Asia Pacific (APAC), Global Politics

Cross-strait News Daily Round-up for Dec. 4

Talks between Cathay Pacific and its pilots turn out to be a dead end

Talks between Cathay Pacific Airways (HKG: 293) and its pilots regarding their paychecks turned out to be a dead end on Dec. 3, that more potential flight delays and cancelations can be expected in the near future.

Approximately 1,700 union members from Hong Kong, New Zealand and the United States joined the standoff with Asia’s biggest international carrier and insisted on a work-to-rule campaign.

In October, union members declined an offer from Cathay Pacific Airways of a 10% pay increase over three years.

China Aircraft Leasing plans a US$2 billion investment in Harbin

China Aircraft Leasing Group (HKG:1848) announced its proposal of a US$2 billion investment for an aircraft disassembly operation in Harbin on Dec. 4, two days after it announced that it has completed the purchase of 100 jets from Airbus at a total list price of US$10.2 billion.

China Aircraft Leasing, jointly controlled by China Everbright Group, China Aerospace Science and Technology Corp and Friedman Pacific Investment Holdings, said that it had entered into a memorandum of understanding with Harbin’s government to undertake an aircraft disassembly project that it planed to make it one of the biggest operations in the world.

Chinese economy rallies in non-manufacturing sectors

A latest data by HSBC (HKG: 0005) on Dec. 3 said that measures of service-sector activity in China showed a marginal improvement in November.

HSBC said that China’s official non-manufacturing PMI rose to 53.9 in November from 53.8 in the previous month. Qu Hongbin (屈宏斌), chief economist for HSBC Hong Kong, described the manufacturing sectors as continuing to experience “sluggish activity,” although the November cut in benchmark interest rates by the People’s Bank of China, the nation’s central bank, is expected to stabilize demand in the short term.

The same data by HSBC showed that private sector activity dropped for the fourth straight month in November, although retail sales figures showed a second straight month of growth and overall retail sales rose 1.4% in October. It undercut claims that the economy was suffering because of the ongoing student-led pro-democracy rally in Hong Kong.

“I just don’t find sufficient evidence that it affects people’s sentiment,” said economist Raymond Yeung from ANZ.

He said that China’s anti-graft drive has been the more important factor in explaining Hong Kong’s weak retail environment this year.