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Possible Challenge to Macau Gambling Takes Shape in Hainan

February 18, 2013 by Leave a Comment

SANYA, CHINA — Placing bets on green-felt baccarat tables in a new casino bar on Hainan, a resort island in southern China, visitors seem oblivious to a huge wager quietly being made around them — one that could siphon business from Macau, the world’s largest gambling hub, an hour’s flight away.

For now, players at the casino bar, Jesters — part of the Mangrove Tree Resort World, which opened late last year on Sanya Bay — cannot win cash, only points they can use at the resort to pay for accommodation, luxury goods, jewelry and artwork.

Owned by Zhang Baoquan, an art, film and real estate mogul, the casino bar is the Chinese government’s first approval, albeit tacit, of a gambling concept outside Macau and apart from two state-run lotteries. Global investors, including some of the biggest casino companies, are watching.

“Our casino bar is the first in the country,” Mr. Zhang said in an interview at his 23rd-floor office overlooking the 70-hectare, or 173-acre, property. “The government is monitoring. It’s a test.”

“Right now we are not at this stage,” he added, referring to whether casino gambling was being legalized in mainland China. “But my personal opinion is, in future, there is a big possibility that they will have.”

The stakes are enormous — casinos in Macau, the former Portuguese colony that is now a special administrative region of China, posted $38 billion in gambling revenue last year, primarily from mainland Chinese players. If Beijing were to allow gambling elsewhere in the country, the cash would follow.

Last year, MGM Resorts International opened a hotel in Sanya, a popular tourist destination on Hainan Island, and a fellow U.S. casino operator, Caesars Entertainment, plans to open a hotel in 2014.

When asked about gambling in Hainan, an MGM spokesman said the company had no plan to introduce “anything of this kind.” Caesars did not respond to requests for comment.

Dressed in jeans and a black-and-white Hawaiian shirt during his interview, the 56-year-old Mr. Zhang — ranked by Forbes magazine as one of the 300 richest people in China in 2012 with a fortune estimated at $600 million — said he aimed to create an integrated resort, similar to those in Las Vegas, Macau and Singapore, where gambling, convention space and retail outlets were offered together.

Mangrove Tree Resort World, the newest addition to Hainan’s rapidly developing hotel industry, will be one of the biggest resorts in mainland China, when construction is completed next year. It is to have more than 4,000 rooms, a convention hall able to accommodate 6,000 people and a water park.

It is one of 10 integrated resorts that Mr. Zhang is developing around the country, including another in Sanya and others in Lhasa, the Tibetan capital, and Qingdao, on the northeast coast.

While the Chinese government does not permit casinos on the mainland, Mr. Zhang said Hainan could become an exception. Sensitive to existing restrictions, the soft-spoken businessman emphasized that along with casino bars, cultural attractions like art galleries would be incorporated into the planned resorts.

Inside Jesters, the Sanya resort, with its garish chandeliers and a ceiling made to look like a giant roulette wheel, players buy tickets costing 500 renminbi, or $80, apiece. Bets range from 20 to 2,000 renminbi in the low-rollers’ area, while the high-limits bets run from 2,000 to 100,000 renminbi. Patrons will be able to bet more that 100,000 renminbi, once the V.I.P. room opens on the second floor.

The casino bar, with 50 gambling tables now, is open only to hotel guests, but when the resort is completed, local residents are to be allowed in.

When players win, they receive points that can be used to buy products available in the casino, like an iPad 3G or a Rimowa suitcase.

Article source: http://www.nytimes.com/2013/02/19/business/global/possible-challenge-to-macau-gambling-takes-shape-in-hainan.html?partner=rss&emc=rss

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Chinese Economy Picks Up Steam in Last Quarter

January 17, 2013 by Leave a Comment

HONG KONG — The giant Chinese economy picked up some steam during the last few months of 2012, closely watched data from Beijing on Friday confirmed. But at the same time the figures underlined the view that the pace of future growth is likely to remain well below that seen in recent years.

China’s gross domestic product expanded 7.9 percent during the final quarter of last year, compared to a year earlier — slightly better than expectations, and significantly above the 7.4 percent pace recorded during the previous quarter.

Separate data for the month of December also came in a touch better than analysts had forecast: Retail sales expanded 15.2 percent from a year earlier, and industrial output grew 10.3 percent. Both figures were slightly better than those recorded in November, and helped lift stock markets in mainland China and Hong Kong on Friday.

China’s mild re-acceleration has been helped by a gradual recovery in overseas demand for Chinese-made goods in recent months, as well as a string of economic stimulus measures that helped dissipate earlier concerns that China might be headed for a “hard landing” during 2012.

At the same time however, the batch of data released by the Chinese statistics bureau on Friday also underlined that China’s once red-hot economy has now settled into a much lower pace of expansion.

