Forest City: China’s New Limits on Money Outflows Hit a Would-Be Paradise

NEIL GOUGH and CAO LI New York Times 24 Mar 17;

HONG KONG — China’s intensifying efforts to keep money from leaving the country have cast doubt over big Hollywood deals and other marquee investments.

Now, they are blocking Kitty Zhu from buying her dream home.

The 39-year-old Ms. Zhu, who runs a cosmetic center in the southern Chinese city of Zhuhai, is one of hundreds of Chinese investors who have bet money on an ambitious but troubled residential project in Malaysia. More than 1,200 miles from China, the $40 billion Forest City housing complex — when completed — will combine lushly green beachfront property with amenities for children and the elderly alike, according to its developer.

But while the developer is Chinese, the payments must be made in Malaysia. Ms. Zhu and other buyers now say they have run into problems making payments on their Forest City apartments.

“I‘ve lost confidence in this project and I don’t want to pay any more,” said Ms. Zhu, who has already paid nearly $44,000 of the $334,000 purchase price. “I told my salesman that I want a refund, but he just avoids me.”

Chinese officials are scrambling to keep money in its borders, and the efforts are hitting big companies and people like Ms. Zhu alike. China spent $1 trillion shoring up its currency since 2014 as big companies and regular investors shifted their money out of the country over worries about slowing economic growth and the prospect of better returns elsewhere. In response, China has put new limits on the ways Chinese can invest and use their credit cards abroad.

The limits now appear to be hitting Chinese efforts to buy real estate globally. In December, China’s currency foreign-exchange regulator said it would take a harder look at how some were buying property, among other investments. On Friday, the overseas arm of UnionPay, the state-owned firm that dominates bank card payment processing in China, said it would prohibit the use of its cards for cross-border property acquisitions.

The moves could hit a large group: The Chinese invested $33 billion in overseas commercial and residential property deals last year, according to Jones Lang LaSalle, a real estate services firm. Building homes in overseas markets like Hong Kong, Malaysia, Australia or New York City and marketing them to investment-minded buyers back home has become a cottage industry for China’s larger property developers, who also promote the strategy as a way to help export China’s industrial overcapacity.

“It is a major problem for some developers that have megaprojects overseas, as it appears they sell, and were intended to sell, mainly to Chinese investors rather than local buyers,” said Nigel Stevenson, an analyst at GMT Research in Hong Kong. “Anecdotally it does seem much harder for Chinese buyers to transfer money offshore to pay for properties,” he added.

Country Garden, the Chinese developer building Forest City in Malaysia, has also been affected. In a Chinese-language statement sent this month to the Reuters news agency and reviewed by The New York Times, Country Garden said it decided to temporarily close its international property sales centers in mainland China for repositioning and upgrading “in order to better meet the existing foreign exchange policies and regulations.”

A Country Garden spokeswoman said the closure of the sales centers was “not a knee-jerk reaction” to the policy and reflected a shift to selling internationally. Speaking to reporters in Hong Kong on Wednesday, Yeung Kwok-keung, the chairman and founder of Country Garden, skirted the question and struck the same point.

”This project is for sale to the entire world,” Mr. Yeung said.

Forest City bills itself as “a dream paradise for all mankind.” A promotional video for the project highlights a special duty-free shopping zone and its proximity to Singapore, and includes video of tropical fish and sea turtles swimming in turquoise waters.

It is also surrounded by freighters. Just to the west of Forest City is Malaysia’s Tanjung Pelepas container port, which is busier than the ports of Los Angeles or New York. Across the water in Singapore lies an industrial district.

The four artificial islands of the Forest City site cover nearly eight square miles. Recent drone video shows a handful of apartment towers under construction, while completed buildings include the spaceshiplike sales showroom and a hotel.

Videos show beaches sprinkled with white sand covering the newly reclaimed shorelines. In front of the showroom, dozens of life-size sculptures of seals perch incongruously in the equatorial heat.

Last year, Rafael Liu and his father were in the showroom of a Country Garden development in China’s eastern Jiangsu province when they learned about the Forest City project in Malaysia.

“We felt that it could be a place for my father to go in the winter,” said Mr. Liu, a 27-year-old banker from Nanjing. His father went on a buying tour last year to Malaysia and liked what he saw. When he came back to China, father and son went to a Country Garden sales office and paid more than 30 percent down on an apartment costing over $130,000.

