MB 101 | September 2012

Macau MOP 35

Hong Kong HK$ 40

Mainland China RMB 35

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MB Report 50 Degrees of success The new academic year welcomes a record number of tertiary education students

Gaming 56 Strip drag Sands China to open the second phase of its Cotai Central casino resort this month 62 Smart play Macau Golf Open gets a casino sponsor 66 A gambling problem Gambling addiction is becoming a serious issue in Vietnam 68 Fines roll in Singapore casinos have already been fi ned over US$1 million

Special 71 G2E Las Vegas All you need to know about the world’s premier gaming trade show and conference event

Tourism 86 A question of value The government is striving for more budget hotel rooms

Economy & Finance 26 Secret attraction Macau is an attractive place for international companies to do business, says HSBC Macau’s executive

Politics 32 Industrial evolution The trade unions want limits on severance pay to be scrapped

Greater China 36 Prime slot CCTV Africa is part of China’s bid to beef up its “soft power” strategy

Survey 39 A city at ease Most people in Macau sleep well, says the latest Macau Business Quality of Life survey

Property 42 Land locked Details of what will be built on Macau’s new reclaimed areas are still being discussed 46 Up for a brawl Chinese Estates intends to fi ght the government’s decision on La Scala

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Business 92 Glittering heritage Che Lee Yuen is one of the oldest gold jewellers in Macau 94 True love SJM’s Louis Ng buys a French vineyard

Human Resources 96 Going for the right change Hopping from one job to another can ruin a career

Technology 100 The ideas lab Start-up incubator Manetic has already helped dozens of fl edging companies

Arts & Culture 104 Culture of expectancy Hong Kong’s West Kowloon Cultural District is making progress, says CEO 108 Agent provocateur The Cultural Centre presents a site-specifi c production 110 Much music The Macao International Music Festival kicks off next month

Entertainment 112 Bursts of light The annual International Fireworks Display Contest is back

Opinion 10 From the publisher’s desk Paulo A. Azevedo 12 Editorial Emanuel Graça 25 Getting away with it Bill Kwok-Ping Chou 31 Questions of trust José I. Duarte 38 Immensity in a pint pot Keith Morrison 95 Blinkered to the point of blindness Gustavo Cavaliere 102 Confusion in the cloud Amy Lee 117 Who are tomorrow’s consumers? Sanjeev Sanyal

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MACAU BUSINESS OFFICIAL BLACKBERRY CARRIER

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Editorial CouncilPaulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang

VOL.1 Nº101

Founder and PublisherPaulo A. [email protected]

Editor-in-ChiefEmanuel Graç[email protected]

Senior AnalystJosé I. [email protected]

Art DirectorsConnie Chong, Luis [email protected]

Hong Kong BureauMichael Hoare (Chief), Anil [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, Agencies

IllustrationG. Fox, Rui Rasquinho

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

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

AdvertisingXu Yu, [email protected]

Advertising AgentsBina [email protected]é [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]

[email protected]

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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from the publisher’sdesk

PAULO A. AZEVEDOFOUNDER

AND PUBLISHER

I am hopeful that one day we will understand why two of our senior offi cials, Secretary for the Economy and Finance Francis Tam Pak Yuen and Secretary for Transport and Public Works Lau Si Io, apparently have a problem communicating.

Mr Tam clearly knows that he should keep quiet about the gaming industry. He knows only too well that it pays the city’s bills, just as he knows that the sword of Damocles hangs over the sector.

The peril gaming faces is due to compromises reached with Beijing.

Macau agreed that the industry’s growth would be controlled, to prevent mainland Chinese from gambling too much. In return, Beijing partly opened the tap that controls the fl ow of mainland visitors.

This agreement no longer makes sense. It is not by artifi cially preventing the growth of Macau’s casino industry that policymak-ers stop mainland punters from gambling. If they could not gamble here, they would do it in the Philippines, Singapore, South Korea, Vietnam, Cambodia, Laos – you name it.

But what is done is done. Until all the caps on the number of gaming tables fade away and demonising the gambling industry becomes a thing of the past, Mr Tam needs to balance his actions carefully.

On one hand, he needs to ensure that casino operators are pro-vided, in good time, with enough resources that are up to their ex-pectations – expectations that were fi rst fuelled by the government. On the other hand, Mr Tam must keep a tight grip on the number of new casinos allowed and on the growth rate of gaming revenue.

It is detrimental to Mr Tam’s juggling act to have a fellow-secretary that keeps on turning down whatever he feels like turning down. This tendency is most pronounced in sensitive areas such as casino development, where silence may not only be golden but also a sign of clairvoyance.

We all know that sooner or later the casinos Mr Lau keeps on turning down will be allowed. So why pretend otherwise now? Mr Lau should not mind if, in due course, he comes to be regarded as an inconsequential bureaucrat.

PATIENCE IS A VICE

[email protected]

Francis Tam clearly knows that

he should keep quiet about the

gaming industry. He knows only too

well that it pays the city’s bills,

just as he knows that the sword of Damocles hangs

over the sector

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ALL-ROUND IDLENESSIn a small city like Macau, land is a pricey resource. Not imposing strict

rules on developers might well mean trouble.Let us not mince words: many of the developers operating here – be

they from Macau, Hong Kong or the mainland – could not care less how they go about getting what they want. Many have the resources, but not the ethical standards demanded by best business practice.

Therefore it is the government’s duty to draw the line and impose regula-tions to be followed by all. But this is not happening.

Some investors are penalised because they fail to deliver by the deadline agreed with the government for the development of a given piece of land. Oth-ers can delay projects again and again, yet escape reprimand.

This may happen because there is a culture of opacity in the bureau that oversees the property sector. Or maybe it happens because Macau has a secre-tary that lacks the savvy and power to face up to the big boys.

Either way, it lowers people’s opinion of Fernando Chui Sai On’s govern-ment. Mr Chui and his cabinet had promised to eradicate such unacceptable inequities, but their promises are fading fast. How decisions on land grants are made remains opaque. There appears to be disregard for public accountability.

The government still has not decided what to do with more than 100 parcels of land it granted which remain idle, including almost 50 plots it said it was considering taking back. Meanwhile, after years of delay, developers such as Tin Wai Investment Co Ltd and Polytech Asset Holdings Ltd are fi nally starting to act on pieces of land they were granted. Nothing happened to them for failing to meet the original deadlines set by the land grants.

Other developers can put off breaking ground even longer. This is true of the two pieces of land next to the Grand Emperor casino hotel that are sitting idle (photo 1) and, even more alarmingly, of the huge plot across the road from the Regency Hotel in Taipa (photo 2). In the latter case, there is talk that the land has changed hands and that the use it is intended for may have changed. But it still sits undeveloped.

What is the Lands, Public Works and Transport Bureau doing about these cases? It seems that all it has done so far is wait.

In a city where each square centimetre of land is valuable, we cannot afford the luxury of waiting for years for some projects to be completed. But some people in the government are just too patient, at least with some developers.

In a city where each square centimetre of land is valuable, we cannot afford the luxury of waiting for years for some projects to be completed

Photo 1 Photo 2

SEPTEMBER 2012

Both Ordos and Macau

urgently need to refocus

their policies on private housing to

give priority to what is most important –

people

A TALE FROM THE DESERT

[email protected]

editorial

EMANUEL GRAÇAEDITOR-IN-CHIEF

typical buyers were Inner Mongolian ex-farmers who made a million by entering the coal mining business or selling their lands to mining compa-nies. These newly minted millionaires bought apartments not to live in but as places to park their wealth.

Ladders and snakesThe authorities in Ordos supported all this. They saw it as a way of bolster-ing the city’s stature and ensuring the region’s wealth remained in Ordos, instead of being invested in Beijing, Shanghai, Hong Kong – or even Ma-cau. The government’s revenue from big land sales to developers was an extra sweetener.

But the property bubble burst last year and real estate prices dropped sharply, in some cases by two-thirds. They have yet to recover fully.

You may ask what this has to do with Macau. As I see it, Ordos and Macau have much in common.

The authorities here, as in Ordos, have been informally sponsoring private real estate projects that cater mainly to the high end of the market and the interests of big developers. This has meant a profusion of upmar-ket residential buildings which are places for investors – from Macau and elsewhere – to park their cash rather than homes for residents.

So far this free-wheeling policy has not done here the kind of dam-age seen in Ordos. This is mainly due to the wave of expatriates coming to Macau, who rent many of the homes bought by investors.

Offi cials often mention Macau’s lack of land as the main reason for its unbal-anced real estate market.

While this obviously plays a signifi cant role in the overall equation, a recent visit to Ordos, in Inner Mongolia, has made me wonder if there is more to it.

Ordos, although surrounded by sandy desert, is quite similar to Macau in several respects. Both cities have become rich in the blink of an eye and both have done so more because of ser-endipity than the vision and planning of their offi cials.

Ordos, dubbed “China’s Dubai”, built its wealth on its abundance of natural resources and now boasts a large number of billionaires and a government fl ush with cash. But what has made Ordos notorious is its status as arguably the mainland’s biggest ghost town.

Its newly-established Kangbashi district was projected to house more than a million people – almost twice as many as live in Macau – but remains mostly vacant. The problem has spread to the entire city, where it is easy to spot empty offi ce towers and empty duplexes.

Even so, construction of more commercial and residential buildings continues, albeit more slowly than before, while the mainland’s economic growth decelerates. Work has stopped at several sites, now occupied only by huge concrete skeletons.

Although many buildings in Ordos remain empty, much of the fl oor space inside belongs to investors. The

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But for most residents here, the story is different. First, this policy has constrained their legitimate aspiration to climb the residential ladder – an aspiration fuelled by economic growth. Now, as real estate prices soar, it is pushing many down the ladder.

To counter this, the govern-ment is undertaking an ambitious public housing programme. But the size and quality of the homes being built is raising eyebrows. And they do not solve the problem of several middle-class families that are too rich to qualify for public housing, even after the government recently reviewed the eligibility criteria, but are too poor to buy a home in the private market.

As in Ordos, all these problems can be traced back to

Wheel clamping

Write a letter to the editorTo submit a letter to the editor e-mail [email protected] with the subject “Letters to the Editor”.

Letters may also be sent by regular mail to this address: Letters to the Editor, Macau Business, Block C, Floor 9, Flat H, Edf. Ind. Nam Fong, No 679 Av. Dr. Francisco Vieira Machado, Macau.

Please include your full name, address and a telephone number for confi rmation purposes. Letters should be 200 words or fewer and all are subject to editing.

NEW PARTNERSThe circulation of Macau Business continues to grow and so does our network of partners. The latest to join are the two newest hotels in town. Your magazine of reference is now available in Conrad and Holiday Inn, at Sands Cotai Central.

I don’t understand why we have to clamp cars. Can anyone explain?

If a car is parked illegally, presumably it is causing a nuisance or obstruction. So, why is a clamped vehicle left for anything up to a week before it is removed? It only compounds the problem!

We do not have enough spaces for all cars in Macau to park legally. So, why are vehicles which overstay on a parking meter also clamped and left for what seems to be the obligatory week before they are removed? It just deprives other road users from access to that space.

If we don’t have the resources to manage the clamping effi ciently, then why bother? If a deterrent for illegal parking is necessary, simply increase the fi ne to a clamping equivalent.

Can anyone explain the rationale? I don’t understand.

Roy Goss

the absence of proper government vision and planning that is in tune with people’s needs. While the lack of land is a constraint here, it does not by itself defi ne the real estate market. The government is the main supplier of land to the private market and so has a big say in what gets built.

Macau is unlikely to end up a ghost town like Ordos. But it risks becoming an uneven city, with homes in the private market available only to the very rich. The rest will have to stick to low quality public housing estates or move to Zhuhai.

Ordos and Macau are exact op-posites in some ways but strikingly alike in others. Both urgently need to refocus their policies on private housing to give priority to what is most important – people.

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Swinging for charityGood causes and sport will meet next month at the Annual Macau Business Charity Golf Tournament and Gala Dinner

The greens are cut and the clubs are polished. In its sixth edition, the Annual Macau Business Charity Golf Tour-nament and Gala Dinner will again assemble Macau’s

business community for a memorable event that combines sport, entertainment and charity.

Next month, senior executives and major businesspeople from around the region will get together for two rounds of golf. Not only will they be swinging the clubs for a good time, but most importantly, they will be gathering to help good causes.

The Annual Macau Business Charity Golf Tournament has proven in past editions that corporate social responsibility is a thriving concept here. It hopes to continue doing so this year.

Participating teams have hailed from every corner of the business community, from banking to construction and engi-neering, and from professional services to gaming.

“As a socially responsible corporation, Macau Coca-Cola would like to express our spirit of love and care as well as our attention to the community by participating in various local charity events, which ultimately contributes to the society,” says Sonia Vong, marketing manager of Macau Coca-Cola Beverage Co. Ltd, one of the participating companies.

Through the tournament, the most recognized charitable event of its kind in the Pearl River Delta, Macau and its corpo-rate patrons show that the region not only stands for casinos and entertainment, but also puts a great focus on social responsibility.

As in previous editions, this year’s HK$200,000 (US$25,785) prize money is to be split between the two teams that fi nish the tournament with the best net and gross scores respectively. Each winning team will have the right to name one or more charities to which they will forward their winnings.

Swinging for charityGood causes and sport will meet next month at the Annual Macau Business Charity Golf Tournament and Gala Dinner

Since the tournament’s debut in 2007, over HK$2.5 mil-lion has been raised and distributed among charities and social projects in Macau, Hong Kong and the mainland.

After a record participation of 32 teams and 96 players in 2011, this year the organizers are aiming even higher.

Rules changeThis year, there are a few changes to the tournament.

Unlike previous editions, the two rounds of play will be held over a three-day span to create a regular tournament feel for the event, instead of having a week separating both “turf challenges”. In addition, the prize ceremony and the charity gala will take place less than one week after the end of the tournament.

The organisers have also decided to only allow profession-al players to join in, if they team up with a Special Olympics athlete, who has to be counted into the score with nine shots. Furthermore, an entire Special Olympics team will compete in this year’s tournament – sponsorships are welcome.

This year’s tournament will include the “mulligan rule”.In golf, a mulligan is an extra stroke that is replayed from

the spot of the previous stroke after an errant shot, and not counted on the scorecard. The result, as the hole is played and scored, is as if the errant shot had never been made.

For instance, if a ball is played into some bushes, the player can retake the shot from the previous position using a mulligan.

Mulligans speed up play by reducing the time spent searching for lost balls, and reduce frustration, increasing en-joyment of the game, as a player can “shake off” a bad shot more easily.

Inbox14

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Each team is allowed to use three mulligans, which are available for sale, with proceeds going to charity. The mulli-gans start at HK$1,000 for the fi rst, HK$1,500 for the second, and HK$2,000 for the third mulligan.

The fi rst round of the tournament will be held at Caesars Golf Macau, on October 26. The second round will be played at the Macau Golf & Country Club two days later, on October 28.

Threesome Texas Scramble has proven to be an effi cient playing format throughout past tournaments. It will again be applied together with a double Peoria scoring system, which enables game veterans and newcomers to compete on a more even ground.

The friendly competitive spirit of the tournament will be emphasized with special challenges and side events in a re-laxed atmosphere, highlighting the charitable character of the competition.

The Macau Business Gala Dinner, on November 2, will close the charity outing in the splendid ambience of the Westin Resort’s Pool Loggia, staging the prize ceremony of the golf tournament. With an extraordinary assortment of culinary specialities, and the fi nest wines and cigars, this is an evening you don’t want to miss.

One of the highlights will be the special charity auction of exceptional memorabilia from the world of sports, entertainment and music, including rare collectables of sport heroes such as Mu-hammad Ali, and music legends like The Beatles, among others.

Join us in celebrating corporate social responsibility. To fi nd out more please email [email protected]. Addi-tional information is available at www.macau-event.com.

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bizintelligenceonline.com macaubusinessdaily.com

goldfi shmacau.com

AN EXPANDING FIELD

YEAR NUMBER OF TEAMS

20072008200920102011

1111192832

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GDP POSTS SHARP GROWTH SLOWDOWN

MINIMUM WAGESTUDY BEGINSThe study on a statutory minimum wage for all cleaning and security staff started last month. This comes almost one and a half years after the Standing Committee for the Coordination of Social Affairs agreed to commission the research to University of Macau as part of its on-going discussions on the establishment of a statutory minimum wage for Macau. At present the city only has a minimum wage for employees of cleaning and security companies contracted by the government.

LONG HOURSAT THE OFFICEDo you feel you are working more? It is likely that it is not just a feeling. According to the latest data unveiled last month by the Satistics and Census Service, the median time per week actually worked by employees here is going up. In the second quarter, the overall median stood at 46.5 hours, up by 0.2 hours over just three months before. By sector, those working the longest were domestic workers, with an overall median of 49.3 hours, the fi gures show.

REVAMP FORFISHERMAN’S WHARFMacau Legend Development Ltd announced a HK5$billion (US$645 million) redevelopment plan for its seven-year-old Macau Fisherman’s Wharf theme park. According to chief executive David Chow Kam Fai, the fi rst phase of the expansion will refurbish the theme park and add two hotels, a yacht club and a dinosaur museum. To help fi nance the redevelopment plan, Macau Legend sold 4 percent of its stock to a subsidiary of SJM Holdings Ltd for HK$480 million.

Macau’s gross domestic product expanded by 7.3 percent in real terms in the second quarter

Macau’s economy posted a signifi cant growth slowdown in the second quarter, fi gures released last month by the Statistics and Census Service show.

The city’s gross domestic product for the second quarter expanded by 7.3 percent year-on-year in real terms, affected by decelerating growth in gaming revenues, total visitor

spending and investment.That compares poorly with the

growth rate for the fi rst three months of the year. Macau’s economy expanded by 18.6 percent year-on-year in real terms in the fi rst quarter.

It was also the slowest growth rate in almost three years.

In the fi rst half of 2012, GDP expanded by 12.6 percent in real terms.

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The vice-president of the Social Security Fund Chan Pou Wan said last month that the government is considering to double the monthly social security contributions both employees and employers have to pay. The move is to ensure the long-term sustainability of the system, Ms Chan said.

She added that the government was also eyeing to modify the proportion of what employees and employers need to pay to the fund from a 1:2 proportion to a 50-50 proportion by 2015. The value of the monthly contributions to Macau’s

INVESTMENT IN HENGQIN REACHES MOP80 BILLIONA total of six projects totalling RMB64 billion (MOP80 billion) of investment from Hong Kong and Macau are being implemented in Hengqin Island or negotiated, according to Niu Jing, director of the administrative committee of the area. These projects include Hengqin-Macau industrial district and the RMB20-billion Hengqin Chime-Long International Ocean Resort. Last year, 11 enterprises from Macau were registered in Hengqin.

PERSONAL DATA CASES ON THE RISEThe Offi ce for Personal Data Protection investigated a total of 135 cases last year, according to the body’s annual report, released last month. Of those, 76 cases were concluded. There were 86 new cases investigated in 2011 – a 36.5-percent rise year-on-year – plus 49 transferred from 2010. The offi ce’s annual report said that in 30.3 percent of the cases concluded, it was found the complainant was correct.

social security system currently stands at MOP15 for workers and MOP30 for employers.

According to a 2010 report by Watson Wyatt Worldwide commissioned by the government, if no changes are made in the amounts each party contributes, the system’s assets will run out in less than 30 years.

The fund offers benefi ciaries elderly allowances, aside from other types of allowances related to disability, unemployment or sickness, for instance.

The goal is to ensure the long-term sustainability of the system

GOV’T CONSIDERING TO DOUBLE SOCIAL SECURITY DUES

SMES RUSH FOR LOANSMacau’s small and medium-sized enterprises received over MOP120 million (US$15 million) in interest-free loans from the government’s SME Aid Scheme in the fi rst half of 2012, our sister publication Business Daily reported. According to the Economic Services Bureau, loans to SMEs through the Aid Scheme almost doubled from the MOP60.9 million approved one year before. In the fi rst six months of 2012, a total of 380 companies were granted loans, up by over 95 percent in comparison with one year before.

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CHUI SAI ON SHOWERS MORE CASH

MICE CONTINUES DROPPINGThe number of meeting, incentive, convention and exhibition (MICE) events held in Macau continued to drop in the second quarter. Information from the Statistics and Census Service shows that a total of 234 MICE events were held from April to June, a year-on-year 10-percent decrease. The total number of participants and attendees went up by 8 percent to 130,000.

The government announces raises in several subsidies and cash allowances

CROSS-BORDER PARK GETS DUTY-FREE AREAThe Zhuhai authorities opened last month a duty-free shopping area for imported products in the Zhuhai part of the struggling Zhuhai-Macau Cross-border Industrial Park. The precinct has over 5,000 square metres. Zhuhai authorities say that if this new venture is successful, duty-free shopping might be allowed elsewhere in the park.

The government will increase a series of subsidies to help people tackle infl ation, Chief Executive Fernando Chui Sai On said last month. He was speaking at the Legislative Assembly where he answered questions raised by legislators on his governance and social issues.

The government will increase the monthly electricity subsidy it gives all households from MOP180 (US$22.5) to MOP200.

On housing policies, Mr Chui plans to raise the income ceiling to be eligible to acquire a government-subsidised residential unit. The ceiling will be raised to MOP19,355 for one-member households, up from MOP17,000, and to MOP38,710 for two-member families, up from MOP34,018.

Mr Chui said the new adjustment would cover 80

percent of households in Macau.The government will also

increase by 8 percent the temporary cash allowance it pays to households waiting for public housing units, Mr Chui said.

He announced the government will continue the cash hand-out policy in 2013.

BNU INCREASES SHARE CAPITALBanco Nacional Ultramarino (BNU) announced last month that its parent company has increased the share capital of BNU from MOP400 million (US$50 million) to MOP2 billion, effective from August 29. The goal is “to support the business expansion of BNU,” the bank said in a press release. BNU is owned by Caixa Geral de Depósitos SA, a banking group controlled by the Portuguese government.

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The number of imported workers in Macau reached a new all-time high in July. According to offi cial data from the police, Macau had a total of 104,938 imported workers by July-end, 60 percent of whom came from the mainland.

That is above the previous peak, recorded in September 2008, when Macau’s imported labour workforce reached a total of 104,281 people.

Hotels and restaurants are the number one employer for imported workers, giving work to 30 percent of the total. Domestic work comes in a distant second place, employing 16 percent of the city’s imported workforce.

NEW ALL-TIME HIGHFOR IMPORTED WORKERSThe imported workforce reached a new peak in July, at close to 105,000

BRANDED PRODUCTS FAIRENDS ON HIGH NOTEThe Guangdong & Macao Branded Products Fair, which took place last month, attracted over 136,000 people. The event recorded around MOP40.5 million (US$5.1 million) in sales, a 5-percent increase over last year’s event. The Macao Trade and Investment Promotion Institute and the Department of Foreign Trade and Economic Cooperation of Guangdong Province jointly organized the event. The next edition is scheduled for early August 2013.

VINCENT PIKET TO HEADE.U.’S MACAU OFFICE

Vincent Piket is going to be the

new head of the Offi ce of the European Union to Hong Kong

and Macau, Portuguese

news agency Lusa reported. The Dutch national replaces Maria Castillo Fernandez, who returned last month to the E.U. headquarters in Brussels. Mr Piket is expected to arrive in Hong Kong by mid-this month. He is currently the head of the delegation of the European Union to Malaysia.

NEW HANGAR FORPRIVATE JETSThe Macau International Airport Co Ltd is calling for bids to design a new hangar for private jets. The purpose of the hangar is to “cope with the expansion of the general aviation facilities”, the tender document says. The facility will be located in the northern part of the airport, next to an existing hangar.

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AUGUST 2012

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RETAIL SALES UPBY 30 PERCENTThe value of retail sales for the second quarter of 2012 totalled MOP12.74 billion (US$1.6 billion), up by 30 percent year-on-year, data from the Statistics and Census Service shows. Retail sales of watches, clocks and jewellery led the pack, amounting to almost one third of the total volume of sales. The value of retail sales for the second quarter decreased 3 percent over the previous three months.

MORE COMPANIESINCORPORATEDA total of 949 new companies were incorporated in the second quarter of 2012, up by 4.2 percent year-on-year. The majority were operating in wholesale and retail (346), business services (190) and construction (125), offi cial data shows. From April to June, the number of companies in dissolution totalled 131, up by 17.0 percent. Over 50 were engaged in wholesale and retail.

WAGES DOWN FORCONSTRUCTION STAFFThe average daily wage of construction workers decreased 1.9 percent quarter-to-quarter to MOP552 (US$69) in the second quarter of 2012, according to data from the Statistics and Census Service. The biggest salary drop was among unskilled workers, which saw their average daily wage go down by 5.5 percent, to MOP352.

Plastic money afi cionadosMacau people just love plastic money. The latest trend is renminbi-denominated

credit cards, whose numbers continue to soar, especially since the introduction of MOP/RMB dual currency credit cards, in 2009

598,000The number of personal credit cards in Macau by June-end,

up by 4 percent from three months before. MOP/RMB dual currency credit cards are simultaneously regarded as MOP and RMB cards,

being offi cially counted as two cards

81.7%The year-on-year increase in the number of reminbi-denominated

personal credit cards. By June-end, the fi gure stood at over 90,000

MOP2.8 billionThe credit card turnover in the second quarter of 2012,

up by 17.8 percent year-on-year

MOP151.2 millionThe cash advance turnover for the second quarter of 2012, accounting for 5.5 percent of the total credit card turnover

MOP9.9 billionThe total credit card limit granted by banks in Macau, as at end-June.

The fi gure was up 5.0 percent from end-March

0.72%The delinquency ratio, (i.e. the ratio of delinquent amounts overdue

for more than three months to credit card receivables) as at end-June

SOURCE: MONETARY AUTHORITY OF MACAU

25

SEPTEMBER 2012

Getting away with it

One of Macau’s peculiarities is how easy it is to get all kinds of freebies, ranging from banquets to trips abroad. Most of these free lunches are provided by the myriad

associations, which are heavily sponsored by the government, mainly through the Macao Foundation.

The Commission of Audit, an autonomous body, recently criticised the foundation for the looseness in how it monitors the way its grants are spent.

It is not the fi rst time the commission has questioned the government’s control over granting public funds to associations. It made similar criticisms in 2004. The commission’s latest scolding shows that the government paid little, if any, attention.

In the eight years since, the Macao Foundation has failed to take adequate steps to change the way it works. The result is that public money has continued to be squandered on ostentatious food-and-drink events and entertainment.

Not all associations are equal in the eyes of the foundation.The foundation and the government hand out the biggest

subsidies to associations regarded as pro-government. These include the Macau Federation of Trade Unions, the General Union of Neighbourhood Associations of Macau and the Macau Women’s General Association.

Also on the list are the General Association of Chinese Students of Macau, the Macau New Chinese Youth Association and the Macau General Volunteers Association, founded by Legislative Assembly member Lee Chong Cheng, who was directly elected to the assembly to represent the Federation of Trade Unions.

School for scandalThe hefty government subsidisation of these associations raises two questions. First, do these associations have a proper set of checks and balances to ensure the money they get is used correctly? Second, why are they so generously backed in the fi rst place? Is it because of the social services they provide or are there other, less obvious motives?

One of the latest news stories questioning the use of subsidies by associations is about the research centre established by Mr Lee’s General Volunteers Association. The Macao Foundation gave the centre a grant of MOP5 million (US$625,000) which was spent on the lavish refurbishment of its headquarters in the Macao Daily News building.

The story raised another question. Since the terms of the newspaper’s lease of the land occupied by its headquarters prohibits it from subletting space in the building, why is it subletting space to the General Volunteers Association?

Government offi cials say they have no problem with the association “borrowing” space there.

The Federation of Trade Unions and the Women’s General Association have used public funds to set up scholarship programmes for members or their children. Is this not just a

crafty way of using public money to attract new members to strengthen their hand before next year’s Legislative Assembly elections?

The New Chinese Youth Association used mainly public funds to put on its “Cross-Strait, Three Regions Graduation Ball”. This event is reminiscent of those eating and drinking bashes that mainland Chinese offi cials put on, using public funds, for their own exclusive enjoyment.

And what more is there to be said about the MOP1 million given to the Macao Daily News, owned by a private company, to subsidise its coverage of last year’s Summer Universiade in Shenzhen?

Wrinkly wangleFor the sake of argument, let us assume that these examples are a worthwhile use of public money. But even then it is hard to see how these grants promote or develop cultural, social, economic, educational, scientifi c, academic or philanthropic activities – the criteria that should apply when the Macao Foundation or the government decides on grants.

There are other questionable practices.A copy of what purported to be a letter of complaint to the

Commission Against Corruption was posted online recently. The letter alleged that a home for the elderly run by one of the city’s most infl uential associations failed to admit as many residents as it was required to, and that the resulting surplus of food went to feed staff of the association.

The letter alleged that some of the computers in the home had been supplied, without a public tender, by a company connected with the leader of the association that ran the home.

It alleged that staff had been asked to help misspend government subsidies. And it alleged that employees whose salaries were subsidised by the government had been given work unrelated to the tasks they were paid to do.

