Evening Edition

It's Spencer Musick with you on this Tuesday, May 5th, 2015.

Welcome to the Beijing Hour, live from the Chinese capital...

Coming up on the program this evening...

High-level strategic talks between China and the European Union kicking off in Beijing...

Chinese President Xi Jinping to attend a parade marking the Allied victory in World War II as a part of his upcoming trip to Russia...

The Islamic State claiming its first attack on US soil with the shooting incident in Texas...

In Business: New housing projects in first-tier cities enjoying robust sales over the Labor Day holiday..

In Sports: live updates from the AFC champions league action tonight..

In Entertainment: Stars from across the globe gathering for the annual Met Gala in New York...

Top News

Sino-EU High-level Strategic Talks Kick off

High-level strategic talks between China and the European Union have kicked off in Beijing.

Chinese State Councilor Yang Jiechi and EU foreign policy chief Federica Mogherini are leading the delegations.

Both have spoken highly of bilateral ties in the past 4 decades.

Analysts believe the two-day dialogue will provide a good opportunity for the two sides to expand mutual trust and financial cooperation.

Cui Hongjian is head of Department for European Studies with China Institute of International Studies.

He mentioned Chinese President Xi Jinping's visit to the EU headquarters last year, which has helped push the China-EU partnership to an unprecedented high.

"So, against this new backdrop, I believe this dialogue will improve the strategic trust [and] understanding between the two sides. And it will play an important role in China-EU relations for a long time to come."

The dialogue in Beijing is the fifth round since of talks since their initiation and the first since the two sides jointly adopted the China-EU 2020 Strategic Agenda for Cooperation in 2013.

Among dozens of fields where the two sides have pledged to strengthen cooperation is the banking sector.

Sergio Lugaresi is an adviser from the Italian Banking Association.

"I'm most interested in banking but also in institutional cooperation. Whilst in China there is an opening and reform of the banking sector, in the European Union we have achieved a banking union in the Euro area. And this, I think, is an opportunity for Chinese that want to invest in this sector in Europe."

The talks come ahead of a new round of negotiations next month connected to a China-EU investment treaty.

The event also includes activities marking the 40th anniversary of diplomatic ties between China and the European Union.

Dialogue and Cooperation Remain Themes of Sino-EU Ties :Chinese Ambassador

Anchor:

Meanwhile China's Ambassador to the EU, Yang Yanyi, says despite of disputes and difficulties in the past decades, negotiations and cooperation have remained constant themes of relations between China and the European Union.

The two sides have also worked together to upgrade their relations to a comprehensive strategic partnership focusing on peace, growth, reform and civilization.

CRI's Wang Wei reports.

Reporter:

Yang Yanyi, head of China's Mission to the European Union, says trade and economic cooperation has always been the most stable pillar supporting relations between China and EU.

The European Union has remained China's biggest trading partner for ten years in a row, while China is the second largest trading partner of the EU.

Trade of goods between China and the EU reached over 615 billion US dollars last year.

However, the two sides have come across trade frictions from time to time.

The EU announced that it will impose anti-dumping duties on China's stainless steel industry in March.

Yang Yanyi believes the two sides can work out a solution to the dispute.

"Thankfully, both China and EU are strongly against trade protectionism. We have been making efforts to remove trade barriers. The two sides kept in touch through mechanisms such as high-level economic dialogues and ministerial-level Joint Trade Committee Meetings. We'll continue our talks and consultations to solve trade frictions."

According to Yang Yanyi, the two sides have successfully settled disputes over solar panels, poly-silicon and wine through negotiations and consultations.

Recently, the Chinese government proposed the "Belt and Road Initiatives", an attempt to build a community of shared destiny across the Eurasian continent. As the ending point of the Silk Road economic belt, Europe is expected to play an important role in this strategy.

Yang Yanyi says the EU has advantages in both funding and technologies. At the same time, it also needs plans to create jobs and stimulate investment. Through further cooperation, both China and the EU will benefit from the cross continental initiatives.

"Definitely, the European Uion can become a participant and a partner of the 'Belt and Road Initiatives'. We are delighted to see that both the EU and its member states have expressed interest in and support to the initiatives. There are many similarities between EU's development agenda and our initiatives. If only we can properly integrate them, the effects will be amplified."

Yang Yanyi notes both China and EU are strong advocates of multi-polar world. She hopes the two sides would strengthen exchanges and negotiations so as to jointly voice their common concerns, which will help to establish a fair and just international order.

For CRI, I am Wang Wei.

