 percent more cars were sold here than in the corresponding period of 2011, the Macau Motor Traders Association says. Tax breaks on the purchase of environmentally friendly cars, introduced in March last year, spurred the growth in sales, the association says.

The government has said it intends to subsidise the phasing-out of polluting motor vehicles to the tune of up to MOP400 million (US$50 million), but has yet to say how it will go about it. The govern-ment said in January that it wished to get rid of all highly polluting vehicles – which make up over one-quarter of vehicles on the road – in about 10 years. The number of licensed motor vehicles in Macau was 218,909 at the end of January, 5.5 percent more than a year earlier.

thinking about that after 10 years,” he says.Mr Ching says the bus operators

here lag behind those in Hong Kong and elsewhere. “Some investors are in-terested in investing in electric buses, since some are running in Hong Kong, but they are not being driven in Macau,” he says.

Some members of the Legislative Assembly have urged the government to extend the tax breaks on the purchase of electric cars to electric motorcycles and electric buses. However, Environmental Protection Bureau vice-director Vai Hoi Iong has said there are already other in-centives to buy electric motorcycles and electric buses.

This year, the government is ex-pected to impose stricter limits on the emissions of both new motor vehicles and those already on the road. It is also considering how to get the most pollut-ing vehicles off the road.

University of Macau researchers did road tests of electric and conventional vehicles, and found that the power bill for electric vehicles was 70.4 percent cheaper than the fuel bill for conventional vehicles

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Toilet to tapThe government hopes to introduce treated wastewater into the city’s water supply no later than 2015


The government is drafting a policy that mandates wa-ter supplies should be supplemented with treated waste water by 2015. Casino developments in Cotai and pub-

lic housing will be expected to use treated water in toilets and on gardens, among other uses, according to recent reports.

The Maritime Administration is handling the project and is preparing a tender for next year. A bylaw governing the sup-ply of recycled water will be completed later this year. By 2015 the government expects to commence building a water treat-ment plant in Coloane with the capacity to treat 12,000 cubic metres of water a day.

A second plant is apparently scheduled for construction on the peninsula by 2022 with capacity to supply 52,000 cu-bic metres of water a day. It will most likely be located on reclaimed land.

Costings for the projects have not been made public.The twin plants mean the government should meet a short-

term goal to supply about 12,000 cubic metres of treated water each day. In the longer term, the government expects that about 10 percent of water consumed daily will be provided by the

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treatment plants, with about 30,000 cubic meters supplied each day.

The average volume of water consumed in Macau is between 230,000 cubic metres and 250,000 cubic metres daily. Within just a few years, consumption is expected to increase to about 300,000 cubic metres a day.

Maritime Administration Director Susana Wong Soi Man said the twin pressures of a shortage of fresh water and rapid development had placed undue pressure on ex-isting water supplies.

Casinos buy-inHouseholds can expect to pay less for treated water. The tar-iff will be set at about 85 percent of the price for potable water.

Of greater concern for conservation is consumption in the city’s business sector. Industry consumes about 70 percent of the city’s water supply.

The government has urged all gaming operators with new projects in Cotai to install water-recycling equipment to help conservation efforts. Currently, very few casinos are equipped with a treatment system.

Water consumption at the city’s hotels and casinos reached about 17 million cubic metres last year.

A 10-year plan produced by the government says the treated water will be used in newly developed areas of the city, mainly for fl ushing toilets and watering public gardens.

The “recycled” water is likely to be used at public housing in Seac Pai Van, around Pac On in Taipa and the University of Macau campus on Hengqin Island. The gov-ernment expects about one-third of water used in Seac Pai Van will come from a treatment plant.

On the peninsula, treated water will be supplied to Ilha Verde and any projects to be built on land reclaimed from the sea.

The government expects the price of water from the mainland to increase by 15 percent next year. Under the Guangdong-Macau Water Supply Agreement, the price is adjusted every three years. Ms Wong said the tariff to end-users would not be increased.

The government spent MOP95 million (US$11.89 million) last year subsidising each cubic metre of water by MOP1.25.

A 10-year plan produced by the government says the treated water will be used in newly developed areas of the city, mainly for fl ushing toilets and watering public gardens

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April

Date: 10th – 12th

Event: APAC Investments Summit 2013Venue: Venetian Macao-Resort-Hotel, MacauOrganiser: Marcus EvansAddress: 9 Demostheni Severi Avenue, Nicosia 1080, CyprusTel: (357) 22 849 300Fax: (357) 22 849 307Website: www.apacinvestmentssummit.comE-mail: [email protected]

Date: 18th – 19th

Event: Mobile Payments & NFC World Summit 2013Venue: Eaton Hong Kong, Hong KongOrganiser: Symphony GlobalAddress: 10 Anson Road, #26-04 International Plaza, Singapore 079903, SingaporeTel: (65) 6474 1471Fax: (65) 6725 8438Website: www.symphonyglobal.comE-mail: [email protected]

Date: 30th – 2nd MayEvent: Annual Investment Meeting 2013Venue: Dubai International Convention & Exhibition Centre, DubaiOrganiser: Annual Investment Meeting Organising CommitteeAddress: P.O. Box 10161 Dubai, United Arab EmiratesTel: (971) 4 39 23232Fax: (971) 4 39 23232Website: www.aimcongress.comE-mail: [email protected]

May

Date: 15th – 16th

Event: Asia Pacific Hotel Investment ConferenceVenue: Dusit Thani Bangkok Hotel, Bangkok, ThailandOrganiser: Questex Asia EventsWebsite: http://ihif.questexevents.netE-mail: [email protected]

Date: 21st – 23rd

Event: G2E AsiaVenue: Venetian Macao-Resort-Hotel, MacauOrganiser: Reed Exhibitions and American Gaming ExpoAddress: 39/F Hopewell Centre, 183 Queens Road East, Wanchai, Hong KongTel: (852) 2824 0330Fax: (852) 2824 0246Website: www.g2easia.comE-mail: [email protected]

: A Macau Business partner event

Date: 23rd – 24th

Event: Japanese Investments Summit 2013Venue: Hotel Chinzanso Tokyo, Tokyo, JapanOrganiser: Marcus EvansAddress: 6F HANY Higashi-kanda-Bldg, 2-1-8 Higashi-kanda, Chiyoda-ku, Tokyo 101-0031, JapanTel: (81) 3 5823 0688Fax: (81) 3 5823 0689Website: www.japaneseinvestmentsummit.comE-mail: [email protected]

Date: 27th - 30th

Event: CMO Asia Summit 2013Venue: Venetian Macao-Resort-Hotel, MacauOrganiser: Marcus EvansAddress: 9 Demostheni Severi Avenue, Nicosia 1080, CyprusTel: (357) 22 849 300Fax: (357) 22 849 307Website: www.cmoasiasummit.comE-mail: [email protected]

June

Date: 24th - 27th

Event: Corruption & Compliance Asia CongressVenue: To be advised, Hong KongOrganiser: Beacon EventsAddress: 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong KongTel: (852) 2219 0111Fax: (852) 2219 0112Website: www.corruptionandcompliance-asia.comE-mail: [email protected]

Date: 27th - 28th

Event: Banking & Finance Compliance SummitVenue: To be advised, Hong KongOrganiser: Beacon EventsAddress: 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong KongTel: (852) 2219 0111Fax: (852) 2219 0112Website: www.bankingandfi nancecompliance.comE-mail: [email protected]

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”.

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Budding diplomatsSTUDENTS HAVE VALUABLE LESSONS IN TEACHING THE PUBLIC HOW TO PREVENT DIPLOMATIC SPATS FROM FLARING INTO SOMETHING MORE SERIOUS

KEITH MORRISON AUTHOR AND EDUCATIONIST - [email protected]

Macau is having to come to terms with rapid internationalisation. It urgently needs expert international negotiators. But how can we teach people to improve

international relations through negotiation and to settle international disagreements?

In his 2011 book “Change Leader – Learning to Do What Matters Most”, distinguished Canadian author Michael Fullan makes the telling comment that we learn leadership less by reading about it and more by leading. Book knowledge on the topic, he demonstrates, is insuffi cient, often contradictory and of limited help in handling the nitty-gritty of leadership. Rather, leadership is practical, learned by doing it.

Negotiating matters of international relations is the same. One can prepare and train negotiators, and it is important to do so, but the best teacher is often experience – learning by doing.

What better preparation for international negotiations is there than to teach university students, those budding international negotiators and builders of international relationships, by having them conduct a real-life simulation on international relations? An interesting example of this took place in February.

Some 60 students from three universities in Macau came together for a weekend to work on a high-level negotiation, simulated under realistic conditions, of an international settlement of the very real dispute over territorial and other claims in the South China Sea. Students from countries in fi ve continents joined together to draft and vote on a proposed resolution.

The simulation was run by the Hong Kong America Centre of the Chinese University of Hong Kong, with three facilitators who were richly experienced in international relations. The exercise was framed by the United Nations Convention on the Law of the Sea and the 2002 Declaration on the Conduct of Parties in the South China Sea by China and members of the Association of Southeast Asian Nations (ASEAN).

Stress testsStudent teams represented the countries with claims to territory in the South China Sea (Brunei, Mainland China, Malaysia, the Philippines and Vietnam) and other interested parties such as Taiwan, Japan, the United States, ASEAN, oil companies, fi shing associations and the research community.

The resolution dealt with fi ve issues: sovereignty claims; military and security relations; the exploitation of resources such as oil and fi shing; maritime commerce; and protection of the environment, involving joint scientifi c research. The claimant countries voted on the resolution, and any reservations or dissensions were noted.

It was startling to observe the creativity of the students and the seriousness with which they addressed the issues. Also remarkable was the clarity of their articulation of problems and solutions, and their understanding of the issues and their complexity.

The intensity of the formal and informal negotiations among the students was striking, as was their skill in working under pressure to meet tight deadlines. They handled disagreement

within or between groups with ease.Their ability to respond to challenges, to compromise

and to make concessions was tested, but their capacities to listen carefully, think quickly and answer thoughtfully were conspicuous. Overall, it was extraordinary how they handled a steep learning curve and how much information on the issues from various different sources they could absorb.

Valuing compromiseWhat were the students doing? They were learning by doing, focusing on real-life matters, tussling with complex issues, working in teams composed of members who were previously unfamiliar with each other. In short, they were having to combine knowledge, skill and ability to deal with each other sensitively and critically.

The teams quickly realised that, whilst sovereignty was a big factor in the settlement, it was not the only factor. They realised that in important pieces of the negotiation, sovereignty would have to be set aside. They swiftly recognised the power to be found in coalitions of governments and interested parties in fl exible combinations, and the sensitivities involved in working with disparate groups.

One facilitator described the simulation’s important purpose as discovering where the “yes” was between the teams of negotiators – meaning to identify points of convergence and agreement – with a clear commitment to solving territorial disputes in the South China Sea. Particularly striking was the emergence of a driving value across the entire group: to seek an agreed, peaceful solution that all parties could sign.

Sabre-rattling was out.Who says the oldies have nothing to learn from youngsters?

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BY ALEXANDRA LAGESILLUSTRATIONS BY RUI RASQUINHO

THE LIFEBLOOD OF THE CITY’S PROSPERITY, TOURISTS ARE INCREASINGLY ANGRY ABOUT THEIR TREATMENT AND TOUR GUIDES ARE IN THE HOT SEAT

ive or take, Macau welcomes about 30 million tourists each year.

In January alone, 757,000 tour-ists entered the city on package tours. Leading each of those groups was a tour guide. Around the world, tour guides work hard, but there are few places on Earth where tour

guides have a greater workload than in Macau.The number of complaints from tourists has been

increasing and some critics have pinned the blame on tour guides, arguing they lack professionalism, and will-ingly draw tourists into scams to earn money on the side from commissions.

