Increase transparency in property prices

Companies factor in freebies into the cost of the property

 

The marketing tactic of offering lifestyle-oriented freebies is often quite effective when it comes to high-end premium homes

DEVELOPERS often offer sales gimmicks and marketing ploys like free legal fees, rebates, air-conditioners and furniture. Budget 2014, however, seems to make it a requirement that developers be transparent about their property prices.

The adage “There’s no such thing as a free lunch” rings true in this instance. While developers are quick to advertise various blandishments such as “free legal fees/stamp duty, etc”, such freebies are always factored into the property price. These freebies should be translated into cash incentives to be deducted from the purchase price of the property, as otherwise, it becomes meaningless to offer these gimmicks, which are usually recovered in the form of substandard materials. Here, we again thank our Prime Minister for announcing that developers, when offering their products, should disclose the value of the freebies to the buyers. Such transparency is a move in the right direction so that buyers would know what they are letting themselves in for. The enforcers of the law should be able to count on the Urban Wellbeing,

Housing and Local Government ministry to do its job to ensure that there is strict compliance and observance.

Whilst such a requirement will not deter speculation, it will hopefully educate house buyers on what makes up their final property price and not to be misled by developers advertising such freebies.

Additional measures

The National House Buyers Association (HBA) reiterates its call on the Government to take additional measures to stem the steep rise in property prices. There are basically two ways to reduce speculation: increasing the entry cost and increasing the exit cost.

Whilst Budget 2014 has increased the exit cost in the form of the higher real property gains tax or RPGT, more measures are needed to increase the entry cost to further reduce speculation.

The current stamp duty payable for the transfer of properties is based on the value of the property. This does not deter speculators, as the stamp duty payable is the same, regardless of the number of properties already held or bought.

The Government’s current low stamp duty regime has been misused by property speculators to accumulate multiple properties, driving up these prices by creating false demand and denying genuine buyers the opportunity to buy such properties.

It is every Malaysian’s wish to buy at least one property in their lifetime for their own dwelling, and perhaps an additional piece of property as a long-term investment or to fund their children’s education.

Hence,HBA has proposed that the current scale stamp duty remains the same for the first two properties bought, but is increased to a flat rate based on the property price for the third and subsequent properties to discourage speculative buying.

(See table for a comparison between the current stamp duty and the stamp duty proposed by HBA.)

With the same scaled stamp duty payable regardless of the previous number of properties held, speculators are not deterred from buying multiple properties.

Even for properties costing RM600,000, the stamp duty payable is only 2% of the value of the property.

The HBA-proposed stamp duty would not cause any disruption to genuine house buyers who can only afford two properties in their lifetime (one for their dwelling and one for long-term investment).

On the other hand, property speculators would be discouraged as the stamp duty greatly increases their entry cost.

RPGT will not lead to higher property prices 

Certain parties with vested interest are claiming that the revised RPGT rate would lead to higher property prices, as speculators would definitely factor in the RPGT into their property prices, only for the subsequent buyer to end up paying the RPGT indirectly.

Such statements only confirm that speculators are indeed responsible for driving up property prices.

If indeed the speculators factor in the additional 20% to 30% RPGT into their property prices, then it would make the property prices unattractive to the next buyer.

Financial Institutions may be unwilling to finance such exorbitantly overpriced properties, as such institutions have their own market intelligence to determine the fair value of such properties.

RPGT will lead to an orderly property sector
 
The aspiration of every rakyat is to own a roof over their heads and shelter their young rather than making money from properties. Hence, having the RPGT in place would deter speculators, and eventually lead to a more orderly property sector driven by market demand and not speculative forces.

Therefore, HBA supports the Government’s RPGT proposal and urges the public to support such a move to curb the current excessive speculation in the property sector.

HBA strongly believes that the cost of a roof over one’s head should not be left to market forces. The repercussions whereby a large section of society is deprived of affordable housing is serious and far-reaching. The present property price increase does not commensurate with the present rise in wages. The affordability of house ownership is becoming an elusive dream to the present generation. Controlling the upward spiral of property costs is not in the interest of housing developers. In fact, they certainly favour it. Therefore, it would be totally unrealistic to expect any developer to be interested in bringing down property prices.

Contributed by Buyers Beware Chang Kim Loong

CHANG KIM LOONG is the honorary secretary-general of the National House Buyers Association (www.hba.org.my), a non-profit, non-governmental organisation (NGO) manned by volunteers. He is also an NGO councillor at the Subang Jaya Municipal Council.