President Xi to Attend Parade during Russia Trip

A senior Chinese official says President Xi Jinping's upcoming visit to Russia will show both nation's resolve to safeguard world peace and stability and build a new type of international relations featuring win-win cooperation.

During the visit Xi Jinping will attend a major parade to mark the 70th anniversary of the end of World War II.

Vice Foreign Minister Cheng Guoping said China and Russia, as the main Asian and European battlefields in WWII, made great contributions to victory in WWII and the post-war order.

"Peace, rather than conflict, is the basis of human survival and development. Cooperation, rather than confrontation, keeps up with the trend of the times and is a shared aspiration of all peoples. Equality, rather than hegamanism, is the fundamental guarantee for peaceful coexistence between countries. Win-win cooperation rather than zero-sum game, is the only way out for the progress and development of human society."

The Vice minister said the two countries will jointly hold a series of celebrations within bilateral or multilateral frameworks this year in order to remember history and martyrs, cherish peace and shape the future.

Cheng also said China and Russia will further strengthen strategic partnerships.

"Under the guidance of President Xi and President Putin, the Sino-Russian comprehensive strategic partnership has entered a new phase, which has set a good example of peaceful coexistence and win-win cooperation between major countries and neighbors and contributed powerful positive energy for world peace and development."

President Xi Jinping will visit Russia from Friday to Sunday, attending a Victory Day parade on May 9th in Moscow's Red Square.

Russian military parade rehearsal debuts new weapons

The latest rehearsal for the military parade at the Red Square in Moscow has attracted lots of attention, with some new weapons having made their debut.

Among them is the high-profile T-14 Armata tank, which is the first type of third-generation tank with a maximum speed of 90 kilometers per hour.

It is also capable of being installed with a 152mm caliber gun.

It will be the most powerful gun for a main battle tank.

Ahead of the rehearsal on Monday night, police set up protective fences on both sides of the streets to maintain order from the crowds, who were eager to see those weapons uncanvassed for the first time.

"We came to see those weapons, because the Red Square is not open to residents today. I am so interested in the new weapons debuted today, such as T-14 Armata tanks."

"I am very proud of them, because they were developed by ourselves."

"We came to watch the rehearsal of the parade and let the students learn the weapons."

A final rehearsal will be held on Thursday.

The actual parade is due to happen on May 9th.

IS claims first attack on US soil

The Islamic State group has claimed its first attack on US soil, a shooting at an anti-Muslim event in Texas over the weekend showcasing cartoons mocking Mohammed.

According to US media reports, the two suspected jihadists were Elton Simpson, 31, and Nadir Soofi, 34, who shared an apartment in Phoenix, Arizona.

The two opened fire last Sunday in the Dallas suburb of Garland on an unarmed security officer.

The two were shot dead stationed outside the cartoon contest.

The "Draw Muhammad" cartoon contest is an event held by a national anti-Islam group in the Dallas area.

Alia Salem is the Executive Director of the Dallas-area chapter for Council on American-Islamic Relations-Islamic Relations:

"The Muslim community at large in DFW (Dallas-Fort Worth) made a collective decision not to attend or even protest Sunday's events in an effort to ignore the hateful actions intended to incite the Muslim community, but to also give an unchallenged space for them to have their event. While in no way we condone the behavior of these criminals that opened fire, and as Americans we absolutely hold the right to freedom of expression, we must ask ourselves at what point does free speech become hate speech, especially when the intention is so clearly to incite a violent response."

Many Muslims find drawings of the prophet to be blasphemy, and such cartoons have been cited by Islamists as motivation in several previous attacks.

German Chancellor defends Germany's BND intelligence agency

German Chancellor Angela Merkel has defended Germany's BND intelligence agency against accusations that it violated laws by helping the United States spy on officials and firms in Europe.

Merkel said the priority for the intelligence agencies is to ensure the safety of German nationals against the international terrorism threat, which includes working together with other agencies.

"On the other hand, intelligence agencies must be able to work in secret to ensure the public's safety. The German government will do everything it can to ensure that intelligence agencies are able to carry out their duties. In the face of international terrorism threats, they can only do this in cooperation with other intelligence agencies -- and that includes first and foremost the NSA."

However Merkel also said she still believed that it was not acceptable for friendly nations to spy on each other.

"I still consider it to be an important question whether friends should spy on each other, and the answer to it should be that this should not happen. Secondly I would like to say that the chancellery will answer all the questions of the parliamentary body responsible for looking into the matter, which has already begun. As you know, we are currently in consultation with the United States, but the appropriate parliamentary bodies will continue to report on this and I think that is right."

Germany's top public prosecutor confirmed on Sunday that an investigation has been launched as opposition politicians demanded more information about the unfolding scandal from Merkel's government.