The Macau Government Tourist Offi ce (MGTO) received 168 complaints from tourists last year, a 38.8 percent increase from the year before.

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Those in the tourism industry say dissatisfaction is not simply a matter of guides’ lack of professionalism, but a more complex problem that must be solved by the government here and in the mainland.

“The fact that there was a 38.8-percent increase is a cau-tionary sign for our industry. However, we cannot say that our tour guides lack quality just because of the increasing com-plaints,” says Amy So Siu Ian, the programme coordinator for the University of Macau’s degree in hospitality and gaming management.

The government-funded Institute for Tourism Studies (IFT) teaches a compulsory tour guide course. Would-be tour guides have to take a 180-hour-long course and pass an ex-amination in order to receive certifi cation and a licence from the tourist offi ce. Guides have to take a refresher programme every three years to renew their licences.

“Training is not the problem,” says Diamantina Coimbra, director of the Tourism and Hotel School at the tourism institute.

Tough crowdMs Coimbra says the quality of the institute’s training course is guaranteed. “In the past few years there have been some complaints about the quality of tour guides but the problem is not with training but in working conditions”, she says.

Michael Chan Chun Chin is the institute’s heritage course coordinator, and was once a tour guide himself.

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NUMBER OF STUDENTS AND GRADUATES OF THE TOUR GUIDE COURSE

Students Graduates

He says the main source of complaints stems from mis-communications between the mainland-based travel agents, who organise the tours and aggregate tourists, but do not ad-equately communicate their itineraries. About 74 percent of tour groups in January came from the mainland.

“The problem is not because of Macau. Groups are pushed to Macau without paying accommodation fees or the total fare for the tour, without informing the agent here,” he says.

The situation is exacerbated by a need for guides to es-tablish good communications with their tour groups in a short period of time. “Most visitors to Macau are on ‘day-tours’ of two days and one night,” he says.

“Zero-fare tours” or “negative-fare tours” are another problem.

A zero-fare tour has small additional fees – or none at all – but fails to cover all its costs. To make up the shortfall, tour-ists are forced to visit shops and pressured into buying cheap goods that are overpriced.

Macau Tourist Guide Association president Angelina Wu says the complaints against tour guides are wrecking the profession’s image. The problem comes from cheap prices for tours and guides who are forced into doing “something to cover the expenses”.

“It’s very diffi cult to convince visitors to pay higher fares for the tours,” she says.

In February, a tour guide called the police for fear of being

“In the past few years there have been somecomplaints about the quality of tour guides but the problem is not with training but in working conditions”, says Diamantina Coimbra, director of the Tourism and Hotel School

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hurt when a group of mainlanders complained that their itiner-ary excluded casinos that were listed in the schedule produced by the travel agency.

After two days in Hong Kong, the group landed here and was told that an additional RMB200 (MOP255) had to be paid by each tourist to visit the selected casinos, because the tour guide considered them as options.

A spokesperson from MGTO pointed out that the com-plaint cases generally involve a variety of issues and “it is not suitable to make a hasty appraisal of the professional quality of tour guides simply based on the increase in the number [of complaints]”.

“We believe that the increase in the number of complaints is attributed to the Macau Government Tourist Offi ce’s wider promotion of our hotline service. Besides our promotions at different local hotels, major ports and MGTO information counters in Macau, the pro-motional videos are broadcasted on our website and in different districts to inform visitors of the available hotline service, a convenient channel for en-quiries and complaints for visi-tors to Macau,” it was said in a written reply.

Solutions wantedOf the 168 complaints received by the tourist offi ce last year, 48 were from tourists who lost contact with their guide or were aban-doned. Another 45 complaints were about overcharging by tour operators. Nineteen tour-ists complained about their tour itineraries, hotel facili-ties or food. The majority of the complaints, 155, were fi led by mainlanders.

Ms Coimbra says solutions should be found at a very high level, hopefully between govern-ments.

“Not even the Macau government can solve this problem. It has to be dis-cussed between Macau and the provinces that are send-ing those tourists to Macau,” she says.

She says that there is nothing that IFT can do in terms of training and educa-tion. “Most of our students only need 10 or 20 percent of the knowledge we teach when doing the job, but we require 100 percent in the examina-tion. When they [guides] are running a group, visi-tors do not want to listen

The MGTO says that the increase in the number of complaints against tour guides is attributed to a wider promotion of the offi ce’s hotline service

to the guide’s explanations. Most of them just want to take a picture and it’s enough,” she says.

Only high school graduates can enrol in the tour guide course. The contents of the programme include Macau’s cul-ture and history, tourism attractions, an introduction to tour-ism, theory and practice of tour guiding, and fi rst aid.

The tourist offi ce and several mainland provinces have signed agreements committing each party to “Quality and Honest Macau Tours”. The goal is to combat the zero-fare tours and negative-fare tours with a code of conduct for main-land travel agencies arranging tours to Macau.

Ms Wu says not all of the travel agencies that sign the agreements actually follow the guidelines. She

wants greater controls imposed.The tourist offi ce has urged tour op-

erators to attract tourists through offer-ing quality tourism experiences and

not competing on price alone. The offi ce is drafting a new law to

regulate the activities of travel agencies, which is expected to

be completed this year.Ms So wants the government

to undertake detailed research to pinpoint the real reasons for the increase in the number of com-plaints before identifying where tour guides need to improve.

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Mindy Lei, 31, has just sailed through an interview for a job at a publishing company

but has plans to become a licensed tour guide. She enjoys the city’s culture and heritage, and being a tour guide is how she wants to spend her retirement.

“With the licence, I can be a part-time tour guide. And I just think of my retirement and to have a licence like that would be good,” she says.

She is attending the tour guide course at the Institute for Tourism Studies.

Elizabeth Calangi graduated from the course but did not become a full time tour guide.

Mrs Calangi, 50, fi nished each of the three courses for tour guides: the 180-hour Tour Guide Course; the 36-hour Macau Heritage Tour Guide Course; and the 24-hour Cultural Heritage Interpre-tation for World Heritage Sites that is recognised by UNESCO.

Instead she decided to stay in her job as a director of membership and marketing. The course for tour guides was for self-development only, she says, as her job includes showing business-people and clients around the city.

She is not alone in turning down tourism jobs.

Each year, IFT has about 400 places for students in its tour guide course. It says just half are fi lled and about only two-thirds end up graduat-ing. Between 2007 and last year, 1,227 students enrolled in the course. Some 718 graduated.

The coordinator of the institute’s heritage courses, Michael Chan Chun Chin, says many students in the tour guide course do not work as hard as they should, because they enrol for personal development and not because they actually want to become profes-sional tour guides.

There were 1,664 licensed tour

guides in Macau at the end of Febru-ary, the Macau Government Tourist Offi ce says.

“In the past fi ve years, the number of licensed guides has kept rising, mak-ing an overall increase of 28.5 percent,” a bureau spokesperson says.

School rulesMs Diamantina Coimbra is the director of the Tourism and Hotel School at the Institute for Tourism Studies. She says there is a high drop-out rate and some graduates quit the industry after only a few months because of the working con-ditions. Qualifi ed guides do not earn a basic salary and have to work hard to survive.

“Every year we train a very large number of people, but not all of them go on to work as tour guides. The students gain all the knowledge we want them to gain but the reality is that when they go to work it’s totally different,” she says.

Ms Coimbra says that despite the course’s focus on history, culture and heritage, the working conditions for guides do not allow them to reveal their potential.

“The travel agency gets the group with only a very little amount of money and they have to pay for the driver, the hotel and food,” says Ms Coimbra. “So they have to fi nd a way to have every-thing paid for. How do they do that? By getting commissions from somewhere,” she says.

“If you have a group for two hours, you would not take them to the Ruins of St. Paul’s to look at the façade, but to a shop, hoping they might buy something to put some money in your pocket. This is the reality.”

Once every three years the law says guides have to come back to the insti-tute to take a refresher seminar and sit a written test to renew their credentials

“Agencies don’t want to hire guides as full-time workers because during the low season they have no money to pay their salary,” says Macau Tourist Guide Associationpresident Angelina Wu

Just one in fi ve tour guide course graduates work in the industry, where the work is hard and the money is too little

Little glamour, all slog

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Guides work from 8am to 9pm every day of the week when they are on the job. Ms Wu says that because it is a “very hard work” it is diffi cult to fi nd new blood.

But there are enough professionals to meet the demands of the tourism in-dustry because most tourists do not join tours.

The Macau Government Tourist Of-fi ce says tour guides have been listed in the self-employed category used by the Social Security Fund since 2006, to al-low guides easier access to government assistance and help protect the rights of self-employed guides.

or work permit. About 400 people attend the refresher programme each year.

Of Macau’s 1,600 tour guides, 60 percent are female, 90 percent are free-lancers and their average age is about 40 years old, says Macau Tourist Guide As-sociation president Angelina Wu.

‘Very hard work’Salaries are paid by the hour, according to the languages they speak. “Guides that only speak Chinese will earn a lit-tle bit less. If they speak Japanese, for instance, they will get a higher amount,” Ms Wu says.

A more experienced guide will earn

MOP200 (US$25) an hour, while less experienced ones earn about MOP800 a day.

“Agencies don’t want to hire them as full-time workers because during the low season they have no money to pay their salary, sick leave or annual leave,” she says.

Ms Wu was a tour guide for 20 years but also owned a souvenir shop near the Ruins of St Paul’s to supplement her in-come during the low season.

“I enjoyed the job very much but I was not earning enough money and I was always under too much pressure,” she says. A.L.

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The shortage of suitable workers hampers every business here, perhaps none more so than restaurants owned by masters of the culinary arts such as Joël Robuchon. The

French chef, who has more Michelin stars under his belt than anyone else in the world, told Macau Business in an exclusive interview that fi ne dining here was developing quickly, but lagged behind fi ne dining in other cities where he has restau-rants, such as Las Vegas and Monaco.

Robuchon was in Macau last month to visit to his new restaurant, Robuchon au Dôme, at the Grand Lisboa ho-tel. Robuchon au Dôme has been open for more than a year, having supplanted Robuchon a Galera at the Lis-boa Hotel, which had been open for more than 10 years.In this year’s Michelin Guide, the new restaurant is the only one in Macau with three stars, having inherited the three-star rating of its predecessor. In the Elite Traveller World’s Top Restau-rants Guide 2012, the new restaurant is ranked 43rd.

Robuchon says much remains to be done.“Macau is developing very, very fast. However, for Macau

to be at the same level as other international cities, it has to work more on the people, both in recruitment and training,” he says.

“To set up this restaurant, when we started, we had to train a lot of people.”

Were it not for a lack of qualifi ed restaurant manpower here, Robuchon says, fi ne dining in Macau could easily be as good as it is in cities such as Las Vegas.

Robuchon has 17 restaurants around the world. He is plan-ning to open three more this year: one in Istanbul, one in Bang-kok and the other in Mumbai.

He has restaurants in nine cities with an average of two locations per city, but Robuchon Au Dôme is his only restaurant in Macau. And don’t expect any others any time soon.

“At the moment, we have no plans to open a new restaurant here because this is actually high quality and it’s important to concentrate on this one, to improve it. I don’t want to create competition between two restaurants,” Robuchon says.

“In Las Vegas we had only one restaurant for eight years. It’s going to be the same in Macau.”

Fitting StageThe Miele Guide recently dubbed Robuchon au Dôme the best restaurant in Asia – better than Singapore’s Iggy’s, which had

Seeing starsFine dining in Macau lags behind the world’s great cities because it cannot compete for skilled manpower, says a celebrity chefBY ALEXANDRA LAGESPHOTOS CARMO CORREIA

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Robuchon au Dôme’s executive chef Francky Semblat and Joël Robuchon

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Hospitality

won the accolade a record three times but which is now ranked fourth.