Related posts:

1.  Property gain tax won't hurt genuine buyers
2,  New tax rate on property to keep away flippers

Singapore wooing the best minds back to home

 

Singaporean at heart: Cardiologist Carolyn Lam returned from Mayo Clinic in the United States to practise and do research at the National University Hospital, where she focuses on women’s heart health. — The Straits Times / Asia News Network

Many top Singaporean researchers work abroad. What will bring them home — and at the same time help retain scientists who stayed on in the republic?

FOUR decades ago, armed with a newly minted doctorate from Cambridge University, a young Malaysian neuro-anatomy researcher arrived to work at the then University of Singapore.

Having come back to South-East Asia to be closer to his family, Prof Ling Eng Ang found a research landscape “like a Third World country”. Research funding was scarce; the lab had to buy and breed its own rats for studies, and there was no budget to publish papers in top journals that sought fees from researchers.

When the university began hiring scientists from the rich West who had lengthy publication records, “how could we compete?” he recalled.

Singaporean researchers left for countries with a more developed culture of science and richer funding. Later, others went and stayed, seeking to grow their careers.

Now, Singapore wants to woo this diaspora home, particularly those who have excelled in their fields.

Once they are headhunted by universities and research institutes in the island-state, scientists who are Singapore citizens will get up to five years of research funding.

This comes out of the S$16.5bil (RM41.2bil) pot earmarked for R&D between 2011 and 2015, while their salaries are paid by the institute that employs them.

“By doing so, we hope to anchor the research capabilities and grow the Singapore core,” Prime Minister Lee Hsien Loong said last month when he announced the scheme.

Lee explained it was “worthwhile to make an extra effort”.

“These are the people who might not be otherwise thinking of coming back,” he said.

“They have already set up their careers, settled in and have challenging and exciting jobs. wherever they are in the world. We say: come back, we would like to have this link with you, either come back to visit or come back to relocate.” This seems like a good idea in principle.

As the popular narrative goes, Singapore has very deliberately been bootstrapping itself up to the head of the class in engineering, physical and biomedical sciences over the past two decades, a process jump-started by importing big-name scientists from the West.

Now, it’s time to groom Singaporeans – who presumably will have a vision for science in the republic – to take up leadership positions. That is the core idea. But how effective will it be?


Singaporean stars

The National Research Foundation (NRF) does not keep tabs on how many Singapore scientists are abroad, but it said it was building a database of those overseas.

However, it is known that some are outstanding in their fields. For example, Prof Peh Li-Shiuan of the Massachusetts Institute of Technology’s electrical engineering and computer science department studies ways to boost the computing power of computer chips.

Assoc Prof Wong Chee Wei at Columbia University manipulates light to study tiny nanostructures. Last month, he was named a Fellow of the Optical Society of America.

Another Singaporean, Dr Desney Tan, is a principal researcher at Microsoft’s research division, where he studies human-computer interaction, mobile computing and healthcare applications.

Even if Singapore could track all its expatriate scientists down, drawing them back is a different matter. Choosing where to live and work are very personal decisions.

Singapore presents itself as a vibrant, well-funded destination for science research. If this is the case, why do Singaporean scientists need an extra carrot to come home?

In some fields, the opportunities elsewhere are richer.

Assoc Prof Leonard Lee of Columbia Business School, whose PhD in marketing was from MIT, said the opportunity to learn from his field’s best minds was “too great to miss”. But he keeps a foot in each country, giving seminars at the National University of Singapore (NUS) and other Singapore universities.

And Microsoft’s Dr Tan said the firm offered him support to build a “dream team”. He was also drawn by the chance to “conduct scientific research with the very best and then to translate that research into commercial products that get used by millions of people”.

Over time, many put down roots overseas. Some have married non-Singaporeans and live in their spouse’s home country. Some like the economies of scale in the research environment at, say, Harvard.

The truth is, people sometimes leave because they are simply dissatisfied with the level of bureaucracy or pressure for quick results. The latter has also been known to turn off some of the big names lured from overseas.

NRF might be more successful if it understood what draws Singaporeans home.

Family is a major reason: Nanyang Technological University (NTU) mathematician Chua Chek Beng gave up a tenure-track post at the University of Waterloo in Canada in 2006 because he and his wife wanted to be closer to their parents in Singapore.

It helped that he was offered the chance to work at NTU’s brand-new school of physical and mathematical sciences, too.

Assoc Prof Too Heng-Phon of NUS’ biochemistry department, who is Malaysian and a permanent resident here but whose wife and son are Singaporean, said he came back to the region to be closer to family as well.