The allegations in the letter are unproven. But one thing is sure: there is insuffi cient supervision of how associations spend the money the government gives them.

No leader of an association has ever been investigated for misusing a subsidy, let alone punished. In the apparent absence of action to deter misuse, the scope for misuse has widened.

To put a stop to the misspending of government subsidies, the Commission of Audit and the Commission against Corruption must investigate publicly funded associations – especially the big pro-government associations – to see if they are putting the money they get to good use. If any wrongdoing is detected, the wrongdoers must suffer the consequences.

If the government and the pro-government associations try to protect those that misuse public funds, the people might well punish them heavily. Popular trust in government offi cials and the popular vote for pro-government associations in the Legislative Assembly elections would both probably plunge.

BILL KWOK-PING CHOU ASSOCIATE PROFESSOR OF POLITICAL SCIENCE, UNIVERSITY OF MACAU

THE GOVERNMENT MUST SUPERVISE THE USE OF PUBLIC MONEY GIVEN TO ASSOCIATIONS MORE CLOSELY

26

SEPTEMBER 2012

Competitive tax rates: check. Business-friendly government: check. International companies

with a foothold here: work in progress. The head of corporate banking at the Macau branch of HSBC, Francis So, says Macau is an attractive place for in-ternational companies to set up shop but it remains undiscovered.

Mr So says Macau compares well to Hong Kong. “We have got a much more attractive tax rate and rents are very rea-sonable here,” he says.

Hong Kong has a fl at corporate tax rate of 16.5 percent on assessable profi ts. In the mainland, the standard rate is 25 percent, although it is lower for qualifi ed enterprises in industries encouraged by the central government.

Macau is much more appealing. The threshold for liability for corporate tax is MOP200,000 (US$25,000). Profi t be-tween MOP200,000 and MOP300,000

BY EMANUEL GRAÇA

Secret attractionHSBC Macau’s head of corporate banking says Macau is an attractive base for international business but it remains off the radar

is taxed at 9 percent and anything more than MOP300,000 is taxed at a rate of 12 percent.

Profi ts made by approved offshore fi nancial and non-fi nancial institutions from selected activities offshore are ex-empt from all forms of tax. The govern-ment also offers incentives for trade and for businesses that want to set up here.

Improvement neededThe problem, Mr So says, is the lack

of awareness of these advantages among bankers and companies.

“Macau has a lot of unique proposi-tions. We should probably market that a lot more,” he says. “The perception has always been Macau is a gaming centre. I think it is really about raising awareness of the attractiveness of Macau’s operat-ing environment for business.”

HSBC Macau recently put on a roadshow to impart knowledge of the

Economy & Finance

city’s potential at HSBC branches in Hong Kong and the mainland. Mr So says there are signs that more compa-nies are fi nding out about the attrac-tions of Macau as a place to do business. “Awareness has increased over the last few years,” he says.

Examples include mainland compa-nies going offshore to save on tax or that are establishing procurement and sup-port offi ces abroad. Mr So says HSBC Macau has helped companies with these profi les on several occasions.

Despite the advantages Macau has on paper, improvements in the economy are needed to make the city more attrac-tive. Several of HSBC Macau’s inter-national customers complain about dif-fi culty in fi nding and keeping qualifi ed manpower.

Island of opportunity“We have had some customers who de-cided to reduce their presence here, and the primary driving motivation for that was really talent. They were not being able to attract and retain talent,” Mr So says. “It has been a diffi cult experience for managers to address the issue.”

The bank’s international customers frequently complain about the cumber-some and lengthy procedure that com-panies from outside the city must follow to set up shop in Macau. Once here, they grouse about getting to and from the offi ce. “Taxis are extremely hard to ob-tain,” says Mr So.

Even so, he says investment in Hengqin Island, being co-developed by Macau and Guangdong with Beijing’s support, means more international com-panies are due to establish a presence on this side of the Pearl River Delta.

“It is an exciting opportunity,” Mr So says. “Obviously, there is going to be a lot of companies that are going to be looking to develop business on Heng-qin. We are defi nitely exploring some of those opportunities.”

Mr So is guarded about whether HSBC will open a branch on Heng-qin, saying it is something that is being explored.

Deep historyHSBC Macau celebrates four decades in operation this year.

“It is something we are very proud of,” says Mr So. “We have been through all the ups and downs of the Macau economy over the past 40 years.”

He says his bank’s main strengths

27

SEPTEMBER 2012

are trade and international connections. “We have a deep history in this. We are very experienced and very strong. We have an experienced talent pool in this arena,” he says.

Hongkong and Shanghai Banking Corp Ltd, the forerunner of the HSBC Group, was established in 1865 to fi -nance trade between South China, Eu-rope and North America. The group’s global network now offers the gamut of trade services.

The group is the leader in global trade fi nance, with a 9 percent share of the market, according to the results of independent research quoted by Reu-ters. Last year the group facilitated trade worth US$500 billion and in doing so made revenue of US$2.5 billion – a sum it hopes to double in four or fi ve years. The group has its headquarters in London and about 6,900 offi ces in 84 countries.

Mr So says trade accounts for more than 50 percent of HSBC Macau’s busi-ness. Most of its corporate customers are international companies that use the HSBC group in other parts of the world too.

Growing togetherThe bank’s business here is growing, despite the slowing of economic growth, Mr So says.

“Some of our customers have ex-perienced slowdowns over the last few quarters, given the problems in the U.S. and Europe, but the majority are actu-ally experiencing growth,” he says.

The HSBC group has a network of global relationship managers. Mr So says these managers ensure that the bank gives international customers serv-ice that is coordinated worldwide. Not many Macau companies need such serv-ice, but Mr So says it is useful for global companies that do business here.

Mr So says the banking business

in Macau continues to expand at a double-digit rate. Monetary Author-ity of Macau data shows that the banks here had combined operating profi ts of MOP2.76 billion in the fi rst half of this year, 27.1 percent more than a year before. It was the industry’s best fi rst half ever.

Last year HSBC Macau made a pre-

“We have had some customers who decided to reduce their presence here, and the primary driving motivation for that was talent,” says the head of corporate banking at HSBC Macau, Francis So

tax profi t of MOP246.8 million, 23 per-cent more than the year before. Mr So says HSBC Macau will keep growing this year.

“As trade grows, we will grow,” he says. The value of Macau’s merchandise trade was MOP45.19 billion in the fi rst seven months of this year, 21.5 percent more than a year before.

bizintelligenceonline.com

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oto

: Man

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l Car

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so

28

SEPTEMBER 2012

Real estate reality

The real estate market is one of the most sensitive to changes in the economy and to the mood of buyers. Since the liberalisation of the gaming market, property has been among the most dynamic economic sectors here, with pronounced peaks and troughs.

The log scale used in the fi rst graph fl attens out the oscillations in the real estate market. However, if a linear scale was used it would be diffi cult to show the residential, offi ce and commercial segments together.The residential segment is by far the largest. In the period represented here, it has two extremes. They were reached in the fi rst quarter of 2009, when just 801 sales took place, and in the second quarter of last year, when the number of sales reached 8,255, in anticipation of the introduction of the new special stamp duty on the resale of new homes. Note, however, that the ensuing drop was not as prolonged as that in late 2008 and early 2009.The data for the second quarter of this year shows the housing market is again rising, although the number of homes sold, 5,555, is well below the peak of 8,200 a year before.The latest changes in the commercial property market are also notable.

Despite the quarterly oscillations, the growth index in the second graph suggests a declining trend overall in the number of sales in each segment.Sales of offi ce and commercial premises are below the 2004 fi gures.On the other hand, the average number of home sales in the fi rst half of the period represented is above the average in the second half.

The variations in the number of sales are not refl ected in any sustainable drops in prices. Average prices in all major segments are generally climbing. The steepest rises began in 2009.

GRAPH 1

GRAPH 2

GRAPH 3

Economic Trends by José I. Duarte

GRAPH 1 - Real estate sales

GRAPH 2 - Growth index for real estate sales

GRAPH 3 - Average transaction prices of real estate premises

0

1,000

60

80

100

20

40

10

100

10,000

160

80,000

60,000

40,000

20,000

0

140

120

200920082007200620052004 2010 2011 2012

2004

2004

2005

2005

2006

2006

2007

2007

2008

2008

2009

2009

2010

2010

2011

2011

Commercial

Commercial

Residential - Taipa

Residential

Residential

Residential - Macau

Offi ce

Offi ce

Offi ceResidential - Coloane

NUM

BER

OF D

EALS

(LOG

SCA

LE)

GROW

TH IN

DEX

(BAS

E: 2

004=

100)

MOP

/M2

29

SEPTEMBER 2012

Demographic dynamics

The effects of demographic changes are often understated. However, population dynamics in many ways determine what an economy can achieve.

The population has grown since 2004 at an average rate of about 2.8 percent per year. This pace would double the population in about 25 years. The rate is not any higher because in 2009 the population shrunk slightly.Nonetheless, at the end of June, 106,000 more people were living here than at the end of 2004, an increase in population of more than one-fi fth.

The different types of fl ow of people into Macau or into this world that contribute to population growth here vary in the period represented.Natural growth has been quite low since 2004. Even so, there is an obvious upward trend.Except in two of these years, the number of mainland immigrants with one-way exit permits has always exceeded natural growth. From 2004 to last year, the cumulative number of immigrants with one-way exit permits exceeded the cumulative number of new-borns here by a margin of almost 60 percent.

A more complex picture emerges when we look at the net fl ows of people directly associated with the labour market, which are more sensitive to policy changes and have been the main driver of population growth in recent years.We see considerable rises up to 2007, followed by a steep slowdown the next year. In 2009, the number of non-resident workers actually fell by more than 17,000.The unsustainability of the restrictions on imported labour that caused the drop in 2009 is demonstrated by the rebound last year, and the marked rise in the number of imported workers that continued in the fi rst half of this year.Residence authorisations are clearly declining. The net balance in the fi rst half was close to nil.

GRAPH 5 - Population, natural growth and Chinese immigration

GRAPH 6 - Population growth, residence authorisations and non-resident workers

GRAPH 4 - Total population

GRAPH 4

GRAPH 5

GRAPH 6

600,000

10,000

8,000

6,000

4,000

575,000

550,000

525,000

500,000

475,000

450,000

0

2,000

Natural growth

Persons authorised to reside in Macau (net balance)

30,000

20,000

10,000

-10,000

0

-20,000

Chinese immigrants with one-way exit permits

Non-resident workers (net balance)

NUM

BER

OF P

EOPL

ENU

MBE

R OF

PEO

PLE

NUM

BER

OF P

EOPL

E

2004

2004

2005

2005

2005

2006

2006

2006

2007

2007

2007

2008

2008

2008

2009

2009

2009

2010

2010

2010

2011

2011

2011

2012H2

2012H1

30

SEPTEMBER 2012

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)

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

Employed population

Labour force participation

Non-resident workers (end-balance)

MOP 81.9MOP 72.0

-- --

MOP 172.1MOP 314.4MOP 134.5

6.0%

29.1 20.726.2 18.0

27.722.743.2

2.5

41.5 44.9 29.7

--

5.15.59.35.3

-52.4

4.95.54.5

20.622.7

6.111.9

8.8-2.0

-100

5.26.44.1

15.69.3

18.6 20.3 41.1

--

0.2 41.2

--

15.3 22.3

--

16.07.3

-- --

13.618.6

--0.1

Economic output

Money and prices

External merchandise trade

Public accounts

Utility consumption

Transport and communications

Employment

2011

2011-end

2011

2011

2011

2011-end

Oct - Dec 2011

Year-on-year change (%)














Latest

Latest

Latest

Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Notes

Notes

Notes

Q2 2012Q2 2012

-- --

Jun 2012 Jun 2012 Jun 2012Jul 2012

Jan-Jul 2012Jan-Jul 2012Jan-Jul 2012

Jan-Jul 2012Jan-Jul 2012Jan-Jul 2012Jan-Jul 2012

Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012

Jul 2012 Jul 2012 Jul 2012 Jul 2012 Jul 2012

MOP 292.1MOP 273.1

MOP 531,723MOP 497,219

MOP 161.9MOP 291.6MOP 272.4

5.8%

MOP 112.7MOP 99.7MOP 49.0MOP 63.7

70.53,857

81.742,908

73.6

206,34995,151

111,1981,353,194

209,223

35.41,959

42.222,766

--

211,90498,786

113,1181,481,329

219,938

MOP 71.6 MOP 61.7MOP 25.6MOP 46.0

MOP 7.0MOP 62.3

- MOP 55.3

MOP 4.6MOP 40.6

- MOP 36.0

2.1%

MOP 10,000

339,80072.9%

94,028

2.0%

MOP 11,000

341,00072.2%

104,938

-0.6

11.1

5.51.5

24.0

-0.7

13.4

3.00.1

20.4

billionbillion

billionbillionbillion


billionbillionbillionbillion

million m3

million kWhmillion Ltonsmillion m3

million m3

million kWhmillion Ltonsmillion m3




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

May-Jul 2012

Apr-Jun 2012

May-Jul 2012

May-Jul 2012

Jul 2012

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

Statistical Digest

31

SEPTEMBER 2012

Communication requires some level of shared understanding about the meaning of words. Transparency requires that those that want and are entitled to know

have access to relevant information. Trust grows when people mean what they say and do what they must.

Ideally, words should be transparent. Information should trustworthy and trust should be deserved.

We know in life things are not – and possibly cannot be – that spotless at all times. We accept as normal that not everything will always be told, that the occasional omission or white lie may fulfi l a useful function. But if the disconnect between words said and their meaning grows, if people cannot rely on the stated aims to underpin decisions, if distrust of institutions becomes ingrained, public life decays.

Public authorities have special responsibilities in these matters. They should, more than anyone else, be precise, transparent and trustworthy in their actions and intentions. They are less so here than is desirable. Public works, a sensitive area in any government anywhere in the world, provides an inexhaustible source of examples.

Not long ago the budget for the underwater tunnel connecting Macau to Hengqin Island was radically increased. We were told this was due to three things.

We were informed by the government that the ground through which the tunnel was being dug was more challenging than expected. Second, we were told that, in any case, the previous budget was just an estimate. But we were reassured that not a single pataca more would be spent from then on.

Questions, questionsSeveral questions come to mind.

Should we conclude that work started without proper feasibility studies, that we were just jumping in and hoping for the best? Might we also conclude that budgets are in essence nearly meaningless documents that for some arcane reason are mentioned when a decision is announced? Also, who is in a position to ensure that there will not be any more cost overruns, and will take responsibility if, in the end, it does not turn out that way?

Then came the cave-in at the construction site. We were told a few more things by the government. The ground was very complex, they said, again. We were told that this was just a minor incident that would not affect the safety and structural integrity of the tunnel. In particular, we were assured that Macau was in charge of the monitoring and quality control and therefore, presumably, they were in safe hands. I wonder what the guys across the border make of this kind of statement.

Finally, we were told that the construction company would

have to take full responsibility for any additional costs and delays.

Is that clear?I would like to know why are we still surprised by the

complexity of the ground in which the tunnel sits.Also, if Macau is monitoring and controlling the work, how is

it that so much uncertainty persisted for so long about whether there were any deaths in the cave-in, or that the contractor disregarded instructions to suspend work as the weather deteriorated just before the incident took place?

Finally, if the contractor bears all the additional costs resulting from the incident, will the promise that there will be no further budget overruns be kept? He pays, not us, right?

And more questionsThen, just as the issue of the tunnel started to fade from the collective memory, public works popped up again in the newspapers. The government had given a job worth millions to a company belonging to a legislator, without any public bidding.

There is nothing outstandingly new in this. I suppose we can easily agree on that. But this is something that goes against the promise of greater transparency and open tenders as a general rule.

The benefi ciary, when asked about the issue, did not make life any easier for offi cials. He said it was normal that his company should get the job, because his company (and presumably he himself) had gained the government’s trust since the handover.

He went on to say he had accepted the job as a political duty. He tried to assure us that he would gain nothing from it.

Then he could not recall how many contracts his company had been granted directly since the handover – in all probability more than a couple, otherwise the fi gure would have come to him easily.

The point here is not the individual case, no matter how many questions it raises. But this case should prompt the government to come forward with some clarifi cations.

First, what are the circumstances in which the government feels it appropriate to assign contracts without open bidding or consultation? Second, what are the selection criteria in those cases? Third, can offi cials make public a list of the contracts granted directly, their benefi ciaries, the amount and the method of selection?

That would help to clear up some of the suspicions the public may hold against the government.

It would reassure people that when the government commits itself to more transparency, the word means what we think it means and the government means what it says. There is no stronger basis for trusting our public institutions.

Questions of trustJOSÉ I. DUARTE ECONOMIST, MACAU BUSINESS SENIOR ANALYST - [email protected]

THERE IS A CONCERNING DISPARITY BETWEEN WHAT THE GOVERNMENT SAYS AND WHAT IT REALLY MEANS

32

SEPTEMBER 2012

Industrial evolutionIndustrial evolutionThe trade unions want the ceiling on severance pay to be scrapped; the government says it is open to changes in the law

BY ALEXANDRA LAGES

Politics

33

SEPTEMBER 2012

As Europe totters into a new era of austerity, governments there are pushing for cuts in severance pay, to make lay-offs cheaper for struggling companies. As Macau basks in

a spell of full employment, the trade unions are demanding the opposite: they want the limits on severance pay to be abolished.

The limits were last raised in December 1997. The labour law was revised in 2008 but the government and the Legislative Assembly, disregarding the economic boom that had taken place in the interval, failed to agree on raising the limits any further.

Four years on, there are signs of change. On the eve of La-bour Day this year, Chief Executive Fernando Chui Sai On con-ceded that the severance pay limits needed to be reviewed to take into account changes in pay and society at large. He said as much again last month in answering questions from members of the Legislative Assembly.

The government says the issue should fi rst be discussed by the Standing Committee for the Coordination of Social Affairs. The committee comprises representatives of the unions, the em-ployers and the government.

At present the law entitles an employee whose contract is terminated without cause, to compensation calculated using a formula which takes into account the employee’s years of serv-ice and monthly pay. An employee is entitled to severance pay amounting to one-third of their current monthly pay for each year of service with their employer, if they have worked for the em-ployer for between one and three years. An employee is entitled to severance pay amounting to two-thirds of their current month-ly pay for each year of service with their employer if they have worked for the employer for more than 10 years.

Twin attackThere are two limits. Any monthly pay above MOP14,000 (US$1,750) does not count, and severance pay cannot amount to more than 12 times the employee’s monthly pay. In effect, the maximum amount of severance pay is MOP168,000. That is how much a laid-off employee paid MOP14,000 or more a month would get if they had 18 or more years of service.

The government has already started revising the 2008 labour law, so the trade unions are taking the opportunity to push offi -cials to change what the law says about severance pay. The Macau Federation of Trade Unions, which represents 70,000 workers, is leading the way. Last month, the federation handed the govern-ment a petition containing close to 16,000 signatures which urges the abolition of the limits on severance pay.

The federation wants to do away with the MOP14,000 cut-off, so the amount of compensation is always based on an employ-ee’s actual monthly pay, however high it is. And it wants to get rid of the ceiling of 12-times monthly pay. The federation prefers any change in the law to be discussed fi rst by the Standing Committee for the Coordination of Social Affairs.

The New Macau Association is also proposing changes to the law on severance pay. It proposes doubling the cut-off to MOP28,000 and the complete removal of the ceiling of 12 times of monthly pay. The association wants the Legislative Assem-bly, where it holds three directly elected seats, to take the lead in amending the law, and submitted a bill containing its proposals in July.

The Macau Federation of Trade Unions and the New Macau Association both consider the present limits unreasonable and in-appropriate for today’s labour market. They think the limits are especially unfair to long-serving employees.

“When the MOP14,000 monthly salary cap was stipulated

34

SEPTEMBER 2012

in 1997, the median wage in Macau was MOP5,221,” says Kwan Tsui Hang, a senior member of the Federation of Trade Unions and a directly elected member of the Legislative Assembly. “At that time less than 10 percent of em-ployees earned more than MOP15,000 monthly income.”

In the second quarter of this year median monthly pay was MOP11,000, double the fi gure in 1997. “Nowadays, nearly 35 percent of the workforce earns more than MOP15,000 per month,” Ms Kwan says.

Age-old problem“Therefore the MOP14,000 monthly sal-ary cap causes over 100,000 employees not to be able to get enough compensa-tion in case they are dismissed, which is impossible to accept.”

Ms Kwan says the limits were im-posed in 1984, when severance pay was fi rst mandated by law, to protect employ-ers. She says there were fears that many companies would be unable to comply with the law if there were no limits. The limits were subsequently raised three times in the pre-handover period, but not once have they been raised by the SAR government, she says.

Ms Kwan says the issue is especially important for older workers who, hav-ing been laid off, have diffi culty fi nding new jobs because they are considered too old. She says that in many cases their severance pay is the only money they have for their retirement because they have no private pension fund. “For these employees, if they are dismissed, no matter that they have served their companies for decades, they can only receive a maximum MOP168,000 com-pensation,” she says. “Can this provision be good enough to protect employees? How contradictory is this provision to the current remarkable economic devel-opment of Macau?”

Strange silenceMonetary Authority of Macau data shows that only about 90,000 work-ers were covered by private pension schemes at the end of last year, of which 10,000 were non-residents. Just 30.6 percent of the private-sector workforce were covered.

Ms Kwan says severance pay is of concern to senior managers as much as their subordinates. After all, senior man-agers are paid more, but the same limits apply to their severance pay.

2,000 2,001to

3,500

3,501to

5,000

5,001to

8,000

8,001to

10,000

10,001to

15,000

15,001to

20,000

≥ 20,000 Unpaid/unknown

MONTHLY EARNINGS FROM EMPLOYMENT, 1997 (MOP)

Perc

enta

ge o

f em

ploy

ed p

opul

atio

n

30%

25%

20%

15%

10%

5%

0%

5.2%

17.4%

24.0%

27.4%

8.4% 8.5%

3.0% 4.4%

1.7%

3,999 4,000to

5,999

6,000to

9,999

10,000to

14,999

15,000to

19,999

20,000to

39,999

40,000to

59,000

≥ 60,000 Unpaid/unknown

MONTHLY EARNINGS FROM EMPLOYMENT,SECOND QUARTER OF 2012 (MOP)

Perc

enta

ge o

f em

ploy

ed p

opul

atio

n

30%

25%

20%

15%

10%

5%

0%

8.2% 8.4%

25.1%22.6%

15.3% 15.6%

2.0% 1.0% 1.8%

“The monthly salary cap causes over 100,000

employees not to be able to get enough compensation,”

says Kwan Tsui Hang

Ng Kuok Cheong says he often hears from employees that have had their severance

pay capped

Politics

So

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: Lab

our

Aff

airs

Bur

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So

urce

: Sta

tistic

s an

d C

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s S

ervi

ce

35

SEPTEMBER 2012

spokesperson gave no precise fi gures.A government-appointed member

of the Legislative Assembly, Gabriel Tong Io Cheng, says people fi nd it hard to understand the maximum payout of MOP168,000, considering how much the economy has grown. He says the proposals made by the Federation of Trade Unions and the New Macau As-sociation are all reasonable. “We must see now what to do to make sure the business sector can afford the change,” says Mr Tong, who is also a University of Macau law scholar.

The employers have yet to make any counter-proposal. Of the three rep-resentatives of employers contacted by Macau Business for this article, only Chan Chak Mo, the chairman of the United Association of Food and Bever-age Merchants of Macau, was willing to talk. Mr Chan, who is also an indirectly elected member of the Legislative As-sembly, says he is satisfi ed with the law as it stands.

Mr Chan sees no need for changes, but he is open to discussion. “The world is changing every day,” he says. “As long it is reasonable and the business sec-tor can bear the extra expenses, I think it’s okay.”

A member of the New Macau Asso-ciation, Ng Kuok Cheong, says he often hears from employees that have worked for the same employer for over two decades, yet have their severance pay capped. “They can do nothing,” he says.

The Labour Affairs Bureau says that, on average, one in fi ve disputes it deals with is related to severance pay. A spokesperson for the bureau told Macau

Business that in the fi rst seven months of this year it had received around 1,250 re-ports about disputes related to severance pay in 15 different industries.

The spokesperson said the bureau was still looking into 180 of these re-ports. In the other cases, most were based on complaints that the bureau con-sidered unfounded, or the employers and employees agreed on a settlement. The

Gabriel Tong Io Cheng says people fi nd it hard to understand the maximum

payout of MOP168,000

Businessman cum legislator

Chan Chak Mo sees no need for changes

36

SEPTEMBER 2012

The countdown starts and the Ken-yan newsreader runs through the top headlines for the evening bul-

letin. In a few minutes he will go on air in Nairobi, broadcasting live for China state television.

It’s 8:00pm in the Kenyan capi-tal and 1:00am in Beijing, when China Central Television (CCTV) hands over to its Nairobi team for “Africa Live”, an hour-long fl agship programme billed as a “new voice” for African news and Sino-African relations.

On a recent night, the spotlight was on Rwanda’s economic expansion and the Somali athletes taking part in the Olympics in London.

“We want to keep a balance,” Pang Xinhua, CCTV’s managing editor who runs a network of correspondents in a dozen African countries, told AFP. “We are not only talking about war, diseases or poverty, we also focus on economic development.”

“Africa Live” is put together by a

Prime slotCCTV: Africa’s true image or China’s strategic vehicle?BY AUDE GENET* IN NAIROBI

team of 60 or so people in Nairobi – about 50 of them Kenyans. It holds a prime time slot in East Africa but is also televised worldwide.

“We opened this bureau in order to be able to tell the real Africa story, the real story of China and the real story of Sino-African relations,” CCTV Af-rica chief Song Jianing says, echoing re-marks by China’s ambassador to Kenya when the switchover started in January.

Nairobi was CCTV’s fi rst regional bureau to produce and broadcast its own hour-long news programme. Its cousin CCTV America soon followed suit.

‘Soft power’ strategyFor its inauguration, CCTV Africa managed to get Kenyan Vice President Kalonzo Musyoka to make a speech. He urged the channel to “present a new im-age of the continent” to break with the trend in which Africa is often shown in the international media as “the continent of endless calamities”.

Chris Alden of the London School of Economics says CCTV Africa is “part of a wider strategy to combat what can be seen as a negative relationship” between China and Africa. “Chinese offi cials start from a diagnosis that too many Africans rely on Western-based news services,” says Mr Alden, who is certain CCTV “will have an impact.”

“Where there is deep unhappiness among local African businesses experi-encing displacement due to competition from Chinese companies, it won’t elimi-nate that, but it could lessen a negative effect,” he says.

“It’s also... for Chinese people to get a better understanding of Africa,” he adds, saying events like last year’s Liby-an confl ict in which 30,000 Chinese had to be evacuated by Beijing “have an im-pact on Chinese investments in Africa.”

For David Bandurski of the China Media Project at Hong Kong University, CCTV Africa is part of China’s bid to beef up its “soft power” strategy, a no-

Ph

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: AF

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37

SEPTEMBER 2012

37

Nairobi was CCTV’s fi rst regional bureau to produce its own hour-long newscast

tion that fi rst emerged with President Hu Jintao in 2007 and aims to win infl uence abroad by appeal and exchanges rather than threats or force. Other pundits point to the media’s role in this.

“China has sent its state media on a global mission to advance its infl u-ence in the world,” says Yu-Shan Wu from the South African Institute of In-ternational Affairs, in a recent paper noting that Beijing’s efforts “previously focused on trade, investment and diplo-matic activities.”

And this mission is not limited to CCTV and its Africa broadcasts. The Chinese TV giant also has programmes in French, Spanish, Arabic and Russian, while the state news agency Xinhua is also expanding worldwide.

CCTV Africa, meanwhile, in-sists that it wants to present the world through an African prism. “The thing I like is that we are telling the story from our perspective,” says Beatrice Mar-shall, a star newsreader at the Kenyan station KTN who was wooed over to CCTV Africa.

*AFP NEWS AGENCY

“When you go to rural Kenya now, you see that everyone can watch TV, listen to radio, people are more edu-cated and we want to talk about that,” she told AFP.

On the delicate issue of whether Be-ijing censors content, Douglas Okwatch, editor on the Saturday “Talk Africa” programme presented by Ms Marshall, says staff have a free hand on their sto-ries “as long as they are objective, bal-anced and not dragging in unnecessary controversies.”

“One thing they [CCTV] are doing right,” analyst Ms Wu told AFP, “is to provide a platform for Africans to speak their point of view.

“On other channels, I don’t fi nd

such platforms to speak on Africa by Africans,” she says, but questioning how CCTV Africa will fare if it emphasises only the upside of Sino-African rela-tions. “Credibility is not covering only the positive stories,” says Ms Wu.

Hong Kong University’s Mr Ban-durski, meanwhile, says CCTV news products “must be subjected to political controls, even if these controls are not necessarily as rigid as those imposed on domestic Chinese media.” But he agrees it will be “very diffi cult to build a cred-ible international media when you do not have suffi cient leeway to produce truly professional coverage.”

CCTV Africa chief Ms Song, whom the staff all call “Madame Song”, insists that Beijing has not rejected any content so far, and hopes soon to add a second hour of programming out of Nairobi.