Robuchon au Dôme is the only restaurant in Macau on the Miele Guide’s list. The publisher of the guide said the new restaurant provided “a fi tting stage for the brilliance of chef Francky Semblat… proving once more that dining is a holistic experience”.

Robuchon au Dôme’s predecessor here, Robuchon a Galera, had been a fi xture in the Miele Guide’s list of the top 20 restaurants since the guide’s inception fi ve years ago. The guide ranked Robuchon a Galera fourth last year.

Robuchon says the Miele Guide is still a novelty and it is too soon to tell what effect its opinions will have on the mar-

ket. But he agrees that Robuchon au Dôme is “more attractive” than Robuchon a Galera, not only because of its food, but also because it is on the top fl oor of the Grand Lisboa and offers diners stunning views.

“I’m very happy because the restaurant is always full. Most of all, we have more and more regular clientele, espe-cially local clients, but also those coming from Hong Kong. If clients come back, it means they like it. Our goal is achieved because we have the loyalty of the local clientele, who we con-sider diners from Macau and Hong Kong.”

Favoured offspringRobuchon feels that setting up a restaurant is almost like rear-

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Tour of duty

Chef Joël Robuchon, now 68, retired from the kitchen at the age of 50, hav-ing seen stress kill some of his peers.

But his idea of retirement is rather unique.Robuchon says he has no hobbies. He says

he has no time for hobbies. After he retired from the kitchen, he began opening restaurants around the world that subsequently began to collect stars in the Michelin Guide.

Now he devotes his waking hours to taking care of his restaurants. “I have no really free time. I work every day, even on Saturdays or Sundays. I have no days off,” Robuchon says.

“I only take two months of vacation per year, in July and August. I spend time in Spain. But this work is very impassioning. I love my work, even if it is too stressful and competi-tive. I’m fi ne with that. It’s really motivating,” he says.

Robuchon is the only chef in the world with 28 Michelin stars to his name. He won the fi rst two for the Hotel Nikko de Paris, where he was executive chef and food and beverage manager.

Robuchon opened the fi rst restaurant of his own, Jamin, in Paris in 1981. The restaurant won its fi rst Michelin star in its fi rst year, its second the following year and its third the year after that. He set up the fi rst Joël Robuchon res-taurant in 1994, and that year the International Herald Tribune dubbed it the best restaurant in the world.

Today, Robuchon strives to ensure that his restaurants continue to deserve the renown that their Michelin stars give them. “Of course, there is pressure. Even today, after all these years, I still feel the pressure every day. It’s im-portant to take care of the stars,” he says.

Joël Robuchon no longer does the cooking but he is fully committed to managing his restaurants

ing a child. So his new restaurant here still needs a lot of nur-turing. “We have to grow the restaurant step-by-step to make it better than the old restaurant,” he says.

Macau now has more Michelin-starred restaurants than it did before. Robuchon’s new restaurant has three stars in this year’s Michelin Guide. Four more restaurants here have two stars and two others have a single star.

“I’ve been in Macau for 12 years now and, of course, there’s more and more competition,” Robuchon says. He says his restaurant has to work harder to maintain the standard of its food and raise it.

Macau’s restaurants must now rise to the challenge of sat-isfying an ever-greater variety of diners. “Before, the majority

of the clientele was Chinese but now we can see more Western people, from Europe and America. Because of that we have changed our menu a bit,” Robuchon says.

“We can compare Macau with Las Vegas. So there is a mix of people who come to the restaurant and the trend is for this mix between Westerners and Asians to continue to increase.”

Robuchon is reticent about the profi tability of his restau-rants. Asked which is the most successful of his 17 restaurants, he says all are equal. But he admits that his oldest restaurants are his favourites, and his restaurant in Macau, although re-incarnated with a new name in a new place, counts as one of his oldest.

Robuchon says the Michelin Guide is the best guide, as it is the most honest.

“From the moment we got the three Miche-lin stars in Las Vegas, the restaurant has al-ways been full. The same happened in Macau,” he says.

In managing his 17 restaurants, Robuchon closely concerns himself with the food they serve, which, he says, is the most important as-pect. He is keen to maintain the quality of each of his restaurants, because diners expect each to be as good as the others, whether it is in Singa-pore or Macau.

“I go to each restaurant four times per year, for one week. I go there with three or four chefs, people that I know well. For instance, the chef of Robuchon au Dôme has worked with me for 16 years,” he says.

To ease the stress that his chefs work under, Robuchon gives them a good measure of crea-tive autonomy.

“I’ve known my chefs for a long time. We are a team,” he says. “Of course, chefs are al-ways stressed, but I try to give them some free-dom to create.” A.L.

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With the number of tourist arriv-als climbing to more than 28 million last year, there is a new

breed of investor with an eye on the sou-venirs that tourists take home.

Restaurant operator Future Bright Holdings Ltd is placing a big bet on food.

New product lines such as almond cookies, egg rolls and beef jerky have been considered since last year by the company. A statement to the Hong Kong Stock Exchange last month spells out a goal “to tap into this Macau food sou-venir market by early 2014”. A market-ing campaign in Macau, Hong Kong and Guangzhou will support the new products.

Shops selling souvenirs in Macau have enjoyed double-digit growth for a number of years, but Macau Pastry Spe-cialty Association president Alan Ho Hoi Meng warned in October that tour-ists were tending to spend less on sou-venirs. Retailers expected a slowdown in sales last year and there was research underway to improve the appeal of prod-

Healthy

Future Bright hopes to command a 5 percent market share of the market for food souvenirs

ucts destined for consumers with differ-ent tastes.

Future Bright sees “lots of poten-tial” in souvenir foods “in which there are few major players”. An analysis by the company found the value of the mar-ket could represent as much as HK$5 billion (US$644 million) in sales a year, based on an average MOP185 spent by each tourist on food souvenirs in the fourth quarter of last year.

Acquiring tastesPart of the plan to move into food prod-ucts for tourists has been laid out. Fu-ture Bright says it will rent a gross fl oor area of about 930 square metres to house production facilities. Potential sites in Macau “are currently being identifi ed”, the company says, and it expects they will cost about HK$12 million to 20 million to set up.

Recently acquired land in the Macau section of the Zhuhai-Macau Cross-Border Industrial Park will eventually

house a centralised food-processing and logistics centre, with some additional facilities for the production of foods for tourists.

The centre will be housed in a fi ve-storey building – with a total gross fl oor area of about 9,400 square metres. A plan has already gone to the government for approval.

Future Bright – whose managing director is president of the Macau Ca-tering Industry Merchants General As-sociation and a member of the Legisla-tive Assembly, Chan Chak Mo – plans to sell its food souvenirs at restaurants and branded shops or counters.

The stock market fi ling says the company’s management plans to be “able to capture 3–5 percent market share of this food souvenir market with-

appetites

Hospitality

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HK$242.3 million. Greater turnover from the food and beverage business, a one-off gain of HK$11.9 million from ending a lease agreement, and a “net fair value gain of HK$108.8 million on property investment businesses in Macau” helped profi tability.

Turnover increased 18.7 percent to HK$659.6 million. Turnover from the food and beverage business alone was HK$632 million, also representing a climb of 18.7 percent.

The company expects an increase in rental income from its six-storey com-mercial property in Macau. Tenancy agreements there expire at the end of this year and rental income from the building was HK$14.1 million last year.

The group has proposed a fi nal divi-dend of HK4.5 cents a share.

in the 12 months upon its entry” into the category.

An expansion of the company’s industrial catering business is also planned. By July, Future Bright will op-erate canteen services for the University of Macau at its new campus on Hengqin Island.

The company rolled out the catering business two years ago. Its fi rst contract was taking care of canteen services for the Macau Polytechnic Institute. Since last August, it has operated the canteen at the Macau University of Science and Technology, which serves about 9,000 students.

Dinners servedThe company expects more opportuni-ties in catering are likely, with a hand-

ful of big development projects coming online between 2015 and 2017. Future Bright says it will “continue its current business model to cautiously expand its restaurant chain”, to meet what it pre-dicts will be additional demand from tourists entering the city on the railway between Guangzhou and Gongbei, and the Hong Kong-Zhuhai-Macau Bridge, due to open in 2016.

The group plans to open more than a dozen restaurants this year: two at the Macau International Airport; four at the University of Macau’s Hengqin campus, including a staff and student canteen; a number of Macau-style “cha chaan teng” restaurants; and one Shiki Hot Pot res-taurant within a shopping complex.

Despite higher operating costs, net profi t grew 170.4 percent last year to

Future Bright sees “lots of potential” in souvenir foods in Macau “in which there are few major players”

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Tourism Statistics

Total

- Same-day visitors

- Overnight visitors

Average length of stay

Hotel and guest-house rooms

Hotel guests

Hotel average occupancy rate

Average length of stay

Total spending (excluding gaming)

- Non-shopping spending

- Shopping spending

Per-capita spending

Asia

- Mainland

- Guangdong

- Fujian

- Zhejiang

- Hunan

- Beijing

- Shanghai

- Tianjin

- Chongqing

Individual visit scheme

- Hong Kong

- Taiwan

- Japan

- South Korea

- Others

America

Europe

Oceania

Others

4,689,161

2,459,066

2,230,095

0.9

26,027

832,543

82.9

1.40

MOP 14.6

MOP 7.5

MOP 7.1

MOP 2,019

4,580,655

2,982,384

1,402,831

115,944

99,875

84,786

68,927

101,572

21,916

32,194

1,370,758

1,111,963

157,937

47,891

92,048

188,432

42,882

40,783

21,367

3,474

0.3

-3.8

5.0

0.0

16.6

10.8

-1.0

-0.13

20

23

16

7

0.3

4.6

-3.3

-13.0

7.7

10.2

3.7

7.2

26.9

12.9

8.2

-6.6

-11.8

0.0

11.5

-4.6

-1.3

4.3

0.9

8.6

2.1

-1.9

6.9

0.0

16.5

19.1

3.8

-0.13

9

15

3

11

2.3

7.3

-0.7

-13.4

9.2

4.9

13.1

12.5

2.9

12.9

11.8

-4.0

-6.5

-33.3

0.5

-8.9

-6.6

0.7

-13.0

-16.5

Visitor arrivals

Hotels

Visitor expenditure

Visitors by place of residence

2012

2012

2011

2012









Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Feb 2013

Jan 2013

Jan 2013

Jan 2013

Jan 2013

Oct-Dec 2012

Oct-Dec 2012

Oct-Dec 2012

Oct-Dec 2012

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

Jan-Feb 2013

So

urce

: Sta

tistic

s an

d C

ensu

s S

ervi

ce

28,082,292

14,504,994

13,577,298

1.0

26,069

9,541,397

83.1

1.40

MOP 45.3

MOP 22.9

MOP 22.4

MOP 1,619

27,356,924

16,902,499

7,929,668

811,288

620,196

587,904

326,469

505,280

127,635

194,420

7,131,904

7,081,153

1,072,052

395,989

444,773

1,460,458

306,521

262,692

129,165

26,990

days daysdaysday

nights

billion

billion

billion

billion

billion

billion

nights nightsnights

percentage point

percentage points

101

APRIL 2013

MGTO OPENS MOSCOW OFFICEThe Macau Government Tourist Offi ce (MGTO) opened a representative offi ce in the Russian capital Moscow last month.“Russia is one of the most sought-after markets in the world in terms of tourism potential, and for Macau the Russian market is the fastest growing emerging market,” MGTO Director Maria Helena Senna Fernandes said in a statement.