German media suggested that EU governments and agencies, especially France, were the targets of the BND's spying for the NSA.

US Pledges 45 Mln USD to Help Kenya with Refugee Crisis

The United States government has announced it's going to provide 45 million US dollars to help Kenya deal with an increasingly complex refugee crisis.

The assistances comes amid threats by the Kenyan government to shut down the massive Dadaab Refugee Camp.

The threat to shut down Dadaab has been made following last month's attack on a university campus by members of the Somali al-Shabaab militant group.

Kenyan officials have suggested the militants have support within the Dadaab refugee camp, which is home to some 600-thousand Somali refugees.

US Secretary of State John Kerry has made the US pledge while on a stop in Kenya.

"I'm pleased to announce that the United States has just provided an additional 45 million (US dollars) to the UN High Commissioner for Refugees for the operations here in Kenya and we are proud of the fact that we're perhaps the largest donor in the world in terms of the refugee effort at this moment, with 3.8 billion alone going to the refugees from Syria and that conflict and this year, a significant, about a 100 million dollars coming in additional aid for the fight against terrorism here in Kenya alone."

As part of his time in Kenya, John Kerry has also held extensive talks with Kenyan President Uhuru Kenyatta and other officials on how to combat the al-Shabaab extremists operating out of Somalia.

His trip is also meant to set the stage for US President Barack Obama's visit to Kenya later on this summer.

Telecommunications in Kathmandu Mostly Restored

Telecommunications in Nepal's capital Kathmandu have been mostly restored with the help of a Chinese company.

92 percent of mobile base stations in the quake-hit city have now been repaired.

The telecom system in the Nepali capital was paralyzed during the first two days following the disaster because many base stations were destroyed during the quake.

Zhang Bo, the chief technician of the Chinese company Huawei in Nepal, says they started repairs on the base stations near hospitals and government facilities first.

"We will repair 50 to 60 base stations daily. We prepared 10 oil machines after the earthquake and started with hospitals and core government departments. They must be guaranteed, as those are places that will save people's lives."

According to the Ministry of Home affairs, death toll from the massive quake and aftershocks has reached 7-thousand five hundered fifty seven, while the number of injuries rose to 14-thousand five hundered thirty six on Tuesday.

China to Relax Control on Medicine Price

Anchor:

The National Development and Reform Commission, China's economic regulator, has confirmed the country will lift price controls on most medicines starting from next month.

CRI's Huang Shan reports.

Reporter:

From June 1, China will relax price controls over the majority of medicines, except narcotics and some listed psychotropic drugs.

The head of National Development and Reform Commission's Medicine Price Department, Song Dacai, introduces the importance of this reform.

"The reform will build a new formation mechanism for medicine prices. Through these means, prices can better reflect the situation of supply and demand in the market. With a more flexible price mechanism, patients' increasing needs for certain medicines can be satisfied; meanwhile, pharmaceutical companies will put more efforts towards development and innovation, as well as ensure the quality of medicines."

With the reform, authorities are hoping that the price of major medicines can be decided by the market, and that medical insurance system can have a larger say.

Song Dacai stresses that the government will still supervise medicine prices, and serve as a defender of reasonable prices and orderly medicine market.

Insiders believe the move can further boost industry innovation and help medicine makers become more profitable.

Li Chuyuan from the Guangzhou Pharmaceutical Company is one of them.

"In the past, though the price of raw materials has increased over five times, we still cannot raise products' price levels. This has hindered our company's development. I think as the reform is being implemented, pharmaceutical companies like us will have more motivation, because the price can be adjusted according to market situations. At the same time, we can better meet patients' needs for low-cost medicines."

For consumers, the first thing concerning them is whether medicine prices will rise after the reform.

The vice-president of Teda International cardiovascular hospital, Liu Yaping, says that prices may not necessarily go up.

"I think after the reform, medicines price will not rise. Moreover, lower medicine price will give more room for hospital's development."

China has promised to further relax price controls.

The country has already relaxed its grip on low cost medicines, telecom services, tobacco, ports and railways, air transport, natural gas and electricity.

For CRI, I'm Huang Shan.

Finance companies expanding to China's film industry

Anchor:

As China's film market continues to surprise the world with ever-bigger records, more and more finance companies are paying attention.

But as CRI's Laiming reports, both domestic and foreign businesses will face challenges as they seek to expand in the world's second biggest film market.

Reporter:

China's film industry is expanding fast.

In April 2015, the 5th Beijing International Film Festival witnessed the signing of 35 projects worth 2.2 billion dollars.