And at a time when many Western media houses are struggling to survive, the Chinese TV giant has the means to fi nance its expansion projects. CCTV aims to rank among “the biggest media groups in the world”, says Ms Song.

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38

SEPTEMBER 2012

Pint-size Macau is besotted by immensity and this infatuation does immense damage to the city.

This used to be a place of ground-level sights with an elegance and tranquillity that enchanted the eye. Now though, these qualities have been all but swallowed up by monstrous skyscrapers, kitsch of an almost unimaginable order, unspeakable ugliness and the overwhelming subjugation of quality by quantity.

The Venetian Macao is the biggest hotel structure in Asia and in the top-10 of the world’s largest buildings by fl oor area. It is a monument to tawdriness.

The Grand Lisboa, which is among the world’s tallest 200 buildings, also ranks highly among the world’s most immensely ugly skyscrapers. It has been variously described as iconic, fl ashy, gaudy, hideous and a horrendous lump of architecture.

And that is just the city’s visible immensity.Vast tracts of the global economy are in turmoil, even

meltdown, but Macau seems strangely immune to the bogeyman of the international markets. Its gaming revenue is immense, gross in every sense: the casinos raked in more than MOP148 billion (US$18.5 billion) in gross gaming revenue in the fi rst half of this year.

Deserts of unemployment, lacklustre business development or economic overstretch are not to be found here. Nor will you fi nd the rich complaining about the market that has brought them wealth beyond the dreams of avarice.

If numbers are anything to go by, Macau is a front-runner in the immensity stakes.

Take the number of tourists piling into the city: more than

Immensity in a pint potMACAU IS OBSESSED WITH IMMENSITY BUT IS PLAIN GROSS IN EVERY SENSE

28 million last year. Add that to the population and it works out at nearly 1 million people per square kilometre, or roughly one person per square metre of land.

Cacophony of ringtonesNo wonder the city has to build skywards. Close to 1.2 million square metres of fl oor space were completed last year and more than 360,000 square metres of gross fl oor area were under construction by December-end.

Take the number of motor vehicles on the 395 kilometres of roads: more than 91,000 cars, 112,000 motorcycles and 6,600 heavy vehicles by the middle of this year. That is about 530 motor vehicles per kilometre of road, or one vehicle every 1.9 metres.

Take the number of mobile phone subscribers: some 1.5 million in June. Or take gaming: the city had almost 5,500 live gaming tables and more than 17,000 slot machines in the middle of this year.

Oh yes, featherweight Macau can punch well above its weight in the immensity arena.

But there is another side to immensity. The infl ation rate here is immense: more than double Britain’s, three times France’s and more than four times South Korea’s.

Property prices here are immense, and the discourses of derision from the repellent, hegemonic, real estate fat cats to their critics do little to make life tolerable for those seeking simply to own a fl at.

The city has immense environmental problems. On nearly 20 percent of days last year the air quality in the Northern District was offi cially below “good”. More than 300 tonnes of untreated waste was dumped in landfi lls last year. The number of migratory and resident bird species to be seen here fell from 174 in 2009 to 96 last year – an immense drop.

Nasty diseaseThe divide between rich and poor is immense and widening.

Many citizens live in great poverty, particularly the elderly and the infi rm. Half of the employed population earned less than MOP11,000 a month in the second quarter of this year, and heaven only knows how much less the elderly, unemployed, sick and disabled have by way of income.

Poor health is rife. The number of primary healthcare consultations, more than 2.5 million last year, is enormous.

Social inequality and social exclusion are egregious, social solidarity is corroded by the search for profi t at any cost, and development is spurred on by the vision of immense wealth for a few and to hell with the rest.

Macau is an incubator of immensity. Immensity is an infection which contaminates the minds of the rich, and which allows economic Darwinism to stunt the development of a caring, humane society.

With a burgeoning economy, it escapes me why there is so little investment in the development of real quality of life, and so much investment in immensity.

Pint-size Macau has bucketfuls of immensity problems.

With a burgeoning economy, it escapes me why there is so little investment in the development of real quality of life

KEITH MORRISON AUTHOR AND EDUCATIONIST - [email protected]

39

SEPTEMBER 2012

Never Not during the past month

Less than oncea week

Once or twice a week

More than twice a week

≥ 85% < 85%Once a week More than once a week

SLEEP DISTURBANCES USE OF SLEEP-INDUCING MEDICINEHABITUAL SLEEP EFFICIENCY

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

11.8%

92.1%79.7%85.4%

20.3%

2.8% 6.9%0.9% 0.1%

Macau never sleeps but its inhab-itants are not losing any sleep over the round-the-clock buzz.

The latest Macau Business Quality of Life Report says that most people here sleep very well, thank you.

This quarter’s report special topic is about whether people here feel they have healthy sleeping patterns. A team of researchers from the University of St. Joseph conducted a survey of sleeping habits commissioned by Macau Busi-ness and its Chinese-language sister–publication, Business Intelligence. They

A city at easeThe latest Macau Business Quality of Life Report fi nds sleeping well is no problem for most

questioned more than 1,000 people this summer.

The survey found that sleeping badly is not a problem for most people here. The researchers used the Chinese version of the Pittsburgh Sleep Quality Index, a gauge of how well people sleep devel-oped by U.S. experts. The results of their survey show that almost 90 percent of re-spondents felt that they slept soundly.

The survey also found that 85.4 percent of respondents admitted having disturbed sleep once a week, on aver-age – for instance, diffi culty in getting

Survey

to sleep or interrupted sleep. But this fi gure is comparable to the fi gures for people living in other metropolitan ar-eas, the report says. “This does not im-ply, however, the prevalence of insom-nia, as it is a more specifi c type of sleep disorder,” the researchers say.

Four out fi ve respondents had high sleep effi ciency, meaning that their time asleep made up 85 percent or more of their time in bed. This may explain why most had taken no medicine to induce sleep in the preceding month.

In spite of all this, the report says the possibility that social, economic and cultural changes here may affect sleep-ing patterns should be taken into con-sideration, because the amount of night-time activity has greatly increased in the past 10 years. “Certain occupations facilitate the appearance of ‘chronic disorders of sleep-wake schedule’, e.g., nurses, policemen, casino dealers,” the report says.

“This type of disorder constitutes a collection of syndromes when be-haviours of sleep and of wake become desynchronised, which may result in impairments, either cognitive and/or physical.”

Researchers say sleep plays a criti-cal role in mental and physical health. Sleeping badly is associated with de-pression, anxiety and increased suscep-tibility to accidents.

Insuffi cient sleep increases the risk of developing serious ailments. Con-versely, sleeping well may mean better health and so increase productivity.

The report says it would be pertinent to do a study of employees of the gam-ing industry, especially those that work shifts and deal direct with gamblers, to fi nd out about the relationship between how well people feel they sleep and how satisfi ed they are with their jobs.

40

SEPTEMBER 2012

People’s dissatisfaction with their lives has never been greater, the latest Macau Business Quality of Life Report shows

Survey

People’s satisfaction with their own lives and with living in Macau is dropping, according

to the latest Macau Business Quality of Life Report. In the third quarter, the per-sonal wellbeing index, which measures personal satisfaction, was at its lowest level since the quarterly surveys that the report is based on began in 2007.

The index was at 62.5 percent, 2.6 percentage points lower than in the pre-vious quarter. The drop “is large for the personal wellbeing index, which is nor-mally very stable”, the report says.

Researchers from the University of St. Joseph conduct quarterly surveys on behalf of Macau Business and our Chi-nese-language sister-publication, Busi-ness Intelligence, and use the results in compiling the Macau Business Quality of Life Report.

The disenfranchised masses

All the sub-indexes of the personal wellbeing index were lower in the latest report. The most notable drops were in the standard of living sub-index, which fell by 4.4 percentage points from the previous quarter, and the health sub-index, which fell to 61.7 percent from 65.6 percent.

The University of St. Joseph re-searchers say the personal wellbeing index hovers around 65 percent, on aver-age, in non-Western countries.

“Its current value is still within a range considered normal but should be monitored closely, particularly for groups of the population that may be considered to be most at risk of depres-sion,” their report says.

It says that although the survey did not go into the reasons for people’s dis-satisfaction, “the deterioration of the

economic situation may be the major cause behind these results”. Surveys done during other periods of economic uncertainty also registered greater per-sonal dissatisfaction. Other possible reasons are persistently high prices for housing, crime and income inequality.

Economic depressionThe researchers suggest a follow-up study to fi nd out which groups are least satisfi ed with their quality of life and the reasons for their dissatisfaction. “This study would help policymakers devise policies that target directly the concerns and needs of the groups most at risk,” the report says.

The national wellbeing index, which measures people’s satisfaction with life in Macau, was at 61.9 percent in the third quarter report, 2.5 percentage

40

41

SEPTEMBER 2012

NATIONAL WELLBEING INDEX

60.2%

61.9%

1Q2007 2Q2007 3Q2007 4Q2007 4Q2008 1Q2009 2Q2009 3Q2009 4Q2011 1Q2012 2Q2012 3Q2012

57.6%

59.6% 59.9%

57.9%57.4%

61.0%

63.7%

59.1%

61.2%

64.4%66%

64%

62%

60%

58%

56%

54%

52%

NATIONAL WELLBEING INDEX

TERRITORIAL SECURITY

ECONOMIC SITUATION

BUSINESS

SOCIAL CONDITIONS

STATE OF THE ENVIRONMENT

GOVERNMENT

OVERALL

3Q2012

67.5%

59.5%

63.6%

61.5%

58.1%

60.9%

61.9%

2Q2012

69.2%

64.5%

65.4%

64.3%

61.0%

61.9%

64.4%

CHANGE (Percentage points)

-1.7

-5.0

-1.8

-2.8

-2.9

-1.0

-2.5

1Q2007 2Q2007 3Q2007 4Q2007 4Q2008 1Q2009 2Q2009 3Q2009 4Q2011 1Q2012 2Q2012 3Q2012

68%

67%

66%

65%

64%

63%

62%

61%

60%

PERSONAL WELLBEING INDEX

63.4%

63.9%64.4%

63.8%63.3%

63.0%

65.5%

66.7%

63.8%

65.7%

65.1%

62.5%

PERSONAL WELLBEING INDEX

PERSONAL RELATIONSHIPS

SAFETY

HEALTH

STANDARD OF LIVING

COMMUNITY CONNECTEDNESS

FUTURE SECURITY

ACHIEVEMENTS IN LIFE

OVERALL

3Q2012

63.7%

64.6%

61.7%

59.6%

64.9%

63.1%

60.0%

62.5%

2Q2012

67.4%

65.7%

65.6%

64.0%

66.0%

64.3%

63.0%

65.1%

CHANGE (Percentage points)

-3.7

-1.1

-3.9

-4.4

-1.1

-1.2

-3.0

-2.6

PERCEPTIONS PERCEIVEDThis is the fourth and fi nal in the third

series of Macau Business Quality of Life Reports, an undertaking of De Ficção – Multimedia Projects, the publisher of Macau Business. The reports began in 2007. They focus on subjective indicators, or how people perceive life here.

Every quarter, the University of St. Joseph surveys a sample of 1,000 re-spondents for the report. The Quality of Life Reports use the international well-being indexes, universal gauges of how people feel about the quality of their lives. These indexes are the personal wellbeing index and the national wellbeing index.

The personal wellbeing index gauges people’s satisfaction with the quality of their own lives, by measuring how they feel about their standard of living, health, achievements in life, personal relation-ships, safety, community connectedness and future security.

The national wellbeing index gauges people’s satisfaction with the conditions in their country by measuring how they feel about its economic situation, the state of its environment, its social conditions, ter-ritorial security, business and government.

Every quarter the Quality of Life Report also looks at a special topic. Previous topics have included people’s appreciation of the housing market, people’s civic par-ticipation and people’s satisfaction with the development of the gaming industry. This quarter’s report focuses on how well people feel they sleep.

The Macao Foundation and Wynn Macau Ltd sponsor the Macau Business Quality of Life Report.

points lower than in April. The fall was due to drops in all the sub-indexes of the national wellbeing index. The big-gest drop was in the satisfaction with the economic situation sub-index, which fell by 5.0 percentage points.

“Concern with the economic situ-ation is impinging on people’s life sat-isfaction, explaining at least partly the sharp decrease in satisfaction levels,” the report says.

The fall in the national wellbeing reverses a steady climb in the preceding two quarters to its highest level yet. But the index remains relatively high.

The levels of the personal wellbeing index and the national wellbeing index remain similar for the second quarter in a row. This similarity is uncommon. Typically, citywide satisfaction has lagged behind personal satisfaction.

42

SEPTEMBER 2012

Land lockedThe programme of land reclamation announced in 2008 has barely made it off the drawing board

There is much ado about urban planning here, or the lack there-of. Worry persists about how the

government plans to develop the 3.5 square km of reclaimed land it is add-ing to the 29-odd square km that the city now occupies.

Four years after the government an-nounced the reclamation programme, details of what will be built on the new land are still being discussed. And little of the reclamation work has been done. Of the fi ve areas of sea off the penin-sula and Taipa that are meant to be re-claimed, only one is now dry land.

Yet another round of public con-sultation about the programme – the third since 2010 – is scheduled for later

this year before the government gets on with drafting a proper master plan. Of-fi cials say they expect to have the plan ready by next year.

The reclamation programme was announced in 2008. The central gov-ernment approved it in November 2009. Beijing said at the time that develop-ing new urban areas was “an important policy ... to ease Macau’s serious land shortage and to improve the quality of life of the population”.

The fi ve new tracts of land – im-aginatively named Zone A, Zone B and so on – are expected to accommodate up to 120,000 people. Offi cials say they want the development to do as little harm as possible to the environment.

They envisage it having means of trans-port that cause little pollution and sev-eral public parks.

The programme will include a fourth crossing from Macau to Taipa, to the east of the Friendship Bridge. The government has hinted that it prefers a tunnel to another bridge.

Boundaries of erasThere was debate about whether the programme should include moving the Outer Harbour ferry terminal but offi -cials dropped this idea after it caused a public outcry.

The government has asked the Ar-chitects Association of Macau for ideas about how to develop the new land and

Land lockedThe programme of land reclamation announced in 2008 has barely made it off the drawing boardBY SARA FARR

Property

43

SEPTEMBER 2012

THE RECLAMATION AREAS

fi t it in with the rest of the city. The asso-ciation is working on a three-part study.

Macau Business has seen the sec-ond part of the study. It is the work of architects Rui Leão, Adalberto Tenreiro, Francisco Ricarte, Chu Chan Kam, Vic-tor Ao Ieong Iong and Tiago José Pinto.

The study shows that there have been successive waves of reclamation over the years in Macau, and that each time the new land was developed in ac-cordance with the standards of the era. But “old urban patterns no longer cope with contemporary standards of liv-ing,” Mr Leão says.

Even so, the study recommends avoidance of abrupt changes in the ap-pearance of the city where the new land

ZONE AZone A will be to the east of the peninsula, beside the artifi cial island where the Hong Kong-Zhuhai-Macau bridge will land. It will be the biggest zone, covering 138 hectares. It is meant to have roads, public buildings, cultural and tourism facilities, commercial premises, housing and a waterfront promenade. It is expected to house 54,000 people.

ZONEA

ZONE B

ZONE CZONE D

ZONE E1 ZONE E2

Artifi cial island for the

Hong Kong-Zhuhai-

Macau bridge

44

SEPTEMBER 2012

abuts existing land. For example, cer-tain characteristics of the NAPE dis-trict could be used as a model for the development of the adjoining Zone B, Mr Leão says.

Zone A will be one of the most cru-cial, the study suggests. “This is going to be an important area. This is going to be the fi rst thing visitors driving across the [Hong Kong-Zhuhai-Macau] bridge will see. And, also, for residents living in this area it will be important to have greenery,” Mr Leão says.

Paradise ahead – no parkingThe study proposes the cultivation of rooftop gardens on large public build-ings to serve as parks. It proposes el-evated walkways to allow scenic, un-obstructed passage for pedestrians between Zone A and the Areia Preta district. It proposes pedestrian and ve-hicular crossings over the water reser-voir on the peninsula to improve access to and from the east of the city. “All the spaces and facilities need to be acces-sible,” Mr Leão says.

The study also recommends the erection of a landmark skyscraper in Zone B.

Other architects, who are not in-volved in the study, dispute assertions that the city does not need any more land. “It does. Macau is too small and you can’t constantly build up. You have to expand sideways, too,” architect Car-los Marreiros says.

Architects are unanimous in saying that the city needs natural ventilation and light. “There needs to be a balance between open spaces and buildings,” Mr Marreiros says.

He contends that roads six or eight lanes wide will be needed to serve the areas developed on the new land. “Parking is also essential,” he says.

Unlike in the past, demand for parking should be considered at the planning stage, Mr Marreiros says. “Instead of excavating after the land is reclaimed, it should fi rst be thoroughly thought out.”

One option could be the use of automated car parking systems like those in Japan, which allow space to be used more effi ciently. Such systems are available here but are rare.

Mr Marreiros says the waterfront in Zone B could be used for open-air cof-fee shops and restaurants. None of the new land should have gaming facilities, offi ces or too much housing, he says.

ZONE BZone B is to the south of the peninsula and covers 47 hectares. It is the only zone where the land has already been reclaimed, the work having been done even before the reclamation programme was approved. It is divided by the Governador Nobre de Carvalho Bridge. The new complex of courts of law and associated public buildings will be built on it. It already has the Science Centre, inaugurated in 2009. Up to 6,000 people are expected to live there.

ZONES C, D AND EThese zones will lie to the north or northeast of Taipa. Zone C will cover 33 hectares and Zone D 59 hectares. Zone E, near the airport and the Pac On ferry terminal, will cover 73 hectares. These zones are meant principally for commercial and residential use. They are expected to house 60,000 people. Zone E is also meant to have facili-ties for the city’s security forces.

Property

45

SEPTEMBER 2012

STANDING IDLEThe developer of a high-rise building on Guia Hill says it is still waiting for the government to fi nd a solution for the idle construction. The government ordered the developer to stop construction in 2008, after public outcry that the 126-metre high building would block the view of the Guia lighthouse. Both parties have since been in negotiations to fi nd a solution for the building, but with no outcome yet.

NEW CURBS ON PROPERTYMAY BE ON THE WAYA government task force says home prices continue to be “overheated”

RE/MAX CLOSER TO MACAUReal estate company RE/MAX has sold franchise rights for China including the mainland, Hong Kong and Macau, it announced. The new RE/MAX China ownership group is based in Hong Kong and has extensive experience in real estate, banking, fi nancing and franchising, RE/MAX said, without disclosing the name of the franchise rights buyer. The U.S.-based group plans to offi cially open the fi rst RE/MAX offi ces in China in the fi rst quarter of 2013.

PUBLIC HOUSING BOOMBy 2014, one in every four apartments in Macau could be public housing fl ats. On top of the 19,000 public housing units fi rst announced in 2007 and due to be completed this year, the government has plans to roll out an additional 6,000 public housing fl ats from next year. And there are another 3,850 public housing fl ats in the pipeline. Adding these to the existing supply, the government expects to reach the 52,700 public fl ats goal.

The government announced last month that it is considering introducing a new round of measures to curb property speculation. The announcement came after a task force concluded that the residential market is “overheated”.

According to a press release, the task force, established by the government in 2010, is now considering new measures on mortgage, tax, regulation and construction approval.

A fi rst set of cooling measures was announced roughly two years ago. In June last year, a new special stamp duty on re-sale of residential properties was introduced, levying a 20-percent duty on homes resold within a year of their purchase; the duty is reduced to 10 percent if the sale takes place between one and two years after the original purchase.

The measures, especially the stamp duty, have pushed down the number of deals, but not prices. Even so, the task force says the stamp duty policy should be continued, since it has brought “positive results”. The policy is due to be reviewed by mid-2013. P

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SEPTEMBER 2012

Chinese Estates had sold 302 units in La Scala as of June-end, worth some HK$3.8 billion

Hong Kong-based developer Chi-nese Estates Holdings Ltd an-nounced that its unit Moon

Ocean Ltd has fi led an objection to the Macau government regarding its decision to declare the La Scala land sale invalid.

In a fi ling to the Hong Kong Stock Exchange late last month, the developer said it intends to further appeal to the Court of Second Instance against the decision if it doesn’t receive a favourable reply from the government on or before September 14, the last day for lodging such appeal.

The developer had said previously that if the appeal were unsuccessful, it would seek compensation from the gov-ernment for the losses the decision will carry to the group. The company claims it has already invested HK$2.8 billion (US$361 million) in the La Scala luxury residential project.

Chinese Estates had sold 302 units in La Scala as of June-end, worth some HK$3.8 billion. In the case that the gov-ernment decision becomes fi nal, Chinese Estates says it may consider entering into cancellation agreements with purchasers.

Up for a brawlChinese Estates is fi ghting the government’s decision to revoke the La Scala land deal

The government says that if the developer returns the money to buyers, they will be also refunded their stamp duty money.

Last month, the government an-nounced its decision to declare invalid several 2006 acts by then-Chief Execu-tive Edmund Ho Hau Wah confi rming the sale approval of the land where La

Scala is now being built. The land, origi-nally owned by a group of government-controlled private companies, was sold in 2006 to Moon Ocean Ltd.

The government’s move came after the Court of Final Appeal found earlier this year that then-Secretary for Trans-port and Public Works Ao Man Long received HK$20 million from Chinese Estates boss Joseph Lau Luen Hung and BMA Investment chairman Steven Lo Kit-sing in 2005 to ensure they would get the land.

Mr Lau and Mr Lo will both go on trial in Macau starting September 17 on charges of bribery and money launder-ing related with the La Scala deal. Both men have denied any wrongdoing.

Meanwhile, our sister publication Business Daily last month reported that China Star Entertainment Ltd has dropped out of a deal to develop a Nam Van Lake plot linked to the Ao Man Long corruption scandal. The company, which owns and operates hotel-casino Lan Kwai Fong, offi cially said the rea-son is the government still has no urban plan for the area.

Property

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47474747

Source: DSEC

Source: DSEC

(MOP)

(MOP)

2011 2012

AVERAGE TRANSACTION PRICE PER SQUARE METRE OF RESIDENTIAL UNITS BY DISTRICT AS PER STAMP DUTY RECORDS

AVERAGE TRANSACTION PRICE PER SQUARE METRE OF OFFICE UNITS BY MAIN DISTRICT AS PER STAMP DUTY RECORDS

Notes:1. The above information covers building units with stamp duty paid in the reference quarter2. Including residential units that were exempt from the payment of stamp duty~ No fi gure provided/confi dential data

Notes:Only covers offi ce buildings with ten storeys or higher~ No fi gure provided/confi dential data

District

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Macau 23,374 27,078 27,700 36,618 34,011 38,404 40,362 47,767

ZAPE 18,839 32,046 27,393 35,277 23,937 34,674 39,520 39,598

NAPE and Praia Grande Bay reclamation area 27,940 27,802 30,819 37,909 35,200 39,068 41,283 50,784

Downtown Macau 16,305 25,801 ~ 32,506 32,004 37,662 36,006 47,413

Praia Grande and Penha ~ ~ 19,649 31,391 35,023 37,549 44,969 ~

District

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Macau 30,347 33,397 38,261 44,269 36,345 41,519 45,453 55,427

Macau Peninsula 29,517 29,664 37,159 42,296 35,416 39,228 41,266 47,461

Ilha Verde 24,524 27,365 40,402 44,075 37,154 34,363 39,520 53,011

Tamagnini Barbosa 25,886 27,819 26,959 34,159 31,614 30,563 30,276 40,011

Areia Preta and Iao Hon 21,887 22,519 28,581 32,586 31,455 32,246 34,454 40,951

Areia Preta new reclamation zone (NATAP) 34,615 32,314 43,266 51,255 43,308 45,984 47,446 52,276

Móng Há and Reservoir 23,506 26,495 30,706 33,789 32,225 36,135 35,428 39,438

Fai Chi Kei 25,437 24,072 28,762 37,637 35,682 33,401 37,690 45,077

Lamau Docks 28,099 34,437 36,867 35,081 39,655 38,787 46,543 60,767

Horta e Costa and Ouvidor Arriaga 28,603 29,111 32,437 32,889 34,592 38,461 35,943 48,889

Barca 18,849 21,853 25,714 30,370 27,438 27,574 29,132 35,055

Patane and São Paulo 20,990 21,387 23,271 27,901 28,945 29,676 28,885 31,064

Conselheiro Ferreira de Almeida 21,948 23,371 27,004 30,460 29,030 33,714 29,877 39,443

Guia 24,953 27,565 26,267 54,703 38,596 57,699 59,312 56,944

ZAPE 20,705 24,399 28,915 30,228 30,410 31,196 32,537 36,957

NAPE and Praia Grande Bay reclamation area 58,820 51,835 67,891 76,634 60,393 61,126 63,534 76,876

Downtown Macau 18,223 20,742 27,878 27,862 29,745 28,197 30,503 35,733

Barra / Manduco 23,058 27,491 30,973 36,663 30,180 32,085 30,292 39,231

Praia Grande and Penha 32,955 37,988 35,151 34,709 36,672 32,470 37,189 41,408

Taipa 29,583 39,876 33,402 42,457 38,162 45,057 48,107 66,804

Ocean Gardens and Taipa Pequena 31,888 28,837 35,102 45,435 36,629 36,115 41,319 42,510

Downtown Taipa 28,280 41,527 31,750 38,869 36,733 45,243 45,305 57,363

University and Pac On Bay 26,228 22,054 26,991 34,566 37,502 41,668 37,899 41,044

Pac On and Taipa Grande 57,185 56,702 82,688 73,898 68,090 66,910 83,346 103,267

City and Jockey Club 26,654 27,596 27,346 28,948 27,588 35,360 36,659 42,552

Coloane 64,087 64,398 67,484 70,098 61,893 64,063 83,173 78,197

2010

Property | Market Watch

2011 20122010

48

SEPTEMBER 2012

Property | Market Watch

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

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

Source: Centaline

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

Notable residential property transactions - 16/07 to 12/08, 2012

Taipa One Grantai Block 1, H/F, unit A 5,350 40,660,000 7,600

Taipa One Grantai Block 1, L/F, unit B 5,350 34,780,000 6,501

Macau One Central Block 3, M/F, unit B 3,006 25,000,000 8,317

Taipa One Grantai Block 4, H/F, unit O 3,025 23,000,000 7,603

Taipa One Grantai Block 6, M/F, unit X 3,041 20,070,000 6,600

Taipa One Grantai Block 6, M/F, unit W 2,931 19,930,000 6,800

Taipa One Grantai Block 3, L/F, unit I 2,300 16,560,000 7,200

Macau L’Arc H/F, unit J 2,803 15,000,000 5,351

Macau One Central Block 1, M/F, unit E 1,819 13,500,000 7,422

Taipa One Grantai Block 3, H/F, unit L 2,027 13,000,000 6,413

Taipa One Grantai Block 3, H/F, unit K 2,020 12,750,000 6,312

Taipa One Grantai Block 5, M/F, unit U 2,165 11,580,000 5,349

Taipa Kingsville Block 3, H/F, unit H 2,012 11,000,000 5,467

Taipa Nova City Block 7, M/F, unit D 2,500 10,780,000 4,312

Macau The Residencia Block 3, H/F, unit B 1,767 9,950,000 5,631

Taipa Nova City Block 7, L/F, unit D 2,505 9,800,000 3,912

Coloane One Oasis Cotai South Block 2, M/F, unit E 2,066 9,400,000 4,550

Macau The Residencia Block 1, M/F, unit B 1,693 9,300,000 5,493

Macau The Residencia Block 5, H/F, unit A 1,690 8,800,000 5,207

Macau The Residencia Block 4, M/F, unit A 1,693 8,580,000 5,068

Macau Villa De Mer Block 2, H/F, unit B 1,695 8,500,000 5,015

Taipa Nova City Block 13, M/F, unit A 1,731 8,500,000 4,910

Taipa Prince Flower City Block 1, H/F, unit C 1,665 8,280,000 4,973

Taipa The Buckingham M/F, unit E 1,873 8,100,000 4,325

Coloane One Oasis Cotai South Block 9, L/F, unit C 1,818 8,010,000 4,406

Taipa Prince Flower City Block 2, M/F, unit J 1,645 8,000,000 4,863

Taipa Prince Flower City Block 1, H/F, unit D 1,665 7,980,000 4,793

Macau Villa De Mer Block 4, H/F, unit A 1,475 7,480,000 5,071

Macau The Bayview Block 1, M/F, unit E 1,603 7,380,000 4,604

Macau The Bayview Block 2, M/F, unit E 1,603 7,280,000 4,541

Macau The Bayview Block 3, H/F, unit F 1,582 7,270,000 4,595

Taipa Kingsville Block 3, M/F, unit G 1,422 7,200,000 5,063

Macau The Praia Block 3, H/F, unit P 1,426 7,200,000 5,049

Macau Lake View Tower M/F, unit G 1,567 7,200,000 4,595

Macau The Bayview Block 4, H/F, unit A 1,582 7,180,000 4,539

Macau The Praia Block 1, H/F, unit C 1,558 7,000,000 4,493

Macau The Bayview Block 3, H/F, unit B 1,603 7,000,000 4,367

Source: CentalineNotable residential property rentals - 16/07 to 12/08, 2012

Macau One Central Block 7, H/F, unit G 1,181 30,000 25.40

Taipa Pearl On The Lough Block 2, L/F, unit F 2,839 28,000 9.86

Macau One Central Block 1, H/F, unit B 1,359 25,000 18.40

Taipa The Buckingham M/F, unit E 1,873 20,000 10.68

Macau Lake View Tower Block 12, L/F, unit D 1,497 18,000 12.02

Taipa Prince Flower City Block 2, H/F, unit J 1,820 18,000 9.89

Taipa Prince Flower City Block 1, H/F, unit C 1,665 16,000 9.61

Taipa Prince Flower City Block 3, H/F, unit O 1,702 16,000 9.40

Macau Edf. Jardim Nam Ngon M/F, unit F 2,190 16,000 7.31

Taipa The Buckingham M/F, unit C 1,080 15,500 14.35

Taipa The Buckingham M/F, unit A 1,186 14,000 11.80

Taipa Edf. Triumph Unit M/F, unit E 1,100 13,500 12.27

Taipa Kingsville Block 1, M/F, unit C 1,422 13,000 9.14

Taipa Nova City Block 12, M/F, unit A 1,088 12,800 11.76

Macau The Praia Block 1, H/F, unit F 1,571 12,500 7.96

Taipa Jardins do Oceano Block 3, H/F, unit N 1,071 9,000 8.40

Taipa Nova Taipa Block 24, L/F, unit F 823 8,500 10.33

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

49

SEPTEMBER 2012

Building units completed

- Residential

- Commercial and offi ces

- Industrial

- Others

Building units started

- Residential

- Commercial and offi ces

- Industrial

- Others

Macau

- Macau Peninsula

- Taipa

- Coloane

Total units transacted

- Residential

- New building

- Old building

Resident buyers (as percentage of total buyers)