AIRPORT FEES

INCREASE

The government has increased the airport’s passenger service and security fees.Starting late April, the boarding passenger service fee will go

up from MOP90 (US$11.25) to MOP110.The security fee will be raised to MOP30, replacing an existing airport fee of MOP20.

Transit and transfer passengers are exempted.Only passengers aged above two years old will need to pay the new fees.

REAL-TIME BORDER TRAFFIC NOW ONLINE AIR MACAU POSTS RECORD-HIGH PROFITAir Macau Co Ltd profi ts reached a historic high of CNY229 million (MOP286 million) last year.According to the annual report of major shareholder Air China Ltd, this represents growth of 8 percent, up from about MOP250 million in 2011.Air Macau’s income from air transportation increased by 12.9 percent to CNY2.3 billion.The state-owned airline holds a 66.9 percent stake in Air Macau.

Real-time information on border traffi c at the Border Gate, Outer Ferry Terminal in NAPE and the Cotai borders can now be accessed online via offi cial websites.The information platform will also describe the traffi c status in four categories according to the required time for transit: “fast”, which takes about 15 minutes, “busy”, “crowded” and “traffi c to be diverted”.For now the information is only displayed in Chinese and Portuguese languages. The English version of the information platform will be ready later this year. The websites are www.fsm.gov.mo/m and www.fsm.gov.mo/psp/.

The opening was scheduled for a peak period of travel shows in the country, the offi ce stressed in a statement, with Moscow hosting three events in the space of 10 days.The Macau tourism offi ce has already joined the Luxury Travel Mart, held on March 14, and the Intourmarket International Travel Fair, which also took place last month.

The Tourist Offi ce is seeking to tap into a new source of visitors

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Games people playBusiness should be fun. Making business fun can win

more customers and help keep them for longer. And the way to make business fun is “gamifi cation” or turning

something that is not a game into a computer game.The key is reverse engineering what makes computer

games effective and using it in your business. It is especially applicable to employee training.

None other than the executive chairman of Google Inc, Eric Schmidt, said: “Everything in the future online is going to look like a multi-player game.” Companies such as Nike Inc, American Express Co, Microsoft Corp and Major League Baseball have used “game thinking” to increase customer and employee engagement and retention.

In training, employees retain information and skills they acquire through game-based learning better than information and skills acquired through more conventional learning. With imagination, gamifi cation and game-based learning can be used in many areas of the corporate world, such as product launches, service concepts, best practices, and the orientation and training of new employees.

Computer games are still often dismissed as a fringe activity, of interest only to a small number of enthusiasts. So gamifi cation may not be a helpful name.

The word “game” means different things to different people. Usually, the word is associated with frivolity that has little or no productive purpose.

But that is not what gamifi cation is about. Gamifi cation means using the mechanics of computer games in a serious context to engage players and solve problems.

Virtually realFor the game to be effective, employees must agree to take part. One important principle is that the game must have a

purpose and the players must have one or more goals. The game must have rules and restrictions, and working within these limitations must motivate employees to face up to challenges by thinking creatively and strategically.

Another important element is recognising the player’s actions and rewarding them, for example with scoreboards, scores, badges or prizes. And, most important of all, the players must be given feedback. Everyone needs feedback to tell us how near we are to reaching a goal. By following these principles and building motivation into all aspects of corporate culture, companies can achieve amazing results.

A recent survey found that more than 500,000 people around the world play computer or video games for at least one hour a day. One-fi fth of them are in China. It found that 47 percent of gamers are women.

The results of the survey indicate that by 2015 half of all global organisations will be using gamifi cation as their primary method of training employees. The results also indicate that by 2015 the global gamifi cation market will be worth US$2.5 billion (MOP19.99 billion), and that it will double in size between 2012 and 2016.

In the computer game industry, the main impetus for change comes from the “socialisation” of computer games, the result of playing online and the proliferation of portable electronic devices. This means training games can be played anywhere, at any time, becoming part of people’s lives. As telecommunications technology continues to evolve, new platforms, channels, and devices will redefi ne how companies use electronic media and their content.

Well playedAs a designer of training programmes for the hospitality industry, my approach is to use the best technology available and apply the principles from emerging trends to increase awareness among employees, encourage them to collaborate, help them to keep on learning, and improve their skills and lives.

Some training games that employees regularly use are more complex than some of the most complex casino computer programs, but nobody has yet needed to be trained in how to play them. People learn how to play them just by playing them.

The hospitality industry should consider using computer games to educate and train their employees. My company is about to launch an application for training hospitality and casino industry employees. The Macau Government Tourist Offi ce is interested in the application because of its versatility and its ability to be used by many employees at once, which reduces the need to gather them together time after time for meetings or training sessions. The app saves time and money, and most of all encourages employees to take an active part in the development of their skills.

Very soon Macau will have better-trained employees, whose service will be as outstanding as the service in any world-renowned destination for international tourists.

I look forward to it.

GRAND THEFT AUTO IS TAME; WAITING ON TABLES GRACIOUSLY WILL GET YOUR HEART PUMPING

GUSTAVO CAVALIERE HOSPITALITY INDUSTRY EXPERT - [email protected]

103

APRIL 2013

BY LUCIANA LEITÃO

RICHES IN RAGSMore designers are heading here and making a go of the rag trade, perhaps heralding a new dawn for the fashion industry

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Those who work in it, say the fashion business here is still in its infancy. Fashion items are diffi cult to produce and Macau is not such a big market. Yet more and more

people are coming to Macau to work in the fi eld, and this may give the business new impetus.

Lines Lab is one of the most established fashion houses here. It has been growing since its inception in 2006, constantly adjusting its strategy to suit the market. That is why it is now less of a boutique, and more of a studio for the creative talents of founders Clara Brito and Manuel CS. They now like to produce more, and to produce it more regularly. “We now do distribution to other shops, so we’ve lost contact with clients in order to be able to launch two collections per year,” says Ms Brito.

“There are now more channels for designers to show their products,” says Clara Brito, founder of Lines Lab

One of the problems the fashion business has is a lack of factories, which means creators of fashion must fi nd them in the mainland. And mainland factories usually demand a share of what they make.

However, Lines Lab now has a handle on these problems. “At this point we already know how the factories work,” Ms Brito says. This leaves the creative duo free to invest more time and money in their collections and to increase their turnover.

Lines Lab is not the only fashion house getting more business. Ms Brito says foreigners and returning Macau ex-patriates are giving a new boost to the world of fashion here. “These people bring a new input to the city. It allows us to also be better in the way we manage our projects.”

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“Not a lot of locals buy high-end fashion and pay a lot to dress themselves,” says San Lee, local fashion designer

“The market is small and people don’t want to look alike in Macau,” says Sofi a Bobone, founder of Macau Banner Bag

One returned Macau expatriate is Barbara Silva Dias. Ms Dias came home after studying in Britain, Italy, Thailand and Hong Kong, and went on to design the uniforms that the Air Macau cabin crew now wear.

Shades of greyMs Brito says newcomers need time to get organised and to build their own networks, but they are getting there. She says greater competition brings greater quality all round.

The Macau Productivity and Technology Transfer Centre organises events such as Macau Fashion Link and the Macau Fashion Festival, giving designers more opportunities to show their collections, and making them more visible to potential customers. “There are now more channels for designers to show their products,” Ms Brito says.

The only institution here offering education in the fi eld of fashion is the Macau Productivity and Technology Trans-fer Centre. The centre has a course leading to a diploma in fashion design and manufacture. One graduate of the centre is San Lee.

Mr San has been in the business for only fi ve years but he already has his own fashion label, ZICS, and loyal customers. He has a singular style, usually using only three colours in his designs: white, black and grey.

He says it is hard to get more customers because it would require greater investment in production capacity. So his fash-ions are limited editions – and expensive. “Not a lot of locals buy high-end fashion and pay a lot to dress themselves,” Mr San says.

All this means being a designer is only a sideline. “I’m working for an architect and I do fashion design part-time,” he says.

Two years ago Mr San opened a shop in the Sun Star City shopping mall, where he displayed some of his designs. But the high rent and running costs meant the shop was not a pay-ing proposition. He closed it. “Maybe the prices were not right. Also, there were a lot of competitors,” he says.

Mr San now launches one spring and summer collection a year, usually in October during the Macau Fashion Festi-val event. Production is always a problem and he is constantly changing sewing workshops here.

Bags of moneySofi a Bobone from Portugal, co-founded the Macau Banner Bag label in 2005, responding to a challenge laid down by the other co-founder, Miguel Quental, who wanted to recycle advertising banners. Ms Bobone insists that she is a graphic designer by vocation rather than a fashion designer, and that she started the business just to help protect the environment.

The original idea was that companies would give their old PVC advertising banners to Macau Banner Bag, which would make them into bags for use as corporate giveaways. The trou-ble was that companies just could not cotton on to the idea, Ms Bobone says.

“We decided to move on all the same,” she says.Macau Banner Bag went ahead with whatever old ban-

ners it could get its hands on and began making handbags and purses for sale to the general public. It launches one collection a year, always on World Environment Day.

The business has some regular customers, most of them expatriates. “Portuguese like it. So do the Australians,” Ms Bobone says. Macau Banner Bag has no shop of its own but

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APRIL 2013

sells its products at the Portuguese Bookshop and occasionally at fairs held by the Macau Government Tourist Offi ce.

A common theme, production is a problem. “The market is small and people don’t want to look alike in Macau,” Ms Bobone says. So Macau Banner Bag orders only about 100 examples of each design.

Designers’ nurserySmall production runs are unprofi table for bigger mainland factories and since Macau Banner Bag provides the bulk of the raw materials, their scope for making a profi t is diminished.

To overcome the reluctance of mainland factories to ac-cept orders, Macau Banner Bag is considering using materials other than old PVC advertising banners. But the business will still use only recycled materials, Ms Bobone says.

Aoman, who goes by only one name, is another graphic designer who has turned her hand to making handbags and purses. Ms Aoman has two shops in Sun Star City. One, A02, sells casual bags. The other, Anais, sells formal bags. She launches two collections each year, each time lining the bags with different materials and patterns.

Ms Aoman is interested in fashion in general but is not thinking of expanding into clothes because they do not pay. “I would need to invest more money,” she says.

Clothes require more creative work and a greater produc-tion effort, which she does not have time for, as she works as a teacher during the day. Besides, handbags are not as vulner-able as clothing to changing fashion trends, she believes.

Fashion designers are eligible for support from the gov-ernment’s aid scheme for small and medium enterprises. The Macau Productivity and Technology Transfer Centre says it helps fashion designers by letting them use equipment for making clothes, printing fabrics and sewing embroidery.

The centre said in a written reply to questions from Macau Business that it launched its own fashion label, MaConsef, in 2008, to “provide opportunities to potential fashion gradu-ates”. The potential graduates are chosen from students tak-ing the centre’s diploma course. At present 16 of them make designs for the label.

MaConsef is not a commercial venture. What it does is show collections designed by the students. It has shown their designs at the Taipei in Style, Hong Kong Fashion Week and Macau Fashion Festival events.

The CPTTM has created its own fashion label, MaConsef, to provide opportunities to potential fashion graduates

Local graphic designer Aoman is not thinking of expanding from bags into clothes because “they do not pay”

Business

107

APRIL 2013

BY LUCIANA LEITÃO

The Richemont Group is looking healthy, says its chief executive in the Asia-Pacifi c region. Alain

Li tells Macau Business that the group is benefi tting from the strength of its port-folio of brands and the buying power of its customers in Asia.

Compagnie Financière Richemont SA of Switzerland and its subsidiar-ies make high-end goods. The group’s brands include Cartier, Montblanc, Pi-aget, Shanghai Tang, Vacheron Constan-tin and Van Cleef & Arpels.