The head of the statistics authority, Ma Jiantang, acknowledged as much at a press conference in Beijing: “I think you could use these two sentences to give a relatively concise assessment of economic performance in 2012,” he said. “First, national economic performance maintained stability while slowing; second, economic and social development made advances while maintaining stability.”

Annual expansion has slowed to around 8 percent — the pace for 2012 was 7.8 percent, according to Friday’s data, and many analysts expect a similar or slightly better pace for 2013 — far below the double-digit rates it enjoyed in the past.

Moreover, analysts believe the pace is likely to slow even further over the coming decade as the authorities pursue a shift towards higher-quality growth, and grapple with the gradual aging of the country’s population.

Friday’s data confirmed “that the worst is probably over for the economy and that China has avoided a hard landing. But it is quite a narrow escape,” commented Xianfang Ren, an economist at IHS Global Insight in Beijing, in a note. “The economy will likely be wiggling within quite a narrow band of growth rates in 2013, as the upside pull only marginally outweighs the downside drag.”

Chris Buckley contributed reporting.

Article source: http://www.nytimes.com/2013/01/19/business/global/chinese-economy-picks-up-steam-in-last-quarter.html?partner=rss&emc=rss

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Markets Jump on Fiscal Deal

January 2, 2013 by Leave a Comment

Global stocks kicked off the 2013 trading year with a strong start Wednesday, as investors welcomed a deal between President Obama and Congressional Republicans that ended, at least temporarily, an impasse over fiscal policy that had threatened chaos in the new year.

The broad-based Standard Poor’s 500-stock index leapt 1.7 percent in afternoon trading. The Dow Jones industrial average also jumped 1.7 percent, or about 225 points, and the Nasdaq composite index climbed 2.2 percent.

The deadline drama over the fiscal impasse ended when a sufficient number of Republicans in the House of Representatives joined Democrats to back a deal the Senate had reached earlier. The deal modestly raises income taxes on the highest-earning Americans, ends payroll tax cuts and creates permanent tax cuts for others.

“There’s clearly a big relief rally,” said Christian Schulz, an economist in London with Berenberg Bank.

The Euro Stoxx 50 index of euro zone blue chips ended 2.4 percent higher, while the FTSE 100 index in London gained 2.1 percent. The euro gained 0.6 percent to $1.3270, and yields fell on Spanish and Italian government bonds.

Asian indexes also gained, with the Hang Seng Index in Hong Kong rising 2.9 percent. But markets in Japan and mainland China were closed for holidays.

Still, analysts warned that the gains might not last, as the last-minute deal had only bought time.

The deal “is likely to prove only a temporary fix to address fiscal uncertainty in the U.S.,” Lee Hardman, an analyst at Bank of Tokyo-Mitsubishi UFJ in London, wrote in a research note, pointing out that “the planned sequester government spending cuts merely delayed for two months.”

Investors, he added, probably will begin to focus on “whether U.S. politicians will be able to raise the debt ceiling in the next two months to avert a technical default, and whether the delayed sequester spending cuts will now come into force on March 1.”

Mr. Schultz noted that the United States hit the debt ceiling of $16.4 trillion, or 104 percent of 2012 gross domestic product, on Dec. 31, and could it exceed it as soon as February without Congressional action.

There are also questions about how America’s new commitment to cutting the deficit will affect the economy and its credit ratings.

“The austerity they’ve imposed is very modest,” Mr. Schultz said, “perhaps 1 percent of G.D.P. So maybe the most interesting thing will be to see how the ratings agencies react.”

Analysts at DBS in Singapore wrote in a research note: “Call it breathing room, call it kicking the can down the road, call it whatever you like — come mid-February, when the decision on the legal U.S. debt limit will be needed, the fight starts afresh.”

They added, “Two more months of shenanigans and waffling/seasick markets? It certainly looks that way.”

In economic reports, the Institute for Supply Management said manufacturing in the United States expanded slightly in December. Its manufacturing activity index rose to 50.7 points in December, up from 49.5 in November.

In Europe, manufacturing activity remained in the doldrums. Surveys of purchasing managers by Markit Economics showed euro zone factories ended 2012 in poor shape, with both production and new orders declining in December. German factories posted declines in both output and new orders, according to the Markit data, while the Spanish manufacturing shrank a 20th consecutive month, with both the decline and the pace of job cuts accelerating.

David Jolly reported from Paris. Bettina Wassener reported from Hong Kong.

Article source: http://www.nytimes.com/2013/01/03/business/global/03iht-asiamarkets03.html?partner=rss&emc=rss

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Apple Suspends iPhone 4S Sales in Mainland China Stores

January 13, 2012 by Leave a Comment

Carolyn Wu, an Apple spokeswoman, said that because of the incident, the company will suspend iPhone 4S sales in its mainland China stores to protect its employees and customers, The Associated Press reported. Ms. Wu said the store in Beijing’s trendy Sanlitun district could not open Friday morning because of the crowd outside.

