Dongzhi Festival or Winter Solstice Festival

Dongzhi Festival or Winter Solstice Festival

Dongzhi Festival or Winter Solstice Festival or The Extreme of Winter is one of the most important festivals celebrated by the Chinese and other East Asians during the dongzhi solar term on or around December 21 when sunshine is weakest and daylight shortest; i.e., on the first day of the dongzhi solar term. The seasonal significance of the winter solstice is in the reversal of the gradual lengthening of nights and shortening of days.

The coming of winter is celebrated by families and is traditionally the time when farmers and fishermen gather food in preparation for the coming cold season. It is also a time for family reunions.

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Nobel laureate tells Macau to diversify investment

Nobel prizewinning economist Robert Engle has advised Macau to invest more of its reserves in places other than China to spread the risk.

Mr Engle said this would make the city’s economy more resilient in the event of downturns in the mainland economy.

“If the biggest risk to the Macau economy is the Chinese economy, then you do not want to invest all your money in the Chinese economy. You should invest in other assets around the world,” he said.

“If you are investing abroad and the Chinese economy does well, the value of your portfolio may go down. However, in this scenario money will be flowing in and Macau will be prosperous.”

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Bank says gaming revenue slowing in November

Gaming revenue in Macau’s casinos averaged MOP813 million (US$101.79 million) a day in the first 23 days of this month, Credit Suisse says.

The bank says this is less than the daily averages in October and September.

Sterne Agee estimates that table-only gross gaming revenue was MOP17.9 billion in the first 23 days of this month.

Including assumptions about revenue from slot machines, the run rate implies that this month’s revenue will be 20 percent lower than a year ago, the stockbroker says.

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Q3’s 240 MICE events attract 725,000 people

Macau held 240 meetings, incentives, conventions or exhibitions in the third quarter of this year, 14 more than a year earlier, official data show.

The Statistics and Census Service says the number of people that took part in MICE events or attended them rose by 16 percent to 725,000.

About 29,000 people took part in 214 meetings and about 695,000 people attended 26 exhibitions.

The events used 161,000 square metres of floor space.

Each lasted, on average, 2.2 days.
The combined receipts of third-quarter exhibitions were MOP37.33 million (US$4.67 million), 81 percent more than a year earlier.

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Macau companies to be offered some Ilha Verde work

The government says it has given the contract to build the facilities at the new border crossing in Ilha Verde to state-owned Guangdong Nam Yue Group Co Ltd, but will invite bids by Macau companies to design the project, monitor construction and control the quality.

Infrastructure Development Office deputy director Chau Vai Man said so in the Legislative Assembly, where some members have criticised the way the main contract was awarded.

Mr Chau did not answer questions by members about how much the project would cost.

He said construction work would begin after the Guangdong and Macau authorities had decided on the details of the design.

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Academic advises more cooperation in RMB business

Macau should cooperate more closely with other places in the Pearl River Delta to widen the margins on business it does in renminbi, an academic has said.

The head of Sun Yat-sen University’s Linnan College department of public finance and taxation, Lin Jiang, said that despite the huge amount of clearing and settlement done in renminbi, the profit on this business was relatively small and the technical content low.

Mr Lin was speaking in the light of the State Council’s decision this month to approve the policy of supporting the efforts of Nansha in Guangzhou to promote financial cooperation among Guangdong, Hong Kong and Macau.

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Macao Gaming Show

It’s time for another Macao Gaming Show (MGS), organised by the Macau Gaming Equipment Manufacturers Association (MGEMA).

Read the full version of this article in the April issue of Macau Business magazine, now available atMagzter.com, selected newsstand outlets in Macau, Hong Kong bookshops, by subscription and at partner hotels, restaurants, airlines and ferry carriers in Macau.

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The search for truth

An interview with Chinese filmmaker

Jia Zhangke

By Marcelo Cajueiro and Xun Wei

hina’s director and screenwriter Jia Zhangke may be a well-known figure at world top film festivals such as France’s Cannes, but he is worshiped by Brazilian cinephiles as the most important living filmmaker.

The 44-year-old went to Brazil’s leading international film festival, the São Paulo Mostra, for the world premiere of the documentary “Jia Zhangke, The Man from Fenyang,” and for the launch of the book “The World of Jia Zhangke.”

“This documentary was very important for me. It allowed me to understand who I am. For that reason, I am very grateful to Walter Salles,” Jia told the audience at the premiere.