Since then they have been transferring payments once every three months to a bank account in the southern city of Foshan, where Country Garden is based. But recently, the developer told Mr. Liu he could not make payments in China any more, and instead gave him details for accounts in Malaysia or Hong Kong to use. Mr. Liu balked, worried about violating China’s restrictions on foreign currency transactions.

“I am not paying any more,” he said.

But now he and his father are in limbo. They do not want to forfeit the 30 percent penalty for a refund. And pursuing arbitration could also result in steep legal fees.

Like many other Chinese developers, Country Garden has borrowed money from overseas, which could leave it vulnerable to any weakening in the Chinese currency and to higher interest rates in the United States. For companies, a weaker currency makes paying back debt more expensive. More than half of Country Garden’s $12.8 billion in debt is denominated in American or Hong Kong dollars, though the company said on Wednesday that its overall cost of borrowing had declined.

In domestic Malaysian politics, Forest City has also become something of a political lightning rod.

The country’s former prime minister, Mahathir Mohamad, has taken to his blog repeatedly to criticize the project — and the administration of current Prime Minister Najib Razak — for allegedly selling land, residency and other benefits to relatively affluent mainland Chinese and bringing little economic benefit to locals in return. Mr. Najib has rejected these criticisms, saying Malaysia is merely taking a page from Dubai’s playbook by building giant projects to attract outside investors.

In a blog entry March 13, Mr. Mahathir said he recently visited Forest City for the first time.

He noted the impressive landscaping, including the large swimming pool and “beautiful” beach. But he renewed his criticism, saying the project is the equivalent of selling off land to foreigners.

“Indeed, Malaysia is very generous,” he wrote. “Anyone can stay here.”


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LTA’s bike-sharing scheme shelved as private players enter market

KELLY NG Today Online 24 Mar 17;

SINGAPORE — Plans for a government-funded bike-sharing system in Jurong Lake District have been scrapped amid the recent influx of private operators.

The Land Transport Authority (LTA) said it decided not to award a tender for a 1,000-bike system it called in July last year, given that these private operators have plans to roll out “many thousands” of bicycles to more locations in the next year or two.

“The ongoing plans by the private dockless bicycle-sharing system operators have obviated the need for a Government-run system backed by Government grants,” it said in a press release. “LTA will continue to monitor developments in the bicycle-sharing landscape, and introduce new plans if necessary.”

The tender to build, own, operate and maintain the system with 100 docking stations closed in December last year with 13 bids from local and foreign entities proposing both docked and dockless systems, the LTA revealed on Friday. Their price proposals will be unopened, it added.

Since the beginning of this year, fully privately-funded dockless bicycle-sharing services have sprouted here.

ofo and Mobike — both players headquartered in China — and homegrown firm oBike are among the firms to offer stationless bike-sharing models.

Riders can unlock Mobike and oBike bikes using QR codes on their respective mobile apps, while ofo sends users a unique four-digit code once they have booked their rides.

oBike’s vehicles can be rented at S$1 for 30 minutes, while ofo bikes are available at S$0.50 per trip. Mobike, which officially launched on Tuesday, is offering a promotional rental rate of 50 cents for 30 minutes’ use — half the standard rate. The firm was unable to say when the promotion will end.

In its release, the LTA also cautioned riders against indiscriminate parking of bicycles, and encouraged operators to “put in place penalties and incentives” to encourage proper behaviour.

The Government will also take action against indiscriminately parked bikes, such as by impounding the vehicles and imposing “heavy fines” on operators or the culprits involved, it added.

“(Operators) should remove any indiscriminately parked bicycles or derelict bicycles expeditiously, whenever alerted by the public or any government agencies. Strict enforcement action will be taken against all indiscriminately parked bicycles,” the LTA said.

A bike-sharing pilot was first mooted in 2013 to support the Government’s vision to improve first-and-last-mile connectivity and encourage cycling for short trips.

Jurong Lake District was chosen for the pilot because it is set to be re-developed into Singapore’s second Central Business District. Just last year, the Government also said it was mulling expanding the scheme to Tampines-Pasir Ris, as well as Marina Bay with the city centre.


National bicycle-sharing scheme scrapped
Channel NewsAsia 24 Mar 17;

SINGAPORE: A national self-service bicycle-sharing scheme which was slated to be piloted in the Jurong Lake District by the end of this year has been scrapped, the Land Transport Authority (LTA) announced on Friday (Mar 24).

In a media release, LTA said it reassessed its bicycle-sharing plans after several privately funded dockless bicycle-sharing services emerged in Singapore since the beginning of 2017. These operators include local start-up oBike as well as China-based firms Ofo and Mobike.