Grants can help. When she received a Clinician Scientist Award grant from the National Medical Research Council, cardiologist Carolyn Lam returned from Mayo Clinic in the United States to practise and do research at the National University Hospital (NUH), where she focuses on women’s heart health.


Equal treatment

Great teachers are another draw. NUS’ Prof Ling said that while the conditions were spartan back in the 1970s, the late Prof Ragunathar Kanagasuntheram was a great mentor. He also stayed in Singapore out of a sense of duty. “We were almost like the ‘pioneers’ and we helped build up this place both in teaching and research. If we don’t, who else?”

As Singapore builds up its research ecosystem and draws other leading minds, those who come home may themselves become a draw for younger academics looking for mentors.

Prof Ling, for instance, has trained generations of medical students. And collaborations like the Singapore-MIT Alliance for Research and Technology allow those like Prof Peh to guide younger scientists in both Singapore and their home university.

While Singapore draws its own home and attracts foreign researchers, it also ought to recognise those who have long served here. It should treat equally those who have gone abroad and those who have stayed. Researchers like Prof Ling, Prof Lee and NTU dean of science Prof Ling San agreed on this point. The NRF carrot could help to retain outstanding Singaporean scientists, too.

At the same time, the move to woo back Singaporean scientists can also be seen as an exhortation to young scientists to go forth, grow their careers wherever they wish, then come home. They will not be considered quitters, but valuable returnees.

Dr Wilhelm Krull, secretary- general of Germany’s private Volkswagen Foundation and a member of Singapore’s high-level Research, Innovation and Enterprise Council, suggested it was “time to think more in terms of circulation rather than brain drain or brain gain”.

Dr Tan of Microsoft noted that the new scheme signalled a strong commitment to top local talent, a change from previous years.

When he completed his PhD in 2004, he felt Singapore favoured foreign hires with more attention and fat relocation packages. To draw him home, Singapore would have to replicate the “excitement, unfettered support and commitment” of his current conditions.

“There is no cookie cutter formula for this. What will work for one domain and individual, may not work for another ... But if done right, I believe top talent will choose to jump back in from their presumably fulfilling positions outside of Singapore and to embrace the challenge.

“In general, I think many Singaporeans would love to return home and serve the country, and I’m excited to see conditions swinging in favour of this,” he added.

Contributed by  Grace Chua The Straits Times/Asia News Network (ANN)

Malaysia GDP grew by 5% in Q3 2013, Economy and Growth Outlook projections

KUALA LUMPUR: Malaysia’s gross domestic product (GDP) grew by 5% in the third quarter, faster than the 4.7% expansion most economists had predicted, as the economy benefited from strong domestic demand and a rebound in exports.

Bank Negara yesterday also revised the country’s second-quarter growth to 4.4% from 4.3% previously. The central bank is maintaining its full-year growth forecast at 4.5% to 5%.

The GDP is one of the primary indicators used to gauge the health of a country’s economy. It represents the total dollar value of all goods and services produced over a specific timeframe.

“Domestic demand remained the key driver of growth, expanding by 8.3%, while exports turned around to grow by 1.7%,” Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said at a press conference.

She noted that emerging signs of a recovery in the major advanced economies are expected to support overall growth.

“For the Malaysian economy, the gradual recovery in the external sector would support growth. Domestic demand from the private sector would remain supportive of economic activity amid the continued consolidation of the public sector,” she said. “Going forward, economic growth is expected to be sustained although risks continue to remain.”

She said the global economic recovery was under way, but with downside risks from uncertainties over the fiscal and monetary adjustments in several of the major advanced economies.

“The other main contributor to GDP is investment, which is even more important as investment activity leads to capacity expansion, and allows our economy to experience future growth,” she said.

Malaysia’s current account surplus for the third quarter jumped to RM9.8bil, equivalent to 4.1% of the gross national income (GNI), from RM1.5bil in the second quarter.

This was mainly due to a higher surplus in the goods account. The GNI comprises the GDP together with income received from other countries less similar payments made to other countries.

She said net exports turned around and posted a positive growth of 1.6% after seven consecutive quarters of declines, driven by external demand, high commodity prices and strong investment activities.

The ringgit also experienced volatility in the third quarter, as expectations for a scale back in the US Federal Reserve’s asset purchase programme prompted a reversal of capital flows from most regional financial markets.

“The volatility was to a lesser extent than what we had seen previously at the height of the global financial crisis. The movement is similar to other currencies,” Zeti said.

She said the foreign exchange market was significantly larger and liberalised now and market players were, therefore, doing the intervention. However, she said Bank Negara would intervene if there were any severe volatility or market disorder.