- Commercial

- New building

- Old building


- Offi ces

- New building

- Old building


- Industrial

- Others

Total value of total units transacted (2)

- Residential

- New building

- Old building

- Commercial

- New building

- Old building

- Offi ces

- New building

- Old building

- Industrial

- Others

926 902

18 --6

718 686

22 --

10

-69.4-73.0-45.9

---44.1

148.2162.9

8.9200

88.9

21.632.9

1.46.4

-6.7-4.5

26.8-20.7

-1.7

4.6144.5

-3.1

-2.3

42.910,300.0

27.3

-11.6

-6.7-17.8

34.4

28.141.0

5.484.088.083.6

128.8 -- --

115.7-0.7

-43.8-38.3-49.4-27.2

4.2

-38.0-86.0-30.0

7.7

-33.6-73.2-21.3

3.2

-31.5-59.5

-24.2

-32.1-40.8

-6.010.2

-- --

33.3--------

-3.128.5-91.3

---45.5

366.2440.2

0.0 --

233.3

5.42.42.48.3

Construction - private sector

Average transaction price of residential units (3)

Transactions (1)

2011

2011

2011






Month-on-month change (%)

Latest

Latest

Latest

Notes

Notes

Notes

Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012 Jan-Jun 2012

Jul 2012Jul 2012Jul 2012Jul 2012

Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012

Jan-Jun 2012

Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012

Jan-Jun 2012

Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012

Jan-Jun 2012

Jan-Jun 2012Jan-Jun 2012

Jan-Jun 2012

Jan-Jun 2012 Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012Jan-Jun 2012

1,387 1,099

231 38 19

2,159 2,053

86 3

17

27,62417,1767,7839,393

87.8

2,196269

1,927

86.9

932103829

80.0

1947,126

MOP76.3

MOP58.9 MOP41.4 MOP17.5

MOP9.7 MOP0.9MOP8.7MOP3.0

-- --

MOP0.9MOP3.8

MOP45,027MOP43,569MOP41,501MOP68,208

MOP62,137MOP55,077MOP67,246MOP83,240

11,4377,899 3,250 4,649

90.8

995 32

963

94.1

273 26

247

86.0

89 2,181

MOP42.8

MOP31.7MOP20.7MOP11.0

MOP6.5 -- --

MOP1.2-- --

MOP0.5 MOP3.0

billion

billionbillionbillionbillionbillionbillionbillion

billionbillion

/m2

/m2

/m2

/m2

/m2

/m2

/m2

/m2

billion


billion

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

(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

percentage points

percentage points

percentage points

Property S tatistics

SEPTEMBER 2012

mbreport HIGHER EDUCATION

DEGREES OF SUCCESSThe tertiary education system will havemore students and more programmes in the new academic year

The new academic year begins this month, and a record number of students are expected to enrol in a

range of tertiary education programmes that is wider than ever before. Consid-ering what they have to gain, it is little wonder that every year applicants for de-gree programmes overwhelm the city’s

top institutions of higher education.The Statistics and Census Service

provides no data on the average earn-ings of employees with a degree. But what data available indicates is that a de-gree paves the way to better pay. Gradu-ates hold two-thirds of the best-paying jobs here.

A survey conducted last year by the Institute for Tourism Studies showed that less than one year after graduating, the 2009/2010 bachelor degree programme graduates already had a monthly median salary 20 percent above average.

The Institute for Tourism Studies, which turns out workers for the hospital-

BY LUCIANA LEITÃO

51

SEPTEMBER 2012

INSTITUTIONS OF HIGHER EDUCATION IN MACAU

TERTIARY EDUCATION STUDENTS ENROLLED

1990/1991 1995/1996 2000/2001 2005/2006 2010/2011

30,000

25,000

20,000

15,000

10,000

5,000

0

NU

MBE

R O

F ST

UD

ENTS

ACADEMIC YEAR

from the mainland. If public institutions of higher education were not obliged to give priority to residents, the proportion would be higher.

Macau attracts thousands of main-land students every year despite having no world-leading university. The Univer-sity of Macau, the city’s oldest, is only 30 years old.

The University of Macau’s vice-rector for research, Rui Martins, says “it takes time to build a good higher educa-tion institution.”

Mr Martins says economic growth here is so fast that it is diffi cult for uni-versities to keep up. Investment per stu-dent is lower than in other parts of Asia. “In Macau, the cost per student is half of [what it is] in Hong Kong,” he says. Even so, the University of Macau is among the top 200 universities in Asia, he claims.

Emphasis on qualityThe university has more than 8,000 stu-dents, of which around 1,900 are doing master’s degree programmes and about 200 are doctoral students. “This satu-rates completely the campus we now have,” Mr Martins says. This is in spite of expansion since 1999, when the uni-versity had about 3,300 students.

The university is now building a new campus on Hengqin Island which will

cover an area 20 times the size of its present campus. The university is due to begin moving there by year-end so the facilities can be up and running in time for the following academic year. There are however, questions as to whether the schedule can be met after a cave-in at the construction site of an underwater tunnel which will connect Macau to the new campus.

Mr Martins says construction of the campus is on schedule. But the cave-in at the tunnel site may delay the offi cial handover of the campus, scheduled for December 20, he admits. When the campus is handed over to the university, the mainland authorities will turn over jurisdiction to the Macau government.

Mr Martins says the move to Heng-qin will change the university’s ethos. “The emphasis will be on quality,” he says.

The goal is for the university to be among the best in Asia, with a focus on research and development, Mr Martins explains. The new campus will have several residences for students from the mainland and further afi eld, whose numbers are expected to grow as the university builds its reputation.

The new campus will also allow the university to offer new programmes. But one innovation already this year is a programme in international

PUBLIC INSTITUTIONS- University of Macau- Macao Polytechnic Institute- Institute for Tourism Studies- Academy of Public Security Forces

PRIVATE INSTITUTIONS- City University of Macau- University of St Joseph- Kiang Wu Nursing College- Macau University of Science and Technology- Macau Institute of Management- Macau Millennium College

ity industry, had an average of six appli-cants for each of the 425 places available for the new academic year. The Univer-sity of Macau has admitted about 1,500 of the 8,000 applicants for places there.

Mainlanders swell the number of applicants. More than one-quarter of students in tertiary education here are

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integrated resort management leading to a master’s degree.

Of the city’s tertiary education stu-dents, nearly 60 percent are studying for degrees in business administration, tourism, hotel management or gaming.

The University of Macau is also of-fering for the fi rst time this year, pro-grammes leading to doctorates in phi-losophy and religious studies, and in international business law.

The private Macau University of Science and Technology (MUST) will also have new programmes in the new

academic year. The standing vice-rector for academic affairs, Zhang Shuguang, says MUST is offering new programmes leading to a bachelor of arts in foreign language studies, with emphasis on Por-tuguese and Spanish; a bachelor of phar-macy in Chinese medicine; and a bach-elor of hotel management.

Appreciative studentsHe says the university has attracted students from Macau and further afi eld, notably the mainland. “We want to be competitive, creating new cours-

es to develop their skills,” he says.MUST is also launching this year,

a programme leading to a master’s de-gree in charity and philanthropy man-agement. The course will train stu-dents involved in community work or government.

The university has 6,000 students. Mr Zhang says it turned away many ap-plicants for places in the new academic year. He says the university intends to invest only not in expansion, but in re-search and development of Chinese tra-ditional medicine and space technology.

The Institute for Tourism Studies had an average of six applicants for each of the 425 places available for 2012/2013

The University of Macau has more than 8,000 students, of which around 1,900 are doing master’s degree programmes

Macau Business now comes to your inbox with free daily updates from our newsroom

Go now to macaubusiness.com and sign up for our e-newsletter


53

SEPTEMBER 2012

It also aims to offer programmes in ar-eas that the government considers im-portant, including hospitality, creative industries, information technology and foreign languages.

Fit for purposeMUST was criticised two years ago for including in its bachelor of laws programme optional courses such as sketching and “Appreciation of World Movie Masterpieces”.

Mr Zhang says the aim was to pro-vide an interdisciplinary education.

“Any new programme proposal has to be interdisciplinary. It’s a good way to expand the knowledge base for our stu-dents,” he says.

The public perception that MUST is a soft option is wrong, he says.

The Macao Polytechnic Institute had a record 8,100 applicants for places for the new academic year, 7 percent more than a year before. The head of the school’s academic affairs depart-ment, Vivian Lei Ngan Lin, says the number of students from Hong Kong is rising.

The institute will also host a batch of students from Portuguese institu-tions of higher education in fi elds such as management, computer science and translation.

The institute is not offering any new programmes this academic year. Ms Lei says the institution aims for quality, not quantity, in its programmes, and tries to tailor them to meet the city’s needs.

Macao Polytechnic Institute presi-dent Lei Heong Iok is no longer driving for the institution to become a universi-ty. That change would have allowed the

MUST intends to invest only not in expansion, but in R&D of Chinese traditional medicine and space technology

The Macao Polytechnic Institute had a record 8,100 applicants for places for the new academic year

54

SEPTEMBER 2012

TOO MANY COOKS

L.L.

institute to offer its own postgradu-ate programmes. It already runs pro-grammes jointly with universities in the mainland, Hong Kong and elsewhere leading to master’s or doctoral degrees.

Ms Lei says the abandonment of the campaign for university status has noth-ing to do with a report by the Commis-sion Against Corruption last year that highlighted structural and operational problems at the institute. She says in-creases in the number of students at the institute and the number of graduates it turns out are more important than uni-versity status.

New broom The private City University of Macau, formerly the Asia International Open University, has lofty ambitions.

The university was established in September 1992. It changed its name in February last year after businessman Chan Meng Kam acquired it in Septem-ber 2010. Mr Chan is head of Golden Dragon Group Ltd, a member of the Executive Council and a directly elected member of the Legislative Assembly.

The City University of Macau is now being restructured along lines envisaged by Mr Chan. He wants to expand it by putting it on a proper campus. At present the university is in a commercial build-ing in ZAPE. The university’s website says it “plans to build itself, in the next decade, into a medium-sized, fully open and comprehensive university with a high degree of internationalisation”.

At the University of St. Joseph, Pe-ter Stilwell replaced Rúben de Freitas Cabral as rector in May. Mr Stilwell is now reassessing what the university of-fers with a view to improving quality. He has said several programmes may be scrapped. Some scholars are already be-ing laid off.

Mr Stilwell was previously vice-rec-tor of the Catholic University of Portu-gal, one of that country’s most respected private universities. The University of St. Joseph is co-owned by the Catholic University of Portugal and the Catholic diocese of Macau. The University of St. Joseph awards its degrees jointly with the Catholic University of Portugal.

The University of St. Joseph, cur-rently with 1,800 students of which 280 are freshmen, is investing in a new cam-pus in Ilha Verde. Construction started in 2009 and was due to have been fi n-ished by last year, but it has been plagued by delays.

The Tertiary Education Services Of-fi ce is considering applications for

two new private institutions of higher education. If both schools are approved, Macau will boast 12 higher education institutions – a number that some in the education industry think is excessive for a city with a population of less than 600,000 people.

“There are too many higher educa-tion institutions,” says University of Macau vice-rector for research Rui Martins.

He says the provision of tertiary edu-cation should be re-thought carefully. The standing vice-rector for academic affairs at the Macau University of Sci-ence and Technology, Zhang Shuguang, says a strategy is needed for the tertiary education system.

The city has four public institutions of higher education. Its six private insti-tutions rely to a greater or lesser extent on government grants.

The number of institutions of higher education means most high school leavers easily get a place. Some ana-lysts say it means many students get a sub-standard education which does not meet the needs of the market. Of the city’s workforce, 27.1 percent have a degree.

Political commentator Larry So Man Yum argues that the focus should be on ensuring the programmes offered are up to international standards rather than on increasing the number of universities.

“We are wasting our resources,”

says Mr So, who is also an academic at the Macao Polytechnic Institute.

He says ensuring programmes are up to international standards would assure employers of the quality of graduates. It would also make it easier for graduates here to further their stud-ies abroad.

A world outsideMr So says the variety of programmes offered should be re-thought to promote the diversifi cation of the economy into fi elds such as the meetings, incentives, conventions and exhibitions industry.

He would also like to see more pro-grammes in the fi eld of social services so the city can cope with the pressures created by its rapid development. “We are really in need of social workers, psy-chologists, psychiatrists, therapists,” he says.

Teresa Vong Sou Kuan, who heads University of Macau’s Educational Re-search Centre, says internationalisation is the key to the future for tertiary edu-cation. Ms Vong says any new university here should suit its programmes to the needs not just of Macau but of the world beyond its borders.

Ms Vong says the Macau tertiary education system is a laggard in the fi eld of medicine. The degrees it offers are for nursing or Chinese traditional medicine. But she doubts if the two would-be insti-tutions of higher education would invest in costly programmes such as such as medical programmes.


55

SEPTEMBER 2012

More fi nancial support and au-tonomy for institutions will be the two main results of

amendments to the law on higher edu-cation, says the head of the Tertiary Ed-ucation Services Offi ce, Sou Chio Fai.

The city’s tertiary education indus-try is eagerly awaiting the changes.

The current law was enacted in 1991. The government has been pre-paring an amendment bill for several years, but the Legislative Assembly is still waiting for it. It is not on the gov-ernment’s legislative agenda for this year, presented last November.

Mr Sou says the amendments would give institutions of higher education more help with improving their teaching and research. He says changes would provide institutions more freedom to choose what to teach, and establish new systems of evaluation and accreditation.

The University of Macau’s vice-rector for research, Rui Martins, has high expectations.

He says pay at the government-owned University of Macau is linked to pay rates in the civil service, limiting the university’s appeal to top academ-ics. “Salaries in Hong Kong are twice as high, as they have bigger fl exibility,” Mr Martins says.

Academic freedomUniversities eagerly await long-promised changes to the law on higher educationBY LUCIANA LEITÃO

The University of Macau struggles to attract professors qualifi ed to super-vise doctoral programmes. The univer-sity is expected to struggle even more when it moves to its new campus on Hengqin Island as staffi ng needs will go up. Mr Martins predicts that in 10 years from now the university will need double the 500 or so academic staff it currently has.

The standing vice-rector for aca-demic affairs of the Macau University of Science and Technology, Zhang Shu-guang, applauds the intention to give universities more autonomy. But he says the amendments should make it clear that the government supports pub-lic and private institutions of higher ed-ucation alike, and should make it easier for students to go abroad in exchange programmes.

Full-time jobThe head of the academic affairs de-partment of the Macao Polytechnic In-stitute, Vivian Lei Ngan Lin, also wel-comes the drive to increase autonomy for institutions of higher education. Ms Lei says this would allow schools more fl exibility to mould programmes.

The head of the University of Macau’s Educational Research Cen-

tre, Teresa Vong Sou Kuan, says she hopes the amendments will strike a proper balance between university au-tonomy and government supervision. The amendments would entail regu-lar auditing of institutions of higher education.

The Tertiary Education Services Offi ce said in a written reply to ques-tions from Macau Business that after the amendments became law it would ask institutions “to appoint trustworthy and legitimate accreditation agencies to undertake institutional audits for them on a periodical basis”.

Ms Vong is sceptical. The fi ndings of last year’s audits by the government made no apparent difference and were not even released to the public, she says.

José Pereira Coutinho, a directly elected member of the Legislative As-sembly, says the lack of checks on qual-ity by independent third parties is one of the main problems with the terti-ary education system. In particular, he wants closer scrutiny of the qualifi ca-tions of academics.

Mr Coutinho also wants more full-time professors. “There are sev-eral part-time scholars. Teaching loses quality due to the lack of time of the professor,” he says.

Ph

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: Dia

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56

SEPTEMBER 2012

Cotai is due to get its sixth casino this month. Sands China Ltd is to open the second phase of its

Sands Cotai Central casino resort on September 20. The big question is how many live gaming tables the casino will open with. At the end of June the city had 5,498 live gaming tables, two fewer than the limit of 5,500 imposed by the government.

Sands China told Macau Business that the second phase of Sands Cotai Central would have about 200 gaming tables. But it did not say whether these would be new tables or old ones from its other casinos.

The Gaming Inspection and Co-

BY LUCIANA LEITÃO

Strip dragSands China is opening the second phase of Sands Cotai Central with fewer new gaming tables than initially expected

ordination Bureau said it had yet to re-ceive any offi cial application from Sands China for more tables. The bureau said it would “continue to strictly limit the number of gaming tables to 5,500”.

The second phase of Sands Cotai Central contains the fi rst of two hotel towers to be occupied by the Sheraton Macao, with 1,800 rooms. The second hotel tower, with 2,000 rooms, will open early next year. The second phase will also have 38 more shops, restaurants and bars.

Once the Sheraton Macao is open, Sands China will have more than 9,000 rooms across fi ve hotels, 120,000 square metres of meeting and exhibition space,

more than 600 shops and nearly 60 res-taurants, bars and lounges in Cotai – and, of course, four casinos.

Sands China says it has invested more than US$8 billion (MOP64 billion) in Macau so far, some of it in the Sands Macao casino hotel on the peninsula.

It was earlier thought that Sands Co-tai Central could benefi t from a new way of counting poker and mahjong tables dreamed up by the government so the gaming industry could breach the limit on the number of gaming tables without appearing do so.

A government source told our sister-publication, Business Daily, that if a ca-sino had up to 20 poker tables in the same

Gaming

57

SEPTEMBER 2012

area, the regulator would count them as only one table. The source added that the same applied to mahjong tables.

Political stormUnion Gaming Research Macau esti-mated that the new way of counting poker tables alone could give the casinos about 100 extra tables. It said the scheme was likely to benefi t Sands China most, perhaps giving it about 50 extra tables.

But as soon as the new way of counting tables made the news, the gov-ernment made a U-turn. The Gaming Inspection and Coordination Bureau told the Chinese-language press that the plan had never existed – an assertion fl atly contradicted by Business Daily’s sources in the gaming industry.

One source said public disclosure of the new way of counting tables had stirred up a political storm as the gov-ernment here had promised the central government that the number of tables would not exceed 5,500 until next year.

This was yet another setback for Las Vegas Sands Corp, Sands China’s par-ent company. It followed a report in the

Wall Street Journal that regulators in the United States are investigating whether Las Vegas Sands broke U.S. bribery laws in its dealings in the mainland.

The newspaper said these dealings included a US$50 million payment for land for the Adelson Center for US-Chi-na Enterprise in Beijing, a business de-velopment operation that never opened. Also being investigated was sponsorship by Las Vegas Sands of a Chinese bas-ketball team, and the company’s part-nership with Chu Kong Shipping Enter-prises (Group) Co Ltd which operates Sands China’s CotaiJet ferry service, the report said.

Crowded busesA couple of weeks before the April opening of Sands Cotai Central, Sands China said the government was allow-ing it 200 new tables for the fi rst phase. Those 200 tables would have been the last of the gaming industry’s quota of 5,500.

So Sands China executives faced pointed questions about where they would get the tables for the second

phase. Chief operating offi cer David Sisk told Macau Business in March: “Our understanding is that we have an-other 200 new tables that we were essen-tially promised.”

By July, company chairman Shel-don Adelson was not so sure. He admit-ted that there would be some diffi culty in getting all 200 new tables by the time the second phase of Sands Cotai Central opened.

“On September 20, we will not have all of those, but we will be getting them throughout the rest of the year,” Mr Adelson said in conference call. He said Sands China would have to shift tables around among its casinos.

Wherever the second phase of Sands Cotai Central gets its tables, its opening will reinforce Sands China’s dominance in Cotai, especially in mass-market gaming.

Union Gaming Research’s latest mass-market tracker report indicates that from mid-July to mid-August, Sands China’s establishments in Cotai had 69 percent of walk-in visitors, 2 percent-age points more than in the preceding

58

SEPTEMBER 2012

Gaming

period. These establishments had about 55 percent of Cotai’s mass-market tables.

Union Gaming Research gauges overall mass-market customer share throughout the city by counting the number of passengers on casino shuttle buses. By this measure Sands China’s casinos in Cotai had 27.5 percent of the city’s mass-market clientele from mid-July to mid-August, 0.3 percent-age points more than in the preceding period.

Tower powerSands China is the only casino operator with more than one property in Cotai. It has three, and one more is on the way.

Sands China expects to soon begin developing its Parcel 3 site next to the Four Seasons hotel. Sources told Busi-ness Daily last month that the company is proposing to build a replica of the Eif-fel Tower there. Mr Adelson said in July that the company wanted to start con-struction work on Parcel 3 in November.

The gaming operator also expects to build a fourth tower in Sands Cotai Cen-tral, part of which will be occupied by a

hotel run by the St Regis chain. No date has been set for breaking ground for the US$450 million project.

Company earnings reports for the fi rst half of this year indicate that Co-tai is leading growth in the gaming in-dustry. Growth in fi rst-half revenue was faster for casino operators with a pres-ence in Cotai than for those restricted to the peninsula or Taipa.

Star performer Galaxy Entertain-ment Group Ltd’s fi rst-half revenue was HK$28.3 billion, double what it was a year before, and its net profi t increased ninefold to HK$3.4 billion, beating mar-ket estimates. Its Galaxy Macau casino resort, opened in May last year, was a notable contributor to the company’s per-formance.

Melco Crown Entertainment Ltd’s net revenue rose by 11.3 percent and its net profi t increased by 177 percent to US$204.4 million. Melco Crown oper-ates the City of Dreams casino resort in Cotai. It also owns and operates the Al-tira casino hotel on Taipa.

Sands China’s net revenue increased by 23.7 percent to HK$22.7 billion, but

its net profi t dropped, partly because of a non-cash impairment loss of US$100.8 million on Parcel 7 and Parcel 8 in Co-tai. Sands China had already begun site preparations on these parcels when the government decided not to let the com-pany have them after all.

Expensive giftThe fi rst-half results of gaming compa-nies without casinos in Cotai were not so rosy. MGM China Holdings Ltd was the best performer. Its revenue grew by 11.1 percent to HK$10.8 billion and its net profi t leapt by 37.7 percent.

Wynn Macau Ltd’s revenue rose by 0.6 percent to HK$14.4 billion. Its net profi t jumped, but only because a year before it had booked a HK$831.1 million charge for a donation to the University of Macau Development Foundation.

Market leader SJM Holdings Ltd’s revenue increased by 3.9 percent to HK$39.3 billion and its net profi t rose by 28.0 percent to HK$3.4 billion as the company incurred lower charges than a year before.

Altogether, the industry raked in 19.8

59

SEPTEMBER 2012

percent more gross gaming revenue in the fi rst half of this year than a year before.

Investment bank Citigroup forecasts casino gross gaming revenue in Cotai will grow by 24 percent year-on-year in the second half of 2012. In the opposite direction, gaming revenue on the penin-sula is expected to drop by 2 percent.

It seems just a matter of time until all casino operators have a toehold in Cotai. Wynn Macau leads the race to be next, as the government has given it per-mission for a US$4 billion casino resort in Cotai, which will take four years to build. SJM and MGM China have been waiting since 2007 to hear if their ap-plications for land there have been suc-cessful.

Jim Murren, the chief executive of MGM China’s parent company, MGM Resorts International Inc, expects the government to approve soon MGM Chi-na’s request for land in Cotai. “I would expect we will be on the ground starting this year, and keeping to our timetable to open this resort in late 2015,” Mr Mur-ren told Reuters last month.

Sterne Agee & Leach Equity Re-search also expects the government to give MGM China the nod this year. MGM China has said its HK$20 billion development in Cotai will have around 500 live gaming tables, 2,500 slot ma-chines and 1,600 hotel rooms.

Defensive measureSJM chief executive Ambrose So Shu Fai said this year that the MOP15 billion fi rst phase of his company’s develop-ment in Cotai could be open within two years. Mr So told reporters it would have gaming and non-gaming areas.

With expansion into Cotai on hold, MGM China and SJM have been focus-ing on making their casinos elsewhere more effi cient.

MGM China is investing US$50 million in a new VIP area to maintain its share of the market. “It is one of our defensive measures because while the others open new casinos, their market

share will increase,” MGM China vice-president of fi nance Hubert Wang Zhiqi told reporters last month. “You have to invest the money you make, so that your market share can be maintained or increased.”

The new VIP area will be on level two of the MGM Macau casino hotel and will have over 40 VIP tables taken from the company’s inventory of 427. It is ex-pected to open at the end of this month.

The casino operators that are al-ready present in Cotai are preparing for the day when all gaming concession-aires have a presence there. Sands China is not the only operator expanding.

Galaxy Entertainment is building

the second phase of the Galaxy Macau, which will double the size of the casino resort. It is expected to be ready in the middle of 2015.

Melco Crown is forecast to re-start soon construction of Macao Studio City. The company acquired the controlling stake in the stalled project last year. The government approved in July changes in the contract that grants the developer the land for the project. The contract still fails to mention any casino, but analysts think that gaming will somehow fi nd its way into Macao Studio City.

Melco Crown says it expects to start work on another hotel tower in the City of Dreams as soon as next year.

Melco Crown says it expects to start work on another hotel tower at City of Dreams as soon as next year

60

SEPTEMBER 2012

BANK OF AMERICA CUTS FORECAST FOR CASINO SECTORBank of America Merrill Lynch has revised downward its full-year forecast for Macau’s gaming industry. The investment bank now expects the city’s casinos to post a gross gaming revenue growth of 11 percent for the whole of 2012, down from the previous estimate of 14.5 percent, it said in an investors note. The downward revision is related to the slower high-stake gambling growth and slower economic recovery in the mainland.

CAPITAL RESEARCH RAISES STAKE IN WYNN MACAUU.S.-based Capital Research & Management Co has just boosted its stake in Wynn Macau Ltd to 5.02 percent from 4.99 percent. The privately owned investment manager bought last month 1.14 million shares in Wynn Macau, at an average price of HK$17.13 apiece, according to a disclosure fi ling to the Hong Kong Stock Exchange quoted by Bloomberg. Capital Research and Management was founded in 1931 and is based in Los Angeles, California.

WADDELL & REED INCREASESMACAU EXPOSURE

U.S. investor Waddell & Reed Inc has increased its exposure to Macau’s gaming industry by buying a signifi cant stake in Galaxy Entertainment Group Ltd.

The Kansas-based mutual fund company bought two-thirds of the nearly 7-percent stake in the gaming operator sold last month by U.K. private equity fi rm Permira, our sister publication Business Daily reported.

Waddell & Reid is already the biggest shareholder in Wynn Resorts Ltd, the parent company of Wynn Macau Ltd, with a 16.4 percent stake. It also owns a 4.6 percent stake in Sands China Ltd.

Galaxy Entertainment confi rmed that Permira agreed to the sale of about 278.8 million shares, representing 6.65 percent in Galaxy Entertainment, through private placement to a small selective group of investors. After the sale, Permira’s stake in Galaxy Entertainment was reduced to 5.95 percent.

The U.S. investor has bought the lion’s share of the 7-percent stake in Galaxy Entertainment sold by Permira

Gaming

NO MORE LEAKSCasinoleaks-Macau.com announced last month that it has shut down, providing no reasons for the decision. “Casinoleaks-Macau.com is shutting down. Thank you for your interest”, its webpage reads. The website that promised to gradually release information on organised crime in Macau’s gaming industry had not been updated since mid-June. Casinoleaks-Macau.com was fi nanced and authorised by a major U.S. trade union, the Washington-headquartered International Union of Operating Engineers.