The group’s sales in the fourth quarter rose fi ve percent year-on-year to US$3.8 billion (HK$29.5 billion). Ana-lysts had expected sales growth of 7.6 percent. Sales growth fell short of ex-pectations mainly because of the group’s performance in Asia, particularly in China, where sales were fl at.

The Asia-Pacifi c region is Richem-ont’s most important market, accounting for 40 percent of sales. Mr Li would not be drawn on the group’s performance in Asia. “Business is still in a very healthy situation in this part of the world,” he says, adding that the dip in sales for the Asia-Pacifi c region has not changed the group’s strategy. “Of course, there are new customers, new markets and I think if we look more at the macro signs or the demographics of this part of the world – China, but not only China, other parts of Asia – then we can expect more people to enter into the luxury market.”

Mr Li says Richemont is not afraid of competition, as there is room in the market for high-end goods for all – even for new Richemont group brands. “There is more competition but, at the same time, more customers,” he says. A study by HSBC Plc last year found that Chinese consum-ers made up one-quarter of the market for expensive brands, having made up only 10 percent three years earlier.

Cautious buyersThe group’s marketing efforts carefully target would-be consumers. Mr Li says the group has invested “very heavily” in sales support. It has customer service centres in Beijing, Shanghai and Macau.

The group has opened a Richem-ont Retail Academy in Shanghai. “It’s the front end of our operation. We don’t distinguish between different markets – brands are global – but what we do to support [them] has to do with the evolu-tion of the market, maturity of the mar-ket and future potential growth of that market,” Mr Li says.

Consuming passionsThe Richemont group’s chief executive in the Asia-Pacifi c region, Alain Li, is optimistic about growth despite slower-than-expected sales

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Two years ago the group established the Institute of Swiss Watchmaking in Hong Kong, and more recently also in Shanghai, where students take a two-year course certifi ed by the Watchmak-ers of Switzerland Training and Educa-tion Programme. “We can train people locally to sell in our shops, and to open new shops, and to be able to service our growing customers in the mainland,” Mr Li says.

The decision to set up the facilities is designed to cover the shortfall in sales staff, the result of rapid growth that has pushed staff without experience onto the frontlines. Skilled watchmakers are also in short supply.

“There are not a lot of home-grown watchmakers and there is no-one train-ing them,” he says.

Mr Li believes Chinese customers are now more knowledgeable about ex-pensive brands and are starting to make the most informed decisions when they buy high-end goods. “A lot of the Chi-nese consumers do extensive research before they make a decision,” he says.

The Chinese-language websites for each of the group’s brands help cus-tomers make up their minds. “Through travel and through the amount of infor-mation readily available, Chinese people are very keen to learn and study. Defi -nitely the knowledge is extremely high in China today about our products,” Mr Li says.

He says the high-end goods that sell well in Europe sell well in China, too.

“I wouldn’t say there is any signifi -cant difference in terms of products that are successful in China or in Asia versus other parts of the world,” he says. The main difference, he says, is in the age of the customers and what motivates them to buy.

Travellers’ travailsRichemont recently added Net-a-Porter and Peter Millar to its portfolio, bring-ing the number of brands it owns to 20. Some are more than 200 years old. “Of course, not all of them are present in China, but most of our brands entered Asia and specifi cally China very early on,” Mr Li says.

Mainlanders must still travel if they wish to buy certain Richemont group goods. “Purdey, that makes shotguns for hunting, only have one shop in London. While Net-a-Porter, for instance, has just launched a shop in Hong Kong,” Mr Li says.

One Richemont group brand has es-tablished a partnership with a regional agent to increase sales. Watch brand Baume & Mercier has a joint venture with Chow Tai Fook Jewellery Group Ltd so it can exploit Chow Tai Fook’s knowledge of the market in the main-land and its distribution network there. “We hope we can continue together and grow Baume & Mercier in China,” Mr Li says.

He says the agreement is a unique one, with no further collaborations planned for the time being. “We’ll see. There are no plans to do that yet. It’s very early days for us,” he says.

Makers of high-end goods have been particularly successful in the territory. “It is down to, of course, the infrastructure of Macau in terms of being a tax-free

area. Secondly, the demographics, with the opening up of Macau to people in the mainland. So we see the numbers in-creasing every year,” Mr Li says.

The liberalisation of the gaming market here created a favourable en-vironment for sales growth of expen-sive brands. “We have a number of our brands already with operations in Las Vegas, Monte Carlo, so we already have a bit of experience in operating in that kind of environment,” Mr Li says.

He believes the new casino resorts in Cotai and development of the meetings, incentives, conventions and exhibitions market will mean more business for the Richemont group. All in all, Macau still has a lot of potential, he says, giving him every reason to be optimistic about the market here.

Business

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What is executive coaching?Executive coaching is a fl ourishing fi eld that has become

ever more widely known and ever more in demand. The thinking behind it is simple. Just as a personal trainer

helps people achieve physical fi tness, an executive coach will challenge an executive and support him to achieve results at work.

A coach will employ a range of structures, models and methods to obtain results. One powerful attraction of coaching is that it makes the client commit to developing his potential and attaining his goals. The coach is a sounding board, a challenger to a client’s thinking, can help stimulate creativity, provides tools and techniques to deal with problems and gives feedback.

Coaches can work with managers and executives at any level within an organisation, with an individual seeking growth and development. Most clients are sponsored by their organisation and could be initiated by the company or by the manager.

The process will potentially involve similar training and development activities that a group undertakes, but coaching is a one-on-one practice, not a group activity.

At the fi rst meeting a coaching process is agreed upon. After that, the process usually lasts from six to 12 months. Coaching can take less time when there is an urgent, defi ned need.

Game changingA coach will identify objectives and defi ne the results a client is prepared to commit to achieving. An assessment follows. It defi nes where the client is at, with a view to showing the gap between where they are and where they want to be. The organisation can contribute with an initial briefi ng.

The process is always confi dential. It is tailored to suit the

ANDRÉ RIBEIRO CONSULTANT AND EXECUTIVE COACH - [email protected]

COACHING MIGHT PROVIDE THE KEY TO UNLOCKING THE POTENTIAL OF SOME MACAU EXECUTIVES

individual needs of the executive and the collective needs of the sponsoring organisation.

Most companies use coaching to develop the capabilities of high-potential executives or to facilitate transition.

There are some common themes among clients. They may want to propel the company to the next level, better manage time spent at work and away from it, improve performance at work, or prepare for a new role or learn techniques to cope with promotion.

The coach works with clients to identify factors keeping them from achieving results, and builds an action plan to help them achieve their objectives.

The costs vary according to the experience of the coach and the process, and can fall anywhere from MOP2,000 (US$250) a session to MOP20,000 a session.

Coaching is effective in times of change, such as being promoted or managing a special project. In these situations, a coach can assist in developing the skills needed for a new role or situation, and measure, monitor and support their client to make sure they stay committed and take consistent action to guarantee results.

To offer some real-life examples, processes might include: succession coaching in a family-owned, multinational wine company; coaching at an Internet consultancy; coaching a newly appointed chief executive of a global marketing services company; or developing high-potential executives at a telecommunications company.

Executive coaching is in its infancy in East Asia but it appears to be creating a space for itself in the Asian corporate landscape, particularly as multinational organisations expand.

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APRIL 2013

BY LUCIANA LEITÃO

A desirable

The more Portuguese who apply for residence in Macau, the longer they have to wait to get it

Human Resources

Portuguese now have to wait much longer than they used to when ap-plying for residence here. Just a

few years ago, an application for residence would be handled within three months. It can now take up to 12 months to hear if an application is successful or not.

Lawyer Icília Berenguel thinks it takes longer because more people are applying and more submit incomplete applications.

Figures from the immigration depart-ment of the Public Security Police show that in the past three years, the number of Portuguese applying for residence has in-creased by almost 50 percent. In the fi rst

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APRIL 2013

two months of this year alone, 73 ap-plied. Since 2011, the authorities have rejected only one application, because the applicant failed to meet the require-ments.

Mrs Berenguel says that regulations governing residence in Macau confer particular advantages on Portuguese or Chinese passport holders, as the regula-tions only mention these nationalities.

Most Portuguese can get a tempo-rary resident identity card if they are employed by a Macau company.

They can get a resident identity card if they marry a permanent or temporary

The economic slump in the

euro zone means more Portuguese

are looking for work here

resident, or have cohabitated in a de-facto relationship with one for two years or more. Portuguese can also apply for residence on the grounds that they have relatives here, or have a link to the city, having studied, lived or worked here.

An application for temporary resi-dence must be certifi ed by a sponsor, who must be a permanent resident. After seven years here, a temporary resident can apply for permanent residence.

Until recently, gaining temporary residence was quick and easy. But as the number of applications has increased, the process has become slower and more diffi cult.

Most Portuguese working in Macau have residence status. But there are also many Portuguese holding work permits for imported labour, or blue cards. A blue card allows the holder to remain in Macau only for the duration of his or her employment contract.

“I know many Portuguese with a blue card,” Mrs Berenguel says. “They are people with no specifi c technical qualifi cations, or with no certifi cates at-testing to their qualifi cations.”

The immigration department issued six blue cards to Portuguese in 2011. Last year it issued 17 and so far this year it has issued 24. At present, 36 Portu-guese still hold blue cards.

The economic slump in the euro zone means more Portuguese are look-ing for work here, so more are applying for residence.

Macau Business asked the immi-gration department to clarify how long the process takes but did not receive a reply. Mrs Berenguel says it now takes fi ve months, on average, but once took as little as three months.

Anxious waitAdriana Lucas had to wait one year for her Macau resident ID. She arrived 18 months ago to work in a casino resort, under the auspices of an internship pro-gramme run by the Portuguese govern-ment.

When Ms Lucas’s internship fi n-ished, she was offered employment as an events executive and immediately applied for residence. “I fi led the papers in June. I had a sponsor and everything else,” she says.

Ms Lucas had heard that usually Portuguese applicants had to wait two months. She ended up waiting 12 months. As time dragged on, she be-

came concerned. “Someone suggested that it had something to do with the salary, that people earning more than MOP20,000 [US$2,500] would have a faster response,” she says.

Ms Lucas’s job was never in peril. She had her blue card, which could be renewed with or without residence. But her boss was anxious to know the out-come, in view of the government’s curbs on imported labour.

No free rideVideo director João Luís’ case is slightly different. “When I arrived to Macau, I already had a promise of a contract and I started off with a blue card,” he says.

A month and a half month later, he applied for residence. “It was an easy procedure. I presented all the necessary documents. And then I waited for eight months.”

In all that time he heard nothing about the progress of his application. He eventually got his resident ID, just one month before his blue card was due to expire.

Ms Berenguel says incomplete ap-plications, lacking the necessary sup-porting documents, are slowing down the government and extending the time it takes to process an application.

And the applicants who have to wait the longest are those who apply on grounds that do not fi t the mould, whether the grounds are that they have jobs here or that they have relatives here.

The more straightforward your cir-cumstances, the quicker you get your Macau resident ID. But Ms Berenguel says she thinks it is unreasonable to hustle the authorities to grant straight-forward applications swiftly when they are fl ooded with less-straightforward or incomplete applications.

She does not believe politics are at play, causing offi cials to drag their feet or reject applications. In other words, the government is not over-compensating for some sort of colonial cringe induced by the sight of yet another Portuguese.

“If that were the case, how do you explain that most of the marriages and family reunion cases are approved?” she says.

If fault is to be found it is not to be found in the attitudes of the authorities. “Some people think that just because they have a Portuguese passport they are able to reside in Macau. It is not so,” Mrs Berenguel says.

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APRIL 2013

Society

With infl ation accelerating last year, a new type of poverty has emerged. These working poor

do not qualify for government subsidies or food from Caritas’s food bank, but they cannot get by on their wages.