“The region is in a better position to cope with more volatile conditions, as the financial markets are now larger, better developed and more mature.

“We believe there will not be an exodus out of this region, as our region remains an important growth centre in the global economy and, therefore, we will still be the destination for investment activities,” Zeti said.

The consumer price index was also higher at 2.2% due to higher inflation in the transport and food and non-alcoholic beverages categories.

Speaking on the subsidy rationalisation plans the Government has embarked on, she said the opportunity still existed for these price adjustments to be made gradually.

“We are on a steady growth path, and we have not experienced strong demand that would result in strong inflationary pressures. Therefore, it is a good time to make such adjustments,” Zeti said.

-Bernama/The Star/Asia News Network

Malaysia Economy Outlook 2013

KUALA LUMPUR (Nov 18, 2013): The Malaysian economy is expected to see between 4.6% and 4.7% growth in gross domestic product (GDP) for 2013, according to economists, in line with Bank Negara Malaysia's (BNM) projection of a 4.5% to 5% growth this year.

Alliance Research revised its full-year GDP forecast marginally upwards to 4.6% from 4.5% previously, after BNM released the third quarter (Q3) GDP data on friday which saw a stronger growth of 5% for the quarter on the back of a strong recovery in the external sector, as well as expansion in domestic demand. The research house anticipates a 4.8% growth in Q4.

"While growth may be affected by the recent announcements on the sequencing of certain Economic Transformation Projects and policy reforms such as the subsidy rationalisation programmes, we remain positive that the improving external environment would likely offset the weakness and support growth in the coming quarters," said Alliance Research economists Manokaran Mottain and Khairul Anwar Nor Md in a note.

For 2014, it expects growth to pick up to 5%, underpinned by robust domestic demand and improving external conditions.

RHB Research Institute estimated real GDP to grow at 4.7% in 2013, at a slower pace than the 5.6% growth recorded in 2012.

"Growth, however, will likely bounce back and register a faster pace of 5.4% in 2014, as domestic demand will remain a key driver of growth along side with a further improvement in exports," said its economist Peck Boon Soon.

The central bank said going forward, the gradual recovery in the external sector will support growth. Domestic demand from the private sector will remain supportive of economic activity amid the continued consolidation of the public sector. The economy is therefore expected to remain on its steady growth trajectory.

Meanwhile, BNM Governor Tan Sri Dr Zeti Akhtar Aziz stressed that the current volatility in the financial market is comparatively lesser than that experienced during the global financial crisis.

"We're in a position to cope. We've significant reserves of US$137 billion (RM446.2 billion) and we've many swap arrangements with other banks around the region. The region can come together to respond collectively if there's any crisis.

"Previously (under harsher conditions), we'll probably have a 1% to 2% growth. Now we've rebalanced our economy where domestic demand is an important driver, so it'll allow a 4% to 5% growth," said Zeti.

She said Malaysia's financial markets are larger, better developed and more mature now, adding that financial intermediaries are stronger and more importantly, there is greater diversification of portfolios.

"We believe there's not going to be an exodus out of our region (Asia) and it remains an important growth centre in the global economy. Therefore we'll still be a destination for investment activities," said Zeti.

On the ringgit, she said its volatility is similar to the movements of other currencies.

"We've liberalised the market to allow for unlimited hedging for an unlimited time period to hold a foreign currency account. Our corporate sector is in a better position to better manage their foreign exchange exposure, given that we've seen significant two-way flows. "In the event when the market has a risk of becoming disorderly, the central bank will step in to smooth out that volatility."

However, she said in the medium term, the ringgit should reflect the economy's underlying fundamentals.

"If all remains positive, (ringgit) should see an appreciating trend… but as fundamentals change drastically over a short period of time, then the appreciating should remain in a gradual trend."

Contributed by  Ee Ann Nee The Sundaily

Malaysia's 2013 forecast growth revised by IMF

THE International Monetary Fund (IMF) has revised its growth forecast for Malaysia to five per cent for 2013 from its previous projection of 4.7 per cent.

Growth will be underpinned by the domestic demand, with low unemployment and subdued inflation.

In its latest medium-term outlook, which was released following its Article IV Consultation recently, IMF projected growth until 2017 to be between 5.1 per cent and 5.2 per cent.

"Although the domestic demand growth pace is lower than that recorded in 2012, it is still sizeable at over six per cent from 11.6 per cent last year," IMF resident representative Dr Ravi Balakrishnan told the Business Times from Singapore yesterday.

Higher spending by households, firms and the government on consumer and capital goods has offset weak exports to Europe and the rest of the world.