61

SEPTEMBER 2012JULY 2012

To subscribe, call (853) 28331258 or email [email protected]

ON SALE AT SELECTED NEWSSTANDS AND 7-ELEVEN STORES

www.macaubusinessdaily.com

62

SEPTEMBER 2012

Gaming

BY ALEXANDRA LAGES

Smart playSands China is the latest casino operator to bet on sports sponsorship, partnering with the Macau Golf Open

What do the four biggest annual sports events in Macau have in common? All now have a

casino operator as their main sponsor.The latest company to get into

sponsorship of big sporting events here is Sands China Ltd. The gaming com-pany, through the Venetian Macao, is this year’s title sponsor of the Macau Golf Open.

SJM Holdings Ltd is the sole offi -cial sponsor of the Macau Grand Prix for the second year in a row this year and is again the title sponsor of two of the races. Galaxy Entertainment Group Ltd has sponsored the Macau Interna-tional Marathon since 2004 and the Macau stage of the FIVB Volleyball World Grand Prix since 2005.

Desmond Lam Chee Shiong, as-sociate professor of Marketing at the University of Macau, applauds the increasing engagement of casino op-erators in sports sponsorship. “It helps

build the brand,” he says.But Mr Lam says it is unclear

whether it increases custom for the sponsors. “Such sponsorships raise awareness of the corporate brand but do not necessary lead to greater visita-tion to the properties,” he says. He adds that any effective marketing strategy must be backed up by good products and resorts.

Whatever the return on investment, sports sponsorship is advantageous for casino operators, in particular, and the city, in general. “While some see it as purely a branding or promotion exer-cise, others think it is really a corpo-rate social responsibility initiative,” Mr Lam says.

“Either reason is good for all stake-holders. The event organisers get their sponsorship, the sponsoring companies get some exposure, the community gets to enjoy the events and Macau gets its name out to the world.”

And sports sponsorship also helps moderate the community’s perception of the industry, which the scholar says is still seen in a “bad light”.

Million dollar babyHaving a title sponsor is a game-chang-er for the Macau Golf Open. The tour-nament was fi rst played in 1998. But the 2010 edition was scrapped because it could not attract private-sector support.

The tournament has been renamed the Venetian Macau Open this year. It will be played from October 11 to 14 at the Macau Golf and Country Club on Coloane.

The tournament offers US$750,000 (MOP6 million) in prize money and is part of the Asian Tour. It is organised by the Macau Sports Development Board and the Macau Golf Association.

Sands China is investing US$1 mil-lion in the event. The company is foot-ing half of the total bill and the sports development board will cover the rest.

Sands China’s president and chief executive Edward Tracy tells Macau Business that his company intends to continue sponsoring the tournament.

“We are hoping for a good response for this event this year, so we can do it again next year,” he says.

This is not the fi rst time Sands China has associated itself with impor-tant sports events. It has helped bring to Macau NBA teams, the United States

63

SEPTEMBER 2012

sports sponsorship. But SJM chief ex-ecutive Ambrose So Shu Fai emphasis-es the “great benefi ts” to the economy of hosting big sports events. He high-lights the role the events play in “en-hancing the image of Macau globally and diversifying its tourism offerings”.

Galaxy Entertainment’s vice-president of public relations, Buddy Lam Chi Seng, says large international sports contests help attract specifi c kinds of tourists. Mr Lam says tourna-ments are a good draw for families and young middle-class visitors, which in turn benefi ts the gaming and hospital-ity industries.

Sports Development Board vice-president José Tavares says having a big sponsor is a turning point for the Macau Golf Open. “The Macau Open has been lacking a title sponsor for a long time now. Before that, we were the sole sponsor, and that’s not right,” he says.

Mr Tavares is confi dent that the partnership between the Macau Open and Sands China will last, allowing the tournament to grow. This could mean more prize money and bigger names among the world’s golfers. “I don’t think they will back off. Golf is a good product for them,” he says.

Mr Tracy says Sands China chose to sponsor the Macau Open because golf is a fast-growing sport in the main-land and across Asia. As part of the Asian Tour, the Macau Open will reach as many as 650 million homes in more than 200 countries.

“Sponsorship is the life blood of all professional sports. To have such a very strong brand as the Venetian behind the Macau Open re-sets the event to a cer-tain extent. We look forward to greater heights, better players coming in and a better fi eld,” says the chief executive of the Asian Tour, Mike Kerr.

“Sports sponsorship and, in par-ticular, golf sponsorship can offer so much to a brand. It’s about brand profi l-ing. It’s about hospitality. It’s about the aspiration, because golf is probably the most aspirational sport in the world,” Mr Kerr says.

“Golf in Asia is growing at very, very signifi cant levels, much more so than in traditional golf markets such as the U.S. and Western Europe. That’s set to continue. The foundations of the Asia Tour are very strong. Certainly over the next fi ve or 10 years, there is going to be a very strong growth.”

men’s basketball team and top tennis players, such as Roger Federer. It is the fi rst time it has been a title spon-sor of the city’s big annual sporting competitions.

Mr Tracy says sponsoring this kind of event is important if his company is to play its part as a socially responsible corporation. But he acknowledges that it is also a good marketing tool, helping put the Venetian on the map and im-proving its competitiveness as a leisure destination. “Raising the visibility of Macau and of the Venetian is good for business,” he says.

What’s on?Mr Tracy says the city’s gaming com-panies are on the same page with their sponsorships. He predicts more promi-nent sports events will be sponsored by the casinos.

“If we are going to become a world centre for tourism and leisure travel, we have to present events that raise the standards, by which we are judged against other tourism destinations,” he says.

“When people are thinking about if they should book a meeting in Hong Kong or book a meeting in Macau, one of the reasons they might come here is because of the big events happening around their meeting.”

SJM and Galaxy Entertainment do not disclose how much they put into

Sands China’s president and chief executive Edward Tracy says his company intends to continue sponsoring the tournament

The 2011 champion, Chan Yih-shin

64

SEPTEMBER 2012

Gross gaming revenue

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

42.2 10.714.3

1

-37

-2-1--

-1

-12.60.2

--56.5-4.78.9

16.518.444.639.415.334.332.6

105.932.645.0

-45.228.3-7.4

28.29.4

103.323.543.329.4

109.214.3

7.535.1

5.716.8

-24.1256.3

16.28.3

-71.49.38.3

-2.8 --

225.016.0

3.833.3

--2

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-43.2-23.4-50.0-58.3

17.233.3

5.55.0

12.81

Casino gaming

Market share per casino operator*

Gross revenue from other gaming activities

Gross revenue from casino games

2011

2011

2011

2011






Month-on-month change (%)



Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Aug 2012Jun 2012Jun 2012Jun 2012

Aug 2012Aug 2012Aug 2012Aug 2012Aug 2012Aug 2012

Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012

Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012Apr-Jun 2012

MOP 267.95,302

16,056 34

29%16%16%14%15%10%

MOP297MOP440

MOP6MOP0.0036

MOP362 MOP86

MOP46MOP82

MOP1MOP0.0005

MOP102MOP24

MOP783MOP2,712

MOP196,126MOP48,669

MOP211MOP4,774

MOP114MOP70

MOP11,425MOP190

MOP51MOP281MOP151MOP277

MOP35MOP311

MOP1,309MOP225MOP141

MOP318MOP735

MOP52,175MOP15,553

MOP56MOP1,328

MOP22MOP57

MOP3,285MOP52

MOP4MOP82MOP39MOP69

MOP8MOP182MOP348

MOP54MOP44

26%21%19%12%13%10%

MOP 26.15,498

17,03535

billion

casinos

millionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillion

millionmillionmillionmillionmillionmillion

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millionmillionmillionmillionmillionmillionmillionmillionbillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillion

billion

casinoscasino casino

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

percentage points

percentage points

percentage points

percentage points

percentage points

percentage point

percentage point

percentage pointpercentage point

percentage point

percentage points

Gaming Statistics

65

SEPTEMBER 2012

CASINOS SPENDINGMORE ELECTRICITYMacau’s gaming industry saw its electricity consumption levels rise by 18.5 percent year-on-year in the second quarter of 2012. According to offi cial data, the city’s casinos spent 439 million kWh from April to June, roughly double the amount used by Macau’s households during the same period. The gaming industry was responsible for roughly half of the electricity consumption by the city’s business sector during the second quarter.

MOP64 MILLION PROFITFOR MACAU SLOT IN 2010Macau Slot – Sociedade de Lotarias e Apostas Mútuas de Macau Lda has reported a MOP64.4 million (US$8.1 million) profi t for 2010. The company’s results for 2010 were only published in the Offi cial Gazette last month, around one year after the other casino and non-casino gaming concessionaires did so. Macau Slot holds a de facto monopoly on non-racing sports betting in the territory, including football and basketball.

JOCKEY CLUB EXPECTSDROP IN BETTING VOLUMEThe Macau Jockey Club is expecting to record a drop of at least 10 percent in the amount of bets for the horseracing season that ended last month. The decrease is attributed to an overall trend of falling bets in the global horseracing market. In the fi rst half of 2012, the club’s betting amount reached MOP869 million (US$109 million), down by 24 percent year-on-year, according to data from the Gaming Inspection and Coordination Bureau.

NEPTUNE TO ENLARGE FOOTPRINT The junket investor has announced agreements with three junket operators

Neptune Group Ltd announced last month that it has entered into several memorandums of understanding to enlarge its footprint in Macau, by investing in new junket operations.

The agreements involve the junket promoter of the Guangdong 31 Sky Club at Grand Lisboa, the junket representative of the Guangdong VIP Club at MGM Macau, and the junket promoter of Wynn Guangdong VIP Club at Wynn Macau.

Hong Kong-listed Neptune Group is one of the largest players in the VIP gaming business here, with a reported portfolio of over 10 VIP rooms.

The Guangdong 31 Sky Club generates an average rolling turnover of HK$4.8 billion (US$619 million) per month and has at least 11 gaming tables, according to a Neptune fi ling to the Hong Kong Stock Exchange.

The Guangdong VIP Club at MGM Macau has at least 24 gaming tables, the fi ling states, generating a rolling turnover averaging at approximately HK$15.1 billion per month.

The Wynn Guangdong VIP Club at Wynn includes at least 29 gaming tables, posting an average monthly rolling turnover of HK$9.3 billion, according to the same fi ling.

66

SEPTEMBER 2012

Drowning in debt and hunted by his bookmaker, a Vi-etnamese man dug a cave beneath his kitchen and hid there for two months, showing the desperate lengths

illegal gambling addicts will go to in the communist nation.Apart from a state-run lottery and a few foreigner-only ca-

sinos, betting is banned in Vietnam, but the law is widely fl out-ed and every football World Cup or European Championship prompts a surge in illegal gambling rings, police say. Creative minds have also devised a way of using the offi cial lottery as the basis for an illegal game known as “lo-de”, where punters predict the last two lotto numbers of the standard daily draw.

It was playing lo-de that Nguyen Van Thinh lost 1.3 bil-lion dong (MOP498,000) – a fortune for the 41-year-old con-struction worker, who eventually had to sell his Hanoi house in order to pay his creditors.

“It was really a guerrilla life,” he told AFP of his subter-ranean months, when he survived on food and water brought by his wife.

Mr Thinh’s tale of addiction is far from unique in Vietnam, a country of about 86 million people. Each of its 63 provinces

A gambling problemVietnam gambling addicts driven to extremesBY LE THANG LONG* IN HANOI

has an offi cial lottery – and with it an unoffi cial lo-de game.“Lo-de has ruined hundreds of thousands of families and

is tearing apart the fabric of our society,” says Vo Quang Hung of the Hanoi police’s anti-crime squad, adding that it has re-sulted in cases of suicide and divorce. Despite the scale of the problem, there are no support groups such as Gamblers Anon-ymous for addicts to turn to for help.

Since the government moved to limit access to credit at the start of 2011 to rein in double-digit infl ation, gamblers have found it harder to borrow from the banks to repay their bookmakers. As a result, punters turn to unoffi cial lenders, who often hire thugs to collect valuables or even seize houses from gamblers who have fl ed when they cannot meet their payments.

Driven to the brink of suicideOther indebted gamblers voluntarily turn themselves in to the police, preferring to risk fi nes or even prison terms for illegal betting rather than violence at the hands of their loan sharks or bookmakers.

A lottery vendor in Hanoi prepares to handle a “lo-de” ticketPh

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Gaming

67

SEPTEMBER 2012

“A dozen of my neighbours have fl ed this summer. Some have gone overseas after declaring themselves bankrupt. They can’t come back until all their debts have been settled,” cafe owner Nguyen Thi Thu told AFP.

The 36-year-old, who recognises she is a gambling addict, has run into her own betting-related fi nancial diffi culties.

“I was driven to it by my creditors, my back was against the wall – I was going to kill myself to save my family. But thankfully, God had pity on me,” says Ms Thu, whose in-laws lent her more than MOP960,000 to repay her debts.

Even though high-stakes gambling is not new, the recent economic slowdown, which has pushed tens of thousands of businesses into bankruptcy this year, has not helped matters.

“Gambling has for a long time been embedded in our soci-ety and it has broken many families,” says Nguyen Thi Kim, a sociologist at the University of Social Sciences in Hanoi. “It is growing as life gets more diffi cult. More and more people are tempted by the idea of easy, quick money.”

The rare winners at lo-de can get as much as 70 times what they originally bet. Punters can bet from 1,000 dong to thousands of U.S. dollars. Usually bets are placed with street-side bookmakers who earn commission.

An unstoppable ‘social evil’In dealing with this “social evil” which affects everyone from schoolchildren to retirees, Vietnamese authorities – known for locking drug addicts into forced rehabilitation centres – have taken a fi rm line. The problem is treated exclusively as a law and order issue and thousands of lo-de addicted problem gam-blers are arrested each year.

Police focus their crackdowns primarily on the master-minds behind big lo-de rings not individual punters, but say the scale of the problem means this approach is not going to bear fruit any time soon.

“You can see this kind of gambling going on across Vi-etnam, in every village and every province in the north and south of the country,” says Tran Thanh Lam, a police offi cer in Hanoi. In the absence of offi cial statistics, Mr Lam says he believes the illegal gambling market is worth hundreds of mil-lions of dollars every year.

“Unfortunately, we can’t stop it all,” Hanoi anti-crime squad policeman Mr Hung says. “Lo-de is like a giant casino which covers the whole country, and the results of our battle against this vice are very limited because it is based on the of-fi cial lottery which earns a lot of money for the state.”

The rare winners at lo-de can get as much as 70 times what they originally bet. Punters can bet from 1,000 dong to thousands of U.S. dollars. Usually bets are placed with street-side bookmakers who earn commission

*AFP NEWS AGENCY

we live inside ideas.

www.goldfishmacau.com

+853 2833 [email protected]

68

SEPTEMBER 2012

Singapore’s two casinos have been fi ned more than US$1 mil-lion (MOP8 million) since they

opened in 2010, mostly for violating laws aimed at deterring locals from gambling, offi cial data shows.

The mark was passed after the Marina Bay Sands and Resorts World Sentosa casinos were last month fi ned Sg$357,500 (MOP2.3 million) and Sg$140,000 respectively by Singapore’s Casino Regulatory Authority (CRA).

The casinos were punished for “breaching social safeguard require-ments during the period May 1, 2011 to October 31, 2011”, the regulator said in a press release posted on its website. The violations included allowing Singapore

Fines roll inSingapore casinos fi ned more than US$1 million since opening

citizens and permanent residents entry into the casinos without paying compul-sory Sg$100 entry levies and permitting them to remain in the premises beyond the 24-hour time limit.

Foreigners are exempt from the en-try fee, which was introduced as part of government efforts to address public concern over gaming-related social ills.

The two casinos had previously been punished for similar breaches, with Mari-na Bay Sands and Resorts World Sentosa in February slapped with fi nes totalling Sg$385,000. Resorts World Sentosa was also fi ned Sg$530,000 last year for reim-bursing the entry levies of media repre-sentatives covering an event, as well as for lapses in its camera surveillance system.

With the latest fi nes, the two casinos have had to pay a total of US$1.1 mil-lion in fi nes since their opening in 2010. But the fi nes are unlikely to trouble the two properties, with Marina Bay Sands, owned by Las Vegas Sands Corp, the parent company of Sands China Ltd, racking up US$550.2 million in revenue in the three months ended June 30.

Resorts World Sentosa, owned by Malaysia’s Genting group, reported gaming revenues of around US$450 million in the same quarter.

Singapore welcomed a record 13 million visitors last year, thanks in part to the two casino resort complexes, which also offer hotel, restaurant and convention facilities. AFP NEWS AGENCY

Gaming

69

SEPTEMBER 2012

MANPOWER WARNINGMacau’s casinos don’t have enough manpower and the situation will only get worse next year, as the government increases the cap on the number of live gaming tables, warned last month the head of the Macau Gaming Industry Employees Association, João Bosco Cheang Hong Lok. Mr Cheang also noted that starting November 1, all those below 21 years of age would be banned from working inside the city’s casinos.

Working in the gaming industry pays off – not only does the sector pays above average, but salaries are rising faster than infl ation, the latest data from the Statistics and Census Service shows.

In June, average earnings of full-time employees in the gaming industry stood at MOP17,740 (US$2,218), up by 7.8 percent year-on-year. That clearly beat infl ation – for the 12 months ended June, Macau’s composite consumer price index increased by 6.44 percent.

The composite consumer price index is the city’s gauge for infl ation.

Salaries in the gaming industry

RULES FOR SMOKING AREASIN CASINOS “ALMOST” READYThe regulations on the requirements casinos will have to comply with for establishing smoking areas are “almost” ready, according to the regulator. A smoking ban was implemented in Macau earlier this year, however casinos were exempt until the beginning of next year. When the grace period ends, casinos will be entitled to set up dedicated smoking areas for up to half of the casino fl oor area.

TRIADS “UNDER CONTROL”,SAYS GOVERNMENTThe Secretary for Security, Cheong Kuoc Va, said last month that triad criminal activity in Macau is “under control”. Mr Cheong’s comments came after a series of recent violent events has people worried about security in the gaming industry. In July, the director of the Judiciary Police, Wong Sio Chak, admitted the force lacks teeth to fi ght crime inside the casinos.

SALARY GROWTHBEATS INFLATION

were also above the average in Macau. For the second quarter, the city’s median salary stood at MOP11,000 – the Statistics and Census Service doesn’t provide overall average fi gures.

As of June, a croupier earned MOP15,810, up by 8.6 percent year-on-year.

At the end of the fi rst half of 2012, the gaming sector had 52,800 workers, up by 11.6 percent year-on-year. The fi gure doesn’t include junket promoters and junket associates.

Of those, 23,100 were croupiers, a jump of 11.2 percent in comparison with one year before.

Wages in casinos are above average and also growing faster than prices

70

SEPTEMBER 2012

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71

SEPTEMBER 2012

Highlights from the world’s biggest gaming event

72

SEPTEMBER 2012

Game changerG2E 2012 reaches its highest exhibit hall sales level since 2009

The lacklustre performance of gaming in several inter-national markets has not

hindered Global Gaming Expo (G2E). The premier trade show and conference event for the global gaming entertainment industry is as strong as ever, recording soar-ing exhibit hall space sales.

This year, G2E is scheduled for October 1 to 4. The event, organ-ised by the American Gaming Association and Reed Exhibitions, again takes place at the Sands Expo and Convention Centre, in Las Vegas.

Over 410 companies have already registered for more than 24,000 square metres of exhibit hall space – an increase of more than 4 percent compared with last year’s event. These 2012 sales fig-ures include over 65 international exhibitors with more than 3,900 square metres of exhibit space, according to the organisers.

“This is the first time we’ve seen significant growth year-over-year since 2007, and we are extremely encouraged by the sales numbers and what they mean for

the casino gaming industry,” says Courtney Muller, senior vice presi-dent at Reed Exhibitions.

“Additionally, G2E’s attend-ance numbers are tracking ahead of last year’s event, indicating a strong interest by industry buy-ers to discover new products and services that will contribute to the success of their businesses.”

G2E is annually attended by nearly 26,000 industry profes-sionals from around the world. It is divided into two parts: the conference, spanning four days and covering all aspects of the gaming industry, and the three-day exhibition, where all the latest casino and gambling products are on display.

Design Awards backOne of this year’s highlights is the return of G2E’s Casino Design Awards, after a three-year hiatus. Global Gaming Business maga-zine, publishers of the annual Ca-sino Design magazine, is respon-sible for organizing the awards programme, which aims to honour the best architects, designers and

builders in the casino gaming industry.

G2E 2012 will also feature expanded table game content that includes strategically designated space on the show floor and edu-cational programming designed to meet the specific needs of table games operators.

“We recognize that table games are increasingly important con-tributors to casinos’ revenue streams and therefore we have tailored G2E 2012 to meet the needs of this sector,” says Frank J. Fahrenkopf Jr, president and chief executive of the American Gaming Association.

Matt Wilson, Aristocrat’s vice president of marketing for the Americas, says “G2E is incredibly important for suppliers and opera-tors.” Mr Wilson, who was previ-ously deployed in Macau, explains the event is “a time when we come together to discuss and validate the company’s strategic direction with our business partners.”

He highlights however that the Macau market, where G2E’s sister event G2E Asia is held, is very dif-ferent from the U.S. landscape.

“Asian players want a very different experience than those in the North America. This means as a supplier, the only successful strategy is to invest in generating market-driven insights, through working closely with operators and players in each region.”

73

SEPTEMBER 2012

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SEPTEMBER 2012

With several jurisdictions in the United States pushing to regulate Internet gaming, it is timely that the topic is top of the bill at Glo-

bal Gaming Expo (G2E) 2012.Jim Ryan, co-chief executive of Bwin.party Digital

Entertainment Plc, is the exclusive conference key-note speaker at this year’s conference. He is highly regarded for his knowledge of the Internet gaming industry and his leadership of Bwin.party, the world’s biggest publicly traded online gaming business, head-quartered in Gibraltar and listed on the London Stock Exchange.

Mr Ryan will cover the global online gaming phenomenon, its growth and potential. The speech on October 3 will be open to G2E 2012 conference delegates only.

“We are honoured that Mr Ryan will be serv-ing as the conference keynote speaker,” says Frank Fahrenkopf, president and chief executive of the American Gaming Association, one of the organisers of G2E 2012.

“As efforts to legalise and regulate Internet gam-bling in the United States advance and the global market continues to grow, he is the ideal person to provide a comprehensive overview of this develop-ing sector of the industry. His expertise, experience

Always-on messageOnline gaming executive Jim Ryan will give the exclusive conference keynote speech at next month’s G2E 2012

and success in Internet gambling are matched by few others.”

Offline gaming is another prominent topic at this year’s G2E. In another not-to-be-missed session on Oc-tober 3, “The State of the Industry” will involve some of the biggest movers and shakers in the casino world at the same table with renowned suppliers of gaming equipment.

Among the confirmed participants are Michael Leven, president and chief operating officer of Las Ve-gas Sands Corp, the parent company of Sands China Ltd; Jim Murren, the chairman and chief executive of MGM Resorts International, the controlling sharehold-er of MGM China Holdings Ltd; and Gary Loveman, who heads Caesars Entertainment Corp, which owns Caesars Golf Macau, in Cotai.

The debate will be enriched by the expertise of suppliers such as Patti Hart, the chief executive of International Game Technology; Richard Haddrill, the chief executive of Bally Technologies Inc; Walter Bugno, the president and chief executive of Spielo International; and Brian Gamache, who is at the helm of WMS Industries Inc.

All-star line-upKatty Kay, the presenter of BBC World News America, will speak on October 2 on the United States’ presi-dential race for the White House that culminates in November. Ms Kay will consider the increasing po-larisation of the news media and the effect it has on public opinion and political discourse, from Washing-ton to Main Street. She will also offer insights into the health of the global economy, and discuss how the public’s perception of the economy will play a pivotal role in the election’s outcome.

Later Ms Kay will attend a luncheon sponsored by Global Gaming Women, an initiative by the American Gaming Association to increase the participation of women in the industry. There she will discuss her New York Times bestseller “Womenomics: Write Your Own Rules for Success”, in which Ms Kay and co-author Claire Shipman deal in facts that give a fresh perspective on the mostly hidden power that women hold in the marketplace.

On the last day of G2E 2012, the U.S. Department of the Interior’s acting assistant secretary for Indian affairs Donald “Del” Laverdure speaks on tribal gam-ing. Mr Laverdure’s department determines federal recognition, land-into-trust determination as well as other issues closely watched by the tribal gaming industry.

Jim Ryan

75

SEPTEMBER 2012

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SEPTEMBER 2012

Hundreds of companies will be showcasing their lat-est products at this year’s

Global Gaming Expo (G2E). The Las Vegas-based event is arguably the most successful annual global gaming trade show worldwide and several suppliers deliberately wait to launch their latest innovations during the three-day exhibition.

At G2E 2012, Spielo Interna-tional will present its new core games and also exhibit its full suite of cashless solutions. Among its new content-driven titles for the international casino market to be on display, “Egyptian Gold” is the company’s first progressive link using episodic gaming. As the player progresses through the game during one session, he or she can save and reactivate their achieved status during the next play session.

Gaming Partners International

The real trendsetterFrom tables to utilities to systems, the latest technology will be again on display at G2E

Corp (GPI), on the other hand, will be featuring its new B&G Premium Chips that combine advancements in chip manufacturing with a much broader range of design pos-sibilities.

Another new currency product GPI will be featuring at G2E is its new J2 jeton: a product that “com-bines the aesthetic and security features of European-style jetons with the easy handling of Ameri-can-style chips,” according to the company.

Featuring colour edge spots that allow easy identification when in racks or stacks, the J2 can include a wide range of decal and printing options not available on traditional jetons, including holo-grams, diffraction foils and more.

For TCS John Huxley, 2012 marks the return to G2E after a three-year break.

“We are delighted to be back at G2E for 2012. We are focused on providing world class products that meet our customer require-ments for a global market and this expo provides the perfect show-case for us,” says the group’s chief executive, Cath Burns.

TCS John Huxley is currently streamlining and enhancing its core product range with an em-phasis on innovation. Products such as the Supernova Table Bonus System and the Tablet Roulette all feature heavily in this and will be key products on show at G2E.

G2E is already a regular feature in Crane Payment Solutions’ an-nual event calendar. Amongst the

range of products and technolo-gies it will display there this

year, will be the Latin Ameri-can favourite Ardac Elite by Money Controls, one of the companies under the Crane Payment Solutions business group.

The Ardac Elite comes with full note scanning capabilities and unique last bill imaging technology. The bill validator is avail-able with USB connectivity for rapid downloading of

new software and all prominent gaming

protocols.JCM is show-

casing at G2E its award-winning iVizion bill vali-

dator. The com-pany says “iVizion

has ramped up faster than any of the four gen-

erations of gaming bill validators introduced by JCM over the past 22 years.”

77

SEPTEMBER 2012

78

A strong hand

Aristocrat Leisure Ltd is bring-ing together for Global Gam-ing Expo (G2E) a mosaic of

ways for casino operators to grow their business, from slot games to interactive play to mobile apps.

The Australia-based gaming supplier is dedicating an entire section to its popular Mr Cashman, and celebrating with three new game series.

Mr Cashman is back in “Cash-man Live” debuting in the Viridian Hybrid with the titles “I Heart Dia-monds” and “King 7” – new stepper games with traditional symbols like cherries, bars and 7s.

Mr Cashman is also in the Virid-ian WS cabinet with games like “African Dusk”, “Jailbird”, “Jewel of Enchantress”, and “Magic Eyes”.

Finally, “Cashman Fever” brings the excitement to a new level with two additional games: “African Safari” and “Red Crane”.

Meanwhile, “Wonder 4” has ex-panded with a new collection called “Wonder 4 Special Edition”, includ-ing the popular games “Buffalo”, “Indian Dreaming”, “Wild Patago-nia” and “Golden Zodiac”. Plus, the new “Wonder 4 Deluxe” brings a whole new set of games, including “50 Lions”, “Wicked Winnings II”,

“5 Dragons Deluxe” and “Timber-wolf”.

Aristocrat’s new Legends Series is also premiering in the Viridian WS cabinet. Aristocrat will show multiple titles at G2E, including “5 Dragons” and “5 Dragons De-luxe”; and “Queen of the Nile” and “Queen of the Nile Deluxe”.

Tarzan is back in the new game and story line of “Tarzan & Jane Forbidden Temple”. And Superman brings his most famous friends to the game “Superman – The Movie”.

Aristocrat is also displaying its Oasis 360 system at G2E,

named “Best Player Tracking System” in the 2012 Gold-

man Sachs Survey. Ac-cording to the gaming supplier, Oasis 360 is the most widely installed system in North America, moni-toring devices at more than 285 casinos.

Also to be featured by Aristocrat at G2E, nCompass is the com-

pany’s next generation hardware platform of the Oasis 360 Sentinel. Aristocrat says it “is a leap forward in direct customer communication with advanced media delivery.” It utilizes an interactive media win-dow on the main screen of the slot machine, enabling the casino to target messages to specific players on individual machines.