Hundreds of people who had waited overnight in freezing temperatures reacted furiously when an employee announced over a bullhorn shortly after 7 a.m. that the phone would not be sold that day. Police encouraged the crowd to disperse and temporarily cordoned off the store.

It was the second time in less than a year that the Sanlitun store had been forced to temporarily close while trying to offer a new product. In May, four people were injured and a glass door was smashed when a crowd waiting to buy the iPad 2 turned disorderly, according to China Daily.

Apple has struggled in China to protect itself from hoards of scalpers who snap up its inventory and re-sell the products at jacked-up prices. The crowd outside the Sanlitun store Friday included organized units of 30-50 migrant workers, distinguishable by symbols like colored arm bands, who had been bussed in by resellers.

Some told reporters that the store’s decision to close meant they would not be collect more than ten renminbi, or about $1.58, given as a food allowance.

Article source: http://www.nytimes.com/2012/01/14/technology/apple-suspends-iphone-4s-sales-in-mainland-china-stores.html?partner=rss&emc=rss

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Asian Stocks Mostly Down on Europe Bank Worries

December 29, 2011 by Leave a Comment

BANGKOK (AP) — Asian stock markets were mostly lower Thursday as traders shied away from riskier assets as the year drew to a close, but hopes for a successful bond issue in Italy boosted shares in Europe.

Benchmark oil lingered above $99 per barrel while the dollar rose against the euro but fell against the yen.

European shares edged up in early trading. Britain’s FTSE 100 was marginally higher at 5,511.32. Germany’s DAX rose 0.3 percent to 5,788.06. France’s CAC-40 was 0.3 percent higher at 5,788.01. Wall Street was headed for a higher opening, with Dow Jones industrial futures gaining 0.2 percent at 12,099. Broader SP 500 futures rose 0.1 percent at 1,245.80.

Earlier in Asia, however, investors booked losses amid light trading. Japan’s Nikkei 225 index fell 0.3 percent to close at 8,398.89. Hong Kong’s Hang Seng Index closed 0.7 percent lower at 18,397.92. Australia’s SP ASX 200 fell 0.4 percent to end 4,071.10. Benchmarks in India and Singapore were also lower.

Other Asian markets eked out small gains. South Korea’s Kospi reversed earlier losses and closed marginally higher at 1,825.74. On mainland China, the benchmark Shanghai Composite Index gained 0.2 percent to end at 2,173.56, while the smaller Shenzhen Composite Index added 0.1 percent to finish at 850.94.

Investor sentiment waned in Asia hours after the European Central Bank said banks had parked $590.72 billion with it overnight Wednesday. That surpassed the record set only Monday and showed that European banks were using money lent by the ECB bank to park money there instead, rather than make loans to each other.

Francis Lun, managing director of Lyncean Holdings in Hong Kong, said the action on the part of the banks “defeated the purpose” of the ECB lending operation, which was to spur business activity.

“Investors are disappointed at the development,” Lun said. “Europe still has not found an answer on how to solve its sovereign debt crisis. There’s no solution, and they are trying cosmetic measures, which really do not address the problem.”

The development also shook confidence in the euro, which on Wednesday dropped to $1.2910 — its lowest level against the dollar in nearly a year — before recovering slightly.

Traders were closely watching for the results of an auction of longer-dated bonds by Italy later Thursday. The country held what was deemed a surprisingly successful auction of short-term bonds Wednesday, with sharply lower interest rates than at a similar auction a month before.

Meanwhile, the yen’s rise to a 10-year high against the euro put stress on Japan’s exporters. Kyodo News agency said the euro briefly fell to 100.35 yen in Tokyo, its lowest level against the Japanese currency since June 2001. Honda Motor Corp. fell 0.8 percent. Sharp Corp. shed 3.2 percent.

Commodity shares in Australia came under pressure amid worries about the state of the global economy. Gold miner Newcrest Mining Ltd. lost 3 percent. Mining giant Rio Tinto fell 0.4 percent. OZ Minerals fell 2.9 percent after the company said copper concentrate may have spilled from a derailed train.

In currency trading Thursday, the euro fell to $1.2920 from $1.2941 late Wednesday in New York. The dollar fell to 77.70 yen from 77.91 yen.

Benchmark crude for February delivery rose 28 cents to $99.65 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.98 to settle at $99.36 in New York on Wednesday.

Article source: http://www.nytimes.com/aponline/2011/12/28/business/AP-World-Markets.html?partner=rss&emc=rss

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Economix Blog: Is Overregulation Driving U.S. Companies Offshore?