Grassroots associations and trade unions have been behind the estab-lishment of welfare shops popping up around the city. Some observers doubt that welfare shops are a complete an-swer to this new type of poverty, while others see the subsidised grocery stores as a way to buy votes.

Government assistance is available to people living below the subsistence level. The Social Welfare Bureau says an individual needs a minimum income of MOP3,450 (US$432) a month to survive and an eight-member household needs a combined monthly minimum income of MOP16,150. In 2011, the government set the level at MOP3,000 for individu-als and MOP14,350 for an eight-member household.

Rises in the cost of fresh food and

BY LUCIANA LEITÃO

Modern povertySubsidised groceries help Macau’s working poor put food on the table, while charities tend the scars

eating out meant consumer price infl a-tion was 6.11 percent last year, dimin-ishing the buying power of even those living above the subsistence level. It prompted the Holy House of Mercy of Macau, which is often referred to by its Portuguese name Santa Casa da Mis-ericórdia de Macau or SCCM, to open a welfare shop at the SCMM Rehabili-tation Centre for the Blind, next to the Macau Canidrome.

The shop targets households that fall outside the criteria for government aid or for food from the Caritas Macau food bank. Its main benefi ciaries are sin-gle-parent families or households with elderly, ailing or handicapped members.

Socially obligatedThe shop offers donations on the fi rst Saturday of each month. It opened on February 2 and handed out household hampers to 212 households. The ham-pers contained basics such as rice, cook-ing oil, infant formula, canned food and cleaning materials.

The Macau General Union of Neigh-bourhood Associations and the Macau Federation of Trade Unions selected at least 200 of the households that received the hampers.

“The criteria are very varied. You can have, for instance, a couple earn-ing a total of MOP30,000 that are rais-ing fi ve children that go to school,” says SCMM head António José de Freitas.

Each hamper has a retail value of between MOP700 and MOP1,000. The organisation has enough contributions from individuals and companies, includ-ing all the casino operators, to ensure that it can hand out hampers for the rest of the year.

“It’s important that in Macau we have this mutual aid environment be-tween the different communities, and it is very healthy to see that there are com-panies (concessionaries and others) that want to play their role in society or fulfi l their social obligations,” Mr Freitas says.

The group plans to have a different sponsor for its handouts each month.

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Bank of China Ltd sponsored the fi rst handout and Sands China Ltd the sec-ond. “At least we help 200 families a month. So, if to each family we give a hamper that costs between MOP700 and MOP1,000, it means we’ll spend on average each month MOP180,000,” Mr Freitas says. He expects to spend around MOP2.2 million this year.

The benefi ciaries are not necessar-ily the same households every month. The Macau General Union of Neigh-bourhood Associations and the Macau Federation of Trade Unions decide who benefi ts.

Taking careMr Freitas believes one welfare shop is enough, considering that Caritas Macau is already helping the poor with its food bank. “This welfare shop is a comple-mentary structure for those that were left out of the food bank programme,” he says.

As infl ation diminishes buying power, the charitable organisation is not the only body helping out households in fi nancial strife.

Mr Freitas says the Macau Federa-tion of Trade Unions has opened a su-permarket in the north of the city which sells goods to eligible shoppers at dis-counted prices. “You have a ticket and you have to present it to be able to shop there,” he says. A member of the Leg-islative Council, Chan Meng Kam, has opened other, similar supermarkets.

Caritas Macau secretary-general Paul Pun Chi Meng says those in need must be helped. “In the old days, we had initiatives run by foreigners, with over-seas contributions. Now it’s good that local people take action,” he says.

Caritas Macau set up its food bank in cooperation with the Social Welfare Bureau, which donated MOP10 mil-lion to cover the expenses for two years. The food bank is for the unemployed, the homeless and people that receive no subsistence allowance from the govern-ment. Social Welfare Bureau data shows the food bank helped 1,214 families in 2011 and 1,295 families last year.

At fi rst, benefi ciaries could use the food bank only once, after which they had to seek help elsewhere. Benefi ciaries may now use the food bank twice.

Mr Pun says more people are expe-riencing fi nancial stress, creating real, greater mental stress. Welfare shops and the food bank take care of the fi nancial problems, leaving Caritas Macau to con-

centrate more on relieving the health impacts.

“Besides the food bank, we can pro-vide further, psychological, support. We have received about 13,000 phone calls from citizens. More than one-third are facing emotional problems. They are not hungry,” Mr Pun says.

“We have to take care of people from the psychological standpoint, so that they learn how to live better and solve their problems without further support from other individuals, non-governmental or-ganisations or the government.”

Debts of gratitudeMacau Polytechnic Institute social work lecturer Leung Kai-yin fears that some welfare shops may be used to buy votes in this year’s elections.

Mr Leung says long-standing so-cial conventions will mean that some benefi ciaries may return the favour by voting for their benefactors. “They give discounts or advantages to people, espe-cially old people, who think it is a good thing, so they may end up voting for the person in charge,” he says.

“The elderly usually think they should be loyal to institutions.”

The Social Welfare Bureau aids in-dividuals and households living below the subsistence level. Last year the gov-ernment gave subsistence allowances to 10,505 individuals, 609 fewer than in 2011, and to 5,930 households, 267 fewer than in 2011.

The SCCM’s shop targets households that fall outside the criteria for governmentaid or for food from the Caritas Macau food bank

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APRIL 2013

Corporate social responsibility (CSR) has been in fash-ion for decades in developed countries, but the concept has been adopted in Macau only in the past few years.

The economic slump that followed the international fi nancial crisis of 2008 had social costs, which led to widespread pub-lic handwringing. Since then, Macau enterprises have become more aware of their obligations and have begun to shoulder their share of the burden of social responsibility, according to Fanny Iu, Bank of China Ltd’s head of wealth management.

Ms Iu says the liberalisation of Macau’s gaming market and the economic boom have fuelled corporate social respon-sibility efforts.

“Macau people are getting richer but not all residents are enjoying the benefi ts of the economic boom. And we really want to help those in need,” she says.

Carlos Noronha, an associate professor of business ad-

Shouldering the loadThe emerging practice of corporate social responsibility is all about burnishing brands and company reputationsBY CHERRY LEE

ministration at the University of Macau, is an authority on corporate social responsibility. Mr Noronha says dispensing charity was once widely perceived as the only way for cor-porations to demonstrate how socially responsible they were.

Paul Pun is the head of the charity organisation Caritas Macau. “Two to three decades ago, it was we that usually con-tacted the companies fi rst. Most of the companies were willing to donate some money to charities like us, but they would ask us to put their names on the list as a favour,” Mr Pun says.

“In the past, the CSR behaviour of local companies was limited to donations and

related charitable activities. But nowadays things have changed, and local enterprises are much more active in pro-moting CSR activities,” he says.

Community service and voluntary work are the most com-mon ways for companies to show social responsibility. Large

Corporate Social Responsibility

enterprises usually form their own teams of volunteers and arrange a variety of activities such as visiting the elderly, visit-ing children’s homes or making handicrafts with the mentally handicapped.

Give to getMs Iu says that of the 1,300 employees of the Macau branch of the Bank of China, 600 do volunteer work, giving up their spare time to serve the community.

“Employee participation in community service is strongly encouraged,” she says. “We want to make [the benefi ciaries] feel the love of society and let them know that they are never isolated, especially during festivals.”

The company is rewarded with employees with broader horizons that better appreciate their own good fortune and are happier after helping others.

“It is a win-win situation, and sometimes we get more than we give through taking part in the activities. Sometimes we tend to complain about our lives, but our situation is no worse than a lot of people’s, and it is within our capacity to help,” says Ms Iu.

Cooperation among big companies in the practice is rare. Instead companies prefer to demonstrate independently how socially responsible they are.

Big companies tend to turn to charitable bodies such as the Fuhong Society of Macau and the Tong Sin Tong for help in reaching people in need. Companhia de Telecomunicações de Macau SARL (CTM) spokesperson Eliza Chan says: “They have a mature network, which enables us to maximise our re-sources to reach more people in need.”

Staff from CTM and The Venetian Macao make monthly visits to the elderly, or enjoy outings with them. Both com-panies outsource work to charitable bodies such as packag-ing or the distribution of leafl ets. “The mentally handicapped are capable of handling those tasks and they are usually very responsible. Besides, it can also relieve the labour shortage,” says Ms Chan.

Growing concernThe Venetian relies on the Macau Special Olympics group to help it to fi nd employees among the disabled. The Sands China Ltd-owned casino employs disabled people to do a variety of jobs, ranging from photocopying to delivering mail. The tasks given depend on the employee’s abilities and the advice of pro-fessional instructors.

“It is benefi cial for the disabled to work in the world outside rehab centres,” says Sands China spokeswoman Melina Leong. “They usually work four to fi ve hours per day, due to their physi-cal limitations, but we always regard them as team members.”

Ms Leong says The Venetian has made big donations to charitable bodies since 2004.

“To make sure the money goes to the right place, we have always worked with government-registered organisations, and we require a detailed report afterwards,” she says.

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Paul Pun from Caritas says that nowadays local enterprises are much more active in promoting CSR activities

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APRIL 2013

In the past few years small and medium enterprises (SMEs) have also been keen on showing how socially respon-sible they are.

The director of the Fuhong Society, Jennifer Chau, says: “Although they may not be able to support us fi nancially, some of them are happy to offer us technical support.”

An example was an offer to help the Fuhong Society to set up a small laundry where it employs the mentally handi-capped. “An old couple, who used to run a local laundry shop, offered to teach our staff how to run the business when they learned about our project,” Ms Chau says.

Greener shadeBeing socially responsible is not sim-ply a matter of being charitable, says Mr Noronha. “Macau people are more concerned about issues such as environmental man-agement, sustainable devel-opment of society, as well as labour issues,” he says. Thus, some enterprises are beginning to shoul-der their social respon-sibilities by doing more relevant deeds, such as offering health care or holding environmental protection seminars.

The government does not require cor-porations to be socially responsible, however most big companies are eager to show how responsible they are. “Large enterprises are rich in fi nancial resources and labour, but small and medium enterprises cannot afford it,” Mr Noronha says.

He says the primary purpose of CSR is to burnish brands and corporate reputations. “For example, gaming industry players are aware of the social problems that they create, and launch responsible gaming programmes or promote this concept to their guests in order to address com-munity concerns, to minimise the negative impact on Macau society,” he says.

Mr Noronha says some Macau subsidiaries follow the CSR policies of their parent companies in the mainland or oth-er countries, where such policies are usually more mature. He says some companies with business that depends on govern-ment concessions may put more effort into appearing socially responsible when the concessions are up for renewal.

Companies are paying more attention to the environment these days, and most make environmental protection part of their effort to show that they are socially responsible. For in-stance, they endeavour to conserve water and energy, and to separate their waste.

Charity at homeThe vice-president of facilities at Sands China Ltd, Mike Nay-lor, says that by making more effi cient use of its air-condition-ing system and by using LED lighting, The Venetian has cut

its electricity bills by 50 percent. The casino resort intends to install a de-

vice that takes all the water out of its kitchen waste, to reduce the

volume of the garbage.As for separating waste,

Mr Noronha says: “The waste separation system is not fully developed in Macau. Waste separa-tion dustbins are to be found everywhere, but all kinds of rubbish is lumped together when it is sent to the trash company.” The scholar also says that not all

companies can afford the devices that they need

to go green, least of all SMEs.

Some companies count the welfare of their employees

as a social responsibility. Many in-vest in training their employees and

giving them career paths to follow. The purpose is to give employees a sense of belong-

ing and to build loyalty to the company.“Work-life balance, career development, further study

programmes and creating a harmonious working environment are all essential for employees’ welfare,” says Mr Noronha.