“The ongoing plans by the private dockless bicycle-sharing system operators have obviated the need for a Government-run system backed by Government grants. The price proposals submitted by all 13 participants of the tender will be unopened,” LTA said.

Earlier this month, Second Minister for Transport Ng Chee Meng during the Committee of Supply debate had said that Transport Ministry is assessing the bids tendered for the bicycle-sharing service in Jurong Lake District "carefully".

LTA had put out a tender to appoint an operator for the pilot bicycle-sharing scheme in July last year, with options to bid to operate a bicycle-sharing scheme in the Marina Bay/City Centre area, as well as Tampines and Pasir Ris. The tender closed in December 2016 and attracted a total of 13 bids from local and foreign participants, LTA said, adding that the proposals were a mix of both docked and dockless bicycle-sharing systems.

LTA added that it will continue to monitor developments in the bicycle-sharing landscape and introduce new plans “if necessary”.

- CNA/dl


Major issues with bike-sharing apps
Isabelle Liew, The New Paper AsiaOne 24 Mar 17;

Two days after its formal launch in Singapore, Chinese-owned bike-sharing app Mobike still has some major issues to iron out.

The New Paper tried the three bike-sharing platforms - Mobike, ofo and oBike over two days.

Eight out of 10 times, those who tried Mobike could not find the bicycle.

The team combed areas like Tampines, Clarke Quay, Bras Basah and Kallang, and while the app indicated the bikes were at spaces like MRT stations and along pavements, they would be missing from these locations, even after a "reservation" had been made on the app.

Some of the bike icons on the app would even indicate the bicycles were inside private residences, hospitals, storerooms and construction areas.

Although the TNP team managed to find a Mobike at Tampines and Kallang Leisure Park, the bike icon on the app showed it was a distance away from where the two bicycles were supposed to be located.

Mobike uses a dockless bike-share system and users can unlock its bicycles by scanning a QR code on it.

Each bicycle comes with a proprietary "smart lock" containing GPS technology.

In response to TNP queries, Mr Florian Bohnert, head of international expansion at Mobike, said: "If the bike icons are not showing up correctly, we advise users to look around their surroundings and across the streets to locate the bikes, as the marker on the map may be affected by the surrounding environment such as buildings and other possible obstructions affecting the accuracy of the GPS signal on the map view."

A spokesman said the company has more than a million bikes in operation. As it can monitor the location and health of Mobikes in real time, "the number of bikes that are lost or damaged is negligible".

He added: "When necessary we can intervene, for example when a bike is damaged or parked in an unsuitable location."

Mobike had a team studying the local market to prepare for its launch from last October and have ramped up the deployment since Tuesday's launch.

There were similar struggles with China-based ofo, which does not use a GPS system. Users would have to find a bike and enter the bike number in the app.

It will return a combination code which can be used to release the lock on the bike.

The New Paper team searched various MRT stations from the heartlands to the CBD area, parks and Housing Board void decks, but none of ofo's bright yellow bikes were spotted.

Based on the team's two-day mission, local venture oBike seems to have the least issues.

Bicycles from oBike could easily be found, with many parked at various MRT stations.

Unlike Mobike, oBike tracks its bicycles through the GPS system on the user's app, and a bicycle was found at the first attempt, near the McDonald's outlet at Bishan-Ang Mo Kio Park.


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11 puppies seized at Woodlands Checkpoint

Today Online 24 Mar 17;

SINGAPORE — Eleven puppies were found smuggled in a Malaysia-registered car, following further inspection upon its arrival at the Woodlands Checkpoint on Thursday night (March 23).

The puppies were found hidden in a modified fuel tank of the car by officers from the Immigration & Checkpoints Authority (ICA). The car was driven by a lone 43-year-old male Malaysian.

The driver, the puppies and the car were referred to the Agri-Food & Veterinary Authority (AVA). Investigations are ongoing.

Meanwhile, the 11 puppies have been kept for and quarantined at AVA’s facilities. They are being observed for signs of infectious or contagious diseases, including rabies, which can be fatal to both humans and animals.

Responding to TODAY’s queries, the AVA said the puppies will be quarantined for a minimum of 100 days and it will work with its rehoming partners to rehome them after the quarantine period.

The importation of any animals or live birds without an AVA permit is illegal and carries a maximum penalty of S$10,000 and/or imprisonment of up to one year.

The public can refer to the AVA’s website or download the agency’s mobile app SG TravelKaki for more information on bringing back animals from other countries.


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