The growing size of the market has lured many newcomers to join the feast.

Chen Jie, partner of Chinese booking agency Easy Entertainment, has tutored many young directors for the past few years.

"Young directors are not in a favorable position to get funding for their projects. So they need professionals to help them with financing and casting."

In the light of huge demand and gratifying profits, financial companies are quick to adapt.

Shanghai Sova Capital used to focus on private equity funding, but has turned its eyes to the film industry since 2012. Vice president He Xiaoqiu explains the challenges Sova has had to overcome after the strategic shift.

"Finance is a part of the film industry. Many major studios in Hollywood also possess finance and investment capabilities. But China's film industry is rudimentary, its small and there are many irregularities that impede the entry of financial capital."

Film Finances claims to be a world leader in completion guarantees. Founded in 1950, the American company offers assurance to investors that the producers will complete and deliver the films to distributors, the latest being the 2015 spy comedy film "Kingsman: the Secret Service."

April Ye, CEO of Film Finances' China Cultural Services, says the company also needs to adjust as it introduces its services in China.

"Everything here has just recently become industrialized. The film industry and also the people who are interested in doing films are new, a lot of them are from outside the industry. They are new to production and they are new to the film business."

Expanding business in a foreign territory can be daunting, but sometimes all it takes is a reliable partner. In March 2015, Canadian-American entertainment company Lionsgate and China's Hunan TV & Broadcast announced a film finance & distribution deal. Bennet Pozil, executive vice president at East West Bank who worked on the deal, highlighted the benefits for both sides.

"Hunan can learn from Lionsgate in terms of what Lionsgate does internationally, how they made English-language pictures, how they exploit them – international sales, domestic distribution in the US. Conversely, Lionsgate is able to learn from Hunan Broadcasting and TIK Films as to how to make a movie or TV show in China, how to make it successful, how to release it theatrically, how to broadcast it on satellite, or through internet streaming."

With more domestic and foreign players joining the business, there seem to be plenty of opportunities for Chinese directors. But young director Jiang Jun believes filmmakers should still stay focused on their own projects.

"Filmmakers above all need to help themselves. It costs almost nothing to write a really good story, and keep coming up with good stories is what helps filmmakers go further in their career."

For CRI, I'm Laiming.

China-Smartphone Apps brings Legal Challenge to current system

Anchor:

The rapid development of online applications for mobile devices is creating new challenges for China's legal system.

CRI's Qian Shanming reports.

Reporter:

Applications such as Wechat or Weibo started out as programs which would allow friends to share their thoughts.

However, the popularity of these apps has seen them transform into an emerging tool for business owners.

As such, this is creating challenges for regulators hoping to keep tabs on the use of these apps.

Zhao Zhanling is a legal advisor for the Internet Society of China.

He says 3rd party supervision is needed so people who use apps for business can be properly monitored.

"Our laws don't cover the user guidelines laid out before someone uploads a social media app onto their phone. That means no standards are there for the apps. Right now each application has its own code of requirements. That is not enough."

With online shopping flourishing here in China, Zhao Zhanling also says a lack of regulation through apps can lead to problems for consumers to protect their legal rights.

"Social network platforms can hardly be defined as online trading platforms. Customers will have legal problems if they are cheated through these platforms. It'll be difficult for them to sue the sellers and protect their interests."

The Internet Society of China estimates that around 50 percent of people who are scammed by dubious individuals through apps do so by becoming their friends online.

It has also being suggested there is a growing amount of illegal trading being done via social media apps.

For CRI, I am Qian Shanming.

China 's national tourism administration responds to the video that goes viral on line

China 's national tourism administration has again responded to a video posted online that shows a tour guide in Yunnan Province verbally abusing tourists because they didn't buy enough while shopping.

The tourism administration says it will seriously handle the case according to corresponding regulations and laws.

Official investigation also shows that the travel agency behind the tour is also involved in illegal operation.

The Kunming Fenghua Travel Agency has previously attracted tourists with low prices and encouraged them to buy goods during the trip.

Weather

Beijing will be cloudy tonight with a low of 12, tomorrow it will be cloudy with a high of 22.

Shanghai will be overcast tonight with a low of 17, also overcast tomorrow with a high of 22.

Chongqing will be cloudy tonight, 17 degrees the low, tomorrow it will continue to be cloudy with a high of 29.

Elsewhere in the world, staying in Asia,

Islamabad will be sunny tomorrow with a high of 35.

Kabul,rainy, 10.

Over in Australia

Sydney, sunny with a high of 18,

Canberra, cloudy, 10,

Brisbane cloudy, 27,

Finally Perth will be sunny with a high of 20 degrees Celsius.