Companhia de Electricidade de Macau SA spokeswoman Cecilia Nip says: “Our human resources department recently hosted a seminar with Caritas to teach employees how to re-lease work pressure.”

CTM spokesperson Eliza Chan says the company has a career development team. “Both in-house training and train-ing outside are provided for our employees. Language and IT training are the most popular, but employees can also bring up new ideas as long as the courses are benefi cial for their careers or lives,” she says.

About 34 percent of The Venetian’s employees are expa-triates, coming from 59 countries. To avert cultural friction among its employees, the casino resort gives centre stage to a different nationality each month.

“For example, the canteen will have a special section serving Thai food during Thai cultural month, and we put up posters to disseminate knowledge of Thai culture,” says Sands China’s Ms Leong.

The government does not require corporations to be socially responsible, however most big companies are eager to show how responsible they are

Corporate Social Responsibility

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APRIL 2013

BY LUCIANA LEITÃO

Studio Artist Konstantin Bessmertny is thinking of moving his studio to Hong Kong because Macau has become too expensive

Arts & Culture 117

A fter two decades of liv-ing in Macau, and hav-ing moved his studio 12

times, Russian artist Konstantin Bessmertny is tired – tired of the continual increases in his rent and the property squeeze here. Bessmertny, probably the city’s best-known international artist, is now looking at different studios in Macau, but, for the fi rst time, also in Hong Kong. He has not yet made a fi nal decision.

Bessmertny came to Macau 20 years ago after being invited here time after time to exhibit. Most notably, his work was shown in an exhibition of contemporary Russian art held here and in Hong Kong.

He chose to live in Macau be-cause of its location, its blend of East and West, and because it was easy to live here. “It was so good for artists not to waste money on rent-als, as in New York and Paris, just to be living here, working,” he says.

But since then things have changed, and Bessmertny does not believe they have changed for the better. “I see how different Macau has become; how many problems Macau is facing; the speed of construction; investment and tourists,” he says.

Bessmertny uses various me-dia – his work includes sculpture

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APRIL 2013

Arts & Culture

“I refuse to talk about the formula of sucess,” says Konstantin Bessmertny

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APRIL 2013

and installation art – so whenever he has to change his studio, the move is fraught with diffi culties. “I’ve changed 12 times, fi ve times because I wanted to improve conditions but most of the times I was asked to leave,” he says.

After only one year in his present studio, he has been asked to leave. It was the moment Bessmertny realised Macau had lost its advantage over Hong Kong. “Macau was never an art market but was a great place to have a studio,” he says.

Macau has only about 100 industrial buildings.

Bessmertny was born in the eastern Russian city of Blagoveshchensk, near the Chinese border, in 1964. He attended the school of fi ne arts there. He complet-ed his formal education at the Institute of Fine Arts in Vladivostok, where his work was shown in several exhibitions of contemporary Russian art.

Art workoutsDuring his 20 years in Macau, Bessmert-ny has also stayed in the many homes he has around the world. Part of the year he works in Alcobaça in Portugal and, from time to time, he also works in Moscow.

He believes it is impossible for him to choose just one place to live in and, even if he could, his work would require him to travel. “I don’t believe in this cor-porate life, because an artist needs to concentrate,” he says.

Bessmertny likes Alcobaça because of the light there and its people. He likes Russia because it is his home country. “There is now more and more hope, with the changes occurring,” he says. He con-siders Macau a comfortable crossroad, with easy connections to the rest of Asia.

Bessmertny may decide to stay in other parts of the world, depending on the work opportunities. He is now pre-paring for an exhibition in London in September, which will require him to spend a certain amount of time there be-forehand.

Bessmertny’s art mixes irony and sarcasm with music, literature, history, politics and current affairs, but always with a certain sensitivity. His latest way of approaching his art is a good example of how he works.

Since last year he has been in the habit of doing a sort of creative stretch-ing exercise before getting down to the real thing. “Every day, since September 15, I do one work, which is a warm-up before working in the studio,” Bess-mertny says.

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After two decades living in Macau, Russian artist Konstantin Bessmertny moved his studio 12 times

Arts & Culture

A thread of dry humour runs through his work. He tells a story of how his poodle lost one eye to a snake, and points to an installation comprising a snake preserved in a bottle of alcohol and a picture of his dog in a vengeful mood.

An artist should fi nish the work he starts, and to that end Bessmertny be-gins his day with meditation. “You have to discipline yourself,” he says. He is his own boss, so he must set his own sched-ule. “It is the biggest problem for artists. If they go, for instance, on a drinking spree or a travelling spree, it becomes very diffi cult to go back to work.”

Life is hardBessmertny says he is true to his own beliefs. He accepts commissions but does them in his own way, accepting the money only if the patron accepts the work.

He is often disturbed by what he re-gards as “signs of money” in the work of other artists. “It’s so ridiculous. That’s why I quit all institutions,” he says. “And I refuse to talk about the formula of suc-cess.”

What is important, Bessmertny says, is that “the artist enjoys what they are doing”. If a patron happens to enjoy it, too, and wishes to pay for it, that is what makes an artist happy, he says.

Art is Bessmertny’s vocation. But if art could no longer support him, he could always become a graphic designer

He even sold a few of these “warm-ups” at the London Art Fair, and now he will probably take others to sell at future exhibitions. Each piece is just a frag-ment, a seed of something greater.

Snakes and poodlesBessmertny always has a bit of fun. He points to one of his “warm-ups”. “In this one, Picasso is putting on his pants, after satisfying the lady he just painted,” he says.

Some of these works required re-search. Others are the result of ideas that just popped into his head. “My favourite one is this image of Brezhnev calling the Soviet Union, surrounded by James Bond girls,” he says.

Bessmertny has yet to make up his mind about what to exhibit in London in September, but he says that, along with other works, he may take a set of his daily “warm-ups”. He is also thinking about street installations.

His favourite medium is oils, even though he thinks it is the hardest me-dium. “You need to wait for oils to dry but it’s still my favourite. I study it and practise it all the time. And I believe in it.”

Another advantage, he says, is that oil paint better withstands the passage of time. But he also uses several other media, such as collage, sculpture and in-stallations.

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APRIL 2013

or interior designer, he says. He has ex-perience in other occupations.

“During Brezhnev times, I worked as an illustrator for a funny newspaper. The head was an undercover dissident and we did everything together in be-

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he couldn’t do it. He realised he liked fi lms,” Bessmertny says.

He says it is just unfortunate that his son not only likes fi lms, but wishes to di-rect them, too. “Being an artist is a very diffi cult life,” Bessmertny says.

tween the lines,” Bessmertny says.He is a family man, being married

with two children, one of whom also wishes to become an artist. “The boy studied philosophy and business, and he worked at Wynn Macau but in the end

122

APRIL 2013

Next month, the city will be invaded by more than 30 acts from all corners of the world, when the Cultural Affairs Bureau presents the 24th edition of the Macau Arts Festival.

The programme is a blend of inter-national substance, Chinese sparkle and Macau highlights, as it aims to create a platform for cultural exchange.

This year, the festival opens on May 3 and half of the programme comprises Macau productions. The festival presents a varied array of performances from the mainland, Portugal, Britain, France, Spain, the Netherlands, Belgium, Israel, Taiwan, Vietnam, Singapore and Hong Kong.

The performances range from contemporary dance to traditional Beijing opera, multimedia performances, shadow puppetry, audiovisual architectural mappings and exhibi-tions. Shows for all tastes will take to the stage, not only at the city’s performing arts venues but also at many of Macau’s

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THIS YEAR’S MACAU ARTS FESTIVAL FEATURES MORE THAN 30 ACTS, HALF OF WHICH HAVE DEEP LOCAL ROOTS

World Heritage sites.The programme begins and ends with two contemporary

dance works. “Drought and Rain”, by renowned French-Vietnamese director, choreographer and performance artist Ea Sola, lifts the curtain on this year’s edition. “FAR”, an anatomy-defying work by multi-award winning British chore-ographer Wayne McGregor, will close the festival.

A team of choreographers from across Guangdong, Hong Kong and Macau have collaborated to deliver “Love Let-ters”, a dance performance that resulted from inter-regional co-operation.

French choreographer and dance revolutionary Xavier Le Roy blends science with imagination to explore the infi nite possibilities of the human body in “Self-Unfi nished”. The Fresco Dance Company from Israel will present “Refl ec-tions”, dance performance combined with multimedia.

“My Chair 20:13” is a version of dancer Pheobea Tsang’s debut work, featuring alumni of the Hong Kong Dance Com-pany as principal performers, and musical accompaniment by

Drought and rain

Arts & Culture122

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various young collaborating talents. Macau production “Here She Dances” joins multimedia arts with literary excerpts and dance.

For all agesWith 15 different produc-tions, theatre is also one of the festival’s highlights. “Han Yuniang”, a new adaptation of a classical work presented by the China National Beijing Opera Theatre, stars Dong Yuanyuan, artistic successor of famed performer Mei Lan-fang.

The audience will also have the opportunity to experience UNESCO-listed Cantonese opera with performances by the Macau General Association of Can-tonese Opera and the Macau Kaifong Cantonese Opera Juvenile Troupe.

Acclaimed Portuguese actors Maria Rueff and Joaquim Monchique will present the comedy “Home Sweet Home”. Singapore Drama Box will collaborate with talent from Macau in the form of an assistant director, a set designer and a performer to stage “Farewell: The Body in 16 Chapters”. Nine Years Theatre will perform “Who’s Afraid of Virgina Woolf?” by the three-time Pulitzer Prize winning American playwright Edward Albee.

The product of a cast and crew from both Taiwan and Macau, “Wall of Fog” is a play inspired by American writer Eugene O’Neill’s “Long Day’s Journey into Night”.

Prepare to laugh out loud with Dóci Papiaçám di Macau Drama Group, as they debut a new play, “A Vote for Love”.

“Shooting Star” is a musical jointly produced by Spring-Time Experimental Theatre from Hong Kong and local troupe Theatre Farmers.

Audiences are also invited to enjoy other local productions includ-ing “The Golden Dragon” by Theatre Horizon Macau, “A Gambling World” by Step Out, “The Winter’s Tale by William Shakespeare” by the Macao Youth Repertory Theatre, and “The Memorandum” by Hiu Kok Drama Association.

Two puppetry acts will be offered to children: the theatre group Clair de Lune Théâtre from Belgium will bring “The Circus Has Arrived”, and “Hands Up” will be presented by Lejo from the Netherlands.

Apart from the traditional concerts by the Macau Or-chestra and the Macau Chinese Orchestra, the Macau Arts Festival will bring audiences a programme of three fi lms re-

fl ecting the genius, intensity and glamour of the 1920s. It features soundtracks by the Octuor de France and four local musicians, as they provide the silent fi lms with musical accompaniment, played live and synchronised to the masterpieces.

Pingtan celebrities from the Jiangsu Province Pingtan Troupe have been invited to give masterful performances of a variety of famous songs. Suzhou Pingtan, also known as shuoshu, is a towering art form within traditional Chinese culture.

Multimedia world“Picnic in the Cemetery” is a work devised by local com-poser Njo Kong Kie, featuring excerpts from his album of the same name plus new composi-tions written especially for this event. The music is performed by The Folga Project, a quartet featuring Njo on piano, plus violin, cello and guitar.

At the core of the festival programme are a number of other treats. Local artists, who studied under Spain’s Tel-enoika Audiovisual Open Creative Community, have created two audiovisual shows in “Mapping: Made in Macao I and II”, designed specifi cally for the façades of the Mandarin’s House and Tap Seac Square. The Macau Audio-visual As-sociation Cut will also present a multimedia show at the St

Paul’s Ruins.Art exhibitions are also featured in the fes-

tival. “Vanishing Techniques – Photography of Jean Baudrillard” showcases the French

thinker’s unique photographic theory and practice. The Macau Museum will host “Fantasy World – Chinoiserie”, a display of European-made artefacts dating to the 17th and 18th centuries, inspired by an admiration for the Chinese art and philosophy being imported from the East during the Age

of Enlightenment.The Macau Annual Visual Arts Ex-

hibition is again as part of the Macau Arts Festival, for the purpose of promoting local

visual art and encouraging homegrown talent to participate and exhibit their work.