Consumption has been supported by low interest rates, a strong labour market and fiscal transfers to households.

Balakrishnan said Malaysia has done remarkably well and displayed resilience like its neighbours in the face of the global crisis, chalking a 5.6 per cent growth for 2012.

The rebalancing of Malaysia's economy towards greater domestic demand - from its dependence on trade - has led to a significant deterioration in Malaysia's external current account balance, to a surplus of about six per cent of gross domestic product (GDP) last year, compared to 11 per cent in 2011.

The IMF released the details of its annual assessment last Friday together with its first financial sector assessment programme for Malaysia, which endorsed the resilience of the well-capitalised financial sector.

Malaysia's growth story was better than what the IMF expected.

"We are happy with the developments for the near term but there are challenges on the fiscal front for the economy to realise the growth level of 2020."

The government's revenue base needs to shift from the oil and gas receipts, which account for about a third of the total.

The planned goods and services tax would help broaden the revenue base, while the gradual rationalisation of the subsidies programme would help reduce spending pressures while staggering the impact on inflation and incomes.

In the case of investments, he said to sustain the current levels, there must be concerted efforts towards structural reforms, including education to help reduce its skills gap and increase the contribution of human capital.

The report said the Fund welcomed the introduction of a minimum wage this year, which should support the incomes of poorer workers, and recommends considering the introduction over time of unemployment insurance and reforms to the pension system to further strengthen social protection.

Government debt is expected to decline gradually relative to GDP over the next five years, reaching about 51 per cent of GDP by 2017.

The Fund has recommended that there be more "front-loaded" consolidation efforts to reduce the probability of breaching the debt ceiling and ensure the government's goal of reducing debt to 40 per cent of GDP by 2020.

Balakrishnan said while the target to reduce debt is lauded, it is also important that there be more transparency in the concrete measures that Malaysia plans to undertake.

Contributed by Rupa Damodaran Business Times

Related post:
Bank Negara revises downwards Malaysia's GDP to 4.5 ... 

China on road to depeen reforms

The Communist Party of China (CPC) has to acknowledge the market's decisive role in allocating resources as it is proven to be the most effective, said President Xi Jinping when explaining a key document about reforms.

China will deepen its economic reform to ensure that the market will play a "decisive" role in allocating resources, according to a decision on major issues concerning comprehensively deepening reforms, approved by the Third Plenary Session of the 18th CPC Central Committee on November 12.

Entrusted by the Political Bureau of CPC Central Committee, Xi, also general secretary of CPC Central Committee, explained the decision at the session. His explanation was published in full on Friday.

Xi considered the definition of the market's role a major theoretical achievement of the decision.

A proper relationship between the market and government remains the core of China's economic reform, Xi said.

To build such a relationship is to settle whether the market or government plays a decisive role, he said, adding that the market is proven to be the most effective.

Over the past some 20 years, China has established a socialist market economy but there are lots of problems, Xi admitted.

The market is not orderly and many seek profits through illegal means. The market for key production factors, such as labor, capital and land, are lagging behind, he said.

Market rules are not unified and there are prevailing departmental and regional protectionism, he warned, adding that a lack of full competition stops the inferior from being eliminated.

China has to follow the basic law of the market economy and work on the problems of an underdeveloped market system, excessive government intervention and weak supervision of the market, he said.

Accepting the market's decisive role will help the Party and society develop a correct idea about market-government relations, help the country transform the economic growth pattern, help the government change its functions and help curb corruption, he said.

However, Xi noted that to let the market decide does not mean to let it decide all.

"The socialist market economy needs both the market and government but they play different roles," he said.

The government will maintain a stable macro-economy, provide public services, safeguard fair competition, supervise the market, keep market order, promote sustainable development and step in when the market fails, he said.

The market had been defined as a "basic" role in allocating resources since the country decided to build a socialist market economy in 1992.

For a long period of time after 1949, the idea of market had been a taboo associated with capitalism.

Even after the reform and opening up in 1978, the country had

struggled to define the market and some dogmatists still questioned whether socialism could accommodate the market economy.

It was not until the 14th CPC National Congress held in 1992 that a socialist market economy became a consensus.

At the 15th CPC National Congress in 1997, the Party noted that the market, under state macroeconomic control, should be the basic means of allocating resources.

At the 16th CPC National Congress in 2002, the Party said it should leverage to a greater extent the basic role of the market in allocating resources.

At the 17th CPC National Congress in 2007, the Party decided that it should introduce institutions to give better play to the basic role of market forces in allocating resources.