The documentary was directed by acclaimed Brazilian filmmaker Walter Salles, director of “Central Station” and “The Motorcycle Diaries”. He also edited the book written by Jean-Michel Frodon, a respected film critic.

“Next time I think about quitting making movies, I know what I will do: I will watch this documentary again. This film made me understand I will never be able to separate myself from cinema,” added Jia.

Jia, the creator of the 2006 feature film “Sill Life,” which won the coveted Golden Lion at the 63rd Venice International Film Festival, was a guest at the festival seven years ago for a comprehensive retrospective of his work.

He also told Xinhua about his movies and how they relate to China and the world, saying his works are about ordinary people and the contrasts that exist in changing societies, such as his own and Brazil’s.

In his book on the director’s life, Frodon says Jia’s movies are a unique portrait of China’s rise to a superpower in the early 21st century.

“China and Brazil, during the process of their social reforms, feature the new and the old, the poor and the rich. I fell in love with ordinary people, which is linked to my process of growing up and to my memory,” he said.

Jia’s films appear to be largely regional, but their themes are universal.

“The subjects of all my films are people and their everyday hardships: the problems they are facing, how they grow up, their relationship to the society and how they are influenced by it. For instance, ‘A Touch of Sin’ shows how human beings must constantly face violence, which happens not just in China, but also elsewhere,” said Jia.

Despite being hailed as one of the most talented directors in the world, Jia said he wouldn’t care too much about that and instead prefer to concentrate on his work at hand.

More than pursuing a devoted audience or recognition, Jia said he sees his films as a means to search for the truth.

“I only search for the truth, and the truth for me is aesthetics. My effort is to present the natural state of people and the environment,” he said.

Jia has a lot of admirers in Brazil such as Salles and Frodon.

To produce the documentary, both Salles and Frodon spent months with the director at the end of 2013 in Jia’s hometown Fenyang and Beijing as well as other parts of China.

The Brazilian director filmed Jia at his production company Xstream Pictures and on the set of some of his films, such as “Platform” (2000), “The World” (2004) and “A Touch of Sin” (2013).

Salles and Frodon also recorded dozens of hours of interviews with the filmmaker for the book, which also includes essays by Frodon on Jia’s work and on Chinese cinema, among others.

Xinhua

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Love thy neighbour

A study reveals that repeated visitation facilitates

a higher level of tourist spending

Institute for Tourism Studies researchers Anthony Wong Ip Kin and Max Zhao Weibing have discovered that distance does, indeed, have a decaying effect upon tourist demand and loyalty. This means that by being geographically close to major source markets – as Macau is from mainland China – is a distinct advantage.

In their paper titled ‘Exploring the effects of geographic convenience on repeat visitation and tourist spending: the moderating role of novelty-seeking’ the two scholars investigate the relationships pertaining to geographic convenience, tourists’ visit frequency and travel spending, as well as the moderating effect of novelty-seeking. Up to 312 individual mainland Chinese tourists participated in this study.

The paper suggests that ‘it is imperative for destinations to fully capitalise on their geographic advantage. It is true that Macau has benefited immensely from its proximity to mainland China but the threats from many other Asia Pacific Region destinations are forcing the Macau Government Tourist Office to enthusiastically invest in enhancing the market relationship with mainland China,’ it says.

Geographic proximity of a destination to source markets is not only conducive to visitation but facilitates a higher level of tourist spending in the destination, the scholars say. According to the paper, visitors tend to spend more as their frequency of visit increases, suggesting that it is financially rewarding to invest in destination-loyalty programmes.

The paper urges destination managers to bet more on retaining returning tourists.

‘Destination managers, if lacking a long-term vision, would be reluctant to make serious efforts to attract and retain returning tourists. This study provides direct evidence about the value of repeat visitation because it shows that repeat visitation does not simply mean repeat business; it really can generate better financial returns than the first-time visit,’ it says.

It continues: ‘Destinations should thus feel more motivated to research the market segment of repeat visitation and foster loyalty among their tourist arrivals. Moreover, because visit frequency is a function of geographic convenience, destination authorities can utilise the findings of this study to assist in travel demand forecasting and planning.’

Mr. Wong and Mr. Zhao believe practitioners can better justify their expenditure on marketing and communications by targeting neighbouring regions first, since tourists from these source markets are more likely to be loyal. ‘This study further demonstrates that it is meaningfully practical for destinations to classify their visitors into low-novelty seekers and high-novelty seekers. The effect of geographic convenience on frequency of visit is particularly salient for low-novelty seekers.’