The Outdoor Performing Arts Showcase will be held in the northern part of the city to provide free access to the Macau Arts Festival for a wider audience.

This year, the Cultural Affairs Bureau also presents Fes-tival +, a programme that features a number of free admission pre-show talks, poetry reading, post-show sharing sessions and workshops.

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THE OZZIE FUN MACHINEHere they are again, competing in terms of fun and great prizes with our own tournament. Well done Aristocrat team. The Australian supplier of technologies and services to the international gaming industry has been running its golf tournament for seven years now. And every time is better than the last.

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Aristocrat 7th Annual Asia Pacifi c Golf Day

5 Bats team - Nathan Drane, Michael Burnett, Iain Carlyle and Paulo Azevedo

Fortune King Legends team - Charlie Ward, David Punter, John Shigley and Matt Hurst

5 Koi Legends team - Mark Copping, Alastair Dick, Richard Thomas and Nathan Tuck

Team 50 Dragons Legends - Lindsay Stewart, Gary Hann, David Green and Trevor Croker

White Tiger team - John Heng, Frankie Tan, Joe Foo and Anthony Chan

Inca Fortune team - Michael Tjendra, Anthony Yip and Stanley Tjendra

Racing Tycoon team - Luis Pereira, Jeremy Wilton and Geaspar Byrne

Dragons on the Lake team - Mark Daniels, Luka Softa, Peter Johns and Dennis Hudson

Big Fortune team - Stuart Cations, Brett Tolson, Robert Johnston and Phil Geappen

Tarzan & Jane team - Martin Wright, Tim Shepherd, Geoff McDowell and Chris Rogers

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1st place winners - Cash Express Gold Class team -Kenny Yeap, Nathan Carle, Sam McElhone and Andy Crisafi

2nd place winners - Fortune King Legends team - Charlie Ward, John Shigley and David Punter

Award dinner

Denise Stewart, Cherie Ward and Fran Thomas

5 Koi Legends team Fortune King Legends team

Phil Geappen, Robert Johnston and Brett TolsonHaving fun on the greens

Berni Keefe, Beth Doherty and Kate YoungMatt Hurst Peter Johns David Green Gary Hann_Lindsay Stewart

Chipping Challenge

Gary Hann, Lindsay Stewart, Trevor Croker and David Green

Lindsay putting with a pool cue

Geoff McDowell and Chris Rogers

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Debt-friendly stimulus

With much of the global economy apparently trapped in a long and painful austerity-induced slump, it is time to admit that the trap is entirely of our own making. We

have constructed it from unfortunate habits of thought about how to handle spiraling public debt.

People developed these habits on the basis of the experiences of their families and friends: when in debt trouble, one must cut spending and pass through a period of austerity until the burden (debt relative to income) is reduced. That means no meals out for a while, no new cars, and no new clothes. It seems like common sense – even moral virtue – to respond in this way.

However, while that approach to debt works well for a single household in trouble, it does not work well for an entire economy, for the spending cuts only worsen the problem. This is the paradox of thrift: belt-tightening causes people to lose their jobs, because other people are not buying what they produce, so their debt burden rises rather than falls.

There is a way out of this trap, but only if we tilt the discussion about how to lower the debt/GDP ratio away from austerity – higher taxes and lower spending – toward debt-friendly stimulus: increasing taxes even more and raising government expenditure in the same proportion. That way, the debt/GDP ratio declines because the denominator (economic output) increases, not because the numerator (the total the government has borrowed) declines.

This kind of enlightened stimulus runs into strong prejudices. For starters, people tend to think of taxes as a loathsome infringement on their freedom, as if petty bureaucrats will inevitably squander the increased revenue on useless and ineffective government employees and programmes.

But the additional work done does not necessarily involve only government employees, and citizens can have some voice in how the expenditure is directed.

People also believe that tax increases cannot realistically be purely temporary expedients in an economic crisis, and that they must be regarded as an opening wedge that should be avoided at all costs. History shows, however, that tax increases, if expressly designated as temporary, are indeed reversed later. That is what happens after major wars, for example.

Insuffi cient demandWe need to consider such issues in trying to understand why, for example, Italian voters last month rejected the sober economist Mario Monti, who forced austerity on them, notably by raising property taxes. Italians are in the habit of thinking that tax increases necessarily go only to paying off rich investors, rather than to paying for government services like better roads and schools.

Keynesian stimulus policy is habitually described as defi cit spending, not tax-fi nanced spending. Stimulus by tax cuts might almost seem to be built on deception, for its effect on consumption and investment expenditure seems to require individuals to forget that they will be taxed later for public spending today, when the government repays the debt with interest.

If individuals were rational and well informed, they might

conclude that they should not spend more, despite tax cuts, since the cuts are not real.

We do not need to rely on such tricks to stimulate the economy and reduce the ratio of debt to income. The fundamental economic problem that currently troubles much of the world is insuffi cient demand. Businesses are not investing enough in new plants and equipment, or adding jobs, largely because people are not spending enough – or are not expected to spend enough in the future – to keep the economy going at full tilt.

Collective decisionsDebt-friendly stimulus might be regarded as nothing more than a collective decision by all of us to spend more to jump-start the economy. It has nothing to do with taking on debt or tricking people about future taxes.

If left to individual decisions, people would not spend more on consumption, but maybe we can vote for a government that will compel us all to do that collectively, thereby creating enough demand to put the economy on an even keel in short order.

Simply put, Keynesian stimulus does not necessarily entail more government debt, as popular discourse seems continually to assume. Rather, stimulus is about collective decisions to get aggregate spending back on track. Because it is a collective decision, the spending naturally involves different kinds of consumption than we would make individually – say, better highways, rather than more dinners out. But that should be okay, especially if we all have jobs.

Balanced-budget stimulus was fi rst advocated in the early 1940’s by William Salant, an economist in President Franklin Roosevelt’s administration, and by Paul Samuelson, then a young economics professor at the Massachusetts Institute of Technology.

They argued that, because any government stimulus implies higher taxes sooner or later, the increase might as well come immediately. For the average person, the higher taxes do not mean lower after-tax income, because the stimulus will have the immediate effect of raising incomes. And no one is deceived.

Many believe that balanced-budget stimulus – tax increases at a time of economic distress – is politically impossible. After all, French President François Hollande retreated under immense political pressure from his campaign promises to implement debt-friendly stimulus.

But, given the shortage of good alternatives, we must not assume that bad habits of thought can never be broken, and we should keep the possibility of more enlightened policy constantly in mind.

Some form of debt-friendly stimulus might ultimately appeal to voters if they could be convinced that raising taxes does not necessarily mean hardship or increased centralisation of decision-making.

If and when people understand that it means the same average level of take-home pay after taxes, plus the benefi ts of more jobs and of the products of additional government expenditure (such as new highways), they may well wonder why they ever tried stimulus any other way.

ROBERT J. SHILLER PROFESSOR OF ECONOMICS AT YALE UNIVERSITY

THERE IS A WAY OUT OF THE AUSTERITY TRAP, BY INCREASING TAXES EVEN MORE AND RAISING GOVERNMENT EXPENDITURE IN THE SAME PROPORTION

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GREEN LUNG DISEASEA group of concerned residents have arranged a walk to Coloane Hill to draw attention to their opposition to a project to build a block of fl ats 100 metres tall near the hill. The would-be developer, Capital Estate Ltd chairman and Hotel Fortuna owner Sio Tak Hong, says he is determined to build high-rise housing in the city’s green lung.

Mr Sio says he has the “absolute right” to develop the plot, as the land was obtained at auction in Hong Kong seven or eight years ago. Does he really?

The government says further evaluation is needed of any harm the development may do to Coloane Hill. This case is a big test for the government. Will it heed the residents or succumb to Mr Sio’s lobbying?

More residents should join the group opposed to the project and more walks should be arranged. Coloane should not be destroyed by property developers.

URBAN SURVIVAL SCHEMEA bus hit a lamp post in Areia Preta on the morning of March 25. Eleven passengers were slightly injured and treated at the public hospital.

According to the police, the driver crashed his bus while trying to avoid another vehicle. The police say the driver was tested for alcohol and passed.

Frozen Spy is concerned about people’s safety. Since the new arrangements for bus services began in August 2011, the number of accidents involving buses has risen.

Passengers might like to consider a survival kit when they ride the buses. A crash helmet would be an essential part, just in case the novice driver encounters an obstacle that he cannot simply crush under the wheels of his overloaded vehicle.

NOTHING BUT BILLSDirectly elected member of the Legislative Assembly José Pereira Coutinho is unstoppable.

Even before the government announced the September 15 polling day for this year’s elections to the assembly, in which Mr Coutinho will endeavour to keep his seat, the president of the main civil service union was pushing a number of new bills.

Frozen Spy has lost count of the number of bills Mr Coutinho has submitted to the assembly. They include an animal rights bill, a same-sex marriage bill, a domestic violence bill, a trade unions bill and a bill to regulate housing rents.

The same-sex marriage bill was a stroke of genius, a way for Mr Coutinho to court the votes of the gay community now that the president of the New Macau Association, Jason Chao Teng Hei, has revealed he is homosexual and has started a campaign for gay rights. Mr Chao ran for a seat in the assembly as a pan-democrat in 2009 and will run again this year.

But why is Mr Coutinho pushing so many bills when the assembly has so little time left to deal with them before it is dissolved for the elections? Mr Coutinho seems to be campaigning already.

WHAT A LOADCompanhia de Telecomunicações de Macau SARL (CTM) has at last tried to explain why its Internet connections are so slow.

Vice-president of consumer marketing Ebel Cham told a press conference that CTM was not always to blame. Ms Cham said there were various reasons for sluggish connections, such as viruses in the browsers that subscribers use, or everybody trying to get access to the same websites at the same time. She said buffering of multimedia content also slowed things down.

Ms Cham said CTM was trying various solutions to fi x the problem, including spending MOP1.2 billion (US$150 million) on improving its network.

Until the problem is solved, Frozen Spy suggests that subscribers use a good anti-virus software, avoid going online when Internet traffi c is heavy and – if they wish to be entertained – put on a DVD or CD.

If we take to heart Ms Cham’s suggestions, then maybe we will get the Internet speeds we are paying for. Take a bow, Ms Cham.

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Aristocrat Page 19 www.aristocratgaming.com

Bally Technologies Page 07 www.ballytech.com

BNU Page 04 www.bnu.com.mo

Galaxy Entertainment Group Page 21 www.galaxyentertainment.com

Goldfi sh Page 76 www.goldfi shmacau.com

IGT Page 23 www.igt.com

FutureLogic Page 02 www.futurelogic-inc.com

Konami Page 01 www.gaming.konami.com

Macau Cultural Centre Page 27 www.ccm.gov.mo

Macau Post Offi ce Page 34 www.macaupost.gov.mo

MGM China Pages 03 & 05 www.mgmchinaholdings.com

MGTO IBC www.macautourism.gov.mo

Reed Exhibitions Page 17 www.reedexpo.com

Sands China Page 09 and 46-47 www.sandschinaltd.com

SHFL Entertainment Page 15 www.shfl .com

SJM IFC www.sjmholdings.com

Signature Events Page 121

TCS John Huxley Page 85 www.tcsjohnhuxley.com

Zung Fu Motors – Mercedes BC www.zungfu.com.mo

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