At the 18th CPC National Congress in 2012, the Party said it should leverage to a greater extent and in a wider scope the basic role of the market in allocating resources.

"Now, the CPC Central Committee believes that the condition is ready to bring up a new theoretical expression of this issue," Xi said. - Xinhua

China stays on road to reform 

Staying on course: A souvenir with an image of President Xi Jinping (left) and the late leader Mao Zedong on sale at Tiananmen Square in Beijing, during the meeting of the Central Committee of China’s ruling Communist Party, at which major reforms were discussed. — EPA

THE business of China-watching intensified lately for the Third Plenary Session of the 18th Central Committee of the Communist Party of China.

This was a special occasion in also doubling as the first anniversary of President Xi Jinping’s leadership of the party and of China’s Central Military Commission.

It is a measure of China’s rising global status that such domestic occasions should attract serious worldwide attention. The same does not apply for other countries.

Some analysts believe that the world’s second-biggest economy will, by the end of Xi’s term in a decade, become the world’s biggest – and continue to outpace the US and other economies thereafter.

Since economics remains the prime determinant of a nation’s various attributes, China’s economic achievements are closely watched because they indicate its prowess in other spheres as well.

For this particular occasion, there is another reason for Beijing as the world’s centre of attention – Third Plenums are traditionally the stamping ground for new priorities and directions. That it coincides with a new leadership makes for a packed global gallery.

Speculation about Xi’s leadership peaked in the lead-up to this occasion. Opinion was divided over whether China would lean towards reform and further opening up, or veer towards Maoist conservatism.

Xi’s personal style was no help to the betting classes. In keeping his cards close to his chest, he was not one to telegraph his intentions and preferences ahead of time.

Then there was the complication of the Bo Xilai affair. The fall of the former rising star was said to be a sideshow obscuring internal party politicking.

Bo’s supporters tended to look past his controversial hardline tactics, corruption allegations, his wife’s involvement in murder and his Maoist-inspired opposition to Beijing’s reforms. In his defence, they instead questioned Xi’s commitment to reform.

However, any antipathy Beijing had to Bo would also be averse to a Maoist resurgence and therefore be pro-reform. There was also no question of Xi’s priority in targeting corruption and promoting the rule of law.

Nonetheless, for many the doubts about China’s leadership direction persisted. And the question would be settled by the Third Plenary Session of the 18th Central Committee.

Now those who were never in any doubt about Xi’s reform drive feel vindicated. Fence-sitters are also more convinced than ever that Xi and Prime Minister Li Keqiang will take China further along the road of reform.

Doubters are now puzzling over the general nature of official public statements from the plenum. They are stumped by an apparent shortage of specifics.

However, generalities indicate only a lack of details, not a reversal of direction. And given the presence of conservatives like Bo still in the party hierarchy, reformist leaders would do well to avoid advertising their plans to prevent obstruction and sabotage.

Xi is certainly not one to telegraph his intentions and preferences ahead of time. Former Singapore premier Lee Kuan Yew has observed that Xi is not demonstrative while still retaining his affable style.

Besides, Third Plenums of the 21st century have also been less hortatory and more cool and businesslike. A modern China headed by state functionaries rather than ideological patriarchs is where the Xis and Lis are at.

Over the long term, it has been a process of evolution for China’s leadership. In comparisons between Xi-Li and their immediate predecessors Hu-Wen, Xi is said to be more open and approachable.

Xi and Li are also regarded as more purposeful and cosmopolitan, a style that matches the contemporary demeanour of their international counterparts. And style still accounts for much, notwithstanding the weight of official policies and procedures.

Several views from Hong Kong, as expressed through the South China Morning Post newspaper for example, regard Xi’s leadership as clearly Dengist rather than Maoist. That effectively reaffirms the reformist road.

To that extent, this Third Plenum produced no surprises. Continuity and consistency are key to China’s development, and Xi is tasked with ensuring that trajectory in particular.

The polar opposites of Mao and Deng remain a bifurcation – and an ironic one at that. Their differences are strategic and ultimately ideological rather than personal.

Deng the Establishment rebel, the last Long March veteran, the final Paramount Leader and the Other Helmsman who turned China around is still deeply revered, including by the younger generation.

Young professionals and bureaucrats in their 30s, whether in official Beijing, bustling Shanghai or rural Hubei province today have no hesitation to say they are Dengist. They do not denigrate Mao, not even for his excesses and horrors, they just admire his party alter ego.

This is the political status quo of China today. It should therefore be no surprise that the party and state machinery, in carefully reviewing and sifting through contending candidates, has produced leaders that exemplify this bearing.