The novelty factor

This research finding indicates that low novelty-seeking tourists are sensitive to distance, and most probably choose and revisit a conveniently located destination.
By comparison, high-novelty seekers are less interested in visiting destinations within a short distance because physically close places often share similar culture and tourism offerings.

‘Avidly looking for novel experiences, they are also less likely to revisit the same destination. Therefore, for high novelty-seeking tourists, geographic convenience is actually a liability rather than an asset; it creates a travel barrier and hinders them from engaging in short-haul trips,’ the research posits.

According to study findings, novelty is the key to enticing tourist spending; those who seek novel experiences during their trip spend significantly more than their low novelty-seeking counterparts. The economic importance of high-novelty seekers reminds us that destinations should not rest on their laurels with regard to the influx of low novelty seekers from short-haul source markets – they still need to strive hard to compete for high novelty seekers.

To cater to novelty-seeking tourists, the researchers say destinations must actively promote their distinct features and introduce new elements on a continuous basis in order to clearly differentiate themselves from other places in the same region.

‘The experience of Macau illustrates well the practicability of such a strategy. Since the return of Macau to China as an SAR in 1999, especially with the liberation of gaming licences for foreign investors in 2002, the tourism sector of Macau has entered an unprecedented age of transformation in tourism.

‘Macau has not only significantly enhanced its renowned casino infrastructure such as the Cotai Strip and a stream of Vegas-style integrated casinos but it has also done a lot of work in developing event tourism and cultural heritage tourism as well as other ancillary tourism facilities.

‘The dynamic character of Macau makes the city an interesting place for a broad spectrum of visitors including repeat visitors and high-novelty seekers. This probably explains why Macau continues to excel, even though the competition in the regional gaming market has escalated dramatically with more and more Asian destinations stepping into this market.’

The researchers

Anthony Wong Ip Kin, also known as Ip Kin Anthony Wong, is an assistant professor at the Institute for Tourism Studies. He has a doctorate in communication and information sciences from the University of Hawaii at Manoa. Mr. Wong has published more than 100 articles in scholarly journals and international conference proceedings. His research interests include service and tourism marketing, casino marketing and management, and tourist behaviour.

Max Zhao Weibing is an assistant professor at the Institute for Tourism Studies. He obtained his PhD degree in Tourism Management from the World Tourism Education & Research Centre, University of Calgary, Canada. Mr. Zhao’s research interests focus on entrepreneurship and small/family businesses, destination marketing and management, tourism and human development, and China-related tourism issues.

The paper

Anthony Wong Ip Kin and Max Zhao Weibing: ‘Exploring the effect of geographic convenience on repeat visitation and tourist spending: the moderating role of novelty-seeking’, Current Issues in Tourism, 2014

http://dx.doi.org/10.1080/13683500.2013.870538

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China’s vicious growth circle

Keyu Jin

Lecturer in Economics at the London School of Economics

ost economists have a reason to be worried about China’s economy – whether it be low consumption and large external surpluses, industrial overcapacity, environmental degradation, or government interventions like capital controls or financial repression. What many fail to recognize is that these are merely the symptoms of a single underlying problem: China’s skewed growth model.

That model is, to some extent, a policy-induced construct, the result of a deep-rooted bias toward construction and manufacturing as the leading drivers of economic development. This predilection harkens back to the Great Leap Forward of the 1950s, when scrap metal was melted to meet wildly optimistic steel-production targets, thereby advancing Mao’s dream of rapid industrialization.

Today, China’s proclivity for industrial production is manifested in large-scale manufacturing and infrastructure projects, encouraged by direct and indirect government subsidies. By boosting investment and generating tax revenue for local governments, this approach has a more immediate positive impact on GDP than efforts to develop the service sector.

But the model also carries considerable costs. Indeed, China is now locked in a vicious economic circle, sustained by seemingly unrelated distortionary policies that are, in fact, deeply interconnected, even symbiotic.

One of the most glaring features of this pattern is the disparity between China’s GDP growth, which has averaged nearly 10% annually over the last few decades, and its employment growth, which has amounted to just 1-2% annually. Clearly, industrialization and export expansion alone cannot absorb China’s massive labour force.