Headline news

China, EU to celebrate 40 years of ties

The latest round of high-level strategic talks between China and the European Union is being held here in Beijing.

The two-day event will also include activities marking the 40th anniversary of diplomatic ties between China and the European Union.

Chinese State Councilor Yang Jiechi and EU foreign policy chief Federica Mogherini will lead the delegations.

The talks come ahead of a new round of negotiations next month connected to a China-EU investment treaty.

Dozens migrants may drown dead in waters off Sicily

Another tragedy has occurred in the Mediterranean waters with dozens of migrants feared dead.

According to aid group, Save the Children, a boat has sunk off the waters in Italy's Sicily island.

It is still unclear how many people were onboard the boats.

Rescue ships are said to be approaching the site of the accident.

Death toll from Nepal quake soars to 7,557

The Death toll from the massive earthquake and aftershocks in Nepal has reached 7-thousand five hundered fifty seven.

The number of injuries has risen to more than 14-thousand five hundered.

As many as 11-thousand government buildings were destroyed in the quake while almost 190-thousand civilian houses were flattened.

IS claims first attack on US soil

The Islamic State group has claimed its first attack on US soil, a shooting at an anti-Muslim event in Texas over the weekend showcasing cartoons mocking Mohammed.

According to US media reports, the two suspected jihadists were Elton Simpson, 31, and Nadir Soofi, 34, who shared an apartment in Phoenix, Arizona.

The two opened fire last Sunday in the Dallas suburb of Garland on an unarmed security officer.

The two were shot dead stationed outside the cartoon contest.

Indian PM to visit China

The Chinese government has confirmed Indian Prime Minister Narendra Modi will pay an official visit to China next week.

Modi is due to visit China for 3-days starting on May 14.

Modi's time in China is at the invitation of Chinese Premier Li Keqiang.

Details of his agenda have not been made clear.

However, issues connected to economic cooperation are likely to be high on Modi's agenda.

Fears of tsunami downgraded after 7.4-magnitude quake hits PNG

Fears of major tsunamis have been downgraded after a 7.4-magnitude earthquake rocked the ocean floor 150 kilometers south of Papua New Guinea on Tuesday.

A tsunami alert was immediately issued after the quake.

But the latest advisory from the Pacific Tsunami Warning Center said the tsunami threat has largely passed.

An aftershock measuring 5.9 hit the region within half an hour of the original quake.

So far, there have been no reports of damage or injuries.

The area itself is one of the most seismically-active regions on earth.

Biz Reports

Stocks

Turning now to our business news, but first let's have a look at the numbers from the Asian markets on this Tuesday evening.

Chinese stocks plunged Tuesday as the start of an IPO wave cooled investor sentiment.

The Shanghai Composite Index had its worst day in months, losing more than 4 percent.

The Shenzhen Component Index fell more than 4 and a half percent.

More than 20 companies are set to go public on the two bourses starting from Tuesday until the beginning of next week, raising hundreds of millions of dollars in the process.

Hong Kong shares also came under heavy selling pressure, with the benchmark Hang Seng index ending down 1.3 percent, extending losses for the fourth straight session.

Elsewhere in Asia,

Markets in Japan and South Korea were closed for holidays.

Singapore's benchmark Straits Times Index declined 0.4 percent.

Australia's ASX 200 briefly surged after a major rate cut announcement but ended practically unchanged.

We will have more on the rate cut in Austrilia coming up here on the Beijing Hour.

Robust property sales over holiday

It is being reported that new housing projects in first-tier cities enjoyed robust sales over the Labor Day holiday.

This is mainly due to previous government stimulus policies that continued to filter through to the market.

These included a down payment ratio as low as 30 percent for second-home purchases that was released on March 30th.

Hu Jinghui is the vice president of 5i5j, real estate agency.

He attributes the robust sales to the March 30th policy.

"The policy is favorable to smaller home owners, and at the same time real estate agencies can be exempt from sales taxes for the first 5 years, which is further extended from the previous 2 years exemption. Plus, spring festival falls later, so at some point, it drives people who meant to make their purchase in March to buy in April."

According to the China Index Academy, first-tier cities posted a 31 percent surge in sales, second-tier cities rose 5 percent, while third-tier cities dropped 7 percent.

A total of 201 new homes were sold and registered with the Beijing housing authority during the two days, up 19 percent compared with the same period a year ago.

In Shenzhen, the number stood at 195 units, up four-fold from last year.

New projects in Beijing, Shanghai, Guangzhou and Shenzhen reportedly sold out within 24 hours of going on sale.