November 8, 2011 by Leave a Comment

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

As my colleague Richard A. Oppel Jr. reported on Thursday, Gov. Rick Perry of Texas is arguing that companies are sending work abroad primarily because of overregulation in the United States, and not because labor is cheaper abroad.

“They did not leave to begin with just because they could find cheap labor somewhere,” said Mr. Perry, who is running for the Republican presidential nomination. “That may have been part of a formula, but it is not the reason they left. I would suggest to you they left because they were overregulated, and the cost of that regulation and the tax structure that we have in place in this country is what drove the masses away.”

Is that statement true? Are American regulations so burdensome that they are driving companies abroad?

Certainly the United States tax code is impenetrably complicated, and companies do have to deal with plenty of regulations. But even so, the United States is far friendlier to business than are emerging markets like India and mainland China, according to international analyses of regulatory climates.

For the last nine years, the World Bank has been grading countries on 10 measures of business regulation: getting electricity, enforcing contracts, protecting investors, dealing with construction permits, trading across borders, registering property, resolving insolvency, paying taxes, getting credit and starting a business.

Based on these criteria, these are the top 10 countries where it is easiest to operate a business:

  • Singapore
  • Hong Kong
  • New Zealand
  • United States
  • Denmark
  • Norway
  • United Kingdom
  • South Korea
  • Iceland
  • Ireland

That’s right: The United States comes in fourth.

Hong Kong beats the United States, but mainland China — that bugaboo of American employment protectionists — does not. Instead, China comes in 91st. Despite the higher regulatory burden, American-based multinational companies have increased their employment in China by 161,400 from 2007 to 2008, a gain of about 20 percent, according to the Bureau of Economic Analysis. (The most recent data are for 2008.) In fact, American employment in China rose 77 percent in the prior decade, from 1998 to 2008.

India does even worse, with a ranking of 132nd. Edward L. Glaeser has written for Economix before about India’s struggles with having a stable and transparent regulatory system and public sector.

As they have done in China, American companies have ratcheted up their employment in India by 43,000, or about 13 percent, from 2007 to 2008. From 1998 to 2008, the number of people in India working for American companies rose by 54 percent, according to the Bureau of Economic Analysis.

In another measure of business climate and competitiveness put out by the World Economic Forum, the United States ranks fifth, again ahead of China (26), India (56) and a host of other countries where American companies are adding jobs.

Presumably, then, American companies are not attracted to these places because the business climate is more favorable.

Article source: http://feeds.nytimes.com/click.phdo?i=752e2d39d4005f9586bf20aeb3778aaa

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Worries About Italy’s Debt Drag Down Asian Markets

July 12, 2011 by Leave a Comment

HONG KONG — Growing nervousness about the debt crisis in Europe and the prospects for global growth continued to pummel both Asian stock markets and the euro on Tuesday as investors took refuge in what they saw as safer assets.

Stock markets across Asia dropped on Tuesday, continuing a slide that had sent equities around the world lower as investors began to fret that Italy, too, could fall victim to its combination of high debt, feeble growth and political paralysis.

Those worries, combined with the prospect of a possible stalemate in U.S. budget talks and slowing growth in China, pushed down the Dow Jones industrial index 1.2 percent on Monday.

There was no respite on Tuesday. In Japan, the Nikkei 225 index fell 1.5 percent to 9,915 points by the lunchtime break in Tokyo.

The key market indexes in Taiwan and South Korean slumped 1.9 percent, the S..P/ASX 200 index in Australia fell 1.8 percent, and in Singapore, and the Straits Times index dropped 1 percent.

In Hong Kong, the Hang Seng sagged 2.1 percent, while in mainland China, the Shanghai composite index declined 1.1 percent by late morning.

The euro, too, weakened, falling to below $1.40, its weakest since March. The European currency bought $1.397 by late morning in Asia.

The worries about Italy have further shaken already fragile global market sentiment, even though Italy retains solid debt ratings, a sound banking system and a relatively small budget deficit compared to the size of its economy. The jitters prompted the Italian stock market regulator on Monday to impose emergency rules against short selling after shares in Italian banks slumped for a fifth straight session.

The cost of insuring Italy’s sovereign debt against default surged to an all-time high, and the interest on its 10-year bond leaped to a record 5.67 percent.

“The current escalation of the euro area periphery crisis is the third period in which the problems facing Greece, Ireland and Portugal have seriously threatened more serious contagion in the euro area,” Paul Robinson, an analyst at Barclays Capital, wrote in a note.

As serious as the situation is, however, he added, “the previous episodes during which Spain and Italy were significantly affected proved temporary, and the situation facing both economies is far less serious than in Greece’s case.”

Article source: http://www.nytimes.com/2011/07/13/business/worries-about-italys-debt-drag-down-asian-markets.html?partner=rss&emc=rss

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