The experience continues be-yond the casino walls with Aris-tocrat’s nLive play-for-fun virtual casino solution. This is a compre-hensive solution that empowers ca-sinos to take their brand to players online. nLive sites are branded to the casino, so the casino’s custom-ers can extend their experience with the property brand they know.

Aristocrat’s products will be on display in booth 1141.

Aristocrat takes on G2E with a string of new products

79

SEPTEMBER 2012

Driving innovationGet ready for some high-speed fun at Bally’s G2E booth

Bally Technologies Inc is roaring into the 2012 Global Gaming Expo (G2E) packing a lot of power under the hood – new games, systems, and inter-

active solutions all designed to rev up casino opera-tors’ revenue and operating efficiency.

Kurt Gissane, Bally’s Asia-Pacific managing direc-tor, says the gaming supplier will be exhibiting four player-selectable language Chinese/English games at G2E – “China River”, “Crystal Fox”, “Heavenly Em-press” and “Pharaoh’s Dream”.

New this year, Bally will also unveil two more pow-erhouse brands: Nascar and Pawn Stars.

The Nascar progressive video slot features a lineup of who’s who in racing royalty. It is delivered on Bally’s Alpha 2 Pro Series V22/32 cabinet available with both a wide-area progressive top jackpot award and stand-alone versions.

Players select their favorite driver and the game screens change to reflect that driver’s team colors and branding. Players root for their driver in this high-octane experience featuring three bonuses: the

Pit Stop Bonus, Burnout Free Games and the Green Flag Bonus.

Bally is also extending its Nascar lineup to Bally Systems with a new Virtual Racing Nascar applica-tion for the Elite Bonusing Suite. This floor-wide community-bonusing event for iView and iView Dis-play Manager brings the sights, sounds and thrills of Nascar racing to casino floors as players select one of eight drivers. Players who select winning drivers win casino-configurable prizes.

Bally will also be bringing one of the world’s top TV shows, History Channel’s “Pawn Stars”, to casino floors.

Available on the Pro Upright V22/22 Wheel cabi-net, “Pawn Stars” begins when a player chooses their favorite character from the show. Selling and negoti-ating adds excitement in this game highlighted by the Negotiation Bonus, where players choose one of five items to sell and then negotiate with the Pawn Stars for credit awards.

Other premium games in Bally’s G2E lineup in-clude a new double-wheel version of the “Hot Shot” brand, featuring a 42-inch vertical display and twin gigantic wheels, and “Cash Wizard Tiki Magic”, the next game in Bally’s Cash Wizard series.

At G2E 2012, Bally will showcase its full suite of interactive solutions including the Bally Mobile plat-form for concierge casino apps and mobile websites; its open iGaming platform that enables casinos to deliver play-for-free and wager-based poker, table games, video slots and sports betting; and a library of interactive games based on proven casino-gaming content.

The Bally display will be located at booth 1127.

80

SEPTEMBER 2012

Las Vegas-based Konami Gam-ing Inc, a leading provider of slot machines and casino

management systems, has a lot to showcase at this year’s Global Gam-ing Expo (G2E). The company will be presenting an array of new titles with enhanced game features, plus its latest offering on the systems side.

For starters, Konami’s KP3 video platform has extended its game li-brary with proven performing titles and new features.

With real time 3D graphics, “Pride of Egypt” and “Solstice Cel-ebration” have been enhanced with new features to promote a more engaging play.

Konami is also showcasing its “Rock Around the Clock” game on the KP3 video platform. The initial

release titles are “Rock Around the Clock: Tutti Lutti” and “Bebop a Loota”.

This year at G2E, Konami will introduce a line of new progressive products – stand-alone progres-sives and four-level linked progres-sives.

Among the stand-alone progres-sives to be featured, the highlight goes to the new “Rapid Hit Fever” and “Jackpot Streams”, both to be made available on the KP3 platform.

“Rapid Hit Fever” is a clone of Konami’s “QuickStrike” stand-alone progressive. It is a two-level, major and mini, mystery progressive with a progressive payout meter, and also includes an option for operators to designate preferred range settings.

“Jackpot Streams” is a four-level mystery trigger progressive avail-able on KP3.

On the four-level linked progres-sive offering, the star will likely be “Dragon’s Victory”, to be availa-ble on KP3. It is a clone of Konami’s popular progressive game “Pirate’s Loot”.

Also to be featured at the Las Vegas exhibition, the Konami Ca-sino Management System includes a suite of marketing tools with customizable bonusing capabilities, floorwide community bonusing games and precision player track-ing, plus the all-new Konetic Mobile Player Interface and Employee App.

Still on the systems side, Konami will be unveiling at G2E its latest multi-themed, multi-level progressive floorwide bonusing product – Synkros. According to the gaming supplier, this new product is deployable on any manufactur-ers’ games and leverages the ca-sino’s existing media management systems.

Konami’s portfolio of games and system solutions will be available at booth 1154.

World of funFrom its latest games to its new Synkros bonusing product, Konami is bringing it on at G2E

81

SEPTEMBER 2012SEPTEMBER 2012

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82

SEPTEMBER 2012

FutureLogic Inc is presenting its ticket printing and cou-poning solutions to gaming

technology providers and operators at Global Gaming Expo (G2E).

As a premier supplier of super-robust thermal ticket printers to the global gaming industry, Future-Logic says it has shipped more than 1.5 million printers worldwide.

Headquartered in California and with offices across North and South America, Europe, Asia and Australia, FutureLogic is betting promotional couponing is the casino marketing technology of tomorrow. To back this claim, the company will be showcasing its PromoNet intelligent promotional couponing solution at G2E, which

allows casinos to create and run promotions that identify, track and reward customers, both carded and uncarded, in real-time.

By using the data at the game (time of play, amount wagered, etcetera) or data gathered from the player tracking system database, promotions can be developed us-ing PromoNet to attract uncarded players to join the player club, or to enhance the casino experience for existing members.

The PromoNet solution gives operators the ability to analyse and modify promotions for optimum effectiveness and to conduct busi-ness analytics and reports. It can be integrated with “ticket in, ticket out” (TITO) gaming printers and devices such as FutureLogic’s GEN3 Evolu-tion printer, GEN2 Universal printer and TableXchange printer/scanner.

The GEN3 Evolution printer was actually developed specifically with promotional couponing in mind. This printer is the first to offer an optional on-board promotional sys-tem module to create separate and secure processing environments for both TITO and promotional cou-poning. An advanced temperature control technology makes precision grayscale printing a possibility, yielding a high-resolution output for printing eye-catching promo-tional coupons.

The GEN3 Evolution printer is equipped with the industry’s larg-est standard paper capacity of 450 tickets, saving operators up to 30 refills, according to FutureLogic. In addition, a new low paper sensor helps eliminate paper waste by taking ticket stack down to the last ticket.

Also to be on display at G2E, FutureLogic’s TableXchange device connects existing table games to a casino’s existing TITO network, enabling dealers to validate and issue TITO vouchers at table games.

With the ability to buy-in or cash out at table games, the TableX-change printer/scanner provides a bridge between slots and tables, and helps casinos identify valuable crossover players.

FutureLogic’s product range will be on display at booth 4041.

FutureLogic is showing at G2E how casinos can use promotional couponing to boost business

The future of marketing

83

SEPTEMBER 2012

84

SEPTEMBER 2012

U.S.-based Shuffle Master Inc is promising to unveil a handful of new innovations

in each of its five product catego-ries at this year’s Global Gaming Expo (G2E).

In its specialty table games category, Shuffle Master is intro-ducing its newest blackjack side bet, “HouseMoney”, “which is best described as an ordinary side bet with an extraordinary twist,” the company says.

Play starts like a regular game of blackjack: a player places his stand-ard blackjack bet and may opt to place a wager on the House Money side bet; then the player and dealer are each dealt two cards.

The player wins the side bet if their first two cards are a straight, pair, straight flush, or Ace-King suited. Here comes the twist: the player may then choose to add all or some of their side bet winnings to their standard blackjack wager; then play continues like a tradition-al game of blackjack.

The DeckMate 2 shuffler is Shuf-

fle Master’s latest addition to its utility product line. Technological advances have allowed the com-pany to improve upon the perform-ance and security of its predeces-sor, the DeckMate.

These advances include shuf-fler times that are twice as fast as the original DeckMate, on-board optical card recognition to increase security and protect game integrity, and an enhanced shuffling method to reduce wear-and-tear on cards. Plus, the DeckMate 2 also includes an on-board timer allowing opera-tors to call the “clock” and a remote touchscreen interface for card verification.

Shuffle Master is also enlarg-ing its e-Table offering, including a myriad of new features for the i-Table line.

Mississippi Stud will expand the i-Table library. Three Card Poker, Ultimate Texas Hold’em, blackjack and roulette are currently offered. A 3-Card Bonus side bet will be included with Mississippi Stud, to add excitement.

The largest everShuffle Master’s booth at this year’s G2E is the biggest ever from the gaming supplier

i-Table Ultimate Texas Hold’em will see the addition of a progres-sive wager, which will allow con-nectivity to existing felt Ultimate Texas Hold’em and other table’s progressive jackpots.

i-Table will also feature addi-tional language options to make it a truly global product.

Also on display will be a selec-tion of titles from Shuffle Master’s slot range that is available for the Latin American market. The Chi-nese-themed link “Duo Fu Duo Cai” which was launched at G2E Asia in Macau and “The Flintstones” slot machine, which was unveiled at the Australasian Gaming Expo in Syd-ney in late August, will also feature prominently.

Shuffle Master’s booth this year, at number 1241, will be the larg-est it is ever been, according to the gaming supplier.

85

SEPTEMBER 2012For more information visit www.macau-event.com or write to [email protected]

86

SEPTEMBER 2012

Roughly two out of three rooms in Macau are rated fi ve star, great for high rollers but not so pleasing for tour-ists without that much money to spend. The govern-

ment is hopeful of boosting accommodation for budget travel-lers, not necessarily to attract backpackers but to provide more choice and tempt mass-market day-trippers to stay the night.

The government is licensing three new establishments that will offer cheaper accommodation with 300 rooms in total.

Offi cial data shows that 11 projects in the lodging busi-ness, which together are meant to provide 7,320 rooms, were under construction at the end of June. Eight were either small or medium-sized establishments located on the Peninsula, ac-counting for around 650 new rooms altogether. The three re-maining projects were big scale hotels located in Cotai.

“The fostering of the development of budget accommo-

dation is one of the key points that the Macau Government Tourist Offi ce is working on so as to provide a wide range of accommodation options for visitors in different areas of the city,” the tourism bureau said in a written reply to questions from Macau Business.

The bureau says it is consulting other government depart-ments about creating opportunities for investing in and devel-oping more cheap accommodation.

This is part of a plan to increase the number of low-price hotels. Last year, offi cials gathered together some of the main-land’s biggest operators of cheap accommodation to tell them about opportunities here.

Chief Executive Fernando Chui Sai On announced in July that the government would consider allowing small and me-dium enterprises to build low-price hotels near the projected

A QUESTION OF VALUEThe government is striving for more lower-priced hotel rooms as Macau’s idea of “cheap” is less than cheerful for travellers on a budgetBY LUCIANA LEITÃO

Hospitality

87

SEPTEMBER 2012

5-star hotels 4-star hotels 3-star hotels 2-star hotels Guesthouses

NUMBER OF LODGING ESTABLISHMENTS

35

30

25

20

15

10

5

0

27

1412 13

33

Source: Statistics and Census ServiceOn June 30

5-star hotels 4-star hotels 3-star hotels 2-star hotels Guesthouses

CAPACITY, BY TYPE OF LODGING ESTABLISHMENT

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

14,830

5,557

13,608

5,1092,410 838 6331,730 1,265

39,184

Source: Statistics and Census ServiceOn June 30

PLACE OF RESIDENCE OF GUESTS IN CHEAP ACCOMODATION

Mainland China83%Hong Kong

6%

Macau3%

Others8%

new border crossing in the north of the peninsula. “We need to have different types of hotels to satisfy different customers,” Mr Chui said.

Plenty of roomOperators of low-price hotels trot out a list of problems hold-ing them back. They highlight the competition from large casino-hotels that offer big discounts, tempting visitors to pay a bit more for a better room. They complain about rising oper-ating costs and diffi culties in fi nding staff, and about the time it takes to get a licence.

But then, cheap accommodation here is not that cheap. During Lunar New Year the average room rate in a guesthouse was MOP558 (US$70) a night and staying in a two-star hotel cost, on average, MOP956 a night, the tourism bureau says.

Rooms Beds

88

SEPTEMBER 2012

The seedy reputation of cheap accommodation in Macau also scares off visitors. The very expression “cheap hotel” con-jures up images of crime, prostitution and general crummi-ness, no matter how outdated that perception may be.

The city had more than 24,000 guest rooms at the end of June. Fewer than 1,500 were in two-star hotels or guest-houses – although this number was 7.4 percent higher than a year before.

The average occupancy rate of fi ve-star hotels was 82.2 percent in the fi rst half of this year. In contrast, the average oc-cupancy rate of guesthouses was 60.9 percent and that of two-star hotels was 74.5 percent, the lowest in the hotel industry. More than 280,000 people stayed in guesthouses and two-star hotels in the fi rst half of this year, about 8.5 percent more than a year before.

Try the mainlandThe tourism bureau says lack of promotion is partly to blame for low occupancy in cheaper accommodation. Both it and the Macau Hoteliers and Innkeepers Association are this month opening a website to promote low-price hotels and guesthous-es. The website has information on the establishments here and can handle room bookings.

Some entrepreneurs are forging ahead with or without the government. The man in charge of Macao Cheng Loi Group Ltd’s operations, Daniel Cheong, says his company intends to open a new guesthouse in Taipa this year. “Macau is getting more high-end hotels that are more and more expensive. Tour-ists need low-cost hotels, because not all can support such high prices,” he says.

Macao Cheng Loi opened another guesthouse, a joint ven-ture with Fok Weng International Hotel Co Ltd, in the city cen-tre last November. The guesthouse cost MOP10 million to build.

Mr Cheong says the 40-room Towns Well Motel, a stone’s throw from Senado Square, has an average occupancy rate of 90 percent. Most of the guests come from the mainland, although there is the occasional guest from Southeast Asia, Japan or Korea.

A room costs about MOP600 a night, which is not consid-ered cheap. “We are close to Senado Square, perfect for shop-ping,” Mr Cheong explains. “It’s next to the city centre ... [and] our rooms are very big and clean.”

Macao Cheng Loi’s next step is to break into the lodging market in the mainland because, Mr Cheong says, it is diffi cult and expensive to fi nd somewhere to put a new hotel in Macau.

But there are other cheap accommodation projects in the pipeline.

Refuge from expenseTimberider Resort Management recently opened a two-star hotel, Ole Tai Sam Un, and added 24 rooms to its Ole London

The 40-room Towns Well Motel, a stone’s throw from Senado Square, has an average occupancy rate of 90 percent, according to co-owner Macao Cheng Loi Group Ltd

Hospitality

Towns Well Motel

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SEPTEMBER 2012

Hotel. Both hotels are close to the historical centre of the city and rates are up to MOP900 a night.

Hospedaria San Va, in touristy Rua da Felicidade in the city centre, claims the status of Macau’s oldest guesthouse. It occupies a private club built in the late 19th century, which be-came a lodging house in the 1920s to accommodate refugees from the civil war in the mainland.

Hospedaria San Va is a family business, headed by Anna Yip. Ms Yip says guests like the combination of low rates and a convenient location. They come from the mainland, Asia and further afi eld. “Half are usually backpackers, 30 percent are ordinary tourists and 20 percent are university and college stu-dents, as well as budget travellers,” she says.

Ms Yip says the occupancy rate averages between 80 per-cent and 90 percent, and guests usually stay two nights. Rates at the 39-room, no-frills guesthouse can be as low as MOP140 a night.

Lonely Planet international travel specialist website says Hospedaria San Va “defi nitely has character, though the cup-board-like rooms, separated by fl imsy cardboard partitions, are pretty spartan.”

One cause of the increase in demand for low-price hotels is the government’s clampdown on illegal inns. Since the en-actment of the law on illegal accommodation in August 2010,

the tourism bureau has shut down more than 260 establish-ments suspected of providing illegal lodging.

One was Augusters Lodge in the city centre, which was shut down in May for operating without a licence. The own-er, Richard Sarcar, said it had been operating in a residential building since 2008.

Although it was operated illegally, it was popular, and sev-eral international guidebooks and travel websites mentioned it. One night at Augusters Lodge could cost as little as MOP100.

“The economy was booming and many travellers came from the mainland,” says Mr Sarcar. Others came from else-where in Asia, from Europe or America. Many were young adults.

Mr Sarcar, a Bangladeshi resident of Macau, says he ap-plied for a licence after the hostel was shut down. The appli-cation was rejected. “We cannot have a license because we are in a residential building. We have to be in a commercial building,” he says.

Mr Sarcar says the cost of complying with government re-quirements is too high for him. “It would mean around HK$20 million [US$2.6 million].” He is now looking for a partner.

He says there is lack of truly low-price accommodation, as many two-star hotels and guesthouses charge around MOP700 a night. The huge investment required makes it harder to charge much less, he says. “If you have to invest HK$20 mil-lion, how can you offer cheap accommodation?”

Mr Sarcar highlights that people who stay overnight in cheap accommodation actually stay and spend above aver-age. “My guests spent on average MOP2,000 in Macau. They stayed on average two to three days,” he says.

The latest data from the Statistics and Census Service shows tourists stay on average 1.0 days in Macau, spending around MOP1,713 per capita, excluding gaming expenses.

Hospedaria San Va, in touristy Rua da Felicidade in the city centre, claims the status of Macau’s oldest guesthouse

Hospedaria San Va

90

SEPTEMBER 2012

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

16,021,978

8,386,204

7,635,774

1.0

24,268

4,476,310

81.6

1.43

MOP 11.4

MOP 5.8

MOP 5.6

MOP 1,713

15,609,909

9,567,563

4,631,465

471,848

347,190

327,840

186,430

284,271

75,031

110,941

4,010,358

4,113,909

613,654

241,265

250,815

822,703

177,381

143,349

75,668

15,671

12.2

15.6

8.4

--

11.3

11.0

4.3

-0.01

20

23

16

7

12.4

22.2

131.1

164.2

140.1

191.9

185.6

159.0

151.2

166.8

20.1

1.6

-6.0

-4.2

20.2

-0.6

4.5

3.0

0.3

8.8

1.4

-1.5

4.8

-0.1

12.0

12.2

-0.4

-0.07

13

9

17

16

1.4

7.1

0.7

-3.5

8.5

20.6

6.7

6.5

47.9

29.8

7.5

-7.4

-15.5

15.6

8.7

-3.9

1.0

4.4

4.0

16.5

Visitor arrivals

Hotels

Visitor expenditure

Visitors by place of residence

2011

2011

2011

2011









Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jul 2012

Jun 2012

Jan-Jun 2012

Jan-Jun 2012

Jan-Jun 2012

Apr-Jun 2012

Apr-Jun 2012

Apr-Jun 2012

Apr-Jun 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

Jan-Jul 2012

So

urce

: Sta

tistic

s an

d C

ensu

s S

ervi

ce

28,002,279

15,077,119

12,925,160

0.9

22,356

8,612,127

84.1

1.53

MOP 45.3

MOP 22.9

MOP 22.4

MOP 1,619

27,287,076

16,162,747

8,196,139

932,316

575,595

533,495

314,696

471,366

100,585

172,140

6,588,722

7,582,923

1,215,162

396,023

398,807

1,531,414

310,608

251,748

127,983

24,864

days daysdays

nights

billion

billion

billion

billion

billion

billion

nights nightsnights

percentage points

percentage points

Tourism statistics

91

SEPTEMBER 2012

The Macau Government Tourist Offi ce director João Manuel Costa Antunes forecast last month that the city would welcome a total of 30 million tourists in 2012. That would be up by 7 percent in comparison with last year’s record 28 million visitors.

“There will be overall growth in the visitor arrivals this year but it will not be like in the past, when the numbers grew by 10 or 12

MACAU TO PAY FORNEW BORDER CHECKPOINTMacau will pay for the construction of the new border checkpoint with the mainland, to be built in the north of the Peninsula. Lands, Public Works and Transport Bureau director Jaime Carion said last month that Macau would be in charge of the border-crossing project because most of the facilities would be on its soil. There is still no approved schedule or budget for the project, which is awaiting Beijing’s approval. The new checkpoint will be for pedestrians only.

MAINLAND VISAS MADE EASIERThe central government announced an easing on restrictions on travel to Macau by people living in six big mainland cities. The Ministry of Public Security said that from this month people studying or working in Beijing, Chongqing, Guangzhou, Shanghai, Shenzhen or Tianjin who are not permanent residents of those cities would be able to get visas for travel to Macau, Hong Kong or foreign countries. This new policy could mean more visitors to Macau.

PEARL RIVER DELTAGOES INDIANThe tourism bureaus of Macau, Hong Kong and Guangdong province co-organised a series of joint promotion activities last month in three Indian cities to promote tourism in each of the Pearl River destinations, as well as travel itineraries with multi stops. The Indian cities visited included New Delhi, Mumbai and Chennai. The number of Indian visitors to Macau increased from nearly 10,000 in 2003 to 170,000 in 2011.

BULLISH FORECASTTourist Offi ce head expects 30 million visitors this year

percent,” Mr Antunes told reporters. “But I believe the fi gure can reach 30 million.”

From January to July, visitor arrivals totalled 16 million, up 1.4 percent year-on-year. The number of tourists has been dropping since May.

Previously, Mr Antunes had forecasted that the number of tourist arrivals in 2012 would increase by at least 10 percent year-on-year.

“There will be overall growth in the visitor arrivals this year but it will not be like in the past, when the numbers grew by 10 or 12 percent,” says João Manuel Costa Antunes

92

SEPTEMBER 2012

How do you refresh a jewellery business with a venerable histo-ry without destroying the value

in its heritage? That is the challenge Che Lee Yuen faces every day.

Founded in 1867, the family-owned company is now in the hands of the fourth generation, in the person of Stephen Tse. Mr Tse has the task of jug-gling the need to keep the brand’s appeal to residents, while also tapping the bur-geoning tourist market.

Che Lee Yuen is one of the oldest gold jewellers in Macau. It fi rst gained popularity with silver ornaments and later shifted its focus to gold and cus-tom-made jewellery. More recently it has introduced materials such as diamonds.

The company collaborates with var-ious designers to create unique collec-tions. In 2010 Che Lee Yuen launched its Qing collection, inspired by the Qing dynasty court.

Che Lee Yuen has three shops, each meant to suit a different market.

“In recent years, we have spared no effort in fi nding suitable shop locations to establish footholds and strengthen our presence both in the domestic and tour-ist markets,” says Mr Tse. He intends to expand the business into the mainland and Hong Kong as soon as next year.

Fresh bloodMr Tse was brought up in Hong Kong and completed his education at Oxford University in England. He was a late-comer to the world of jewellery, having previously worked in trading in Hong Kong for several years.

He joined Che Lee Yuen in the mid-1990s, taking over from his father and bringing with him several new ideas. One was the establishment in 1997 of RingMaster, a new brand and shop fo-cusing on jewellery for younger people. “Given Macau’s small market, while most of the older generations were al-ready familiar with our brand, we felt the need to expand our customer base

amongst the younger generations,” Mr Tse says.

In 2007, Che Lee Yuen opened a third shop, called O’Che 1867, in the Venetian Macao. This shop specialises in fi ne jewellery meant for wealthy peo-ple from the mainland and abroad. The main branch of Che Lee Yuen, in Rua Francisco Xavier Pereira, concentrates on traditional wedding jewellery.

Intangible assetMr Tse says tourists make up only around 20 percent of the customers in the two shops on the peninsula. At the Venetian shop, 90 percent of the custom-ers are visitors.

As each shop caters to a different market, so the business has different ap-proaches to advertising. The Venetian store mainly advertises jointly with the casino resort’s shopping mall, while also linking up with banks and credit card companies for promotions. The other two shops do more direct marketing and re-

Glittering heritage

Che Lee Yuen, a jeweller with a 145-year history, is pushing hard to keep up with modern tastesBY YUCI TAI

Business

Stephen Tse

Ph

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nio

Mil

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SEPTEMBER 2012

In 2007, Che Lee Yuen opened a third shop, called O’Che 1867, in the Venetian Macao. This shop specializes in fi ne jewellery

lationship-building with their customers.Che Lee Yuen is credited with many

innovations in the jewellery industry in Macau over the past 145 years. The sec-ond generation of managers introduced jewellery gift coupons to the city and the third generation pioneered the use of electrolysis to refi ne gold on a commer-cial scale here.

“The century-old brand is itself an intangible asset. The company has built a good reputation and the brand’s devel-opment potential is vast and pliable,” Mr Tse says. “To preserve our brand image, we had to give up some short-term tricks of the trade. For instance, we won’t wage cut-throat big sales, or enter into compli-cated relationships with tour agencies to tout tourists into our shops to buy jewel-lery and gold.”

Critical massThe liberalisation of the gaming indus-try and the easing of access to Macau for mainland Chinese have increased tour-ism and the incomes of residents. This has been good news for the jewellery industry, and its sales have rocketed. Sales here of watches, clocks and jewel-lery amounted to MOP8.1 billion (US$1 billion) in the fi rst half of this year, 49 percent more than a year before.

Mr Tse says the gold jewellery market is now more competitive than ever before. In the 1960s Macau had around 30 gold jewellery shops. It now has more than 200, he estimates. These include shops run by Macau jewellers, stores under big international jewellers, and pawnshops that also buy and sell gold items.

Che Lee Yuen managers say that unlike some other jewellers here, their company has enough critical mass to cope with competition. This allows it to be more fl exible in designing and pric-ing its products. It has also invested a lot in online marketing, with its own web-site, Facebook page and online advertis-ing campaigns.

The jeweller has a staff of 30 in Macau, one-fi fth of whom are imported. It also has a subsidiary in Hong Kong re-sponsible for procurement.

Che Lee Yuen cooperates with sev-eral Hong Kong designers. Mr Tse says around 30 percent of the products it sells are exclusive designs. The company has collaborated with Macau design-ers in the past, but Mr Tse says there is a shortage of talented craftsmen and women here.

94

SEPTEMBER 2012

BY STEPHEN COATES*

“It is my intention to use all the resources at my disposal to ensure that this land continues to produce world-class wines,” Louis Ng says

Louis Ng Chi Sing, the chief operating offi cer of SJM Hold-ings Ltd who sparked uproar in France when he bought a historic Burgundy vineyard pledged last month to respect

local traditions and restore the chateau to its former glory.Mr Ng has been targeted by the far-right National Front

and disgruntled winegrowers since paying US$10 million (MOP80 million) for Chateau de Gevrey-Chambertin earlier this year, over fears he will destroy the estate’s 900-year-old heritage. But in an attempt to allay such concerns, the 60-year-old Macau casino executive said he planned to work with French architects and winegrowers to ensure the historic cha-teau remains a source of premium wine.

“It is our goal to bring this enchanted property to its full former glory,” he said in a statement. “In time, I hope my new Burgundy neighbours will also come to appreciate my sincere passion for great wines as will be refl ected in the positive im-provements I hope to bring to Chateau de Gevrey-Chambertin.”

The estate includes two hectares of vineyards in one of Burgundy’s top appellations, where growers follow strict rules in order to market their wines under legally protected names.

“It is my intention to use all the resources at my dispos-al to ensure that this land continues to produce world-class wines for wine lovers all around the world for generations to come,” Mr Ng said. He added he had appointed French archi-tect Christian Laporte to repair the chateau, which is listed on a registry of historic Burgundy monuments.

Along with certain unnamed “friends”, Mr Ng had signed a long-term lease with Burgundy winemaker Eric Rousseau, of Domaine Armand Rousseau, to look after the chateau’s wine production.

A serious wine lover“As a long-time wine lover over the past 30 years, I am thrilled to have this excellent opportunity to re-energise and reinvigor-ate this amazing piece of land,” Mr Ng said.

“Our architect will help us to restore this monumental chateau to its original beauty and preserve, as a primary goal, the great historical signifi cance of this remarkable building. I am also extremely happy to have Eric’s immense skills and ex-pertise to see that the chateau’s vineyards again produce some of the best wines in Burgundy.”

Mr Ng described himself as a serious wine lover and an ambassador of French wines in Hong Kong and Macau.

Hong Kong-based wine expert and author Jeannie Cho Lee, who is friends with Mr Ng, says the businessman could be trusted to manage the estate.

“I am sure that given his genuine love for wine and for Burgundy, he will lovingly restore Chateau de Gevrey-Cham-bertin to its former glory,” she says.

True loveSJM’s Louis Ng vows to honour French wine heritage after purchasing the historic Chateau de Gevrey-Chambertin

Unlike its rival Bordeaux, Burgundy remains dominated by relatively small estates run by winemakers who, regardless of how prosperous they may have become in recent years, regard themselves as farmers fi rst and foremost. Properties generally get passed down from generation to generation, making foreign ownership relatively rare, again in contrast to Bordeaux where Chinese investors have established a strong presence.