Global Crude Oil Prices Rebound

Anchor:

The benchmark Brent crude oil price slipped one dollar towards $66 a barrel on Tuesday from the record high this year on Monday.

Meanwhile, Saudi Arabia considered halting bombing in Yemen to allow the delivery of aid, which eased concerns about oil supply from the Middle East.

Crude oil prices have hit 67 US dollars a barrel on Monday, buoyed by expectations of increased global consumption.

The rebound in oil prices this year follows the massive price collapse last year.

Since January, Brent crude prices have rebounded by some 40 percent.

For more on this, the Beijing Hour's Paul James spoke with Gao Shang, commodities analyst with Guantong Futures.

Back anchor:

That was Gao Shang, commodities analyst with Guantong Futures speaking with the Beijing Hour's Paul James.

China supporting consortium bid for Malaysia-Singapore railway: premier

It is being reported that China will support its own companies bidding for a high speed rail project linking Malaysia and Singapore.

Chinese Premier Li Keqiang says the country is experienced in infrastructure construction, especially in high speed railway construction.

The Premier added that he hoped China's railway consortium could put forward a competitive bidding plan for the project.

It is also being reported that the new rail link will trim travel times between the capitals of Malaysia and Singapore to within 90 minutes.

Official Australian interest rates cut

Australia's central bank cut official interest rates by 25 basis points to a record low of 2 percent on Tuesday.

The cut comes on the heels of the decision to cut rates by 25 basis points in February.

The move aimed at improving economic growth and lowering a resurgent Australian dollar, in line with the bank's policy.

But the move could see commercial mortgage rates below 4 percent for the first time in generations, and further fuel an already hyper Australian property market.

Antivirus test labs call out Qihoo 360 as cheat

Chinese antivirus firm Qihoo 360 Technology was censured by three major testing organizations for cheating on several international evaluations.

The three labs of Austria, Germany and the U.K. have stripped Qihoo of all awarded certifications and rankings for this year.

The labs say they will also put in place controls to make sure that Qihoo and others cannot rig the tests in the future.

Qihoo has denied the charges.

Vice president of Qihoo 360 Qu Xiaodong explains that their antivirus software is based on a multi-engine architecture, and works differently in overseas countries because it uses this different model.

"We use different engines of 360 security products in various markets. 360 is an antivirus software with multi- engines. In the Chinese market, we are using the QVM engine based on cloud technology which is more suitable given the market rules."

Qihoo 360 is headquartered in Beijing, and reported revenue of 1.4 billion U.S. dollars in 2014.

Baidu Q1 Revenues down on Increased Expenses

Chinese search engine giant Baidu has reported that its first-quarter revenues stood at some 12.7 billion yuan, or some 2 billion U.S. dollars.

The number is down by 9.4 percent due to large operating expenses incurred by the company.

The company reported total operating expenses totaling over 5 billion yuan, up 60% from the same period last year..

This comes as sales, administrative and R&D expenses all increased.

Baidu is one of the biggest Internet companies in China.

It offers search services and also provides a platform for businesses to reach their customers.

McDonald announces its shake-up plan

McDonald's has announced its plans to restructure its business and add more franchised restaurants around the world.

The new plan comes on the heels of McDonald's recording a weaker-than-expected first quarter.

The company will focus more on its more lucrative regions, including the US, Australia and Canada.

The United States accounts for 40-percent of McDonald's operating income. 　

But at the same time, McDonald's says it has plans to open new stores in high-growth markets like China and Poland.

Brokerage combines units outside mainland

CITIC Securities, China's largest brokerage, is setting up a new company to consolidate its corporate finances and capital market business outside of the Chinese mainland.

The new brokerage will combine the company's merger and acquisition, equity capital market and debt capital market businesses in overseas markets.

CITIC last year sealed a deal to acquire CLSA, a brokerage from struggling Credit Agricole SA.

It is the first major acquisition by a Chinese brokerage of a foreign peer.

Sports

AFC Champions League action: Beijing Guo'an, Guangzhou Evergrande

The last round of group games are underway at the AFC Champions League.

Visiting Beijing Guo'an are through to the knock-outs.

They wasted their chance of early progression after losing 1-0 to Brisbane Roar but didn't let it slip away this time by drawing 1-1 against South Korea's Suwon Samsung.

Dejan Demjanovic put Beijing to the lead at the 25th minute.

With Zhao Hejing injured Guo'an were down one person and Suwon Samsung took advantage of that.

Leo Itaperuna leveled it 1-1 just two minutes later.

