THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

 

  Hongkong Economic Report 2013 (May 14, 2014)
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Hong Kong Budget 2015
Global uncertainty to weigh on HK's economy, finance chief says in budget: The city's economy faces a "challenging" year ahead amid global economic uncertainty, Financial Secretary John Tsang warned as he unleashed a host of measures intended to electrify economic growth. The city's economy will grow this year by between 1 and 3 per cent. He pointed to the economic woes of Europe and Japan as one key factor in the uncertainty. Volatility in the price of oil would exacerbate the situation and made it hard to predict the likely pace of interest rate increases in the United States, Tsang said. US rates have a direct bearing on HK because of the city's currency peg to the US dollar. Among the measures Tsang announced were efforts to boost tourism, including an HK$80 million drive to polish the city's global image and diversify the tourism sector away from its heavy reliance on mainland visitors. Tsang also announced help for the city's 320,000 small and medium-sized businesses. Measures include a HK$1.5 billion injection into funds that support SMEs' marketing and development. The government will also promote industries including fashion, film, arts and technology in a push to diversify the economy. Tsang says the city will further expand its yuan trading; trade settlement in yuan was up 60 per cent year on year for last year to 6.3 trillion yuan (HK$7.9 trillion). Discussions were continuing with the central authorities on a proposed link between HK's stock market and that of Shenzhen and on enhancing a similar link to the Shanghai bourse that was launched in November, Tsang added.
HK's budget surplus underestimated for eighth year in a row: Financial Secretary John Tsang continued his unbroken streak of being wrong, revealing for the eighth year in a row that he had inaccurately predicted the city's budget. He said the city would see a surplus of HK$63.8 billion for the financial year ending on March 31 - six times higher than his original projection of HK$9.1 billion. The financial chief also predicted that the government in the next financial year would have a surplus of HK$36.8 billion. 
HK launches rainy-day fund despite prediction of HK$950b reserves by 2020: HK is to set up a savings fund for a rainy day, the finance secretary announced on Feb. 25 - despite the fact the city's massive fiscal reserves are predicted to reach HK$950 billion in five years. John Tsang also revived the possibility of broadening the tax base in his budget speech when he raised the prospect of introducing a goods and services tax.
HK budget sweeteners help lift some of family's cash burden: Child allowances and rebates are among some HK$34 billion in one-off relief measures announced by Financial Secretary John Tsang, with the aim of "alleviating the financial burden on the public". At least 1.8 million taxpayers will pay 75 per cent less on salaries tax - this time capped at a higher HK$20,000 - while profits tax is to be reduced by the same amount, benefiting 130,000 taxpayers. Other one-off relief measures promised by Tsang include an increase in the basic and additional child allowances.

Economy + Finance
HK posts worst retail sales figures since Sars in 2003: HK's annual retail sales figures fell for the first time since the Sars outbreak in 2003, declining 0.2 per cent last year - mainly due to lower sales of luxury products and some durable items as tourists left less cash behind. Last year's total retail sales came to HK$493.3 billion, which represented a decrease of 0.2 per cent in value but an increase of 0.6 per cent in volume when compared with 2013.
HK tourism sector performing well but research paper warns of possible decline: Tourism has outpaced logistics, finance and professional services as the most rapidly growing sector and biggest job creator among the four so-called pillar industries, a Legislative Council research has found. The sector grew by 161 per cent in real terms between 2002 and 2012, thanks to the rapid increase in mainland visitors - 38 million over the period - since the individual visit scheme was launched in 2003. As a result, the number of people working in the sector also increased by a total of 108,700, or 76 per cent, during the period. The paper also warned the tourism sector should prepare for a possible decline. It cited facilities overloaded by an influx of mainland tourists and the mainlanders' reduced spending on luxury goods.
Anti-mainlander protests damaging city's reputation, says tourism chief: HK's tourism chief and the pro-establishment camp have denounced recent protests against mainlanders, saying they are hurting the city's reputation as a tourist-friendly destination. Demonstrations targeting mainland tourists and parallel traders in shopping centres in Tuen Mun and Sha Tin in this month led to angry clashes, with police using pepper spray and drawing batons. Priscilla Lau, a local delegate to the national legislature, said arrests and condemnation alone could not solve the problem and urged the government to take decisive action against parallel traders.
HK home prices hit record high after rising 13pc last year: HK home prices rose to a record high last year, growing 13.26 per cent year on year. The biggest growth was seen in small flats, the official data shows. The HK Monetary Authority has launched six rounds of mortgage tightening since 2009 with the aim of reining in surging home prices.
New property cooling measures will see higher down payments for HK buyers: Homebuyers will need to come up with a higher down payment for properties under HK$7 million in a new round of mortgage-tightening measures announced by the Hong Kong Monetary Authority after prices in the city's residential market hit an all-time high. It is the seventh lot of measures introduced to cool the market since February 2013. HKMA chief executive Norman Chan said the loan-to-value ratio for residential properties under HK$7 million would be capped at 60 per cent.