Ms Lee says Chinese investors were always going to branch out into Burgundy.

“If you look back at the period when Japanese fi rst be-came enamoured with wine in the 1980s and 1990s, there was quite a stir because Japanese started buying Bordeaux proper-ties and investing in Burgundy domaines,” she says. “It is the same thing now with the Chinese.”

Davis Fong Ka Chio, director of the Institute for the Study of Commercial Gaming at University of Macau, says low-pro-fi le Mr Ng is a very senior and long-term associate of casino tycoon Stanley Ho Hung Sun.

“He is very senior but the information about him in the public literature is quite limited. I only know that he’s a very important guy and a decision maker,” he says.

In Macau’s glitzy casino business, it is sometimes wise to stay below the radar, Mr Fong notes.

“He is very low-profi le. Keeping a low profi le is a good thing.” *AFP NEWS AGENCY

Business

95

SEPTEMBER 2012

Blinkered to the point of blindness

In December 1999, Fernando de la Rua won the popular vote to become Argentina’s next president. His term ended abruptly just two years later, when he resigned amid a deep

economic slump, easily comparable with that faced now by some countries in Europe.

Argentinians like me recall Mr de la Rua’s disastrous management of the economy for several reasons. His short stint as president was marked by inaction in the face of recession.

I am often reminded of Mr de la Rua when I read the news about Macau. The city reminds me of the procrastination I witnessed in my homeland.

In the past two years, I have listened to a string of government speeches stressing the need to push ahead with diversifi cation of the economy, widening its scope from the narrow focus on gambling to take in a greater variety of entertainment. The purpose is to attract more international tourists and offer enough attractions for visitors to stay here longer.

The government, however, does not walk the talk.The city is still dominated by gambling and offi cials have

so far done almost nothing to diversify the economy. As the public purse gets ever fatter because of taxes on gambling, the government is sitting too comfortably to be bothered to change the status quo. Why change anything if business is good, right? Wrong.

Inaction can lead to negative consequences in the long run. These consequences harm individuals, families, communities, the economy and society as a whole.

While the fi nancial and economic effects of inaction are the easiest to measure, there are other, underlying consequences that have deeper ramifi cations: for instance, poorer healthcare and education, a less qualifi ed workforce and social imbalances.

Why are we here?One of the repercussions of persistent inaction here is pointed out by tourists: they go home with the perception that the city has just a handful of attractions.

I was involved recently in a survey of 300 international tourists, most of them on day trips to Macau while they holidayed in Hong Kong. For 95 percent, it was their fi rst visit here.

Around 30 percent said they would not come back as they had already seen and done everything there was to see and do here. Another 15 percent said they might come back occasionally, to gamble.

What really got my attention were the remaining 55 percent. Many of them, when asked if they would ever consider returning to Macau as tourists, were caught off guard and answered the question with a question: “Why?”

Why, indeed, would anyone wish to come back? What would they do here?

Besides seeing the historical sights, which you can do in one trip, or gawping at a few notable casino resorts or, obviously, gambling, visitors have nothing to do here.

Let us face it, this is not Paris or New York, where a tourist

may return several times just to check out the Metropolitan Museum of Art or the Louvre, let alone the other attractions those cities have to offer. Macau’s lack of suffi cient tourist attractions is one of the reasons why the average length of a visitor’s stay fl uctuates around one day.

Where are we going?Macau is not the Las Vegas of the East, as some have dubbed it. It has neither the kind of glamorous nightlife one can fi nd in Las Vegas, nor the kind of shows and family entertainment available there.

Las Vegas is an exemplar of the diversifi cation of an economy once dominated by gambling. While casinos are still the backbone of its economy, Las Vegas has big meetings and conventions taking place every day, pick-of-the-crop concerts, glamorous spectacles and more, which all provide enough action for a family on holiday to stay for a week.

Las Vegas is not unique.Ten years ago, few would have been able to fi nd Dubai on a

map. Today it is full of tourists. To pull them in, the emirate did not need to build casinos. It created other attractions of its own devising.

Like Macau, Dubai is a place where different civilisations meet. It has achieved a perfect balance between tradition and modernity. To make up for its natural shortcomings, it became a world leader in trade and other business. It is an international, dynamic city with an outstanding record – all because of its visionary leadership.

Will Macau ever be able to do the same? Will it be able to turn its back on procrastination and embrace the opportunities ahead? Will our leaders adopt a visionary strategy to wake the city from its sleepwalk and transform it into an attractive, international entertainment hub?

Today, owing to the absence of foresight among those in government, the goal of transforming the city into a tourist destination of global renown is just empty talk. An illustration of this is that instead of a waterfront boulevard brimming with fresh air, entertainment and tourists, what we have are fences made of metal siding blocking the view.

Talk about a lack of vision.

GUSTAVO CAVALIERE HOSPITALITY INDUSTRY EXPERT - [email protected]

WHILE OFFICIALS HAVE BIG DREAMS ABOUT CREATING A WORLD-CLASS ENTERTAINMENT HUB IN MACAU, THEY DO LITTLE TO MAKE THEIR VISION COME TRUE

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BY SARA SILVA MOREIRA

MACAU’S HIGH EMPLOYEE TURNOVER RATE NOT ONLY HURTS THE ECONOMY AND BUSINESSES, IT CAN RUIN

A WORKER’S CAREER

GOING FOR THE

RIGHT CHANGE

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SEPTEMBER 2012

“Those who have jumped one or two times already in the last few years are now settling,” says MyJobs Macau’s Queenie Zhou

“Local workers are becoming more focused on how to increase their work-life balance,” says Lancy Chui, from Manpower Inc

“Macau employees are in a market where they can fi nd better jobs easier than they could in other markets,” says Pentasia’s Starr Xian

Macau is bursting with job op-portunities for permanent residents. While the rates of

employee turnover in several indus-tries here are higher than in many other places in the world, human resources consultants say people are beginning to think twice before changing jobs.

The prospect of more money is no longer enough to tempt people away from their current employers – at least in some cases.

“There are less fi nancial strains nowadays than in the past and local workers are becoming more focused on how to increase their work-life balance,” says Lancy Chui, managing director of the Hong Kong, Macau and Vietnamese operations of international human re-sources consultancy Manpower Inc.

Human resources consultants say residents now want not just a better-paid job but a career. Many workers are more careful about choosing and changing jobs.

“Those who have jumped one or two times already in the last few years are now settling,” says Queenie Zhou, managing director of human resources consultancy MyJobs Macau.

“They are not so eager to change jobs for just a small salary increment, but are rather more interested in invest-ing themselves in the existing company if they feel they are being treated well”.

The slowing of economic growth contributes to the inclination to stay put. Human resources consultants say pay and benefi ts have stabilised in most sectors of the economy, reducing the chances of a worker getting much more money for doing the same job for a dif-ferent employer.

Even so, the rates of employee turn-over are edging up in several industries. Statistics and Census Service data shows that the turnover rate among hotel and restaurant employees was 7.5 percent in the fi rst quarter of this year, 0.2 per-centage points higher than a year before. Among bank employees the rate was 4.0 percent, 0.3 percentage points higher. In the second quarter, the turnover rate among gaming industry employees was 5.9 percent, 1 percentage point higher than a year before.

Quantum of constancyWhile job-hopping can bring immedi-ate fi nancial benefi ts, it may do more harm than good to a worker’s career in the long run, human resources consult-

ants say. They say constantly changing jobs can slow the progress of a worker’s career, reduce job satisfaction and mean fewer opportunities for development – especially for junior managers and un-qualifi ed labour.

Employers will take special note of a resume fi lled with short stints in many companies. “Ideally, staying for a rea-sonably long period in each job could help to impress employers and enhance future employability,” says Ms Chui of Manpower.

Although money is a necessity, and for many job applicants the deciding factor, consultants say applicants should keep other things in mind. “Macau em-ployees are in a market where they are a limited resource and therefore can fi nd new or better jobs easier than they could

in other markets,” says Starr Xian, prin-cipal consultant of the Macau branch of Pentasia Group, a gaming industry re-cruiter. She says it is most important for workers to “have a clear career plan and clear goals for long-term career develop-ment”.

Ms Zhou of MyJobs Macau says that before changing jobs, employees should fi nd out all they can about their prospec-tive employer by studying its website and news about it in the media, and by talking to friends who work there.

Reputation preservationHuman resources consultants recite long lists of things to check before changing jobs. They suggest job applicants check whether a job on offer fi ts their career plan and if it has peripheral advantages

such as opportunities to learn and ad-vance their careers and a good working environment.

They advise applicants to bear in mind the effects a job change can have on their private lives. In Macau, many jobs entail working shifts or at night.

Consultants also advise job ap-plicants to consider the disruption that changing jobs can cause to their current employer. And they say it is important for applicants to learn to say “no” to a job offer, and to be prepared to explain why they are turning it down. Such ex-planations can keep them on good terms with interviewers. In a small market such as this, keeping a cooperative repu-tation is an advantage in unlocking fur-ther job opportunities.

Ms Xian says some employers make it easy for employees to leave as soon as the fi rst opportunity arises. Some com-panies neither invest in training and re-taining staff nor foster team spirit, giv-ing employees a feeling of detachment. Other employers are slow to promote or increase the pay of competent workers,

Human Resources

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in effect telling them that the only way to move up is to move out.

Some fi rms are changing their prac-tices in an effort to retain employees. In-stead of focusing only on offering attrac-tive pay and benefi ts, they are improving the working environment, and giving staff more training and opportunities to advance their careers.

Resisting temptationAna Coutinho said “no” to what might be considered an almost perfect job. After two years with the same com-

pany, she felt trapped in her current po-sition. She decided to look for a more challenging job with better career pros-pects.

Ms Coutinho was eventually of-fered a position in the banking industry that included a higher salary, housing allowance, more leave, an annual bonus and a career advancement plan. On pa-per, it was a great offer but, after some thought, she declined it.

“Even though the offer was very tempting in terms of salary and ben-efi ts, and would have given me experi-

ence in a new fi eld, working in bank-ing didn’t fi t with my career goals,” she says.

A few months later, Ms Coutinho was offered a position which matched her goals in a trading company in Hong Kong. “Originally, I had intended to stay in Macau but this offer included not only satisfactory salary and benefi ts but also autonomy, learning opportuni-ties, good career development possibili-ties and the chance to have hands-on experience in managing business ac-counts, which is what I had wanted in the fi rst place.”

Ms Chui of Manpower advises workers to “maintain a learning mind-set to ensure they continue to develop and unleash their own human potential throughout their careers, instead of just focusing on monetary concerns and other benefi ts”.

Still, most employees continue to be money-driven. A survey commis-sioned by Macau Business this year and conducted by the University of Saint Joseph, showed 42 percent of respond-ents considered pay the most important factor in employee retention. Just 9 per-cent thought the working environment was the most important.

“Although many employees, name-ly croupiers, have a low emotional com-mitment to their job and fi nd it exhaust-

A survey by Macau Business this year, showed 42 percent of respondents considered pay the most important factor in employee retention

Human Resources

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SEPTEMBER 2012

ing, they remain for the salary alone,” says Angus Kuok Chin Him, a doctoral student of applied social psychology at the University of Macau.

Wise heads“A great deal of casino workers would prefer to switch to another industry and to regular offi ce hours,” says Ms Xian.

But because the pay is much lower, they feel their best option is to stay put, she adds.

Ms Zhou of MyJobs Macau says younger people are more money-focused and therefore more prone to change jobs for better pay alone. “Younger people haven’t experienced a slower economy, so they expect high salaries from the start, as well as a fast progression within a company,” she says.

When their expectations are not met, they prefer to leave for higher pay, instead of staying to acquire skills and experience.

Ms Xian says some young work-ers start out pursuing a career in a fi eld they are interested in, but soon begin to compare their pay with that of friends in other industries. They may begin to focus on how much they get paid rath-er than on their careers, and then feel compelled to change to higher-paying jobs, she explains.

Senior employees are less inclined to job-hop. At a certain level, getting more pay is not as important as a better position and better career prospects.

“Higher-level managers are more careful with their moves and are more aware of the potential negative effects of job–hopping,” says Ms Zhou.

According to her, senior managers understand their market value better and have more negotiating power than their juniors, accepting a better offer only after studying it and the prospec-tive employer carefully.

“Although many employees have a low emotional commitment to their job, they remain for the salary alone,” says social psychology expert Angus Kuok

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SEPTEMBER 2012

BY SARA FARR

Start-up incubator Manetic is creating

a legacy of hundreds of good

ideas, spread across more than

a decade

rather than investing time in “less-pro-ductive infrastructure and capital raising activities”.

In the last 10 years, the incubator has received 173 applications for assist-ance and accepted 99. About 43 percent of those businesses have been further developed and commercialised; 16 com-panies are already capable of operating on their own and have sustainable busi-nesses, says Mr Chan. At any one time, the incubator can accommodate a maxi-mum of 20 start-ups.

There is significant diversifica-tion among the businesses that Man-etic has helped.

Bill Gao and his business partner set up Boss Translation Compa-ny Ltd in February last year after

seeing demand for translations spike in each of the three main languages com-monly used in Macau.

The company bridges linguistic gaps and breaks down geographical bar-riers by providing computer-aided trans-lation software online. For the company to succeed, Mr Gao felt he needed addi-tional support. He found it at the Macau New Technologies Incubator Centre, or Manetic.

Manetic was established in 2001 and has since been helping individuals

and fl edgling technology companies turn businesses or product ideas into full-blown commercial ventures.

Companies are offered hardware, such as offi ce facilities; a range of com-mercial support, including business de-velopment services, market research and promotion; and fi nance.

“We provide new companies with customised knowledge and experience, as well as equity investment capital,” says Gilbert Chan, Manetic’s executive director.

He says Manetic’s support allows entrepreneurs to focus on the develop-ment of new technologies and products

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A SAFER PLACE TO SURFMost developed markets have a com-

puter emergency response team. There is a CERT team, as they are known, in Macau too.

The Macau Computer Emergency Re-sponse Team was established by Manetic in February 2010. It receives fi nancial back-ing from the government to provide compu-ter security “incident handling” information, and promotes security awareness.

Manetic executive director Gilbert Chan says the response team collaborates with bodies here and overseas. For instance, it has already handled phishing cases in which the targeted banks were from South-east Asia and North America.

“Every region has a CERT team and we know each other well. So when there is a problem, we act very fast,” he says.

The response team has worked to increase its profi le and ensuring that com-plaints are handled effectively. Today, the Computer Emergency Response Team is handling more incident reports and is en-joying an improved standing, Mr Chan says.

“In the beginning, people were a little wary of telling others what had happened. But after two years of raising awareness and organising seminars with experts from all over the world, people in Macau are becom-ing more aware that this happens every-where else and Macau is no exception.”

In 2007, Manetic also helped support the establishment of the Macau chapter of the Information Systems Audit and Control Association, an international professional association that deals with information technology governance.

“Manetic has helped us in offer-ing free or low-rental offi ces, providing business opportunities, informing us about fairs, hiring employees, [as well as] promoting our products and serv-ices,” Mr Gao says.

Mr Chan says Manetic also provides the latest information and environmen-tal technologies, auditing techniques and standards to start-ups.

For Mr Gao, growing his company through an incubator has been advan-tageous. “The company’s business has grown quite a lot,” he says.

“We started from zero, and now we have more than 10 major clients from the government and media. We are known by many people and are widely recom-mended in Macau’s forums.”

Mr Gao says being “incubated” gives Boss Translation professional rec-ognition. Nobody would care about his “micro-company” without Manetic’s weight behind it, acting as a “kind of certifi cation,” Mr Gao says. “At least, professionals and experts regard our product as feasible or promising.”

Being part of Manetic also offers start-ups the opportunity to build net-works and take part in seminars with experts from their fi elds.

“There are a lot of micro-companies like us [at Manetic]”, Mr Gao says. “We know each other and are like a big fam-ily ... we know we are not alone.”

Mr Chan says the number of compa-nies attracted to Manetic’s service will continue to grow.

“I can see that [some] incubatees are looking at business in the mainland,” he says. This is true among companies de-signing software apps for smartphones and tablets.

“The market here is not very healthy. People are not willing to pay much for a quality app,” Mr Chan says.

He says the scenario is different in the mainland. Companies there are willing to pay more for quality apps “because it affects their image and busi-ness.”

Another problem growing compa-nies face is a lack of qualifi ed human resources. “Labour is the biggest chal-lenge for almost all incubatees. Good local programmers are too expensive to afford,” Mr Gao says.

That hinders the global competi-tiveness of start-ups. “We are small and not competitive in the international market because of our expensive labour costs.”

The scope of businesses ranges from software development to IT consultancy, to e-marketing and e-commerce servic-es. There is a company providing gam-ing software. A number of start-ups are focusing on clean energy and recycling.

The combined muscle of the start-ups provides work to more than 100 peo-ple and there are about 300 clients in the portfolio, both corporate and govern-ment, from Macau and abroad, accord-ing to Manetic’s website.

Among the incubator’s sharehold-ers are Australia’s Crossland Develop-ments Pty Ltd, with a 25-percent stake, the Macau government and Vodatel Net-

work Holdings Ltd, each with a 15-per-cent share. State-owned Nam Kwong (Group) Co Ltd is among the incubator’s major shareholders, with a 10-percent stake.

Manetic is also supported by the Macao Foundation, which granted it MOP7 million (US$875,000) to support its activities this year.

Recognition gainedEven before Boss Translation got off the ground, Mr Gao had been in contact with Manetic. Once the company was set-up, Boss Translation was accepted into the incubator.

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Confusion in the cloud

Worldwide, entrepreneurs running small and medium enterprises understand that business is more reliant on technology than ever before. In several cases, business

and technology have become inseparable.One emerging trend is cloud computing. The premise

is convenient, on-demand access to servers, storage, applications and other resources through the Internet. Users no longer need their own servers, storage or networks, which are, instead, available in the “cloud”. Highlighting the importance and growth of cloud computing, United States consulting fi rm Gartner suggests that this is one of the top-10 strategic technology trends that will infl uence companies this year.

A survey last year by global professional services fi rm Ernst and Young found that 51 percent of organisations worldwide already used cloud computing services or planned to do so within the next 12 months. Cloud services were already being used by several departments of the organisations surveyed, including administration, human resources, accounting, marketing and customer relationship management departments.

Management of an enterprise’s data storage, software applications and complex business processes in the cloud enables it to perform more effi ciently and cost-effectively. Companies no longer need to worry about hardware or software maintenance. Time, effort and investment can be focused on their core businesses.

Cloud computing is far from being available only to big corporations. One familiar cloud computing application winning the hearts of SMEs is Google Apps. It has been adopted by start-ups because it integrates basic offi ce tools, including email, chat, calendar, storage and document management functions.

Google Apps also allows the users of smartphones, tablet computers or any other mobile devices connected to the Internet to get access to the same data. Google’s charge depends on the number of users, so it is more cost-effective than in-house servers and storage, private networks and the support teams such things require.

The prosA close look at Macau reveals that although gaming appears to dominate the business landscape, SMEs are undoubtedly the backbone of the economy. Almost 99 percent of businesses here are SMEs. They employ more than 50 percent of the workforce, Statistics and Census Service data shows.

The rapid expansion of the city’s economy is further fuelling the growth of SMEs. The government has also been supporting their development by providing several kinds of assistance, fi nancial and non-fi nancial.

Information technology resources used by SMEs in Macau might include email, accounting and back-up software, and data security applications – all of which are available in the cloud. The question is whether managers are putting their money to good use and adopting these more cost-effi cient cloud applications.

To better understand the use of cloud computing by Macau SMEs, and as part of my MBA programme at the University of Saint Joseph, I studied how much of this new technology

is used here, what motivates SMEs to adopt it and what, conversely, deters them from adopting it. The research included interviews with managers of SMEs in manufacturing, retailing and wholesaling, restaurants, logistics, real estate, fi nancial and legal services, education and healthcare.

The results highlight that SMEs perceive that what is valuable about cloud services is the ability to get access to data with fi xed and mobile devices, to be able to retrieve information remotely, and to share and back it up more easily.

The consThe results also show that what worries managers the most is unauthorised access to data due to cyber attacks and other breaches. They are highly sensitive about the confi dentiality of their business data, notably personal data on customers, and about the damage that inappropriate use of such data might do to their reputations or fi nances.

SMEs are also concerned about exactly where their data is stored.

Notably, businesses in Macau are generally not as keen to adopt new kinds of IT as SMEs elsewhere. So the infrastructure for cloud computing and the knowledge of it here may be insuffi cient at this stage to allow them to reap all the benefi ts. And managers are reluctant to learn how to use cloud applications.

Another concern is the reliability of Internet connections. The performance of cloud computing applications is closely linked to the reliability of the Internet service. Connections to the web have to be stable and dependable for cloud computing to be a viable business tool. Unfortunately, Macau lags behind Hong Kong, Taiwan, Japan and Singapore in this respect.

These obstacles to the adoption of cloud computing, and the further obstacle presented by the shortage of IT manpower here, can be overcome by opting for physical-virtual-cloud computing – in other words, a hybrid of on-site and off-site services. This would allow SMEs to keep some of their IT resources in-house, while moving others to the cloud. Ultimately, this would diversify their IT resources and still be more cost-effective.

Balance pointOn the other hand, cloud computing service providers here should ensure their services are secure, safe from cyber attacks and other breaches. They should also be more open about where their servers are. They should give their customers regular reports on risk management of their data. They should invite external auditors to regularly assess their levels of security.

Only then can they dispel the distrust of cloud computing among SMEs and get them to adopt it more widely.

A new technology is only considered good when it is used appropriately. Cloud computing allows SMEs access to world-class computing services and tools at lower costs, backed up by world-class support. But SMEs should never underestimate the harm that can be done to their business by data breaches.

AMY LEE*

FEAR OF DATA BREACHES HOLDS BACK SMALL BUSINESSES FROM ADOPTING CLOUD COMPUTING SOLUTIONS

* MS LEE RECENTLY RECEIVED AN MBA FROM THE UNIVERSITY OF SAINT JOSEPH. HER MBA THESIS WAS ON THE USE OF CLOUD COMPUTING BY SMES IN MACAU

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September

Date: 9th – 11th

Event: Global Tourism Economy Forum Macau 2012Venue: Macau Tower Convention & Entertainment Centre, MacauOrganiser: Secretariat for Social Affairs and CultureAddress: Rua de São Lourenço, No. 28, Headquarters of the Macau SAR Government, 2nd fl oor, MacauTel: (853) 2872 6886Fax: (853) 2872 7594

Date: 18th – 20th

Event: Corruption & Compliance, South and South East Asia SummitVenue: Hilton Hotel, SingaporeOrganiser: Beacon EventsAddress: 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong KongTel: (852) 2219 0111Fax: (852) 2219 0112Website: www.corruptionandcompliance.comE-mail: [email protected]

Date: 21st – 23rd

Event: 3rd China Catering ExpoVenue: Venetian Macao-Resort-Hotel, MacauOrganiser: Ministry of Commerce of the People’s Republic of China and the Secretariat for Economy and Finance of the Macau governmentCoordinator: Macau Convention and Exhibition AssociationAddress: Avenida do Dr. Rodrigo Rodrigues, No. 223-225, Nam Kwong Building, 13/K, MacauTel: (853) 2871 5616Fax: (853) 2871 5606Website: www.chinacateringexpo.orgE-mail: [email protected]

October

Date: 10th – 12th

Event: 8th International Hotel ExpoVenue: Venetian Macao-Resort-Hotel, MacauOrganiser: Coastal International Exhibition Co LtdAddress: Room 2106, China Resources Building, 26 Harbour Road, Wanchai, Hong KongTel: (852) 2827 6766 Fax: (852) 2827 6870Website: www.hotel-exhibition.comE-mail: [email protected]

Date: 18th – 21th

Event: 17th Macao International Trade & Investment FairVenue: Venetian Macao-Resort-Hotel, MacauOrganiser: Macao Trade and Investment Promotion Institute Address: World Trade Centre Building, 1st & 4th fl oors, 918, Avenida da Amizade, MacauTel: (853) 2871 0300Fax: (853) 2859 0309Website: www.mif.com.moE-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”.

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

October

Date: 23rd – 27th

Event: Freight Summit 2012Venue: Venetian Macao-Resort-Hotel, MacauOrganiser: Raueber & Walle Solutions LtdAddress: 25th Floor, Tower One, Tern Centre, 237-251 Queen’s Road Central, Hong KongWebsite: www.thefreightsummit.comE-mail: [email protected]

November

Date: 7th – 9th

Event: Wine & Gourmet Asia 2012Venue: Venetian Macao-Resort-Hotel, MacauOrganiser: Koelnmesse Pte LtdAddress: 52 Beach Road, #25-05 Gateway East, SingaporeTel: (65) 6500 6712Fax: (65) 6294 8403Website: www.wineandgourmetasia.comE-mail: [email protected]

Date: 26th – 28th

Event: 3rd Annual Integrated ResortsVenue: Renaissance Sanya Resort & Spa, Hainan Island, ChinaOrganiser: Marcus EvansAddress: Marcus Evans, Suite A-20-1, Level 20 Hampshire Place Offi ce, 157 Hampshire 1, Jalan Mayang Sari, 50450 Kuala Lumpur, MalaysiaTel: (603) 2723 6736Fax: (603) 2723 6699Website: www.integratedresorts-lse.comE-mail: [email protected]

Date: 27th – 28th

Event: Asian Gaming & Hospitality CongressVenue: Galaxy Macau, MacauOrganiser: Beacon EventsAddress: 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong KongTel: (852) 2219 0111Fax: (852) 2219 0112Website: www.asiangamingcongress.comE-mail: [email protected]

Date: 29th

Event: Social Gaming Asia SummitVenue: Galaxy Macau, MacauOrganiser: Beacon EventsAddress: 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong KongTel: (852) 2219 0111Fax: (852) 2219 0112Website: www.socialgamingcongress.comE-mail: [email protected]

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SEPTEMBER 2012

From his offi ce with a wide view, veteran arts administrator Michael Lynch looks down at the

construction site of the West Kowloon terminus of the Guangzhou-Shenzhen-Hong Kong Express Rail Link. Right now, it is just a hole in the ground, be-ing dug on a 40-hectare site where the West Kowloon Cultural District will be built.

Mr Lynch’s interest in the hole is more than curiosity. He wants to see that the new terminus is completed on schedule in 2015. When the work is fi nished, Mr Lynch, the chief executive of the West Kowloon Cultural District Authority, will then be able to start work on an underground car park for what will eventually become a hub for culture and the arts.

Culture of expectancyAfter a wobbly start, Hong Kong’s West Kowloon Cultural District is now on the right track, says its bossBY MARY ANN BENITEZ* IN HONG KONG

The West Kowloon Cultural Dis-trict is part of Hong Kong’s audacious plan to foster cultural and creative in-dustries. It is the largest cultural project in the city to date. Macau is expected to benefi t too as it will be an hour away by ferry from one of the world’s biggest centres of culture and the arts.

The plan envisages a cultural quar-ter for Hong Kong and facilities for holding world-class exhibitions, per-formances and other artistic and cul-tural events. The district will have 17 core venues and 30,000 square metres of space for arts education.

It will be a low-density develop-ment, with ample green space. It will have two kilometres of harbour-front promenade, 23 hectares of open space and a huge park. Assuming the devel-

opment plan for the district gets statu-tory approval, construction is due to begin next year.

The master plan is designed by British architect Sir Norman Foster. It is meant to be “a place for everyone”. The district will have a museum of modern art called M+, theatres, concert halls and other venues for perform-ances.

Water interfaceThe West Kowloon Cultural District Authority is an agency of the Hong Kong government. Its chairman is Chief Secretary for Administration Carrie Lam Cheng Yuet-ngor.

Mr Lynch, an Australian, was ap-pointed chief executive in July last year. He was formerly a director of the

Arts & Culture

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SEPTEMBER 2012

Australian Broadcasting Corporation, chief executive of London’s Southbank Centre and chief executive of the Syd-ney Opera House.

Mr Lynch feels everything is going according to plan so far.

“It’s been a pretty exciting fi rst year,” he says. “We’ve kept up to the timetable that we set out when I came in last year.”

In the past year Mr Lynch has con-centrated on the quest for statutory ap-proval for the development plan, while getting some pioneering cultural events going on. The idea is to stimulate inter-est among visitors even before anything is built on the site. By giving “a sense of what it is going to be like in a few years’ time”, Mr Lynch hopes to gener-ate enthusiasm for the district.

Once the West Kowloon railway terminus is fi nished, Mr Lynch can take a deep breath and get on with putting the development plan fully into action. He is particularly excited about what can be done with the West Kowloon Cultural District’s huge outdoor area.

The district is beside Victoria har-bour and will have some hilly features. It will have a lot of public art, a venue for modern music and an outdoor per-formance space big enough for 5,000 people, where large concerts and other events can be held.

“There’s a huge opportunity to in-terface with the water,” Mr Lynch says. “The park itself will be a really good opportunity to be able to do outdoor performances, ride your bikes, play games,” he says.