The problem is that rapid labour-productivity growth in the industrial sector – more than 10% per year over the last two decades – is reducing the need to hire more workers. The service sector, by contrast, experienced much slower labour-productivity growth (about 5% annually over the same period), meaning that it could be far more effective in generating employment growth. In the United States, about 80% of the total labour force was deployed in the services sector in 2012.

Another consequence of China’s skewed growth model has been a decline in household income as a share of GDP, from 70% in 1990 to 60% in 2009, whereas in the US, for example, the ratio has remained stable, at around 80% of GDP. In other words, Chinese households are missing out on the benefits of economic growth.

This phenomenon, too, can be blamed largely on distortionary policies. In order to cap the rise in labour costs, wages were suppressed, growing by only 5% annually over the last 20 years, even as productivity grew at an annual rate of 8.5%. Meanwhile, financial repression lowered the cost of capital. In the last decade, the average real (inflation-adjusted) return on deposits has been near zero. With about 80% of Chinese household savings deposited in banks, this implicit tax on savings has had a major economic impact, reinforcing Chinese households’ tendency to save and thus undermining consumption growth and exacerbating global imbalances.

In this way, China’s distortionary policies have helped to perpetuate a dysfunctional growth model. Wage suppression, financial repression, and an undervalued exchange rate subsidize exports and production, at the expense of households, which are thus compelled to save, weakening domestic demand. In order to achieve growth targets, the government thus must depend on exports and investment – an approach that leads to the accumulation of massive reserves, which subsequently need to be sterilized. Low interest rates help to contain the cost of sterilization at the national level and reduce costs at the firm level – again at the expense of households.

Breaking the cycle will not be easy, but there is no other way to address many of the most pressing problems confronting China’s economy. Indeed, the current growth model is also taking a heavy toll on the environment, with pollution threatening the population’s health, especially in urban areas.

Moreover, the bias toward manufacturing and export industries leads to a severe misallocation of capital. Less efficient industrial sectors have accumulated significant excess capacity, destabilizing the entire economy, while more productive, efficient sectors lack access to the resources they need.

Restructuring the economy is perhaps the most urgent – and most difficult – challenge facing China’s leaders today. Given that the current distortions are interlinked, they may need to be addressed simultaneously. China’s gradualist approach may no longer work.

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Lawmaker proposes reducing scope of state secrets

A Chinese lawmaker proposed reduction of the scope of state secrets late last month while discussing a draft Counterespionage Law aimed at more comprehensive state security

Leaking confidential documents is one of the common law violations committed by government workers driven by profits, Lawmaker Fu Ying, a former vice foreign minister, told a group discussion during the ongoing bimonthly session of the National People’s Congress (NPC) Standing Committee, China’s top legislature.

Fu pointed out that standards for classified documents in China are “relatively low”. She said some documents are classified as state secrets due to the nature of the department handling them, not because the content falls into the category of state secrets.

Official speeches have sometimes been deemed as confidential before the speeches were delivered or released, said the former diplomat who now chairs the NPC Foreign Affairs Committee. She said they should be declassified after being made public.

China has been increasingly involved in many international events, with various documents to handle. “State secrets that are too widely ranged cannot be effectively managed,” said Fu, also spokeswoman for the NPC annual session.

Formerly known as the National Security Law, the draft rewrites articles that were not in line with other recently revised laws, including the Criminal Law and Criminal Procedure Law.

Foreign organizations and individuals who conduct espionage activities or who instigate and sponsor others in conducting them will be punished, as will domestic organizations and individuals who spy on the country for foreign organizations and individuals, the bill says.

Fu said amending the law is important as required by the country’s demand for rule of law.

Sun Baoshu, vice chairman of the Law Committee of the NPC Standing Committee, proposed the law should include a clause stipulating that “sanctioned state security staff can go to off-limit places to retrieve data.” The current version only says staff can look up files and examine materials and articles in restricted places.

“Some Internet operators or enterprises refused to provide relevant evidence, causing difficulties for counterespionage investigations,” Sun said, adding big data processing is a key method nowadays.

It is necessary to transform the current National Security Law into the Counterespionage Law in order to “prepare for a comprehensive and fundamental state security law,” he said.

At the first meeting of the central national security commission in April, Chinese President Xi Jinping advocated an “overall national security outlook.”

Xi stressed that the challenges China faces in maintaining national security today are more diverse than they have ever been, as it has seen complicated internal and external situations.

Xinhua

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