Thus Xi is no closet Maoist for prescribing self-criticism and attempts at censorship. Some tactics may appear conservative, but the overall strategy is still reformist.

The Third Plenum was clear in promoting the status of the market from “basic” to “decisive.” For this and similar moves, Xi and Li are considered pragmatists in moving modern China forward another notch.

In Beijing today, much of this pragmatism amounts to letting the market determine the economy, allowing the economy to inform governance, and ensuring that good governance safeguards society’s interests through due public regulation.

That also approximates to the “socialist market economy” Deng introduced 35 years ago. Since then, the concept has resulted in moves like cutting red tape, cleaning up a messy credit market and establishing a free trade zone in Shanghai.

Many suspect the best days of Xi’s presidency are at hand. His father is cited as a hero of progressive social development in his time.

Besides the current drive against graft, there is also a campaign against pollution. It is serious enough to require productive heavy industries like steel to cut capacity, with larger plans to move away from polluting sectors in favour of cleaner and more modern industries.

The home-grown company BYD for example not only designs, builds and markets its range of electric vehicles, but also plans to produce vehicle batteries for automobile companies around the world.

China is not only a large and rapidly growing economy, but one focused on the cutting edge of several technologies: ICT, high-speed trains and renewable energies among them.

Earlier this month, a skeptical BBC asked whether this latest Third Plenum will prove as decisive as the ones in 1978 and 1998. The short answer is that it can, depending on the prevailing national interest.

China today differs from the China of Mao’s era in one fundamental respect. The state will now do all it can to meet the nation’s current and future needs while delivering what the government wants, more than simply what the party prefers.

This basic distinction may still escape the understanding of many. The recent Third Plenum has gone some way to rectify that, but proof of it is already evident in recent years.

The rest will come soon enough. The point is that a transforming China with an eye to its future progress has opted for reform not only because it wants to, but more because it has to.

Behind The Headlines by Bunn Nagara

Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (Isis) Malaysia. The views expressed are entirely the writer’s own.

ABC Network's kids say the darndest things

During a children’s segment in a late night talk show in the United States, a child proposed to wipe out the Chinese as a solution to the US$1.3 trillion (RM4.17 trillion) debt to China. The Chinese were not amused.

 

At the network's office in Houston (top left), Washington and Los Angeles (right).

A POPULAR Chinese idiom, Tong yan wu ji, loosely translated means that one should not take offence at what a child says.

The phrase is used to show that a child should not be taken seriously when he or she utters something improper or inauspicious, especially in an unacceptable manner.

It implies that kids say the darndest things, which are candid and laughable at times.

But when a child proposed to wipe out the Chinese during the Jimmy Kimmel Live show as a solution to the US$1.3 trillion (RM4.17 trillion) debt to China, the Chinese were not amused.

During the ABC Network’s late-night programme that was aired on Oct 16, a segment was dedicated to a group of young children having a light-hearted roundtable discussion.

When host Jimmy Kimmel asked for suggestions on how to pay China back, a blond boy answered, “Shoot cannons all the way over and kill everyone in China,” slamming his hands on the table.

“Kill everyone in China? Okay that’s an interesting idea,” Kimmel responded with a laugh.

Another child suggested building a huge wall to prevent the Chinese from coming after them, to which Kimmel replied, “That will never happen.”

Kimmel later asked the panel of four, “Should we allow the Chinese to live?”

The kids had mixed opinions – the screen showed a girl raising her clenched fist, shouting “Yes!” while the blond boy stood by his earlier answer.

“But if we don’t allow them to live, then they will try to kill us,” said another girl who tried to talk some sense into the boy.

“But they’re all going to be killed (first),” two kids, including the blond boy and the girl who had earlier shouted “yes” out loud, argued.

Kimmel wrapped up the segment, noting that it was an “interesting edition of the Kids Talk – the Lord of the Flies edition”.

(Lord of the Flies, a novel by William Golding, tells the story of how a group of boys govern themselves on a deserted island after a plane crash.)

This particular segment has sparked a backlash with viewers commenting that the skit was racially insensitive.

Protests were staged outside ABC studios, prompting ABC and Kimmel to apologise, but the controversy has not died down.

As of Thursday morning, more than 104,000 online signatures were collected on the White House petitions page, urging the Obama administration to investigate the show.

Since the petition had reached the 100,000-signature threshold in 30 days, the White House was compelled to issue a formal response.

Meanwhile, in China, Foreign Ministry spokesperson Qin Gang told a press conference that ABC should reflect on its mistake and respond to the Chinese Americans with a sincere attitude.