Beijing and Suwon both progressed as top two of the group.

Dejan, who scored the goal for Beijing, is happy that he contributed to the game.

"I'm happy that my goal helped my team qualify..."

In another game in the same group,

Urawa Red Diamonds beat Brisbane Roar 2-0.

-----------------------------------

On the field right now, champions from the last two years are clashing as Guangzhou Evergrande host Western Sydney Wanderers.

Bottom-of-the-group Sydney's only hope is if they take out Guangzhou. But that is not enough and they will have to wait for the result from the other game within the group.

There is no pressure on Guangzhou, who are top of the group and already through to the knock-out round.

But they will show no mercy against the team that ended their hope of defending the title on the exact same field 10 months ago.

Sydney knocked out Guangzhou in the quarterfinals and went on to win the title last season.

Guangzhou Coach Fabio Cannavaro said they will show no mercy and the only aim is victory.

Chicago, Los Angeles wins Game 1 of semifinals

The Chicago Bulls took a 99-92 victory over the Cleveland Cavaliers in Game 1 of the Eastern Conference semi-finals.

Chicago's Derrick Rose had 25 points and Pau Gasol added 21.

Chicago never opened up a big margin but Rose and Gasol kept Cleveland's LeBron James and Kyrie Irving's attack at bay to maintain the lead. The Cleveland pair had 19 and 30 points respectively.

Pau Gasol said they were poised and did a great job. But coach Tom Thibodeau says he won't cut his team any slack.

"Yeah. I mean it's the start. You can't get wrapped up in it. For us it's make our corrections and we're going to have to come out and play a lot better in the next game. And you get into a series, it's the first team to four (wins). So we know that it's a battle and we can't let our guard down."

In the Western Conference,

The Los Angeles Clippers held off the Houston Rockets 117-101 in Game 1 of their second round series.

Stephen Curry named MVP of the year

In off-court action,

Golden State Warriors' Stephen Curry has been voted MVP of the year.

The point guard averaged 23,8 points, 7.7 assists, 4.3 rebounds and two steals in the season.

Curry had earlier beat his own record for 3-pointers in a season in a regular season game against the Portland Trail Blazers.

Curry was elated about the award and said it's a dream come true.

"If you take time to realize what your dream is and what you really want in life, no matter what it is, whether it's sports, whether it's in other fields, you have to realize that there is always work to do, and you want to be the hardest working person in whatever you do, and you'll put yourself in a position to be successful. And you have to have a passion about what you do. And basketball was mine and that's what's carried me to this point."

Curry has hit 286 and counting this season as the Warriors keep pushing forward in the playoffs.

Stuart Bingham wins Snooker World Championship

Turning over to Snooker,

Stuart Bingham beat Shaun Murphy 18-15 in an all-England final and won the Snooker World Championship in Sheffield.

Murphy took the early initiative in the best-of-35 match, leading 8-4, before Bingham fought back to trail by one frame at 8-9.

Bingham then won six of the next eight frames to lead 14-11. But 2005 champion Murphy fought back and leveled it at 15 frames.

Bingham went ahead 16-15 after Murphy gave away 38 points in fouls in the 31st frame.

He fired a 65 and 88 break to seal the victory.

It was Bingham's first World Championship. He had seen off Ronnie O'Sullivan, Judd Trump and Graeme Dott in making it into the final.

Bingham's award was a 300,000-pound winner's cheque.

Rio's environment minister dips into polluted bay to show water is safe for Olympic games

Rio de Janeiro's state environment minister Andre Correa has plunged into the Guanabara Bay to show the water is safe to host the Olympic sailing events.

City wastes has ended up in the bay due to Rio's poor sewage and rubbish collection system.

Correa took a few strokes in full clothes in the bay and compared the water quality to that of Ipanema, a beach in Rio favoured by bathers.

"Look, here you can swim just like in Ipanema, just like in Barra. As I said the challenge is the floating trash, that we will have to confront, zero trash, no one can manage this in any bay."

However, a local newsmagazine program pointed out that the minister chose the cleanest part to swim in at the most favorable time.

Water quality in the Ipanema Bay is in bad condition more often than not, according to oceanographer David Zee.

Rio's water quality has become one of the most contentious issues heading into the Olympics.

Fish die-outs have polluted the lagoons and bays designated for rowing, canoeing and sailing events.

Brazil's Olympic Committee said clean-up work is underway and it will be delivered in conditions to host the competitions without any problems.

Entertainment

Stars gather for Met Gala in New York

Stars from across the globe gathered Monday for the annual Met Gala in New York.