Diplomatic gift“What we’re trying to create with the park is a different notion of what a park in Hong Kong is,” Mr Lynch explains. Other parks there are “much too formal and constrained in terms of what hap-pens.”

His aim is to make the park work “whether you are interested in the arts, or whether you just want to go and lie in the grass, or see or talk to your boy-friend or girlfriend, or whatever”.

The West Kowloon Cultural Dis-trict Authority announced this year a competition for the design of the Xiqu Centre, the fi rst of the district’s venues designed for traditional opera perform-ances. The names of fi ve architects are now on the short list of prospective de-signers. The Xiqu Centre is scheduled for completion in 2015.

The West Kowloon Cultural District is part of Hong Kong’s audacious plan to foster cultural and creative industries

The district will have 17 core venues and 30,000 square metres of space for arts education

The master plan is designed by British architect Sir Norman Foster. It is meant to be “a place for everyone”

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SEPTEMBER 2012

“Progressively over the next year, we will undertake competitions for the pieces of cultural infrastructure on the site,” says Mr Lynch. The fi rst part of the park is due to be fi nished by early 2015 and phase one of the M+ museum is due to be ready at the end of 2017. Most of the main venues will be in place by 2020, although the plan envisages work on projects continuing beyond that date.

Switzerland’s former ambassador to China, Uli Sigg, has given the M+ museum a collection of modern Chi-nese art worth at least HK$1.3 billion (US$168 million). The 1,463 works by more than 300 artists – including Ai Weiwei, Ding Yi, Fang Lijun and Geng Jianyi – is perhaps the biggest and most important collection of modern Chi-nese art in the world. The West Kow-loon Cultural District Authority has signed an agreement to lend some of the Sigg collection to Australia’s Na-tional Portrait Gallery in Canberra.

Messy monikerOne of Mr Lynch’s priorities is to re-name the West Kowloon Cultural Dis-trict. He says the present name is too

much of a mouthful. He wants the dis-trict to be easily identifi able and dis-tinctive.

“What we’re looking at is an ap-propriate name and brand for the whole 40-hectare site that will make it easier for people to be able to know what it is, to be able to communicate with us and to understand what’s happening on it,” he says.

Mr Lynch had what he thought was a great idea for a name. “It was ‘WoK’ – West of Kowloon,” he says. “What is the one Chinese thing that every home in the world has?” But the idea was de-rided. Wok also means “mess” in Can-tonese. A branding company is now trying to come up with a new name.

While the branding company brainstorms over a new handle, the West Kowloon authority has other things to attend to. One is the need for more money for road tunnels and the underground car park. Estimates of the extra amount needed range from HK$4 billion to HK$8 billion.

The authority said last year that the cost of developing the district could rise to between HK$28 billion and HK$29 billion. The authority has HK$23 bil-

lion, having invested the HK$21.6 bil-lion that the government granted it in 2008. Mr Lynch told The Standard newspaper that it had given half to the Hong Kong Monetary Authority to in-vest and had put the rest in “a range of non-risky investments including ren-minbi”.

When Mr Lynch took charge the authority had a staff of 80. A year later it had almost 120. By July next year it will have 250.

“We’re now in a position to be able to say that over the course of the next fi ve years, we will change Hong Kong’s perception of what this project is about,” he says.

“The diffi culty from my point of view is that we want to stop talking about what we’re doing. We need peo-ple to see artistic events, commercial events or building. That progress is be-ing made.”

False startsThere is much scepticism about the West Kowloon Cultural District. It has been in gestation for 14 years, having originally been announced by Hong Kong’s fi rst chief executive, Tung

Arts & Culture

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*COPY EDITOR OF THE STANDARD (HONG KONG) NEWSPAPER

Chee-hwa, in 1998. But it was not until 2008 that the West Kowloon Cultural District Authority was set up.

The authority was subsequently shaken by resignations of senior execu-tives. Mr Lynch’s predecessor as chief executive, Graham Sheffi eld, a Briton, resigned after only fi ve months in the job in December 2010, citing health reasons.

The authority’s fi rst executive di-rector for project planning, Angus Cheng Siu-chuen, formerly an execu-tive of Walt Disney Imagineering, last-ed only one week and left for personal reasons.

Later, Hong Kong Chief Executive Leung Chun-ying’s name was dragged into a controversy over a confl ict of in-terest in a design competition connect-ed with the development.

Mr Lynch is well aware of the scepticism but says he is more worried about other tasks.

“The [smart] phone generation is a big challenge for art organisations eve-rywhere,” he says. “We’ve got to think about what we are going to do in terms of how connected [the Cultural Dis-

“It’s been a pretty exciting fi rst year,” says the CEO of West Kowloon Cultural District Authority, Michael Lynch. “We’ve kept up to the timetable that we set out when I came in last year”

trict] is and how well it works.”Hong Kong-Filipino freelance art-

ists Azon and Jun Canete say they are excited by the development of the West Kowloon Cultural District. “Since it was conceptualised, we thought that it would be a good venue, physically, to show art works of an artist. As we are both minorities here in Hong Kong and

both freelance artists, we also thought that we would be given a space to show-case our art works, and also for other artists in Hong Kong,” Azon says.

“Actually, every time we passed through the planned area, we were im-agining that we would have our exhibits there,” she says.

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Arts & Culture

repare yourself to aban-don the comfort of a theatre seat for the latest production by the Cul-

tural Centre. In “Here”, performers take art to some

unlikely outdoor places.The site-specifi c production is a

brand-new, tailor-made theatre creation to be presented in the Cultural Centre’s surroundings by three Macau perform-ers, in partnership with multi-award winning Danish dancer and choreogra-pher Kitt Johnson.

The production is the culmination of the Cultural Centre’s latest artistic exchange programme, aimed at inspir-ing Macau artists by providing them with opportunities to interact with international talent. This year, Johnson is the invited star.

She is known as a solo performer, although her work covers a wide spec-trum. The Danish artist has worked extensively on site-specifi c projects throughout Europe and has created a series of ensemble productions in the past few years.

Preparation for “Here” started in March, with an audition workshop in Macau on the basic concepts of site-specifi c performance, led by Johnson. The three Macau performers eventually selected – Candy Kuok, Jojo Lam and Oscar Cheong – were sent last month for a two-week residency in Copenha-gen to follow up on their training under Johnson. Their stay in Denmark ended with a show assessed by a panel of invited guests.

Back in Macau, the trio are now working on their outdoor creations, to be shown in the Cultural Centre’s urban surroundings. The pieces created will be linked with Johnson’s own new performance. All pieces will premiere on October 26.

Johnson says site-specifi c art is “works that are created within and for a specifi c site in a public or private space”. Primarily, it uses space meant

“HERE” TAKES SPECTATORS OUTSIDE THE WALLS OF THE CONVENTIONAL INTO THE WORLD OF SITE-SPECIFIC PERFORMING ARTAGENT

PROVOCATEURfor non-artistic purposes, often space used in day-to-day life – for example a supermarket, a car park or even a public toilet.

Water soundscapeBut art spaces can also be worked in a site-specifi c way, in the sense that art-ists must take the physicality of space and make it play an active role in their work, allowing the historical, sociologi-cal or other non-physical aspects of that space to defi ne the creation. Site-specifi c art also serves as an invitation to see and experience well-known types of spaces through the lens of perform-ances.

“The site-specif-ic is a provocateur,” says Johnson. “It blocks the way. It puts out the light and sends in the vandals. It fi ddles with the control desk and gives habit a push.”

For the piece she will be premier-ing next month, Johnson has established a “dialogue” with the Cultural Centre complex. During the two weeks in March when she was in Macau to select the artists for “Here”, she explored the nooks and crannies of the centre to look for aspects hidden under its concrete structure. What struck Johnson most distinctly was the feeling of the pres-ence of water.

“You feel the presence of the water very strongly. You have the fountains in the square and the downslope fountain that works as a water soundscape, as well as a visual, almost textural, experi-ence of water,” she says.

“And you have the wavy patterns in black and white on the paved areas. Knowing that also it’s reclaimed land and that the sea played an important role in the Portuguese expansion in the world adds even more signifi -cance to the aquatic presence in the Cultural Centre.”

HEREPRODUCER

Macau Cultural CentreWHERE

Macau Cultural Centre and its surroundingsWHEN

October 26 to 28, at a time to be announcedTICKETS

MOP120, available from www.macauticket.com

INQUIRIEStelephone +853 2870 0699

or [email protected]

Kitt Johnson

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SEPTEMBER 2012

JOJO LAMLam fi rst got in touch with

performing art in 2002, with a site-specifi c performance

entitled “Lost and Found” at the Fourth Chinese Drama Festival.

Since then she has been active in various kinds of art

presentations, including dance theatre, drama, musicals

and cinema.

OSCAR CHEONGA youthful performing

art worker, Cheong is actively involved in various kinds

of dance and theatre. Cheong has performed in Macau,

Bangkok, Guangzhou, Beijing and Taiwan.

He also creates and performs solo works of his own.

CANDY KUOKKuok is a core member of Comuna

de Pedra, a well-known arts association here. She has presented

individual works at several Macau festivals. Kuok completed

a three-year choreography course at the Macau Conservatory and

has taken part in previous artistic exchange programmes run by

the Cultural Centre.

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SEPTEMBER 2012

himsical, largely classical and most defi nitely musical, this year’s Macao International Music Festival brings a sampler of global sounds to the city for one month from October 5.

The Cultural Affairs Bureau has put together 23 performances

in the 26th season of the festival, investing MOP30 million (US$3.75 million) in an East-meets-West fusion of opera, mu-sical theatre, symphonic sounds, choral and chamber music and dozens of contemporary shows.

Among the headliners are the familiar in Italian and Chinese operas, the unusual – including Lithuanian folk and choral music – and the exceptionally popular – the free shows.

The festival organisers have renewed their efforts to pro-vide additional activities, paired with the events. It is part of the festival’s aim to stimulate public interest in the arts. More details are available at the festival’s website.

Inaugurating the festival on October 5 and running for three nights is a full-scale Broadway production of hit show “Peter Pan – The Musical”, starring Tony Award nominee Cathy Rigby.

A highlight of this year’s festival is Vadim Repin’s violin recital, on October 14. Undeniably one of the leading violinists in the world today, the Russian musician has been

MUCH HEAR THE WORLD’S MUSIC IN A MAJOR KEY AT THIS YEAR’S EDITION OF THE MACAO INTERNATIONAL MUSIC FESTIVAL

BY ANNIE CHAU

MUSIC

awarded numerous prizes and appeared with some of the world’s greatest orchestras.

Hometown heroesFestival regulars the Macao Chinese Orchestra bring “New Styles of National Music” to the Macau Cultural Centre Grand Auditorium on October 21. Three prominent contem-porary performers – Dai Ya (dizi), Wu Yuxia (pipa) and Jiang Kemei (banhu) – join forces with the orchestra to present

Haya Band

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Yuja Wang San Francisco Symphony

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Date: October 5 to November 7Venues: Various sites across MacauTickets: Prices begin at MOP80, with great discounts for seniors, students and group buys from the Kong Seng Ticketing Network, either online or by phone. There are limited tickets to free eventsOnline Reservations: www.macauticket.comMore information: Check the festival website at www.icm.gov.mo/fi mm; or call 2855 5555 in Macau, (852) 2380 5083 in Hong Kong, (86) 139 2691 1111 elsewhere in the Pearl River Delta region

masterworks by renowned Chinese composers, putting a modern slant on folk music. The trio are stars of their arts in the mainland, highly sought after for global collaborations.

Macau-born composer, pianist, conductor and living treasure, Lam Bun-Ching performs on October 27 and 28, bringing her Chinese sensibility and Western composition techniques. In each concert, she will be joined by a different group of guest artists.

More traditional music, this time from Inner Mongolia, with the Haya Band. If you have never had the pleasure of hearing “khoomei” or throat singing, or the “morin khuur” or horse-head fi ddle, prepare for a real experience.

Since 2006, the group has been smashing through pre-conceptions of national and ethnic ties, mixing traditional Mongolian singing and instruments with modern instru-ments. In their festival piece “Migration”, the Haya Band – “Haya” means boundary in the Mongolian dialect – infuses ancient melodies with fresh sounds and thinking.

Haya perform on November 5 at the Cultural Centre Small Auditorium but the group will host a free seminar, in Mandarin, the day before at the Macau Conservatory.

Red, white, blueThere has always been a strong classical music fl avour at the festival. This edition features performances by the Kodály Quartet from Hungary, Lithuania’s Kaunas State Choir and interpretations of works by Puccini, Wagner and Verdi, among others.

A headline classical act is the San Francisco Symphony on November 7 at the Macau Cultural Centre Grand Audito-rium. One of the United States’ and the world’s most loved orchestras, they round out the month-long celebration.

Founded in 1911 by a group of San Francisco citizens, music-lovers and musicians, the San Francisco Symphony has become one of the most artistically adventurous arts institu-tions in the United States.

Among the host of international awards they have col-lected in the past 100 years, the symphony has won 14 Gram-my Awards and been awarded 15 times by the American Society of Composers. There’s a hectic performance schedule to meet too, with an average of 220 concerts a year for a total audience roughly equivalent to the population of Macau.

Mainland pianist Yuja Wang joins the symphony in Macau. Her command of the keys has been described as “astounding” and “superhuman”. She has been praised for her authority over the most complex technical demands and depth of insight.

26TH MACAO INTERNATIONAL MUSIC FESTIVAL

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Peter Pan – The Musical

Kodály Quartet

Vadim Repin Lam Bun-Ching

Entertainment112

BY SARA FARR

BURSTS OF LIGHTTEN PYROTECHNICS TEAMS WILL VIE IN THIS YEAR’S FIREWORKS DISPLAY CONTEST TO BRING FIERY DELIGHTS TO THE EVENING SKY

or the past 23 years crowds have gathered on the waterfront to view the delights that the Macau International Fireworks Display Contest has to offer. This year’s contest promises to be just as thrilling.

Ten pyrotechnics companies are due to set the evening sky ablaze on fi ve occasions between September 8 and October 1. They will be from Australia, the mainland, France, Italy, Japan, South Korea, Portugal, Thailand, Taiwan and the United States.

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SEPTEMBER 2012

Entertainment

The companies from France and Italy will be competing here for the fi rst time. The mainland team won last year.

Each display will last about 18 minutes, with two dis-plays every evening of the contest, one at 9pm and the other at 10pm. Competing teams are asked to complement their displays with music.

Sound systems will be installed on the waterfront, namely in the Macau Tower outdoor plaza, in Rua da Torre de Macau and in the square in front of the statue of Kun Iam on Avenida Dr Sun Yat Sen, so that the public can enjoy the soundtracks synchronised with the shows. Radio Macau will simultaneously broadcast the soundtracks on FM100.7.

This year’s contest has a budget of MOP11.5 million (US$1.4 million), 21 percent more than last year’s. The Macau Government Tourist Offi ce has raised its subsidy to entrants by 25 percent to US$25,000 to cover the cost of fi re-works. Logistics support has also been increased for every team.

The tourist bureau is also holding a competition to design a trophy to be presented to the winners of next year’s contest, the 25th edition.

Old rivalsThe International Fireworks Display Contest is meant to celebrate Macau’s industrial heritage. Making fi reworks used to be one of the main crafts here and fi reworks were one of the city’s main exports. Fireworks manufacturing reached its

peak during the fi rst half of the 20th century but the industry fi zzled out in the 1990s with the closure of the last factory.

One of the newcomers to the contest this year is French company Lacroix-Ruggieri, which has more than 250 years’ experience of setting off fi reworks with unique effects and colours.

It is among the top-ranked companies in Europe. In 2010, it won the World Fireworks Championship.

The other newcomer here is from Italy. Orzella Fireworks Srl, established in 1884, specialises in combining special ef-fects with music.

Wealth of experienceThe other eight companies are veterans of previous contests. Some have fi nished in the top three more than once. For

SPARKLING FACTS1) Fireworks were fi rst made only from gunpowder. Today, chemicals are added for special effects, including colour

2) For all their variety, fi reworks are all made in much the same way. The ingredients are put in a shell, the shell is wrapped up and then a fuse is inserted

3) In other countries the authorities advise that only adults light fi reworks but in Macau children set off fi recrackers and rockets by the hundreds to celebrate the Lunar New Year

The International Fireworks Display Contest is meant to celebrate Macau’s industrial heritage. Making fi reworks used to be one of the main crafts here and fi reworks were one of the city’s main exports

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SEPTEMBER 2012

BIG BANG THEORYHistory tells us that fi recrackers and then other kinds of

fi reworks were invented in China. It has been suggested that the fi rst fi recracker was created more than 2,000 years ago – well before the invention of gunpowder.

The suggestion is that bamboo was heated, causing the pockets of air inside to expand until the bamboo exploded. The noise of the explosion scared living creatures, so the Chinese believed that it would also scare away spirits.

The belief spread and it became customary for people to burn bamboo sticks at Lunar New Year to ensure happi-ness and prosperity, much as they set off fi recrackers today. It subsequently became common to burn bamboo to mark other special occasions, such as weddings and births.

Then, in the 9th century, gunpowder was invented. Legend has it that it was invented by accident when a cook mixed charcoal, sulphur and saltpetre, all materials once commonly found in the kitchen.

Chinese alchemists decided that putting this mixture into the pockets of air in bamboo would result in stronger, louder explosions. Subsequent experiments showed that bamboo could be dispensed with altogether and cylinders made of stiff paper or cardboard substituted, and so fi recrackers evolved. Further experiments with leaving one end of the cylinder open resulted in rockets, and so the fi rst aerial fi re-works were created.

Italians became fascinated by fi reworks in the late 13th century, when Marco Polo brought knowledge of them back to Venice from the mainland. But it was not until the 15th century that fi rework displays became an art form, attracting crowds throughout Europe.

These displays became popular in the English-speaking world in the 1700s, when instead of being put on for royalty alone, they were put on for the general public, too.

The novelty reached America only in the 18th century. European settlers used fi rework displays to mark special oc-casions and impress native Americans. S.F.

Panda Fireworks of China, 2011 Marutamaya Ogatsu Fireworks of Japan, 2007

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SEPTEMBER 2012

MACAU INTERNATIONAL FIREWORKS DISPLAY CONTESTSATURDAY, SEPTEMBER 89PM WOORI FIREWORKS, SOUTH KOREA10PM THAILAND FIREWORKS, THAILAND

SATURDAY, SEPTEMBER 159PM SYYUAN FIREWORKS, TAIWAN10PM INFINITY PYROTECHNIC, AUSTRALIA

SATURDAY, SEPTEMBER 229PM PIROTECNIA MINHOTA, PORTUGAL10PM LACROIX-RUGGIERI, FRANCE

SATURDAY, SEPTEMBER 299PM MARUTAMAYA OGATSU FIREWORKS, JAPAN10PM PYRO SPECTACULARS BY SOUZA, UNITED STATES

MONDAY, OCTOBER 19PM ORZELLA FIREWORKS, ITALY10PM PANDA FIREWORKS, CHINA

example, the mainland’s Panda Fireworks Group Co Ltd, which has competed here for the past two years, won last year and came second in its debut in 2010.

United States will be represented by Pyro Spectaculars by Souza, which has huge experience of putting on fi reworks displays for big sporting events – including the Olympic Games and the World Cup. This is the company’s second outing in Macau, after fi nishing second in 2006.

Japan’s Marutamaya Ogatsu Fireworks Co Ltd has also competed here twice. It won in 1993 and came third in 2007. The company is known for its hand-made spherical fi reworks. It has visited nearly 50 countries in the past six decades and put on more than 200 shows.

Pirotecnia Minhota Lda of Portugal was one of the fi rst teams to compete here. It won the contest in 1991.

The “people’s choice”The tourist bureau and telecommunications provider CTM will hold a competition for spectators. Spectators can vote by text message for their favourite team each night of the fi reworks contest. Those who vote for the most popular team of the night will go into the draw for tickets for the Macau Grand Prix in November. The most popular team each night will receive the “people’s choice” certifi cate.

There will also be a contest to fi nd the best drawings and photographs of the displays.

And each night during the event, the General Union of Neighbourhood Associations and the tourist bureau will hold a fi reworks carnival. Last year’s edition attracted 25,000 visitors.

Entertainment

Pyro Spectaculars by Souza of the United States, 2006

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SEPTEMBER 2012

Who are tomorrow’s consumers?

Luxury-brand companies’ stock prices plunged in July, after their fi nancial results disappointed investors, owing largely to slower sales in emerging markets, especially in China.

Meanwhile, news reports indicate that high-end shopping malls in India and China are increasingly empty.

What is going on? Many analysts had expected emerging markets to generate exponential growth over the next decade. But now there is talk of how the global crisis is slowing down these economies and killing off discretionary spending.

But a slowdown in China’s economic growth cannot really be blamed for slower sales of luxury goods or empty malls. The annual growth rate of China’s US$7.5 trillion (MOP60 trillion) economy decelerated to 7.6 percent in the second quarter, from 8.1 percent in January-March – hardly a cause for panic. Moreover, two-thirds of the decline is attributable to slower investment rather than slower consumption. For all of China’s long-term structural problems, it is not exactly slipping into recession.

The real problem is that many analysts had exaggerated the size of the luxury-goods segment in emerging markets. China is by far the largest emerging-market economy, with 1.6 million households that can be called “rich” (defi ned as having annual disposable income of more than US$150,000). But this is still smaller than Japan’s 4.6 million and a fraction of the 19.2 million rich households in the United States. The number of rich households amounts to barely 0.7 million in India and one million in Brazil.

Asia’s middle classThe point is that developed countries still dominate the income bracket that can afford luxury goods. The explosive growth recorded by this segment in emerging markets in recent years refl ected entry into previously untapped markets, with the subsequent slowdown resulting from saturation. The number of high-income households is still growing, but not enough to justify the 30 to 40 percent compounded growth rates expected by some.

This does not mean that growth opportunities in emerging markets have disappeared, but expectations do need to be recalibrated. Despite the economic boom of the last decade, China still has 164 million households that can be called “poor” (with annual disposable income of less than US$5,000) and

another 172 million that are “aspirant” (between US$5,000-US$15,000). Similarly, India has 104 million poor households and 107 million aspirant households.

The real story for the next two decades will be these countries’ shift to middle-class status. Although other emerging regions will undergo a similar shift, Asia will dominate this transformation.

A study by the economist Homi Kharas of the Brookings Institution gives us a sense of the scale of this change. He estimates that 18 percent of the world’s middle class lived in North America in 2009, while another 36 percent lived in Europe. Asia’s share was 28 percent (after including Japan).

But Mr Kharas’s projections suggest that Asia will account for two-thirds of the world’s middle class by 2030. In other words, Asia will displace not just the West, but even other emerging regions. This is the real business opportunity.

Of course, the rise of Asia’s middle class is not the only change we should expect. We are in the middle of a social and demographic shift that will both destroy and create consumer markets. The aging of developed markets is well known, but the latest data show that emerging markets are aging at an even faster pace.

A changing worldChina’s median age is today 34.5 years, compared to 36.9 years for the United States. However, the average Chinese will be 42.5 years old by 2030, compared to 39.1 for the average American. The median Russian will be even older, at 43.3 years.

The impact of aging is already being felt in these countries’ education systems. The number of students enrolled in primary schools in China has fallen by 18 percent since 1990, and by an astonishing 33 percent in South Korea. At the other end of the demographic scale, the share of the aged is growing explosively.

Meanwhile, the nature of the basic consuming unit – the household – is also changing rapidly. In most developed countries, the traditional nuclear family is in severe decline and is being replaced by single-individual households. In Germany, for example, 39 percent of households consist of just one person. Couples with children now account for barely 19 percent and 22 percent of households in the United Kingdom and the U.S., respectively.

Nevertheless, it is not all about consumer atomisation. We are simultaneously witnessing the re-emergence of the multigenerational extended family, with as many as 22 percent of American adults in the 25-35 age group living with parents or relatives. By contrast, the extended family is giving way in India to nuclear families, which now account for 64 percent of households.

All of these changes will profoundly affect the future of consumer markets. For example, we need to revise our mental image of the nuclear family from American suburbia to fi t the rapidly expanding cities of India. By the same token, our mental image of the multigenerational extended family needs to include those in the West. An aging but increasingly middle-class Asia will be at the core of this new consumer landscape.

SANJEEV SANYAL DEUTSCHE BANK’S GLOBAL STRATEGIST

WE ARE IN THE MIDDLE OF A SOCIAL AND DEMOGRAPHIC SHIFT THAT WILL BOTH DESTROY AND CREATE CONSUMER MARKETS

Despite the economic boom of the last decade, China still has 164 million households that can be called “poor” (with annual disposable income of less than US$5,000) and another 172 million that are “aspirant”

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Moments118

BURLESQUE SPECTACULARCity of Dreams’ cabaret show “Taboo” elevated the level of naughtiness last month with the guest appearance of Dita Von Teese. The American-born diva is famous for her dance shows, often inspired by the 1930s and 1940s. The guest appearance of the “Queen of Burlesque” even attracted some Hong Kong A-list celebrities to Macau, all eager to experience the allure of Ms Von Teese. “Taboo” is scheduled to put on its last show this month, on September 15.

Dita Von Teese and her trademark martini glass fi lled with champagne

Walter Hau, Vinci Wong and Stephanie Cheng Ingrid Chen and Charlotte Chen

Stephen Hung, Yvette Yuen, Deborah Hung, Ryan Lam and Fanny Sieh Chrissie Chau

Hanjin Tan

Sally and Robert Lo

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SEPTEMBER 2012

119119

THE MODERN ULTRA-TRIATHLONOffi cials said there were at least two unrelated cases of mainland punters illegally entering Macau last month who admitted to having swum from Zhuhai just to gamble.

Inspired by these cases and still fi red up after the Olympic Games, Frozen Spy hereby proposes the establishment of Macau’s very own triathlon.

It would consist of a night swim in the, ahem, pristine waters of the Pearl River Delta from Zhuhai to Macau; then a 20-hour baccarat marathon; and, fi nally, a 100-metre sprint, chased by the police.

Those that fi nish will get the ultimate reward: gold-standard service in one of the city’s fi ne massage parlours.

Frozen Spy is sure such a competition would be a success, attracting a high number of entries. There are so many mainland athletes practising for the event that it would be a certain gold medal for China.

Does anyone have the phone number for the International Olympic Committee’s Jacques Rogge?

RESEARCH EXERCISELee Chong Cheng, a directly elected member of the Legislative Assembly and trade union leader, has been under fi re because the Macau General Volunteers Association, which he heads, has established a research centre.

The research centre is in the Macau Daily News building. The conditions of the lease of the land occupied by the newspaper’s building prohibit subletting of the premises. But the government has approved “lending” space to the research centre.

Questions have also been asked about funding for the centre, most of which comes out of the public purse. The Macao Foundation granted it MOP5 million (US$625,000) for the lavish refurbishment of its facilities in the Macau Daily News building.

Frozen Spy is sure none of this has anything to do with the Macau General Volunteers Association being well connected: Legislative Assembly president Lau Cheok Va and former Executive Council spokesman Tong Chi Kin are both involved, and the group is informally backed by the infl uential Macau Federation of Trade Unions.

Frozen Spy has just one question: why does a research centre need a private gym?

GOING DADAThe Venetian Macao put on an exhibition last month called “Masters in Ink”, a selection of 90 Chinese ink paintings with an combined value estimated at more than MOP100 million (US$12.5 million).

The exhibits included some unique works. Admission to the exhibition was free and even the catalogue cost nothing.

Frozen Spy applauds such initiatives. Other resorts in Cotai are following the same path. It is nice to know casino operators are doing their fair share to sponsor the arts.

The same cannot be said about the government-funded Art Museum. It is a tough task to remember any noteworthy international exhibition there under the management of Chan Hou Seng.

While Hong Kong hosted a Picasso exhibition, 55 pieces for a two-month stint earlier this year, the Art Museum here enlightened us last year with a display of photos of food taken by residents and tourists with their mobile phones. Talk about Dadaism.

THREE-PIECE SWIMSUITSStill on swimming, one of the hottest trends for beachgoers in the mainland, specifi cally in Qingdao, is the use of nylon facemasks. Many swimmers wear these protective masks to stop jellyfi sh stinging their faces.

The masks – known as “face-kinis” – are most popular among females, who want to prevent sun damage from spoiling their pearly white complexions.

Frozen Spy thinks these masks should be compulsory for the brave swimmers venturing into the waters off the beaches at Cheoc Van and Hac Sá.

With the pH values of one in every three samples of the water there outside the recommended range, and with excessive concentrations of lead and mercury in the briny, a swim at the beach in Coloane is like playing Russian roulette.

Lee Chong Cheng

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MGTO IBC www.macautourism.gov.mo

Morton’s The Steakhouse Page 53 www.mortons.com

PokerStars Macau Page 05 www.pokerstarsmacau.com

Porsche Page 01 www.porsche.com.hk

Sands China BC www.sandschinaltd.com

Shuffl e Master Page 73 www.shuffl emaster.com

SJM Page 107 www.sjmholdings.com

Zung Fu Motors – Mercedes Page 09 www.zungfu.com.mo

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September2012

MB 101 | September 2012

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