On Wednesday, China’s state broadcaster CCTV reported that it had received a response from White House National Security Council spokesperson Caitlin Hayden.

“As the President has stated publicly, the United States welcomes the continuing peaceful rise of China. He believes it is in the United States’ interest that China continues on the path of success, because we believe that a peaceful, stable, and pros­perous China is good for the United States, China, and the world.

“The comments reported on the Jimmy Kimmel show do not reflect mainstream views in the United States on China,” she said.

The controversy has also ignited discussions on the Internet as well.

Nick Zhang Xu, who made waves in cyberspace last year with a video of him speaking English in 10 dif­ferent accents, responded with a video titled “Jimmy Kimmel, you owe us an apology”.

Since it was uploaded to Youku – the Chinese equivalent of YouTube – about 20 days ago, it has been viewed more than 35,000 times.

“What kind of education do the kids have in America? They can just shout out loud ‘kill everyone?’” Zhang asked.

“‘This is an interesting idea.’ You find it amusing. You don’t call it wrong in the first place. What’s the matter with you?”

While sending a strong message across, it was hard not to note that Zhang had attempted to inject some humour into the video as well.

“You know what? We can make shows (to defame you) too. We are really good at remaking things.”

Some Youku users threw their support behind Zhang and agreed that the Kimmel’s skit had painted a larger picture on the culture of violence and hatred.

But there were also people who believed that the kids’ comments were harmless and called for fellow Chinese to be less sensitive.

“We place too much emphasis on “saving face” and cannot afford to have others making fun of us. This is just an entertainment programme,” a user said.

Contributed by Check In China Tho Xin Yi 
The Star/Asia News Network 

Chinese Americans protest across US over Jimmy Kimmel's 'kill Chinese' skit

Thousands of protesters, mostly Chinese, rallied in 27 US cities over a perceived anti-Chinese skit that aired last month in a talk show hosted by comedian Jimmy Kimmel.

A rally in New York, one of 27 cities that saw a protest over the ABC talk show, which aired last month. Photo: SCMP 

Chinese state media reported that protests swept across the United States on Saturday. One was staged at the Los Angeles headquarters of broadcaster ABC, which aired the programme. Participants argued that ABC and Kimmel had not taken full responsibility for what they perceived as an insult to their heritage.

The protesters called for Kimmel to be fired over a segment of his talk show called "Kids' Table" that aired on October 16. Both ABC and Kimmel have since apologised for the episode, in which a six-year-old boy said "kill everyone in China" when asked by Kimmel how the US should pay back the country's US$1.3 trillion debt to China. Kimmel responded: "That's an interesting idea."



However, Chinese-American groups were not impressed. While some accepted the apologies that were offered after the subsequent uproar, others viewed them as insincere and demanded more. Charles Lu, chairman of the Roundtable of Chinese American Organisations, told the Los Angeles Times last week that they wanted a formal apology from ABC not just to the groups protesting, but to all Chinese people around the world.

Online pictures of Saturday's protests showed demonstrators, including college students, parents and children, dressed in red T-shirts with logos reading "Teach kids to love, not to kill", and chanting slogans such as "Kimmel must go" and "Shame on you, ABC".

Chinese Americans express their anger in San Jose, California. Photo: SCMPProtest organisers distributed free posters to demonstrators. One featured Kimmel with a swastika just above his head.
"The protest plays an important role in improving our prestige and national cohesiveness," a Chinese demonstrator in New Jersey said on internet chat room Mitbbs. "The parade is intended to raise the social status of Chinese Americans in the US."

The segment also prompted the submission of a petition to the White House to investigate the Jimmy Kimmel Live! show on the grounds of offensive content. The petition garnered more than 100,000 signatures.

Xinhua said 800 people attended a rally in Washington, where a letter of protest to ABC was read out. The letter urged the broadcaster to fire Kimmel and hold a press conference to officially apologise to Chinese communities. It called on ABC to make sure that such "rhetoric of racial discrimination" was prevented by stepping up regulation of its televised content.

No one from ABC attended the event in Washington to accept the protest letter, reports said. Police were mobilised to maintain order, but the day ended without incident.

The demonstrations are believed to have been the largest held by the Chinese community in the US since those just before the Beijing Olympics in 2008 in response to CNN commentator Jack Cafferty labelling Chinese leaders "goons" and "thugs".

Video: Animators in China to Jimmy Kimmel: Why you shouldn't 'Kill the Chinese'



Contributed By  Keith Zhai keith.zhai@scmp.com