The evening, aimed at raising millions for the museum's Anna Wintour Costume Center, was inspired by the Met's new exhibit, "China: Through the Looking Glass."

Chinese actress Li Bingbing was a guest of honour at the event and was joining the met ball for the first time.

"Actually, this is the first time for me to join Met Ball. I heard Met ball it would like the Oscars of fashion. SO happy and so excited to join tonight. Is also a good opportunities for China and for Chinese celebrating to be here, because it is also special this year in Met Ball, because the theme of this year is China."

Other Chinese stars in attendance were Gong Li and Zhao Wei.

Popstar Rihanna stole the show with a gown designed by Beijing based designer Guo Pei. While Lady Gaga got into the theme wearing a velvet net evening coat hand-embroidered with black rhinestones and 14,000 feathers.

Martin Scorsese wraps up filming in Taiwan

Martin Scorsese is wrapping up filming for his movie 'Silence' in Taiwan.

The film is a high powered historical drama about faith and religion.

At a press event on Monday, Scorsese spoke of the efforts to make the film based on the novel 'Silence' by Shusaku Endo. The director said that he had prepared an early draft of the screenplay back in 1992.

Though the book is set in 17th century Japan, Scorsese chose to film in Taiwan following after being introduced to the province by Ang Lee. It was entirely shot in the province in various locations including Taipei, Taichung and Hualien.

The cast includes Liam Neeson and Andrew Garfield along with Japanese star Asano Tadanobu.

Fast and Furious 7 still leads China Box Office figures

Fast and Furious 7 has extended its record breaking figures at the Chinese box office fighting off competition from both domestic and international films.

Furious 7 took just under $46 million in its third full week of release pushing its cumulative total to $371 million after 22 days.

Chinese romance 'You Are My Sunshine' came in second place earning $35.7 million in its first four days of release pushing romance and youth drama 'The Left Ear' into third place.

Helios, the Hong Kong action film which closed the Beijing International Film Festival came in fourth place with a total of $20 million in four days.

And surprisingly, Arnold Schwarzenegger's crime action film Sabotage only took $1.14 million for a ten day total of just $3.79 million.

New Mission Impossible 5 teaser trailer released

A new teaser trailer has been released for upcoming film Mission Impossible – Rogue Nation.

Tom Cruise reprises his role as Ethan Hunt for the latest installment of the Mission Impossible franchise. This time Ethan Hunt is on the run from a criminal syndicate hunting down Mission Impossible's force agents after the agency's disbandment.

The new movie is set to impress with stunts including Tom Cruise hanging off the side of a jet as it takes off.

The latest Mission Impossible movie is directed by Christopher McQuarrie who wrote Cruise's world war 2 drama Valkyrie. The film also stars Alec Baldwin and Rebecca Ferguson.

British band Blur release documentary on making new album in Hong Kong

British band Blur has released a documentary about making their latest album in Hong Kong.

The documentary named after their new album 'The Magic Whip' is a thirty minute documentary featuring interviews with the band along with personal footage from band members of their time recording in Hong Kong. They chose to record in the city after their Japan tour was cancelled and the band say they were inspired by it's urban feel.

The new record is Blur's first studio album in twelve years and shot straight to number one in the UK last week. However it was close to never being made with bandmates admitting there was a lot of ill feeling within the band before their reunion in Hong Kong.

Blur rose to fame in the 90s at the time when 'Britpop' music was at its height.

Weather

Beijing will be cloudy tonight with a low of 12, tomorrow it will be cloudy with a high of 22.

Shanghai will be overcast tonight with a low of 17, also overcast tomorrow with a high of 22.

Chongqing will be cloudy tonight, 17 degrees the low, tomorrow it will continue to be cloudy with a high of 29.

Elsewhere in the world, staying in Asia,

Islamabad will be sunny tomorrow with a high of 35.

Kabul,rainy, 10.

Over in Australia

Sydney, sunny with a high of 18,

Canberra, cloudy, 10,

Brisbane cloudy, 27,

Finally Perth will be sunny with a high of 20 degrees Celsius.

That’s it for this edition of the Beijing Hour...

A quick look at the headlines before we go...

High-level strategic talks between China and the European Union kicking off in Beijing...

Chinese President Xi Jinping to attend a parade marking the Allied victory in World War II as a part of his upcoming trip to Russia...

The Islamic State claiming its first attack on US soil with the shooting incident in Texas...

In Business: New housing projects in first-tier cities enjoying robust sales over the Labor Day holiday..

On behalf of the Beijing Hour staffers, this is Spencer Musick in Beijing hoping you'll join us for our next edition of the Beijing Hour to open a window to the world together.