Domestic politics
HK democracy movement back on road, but turnout down: Turnout for the first major pro-democracy march of the post-Occupy era fell well short of expectations on Feb. 1 - but organisers rejected suggestions people were growing less determined about the fight for democracy. Rather it was a sign Hongkongers no longer had faith in "conventional ways" of protesting, Civil Human Rights Front convenor Daisy Chan said. She said more "alternative" forms of civil disobedience could emerge unless the government heeded public opinion on "genuine democracy". The front put turnout for the march from Victoria Park in Causeway Bay to Central at 13,000. About 30,000 turned out for the New Year's Day march last year, the front said.
'Cultural Revolution style' attacks on HKU threaten academic freedom: Pro-Beijing newspapers have been making “Cultural Revolution style” attacks on the University of HK for the past three months in an attempt to block appointments of outspoken academics to senior positions, its former law dean alleged on Feb. 3. Professor Johannes Chan said such “persecuting attacks resembling those seen in the Cultural Revolution” would haunt other universities and hurt academic freedom in the city. Chan, who stepped down as dean last year, was recently accused by pro-Beijing newspaper Wen Wei Po of engaging in excessive political participation and of causing HKU law school's “poorer performance” and “a drop in quality”.
HKU law professors hit back against pro-Beijing press 'political interference' attacks: Law professors from the University of HK have joined forces to hit back at attacks on a colleague by pro-Beijing media, saying the news reports were a "worrying" signal of political interference in academic affairs. Nine professors spoke to the South China Morning Post on Feb. 12 as Sophia Kao, a top adviser to the chief executive, admitted discussing with unidentified people whether pro-democracy scholar Johannes Chan was fit to be a HKU pro-vice chancellor. She claimed she could not remember if they were from HKU. Chief Executive Leung Chun-ying was accused of trying to block the appointment of Chan in an Apple Daily report. But Leung's office responded with a flat denial of interference.
HKU told: dig out truth on CY Leung claims: The University of HK should conduct a formal investigation into reported government interference in its internal affairs, says a group of 20 academics from higher education institutes across the city. HKU political scientist Professor Joseph Chan challenged the tradition that chief executives act as chancellor, which dates back to colonial times and is written into the HKU Ordinance. He said it opened the door for government to meddle in the university's affairs for its own political ends. "The previous chief executives and governors exercised restraint and remained solely figureheads," he said. "But the city's chief right now is a chief executive who would exhaust every power at his disposal … There's a need to review the whole chancellor system." The 20 academics behind the call for an inquiry have also started a petition calling on the government not to violate academic freedom.
Leung Chun-ying hits out at pan-dems after filibuster kills off IT bureau … for now: A frustrated Leung Chun-ying said he would not give up on his IT bureau proposal after a funding request to set it up was killed off by a pan-democratic filibuster. After the meeting, Leung said it was "regrettable" the bureau could not be established and criticised the pan-democrats for "playing politics". The pan-democrats slammed officials for failing to provide a clear blueprint before asking for a start-up fund of HK$35 million. They also believed the bureau would be used to create new political posts for Leung's allies.
Keep up pressure for democracy in HK, student leaders tell world summit: Student leaders behind the "umbrella movement" told a human rights summit in Geneva on Feb. 24 that the world must stay focused on the human rights situation in China and keep up the pressure on Beijing to allow more democracy in HK. Federation of Students secretary general Alex Chow and his deputy, Lester Shum, also said they would not retreat or lose hope in the fight for genuine universal suffrage in the 2017 chief executive election.

Relations HK - Mainland China
China's man in HK Zhang Xiaoming hits out at democracy protests: Instilling a sense of national pride and belonging in young people should be a priority for the education system in the wake of Occupy Central, Beijing's top official in HK said. In a high-profile speech at the spring reception of the central government's liaison office, director Zhang Xiaoming also warned the city to be wary of attempts to advocate independence or confront Beijing by illegal means. He warned against using the city's high degree of autonomy as a pretext to reject Beijing's authority.

Legal affairs and human rights
Language and cultural barriers leave Indonesian domestic helpers more vulnerable, human rights figure says: Language barriers and cultural differences may partly explain why Indonesian domestic helpers have been caught up in three of the city's most horrific abuse cases over the past 13 years, a leading human rights figure has said. Mabel Au, Director of Amnesty International HK, spoke in the wake of Feb. 10's verdict on Indonesian domestic helper Erwiana Sulistyaningsih's former abusive employer. Law Wan-tung was convicted of assaulting her and another Indonesian maid, Tutik Lestari Ningsih. 
HK press freedom sinks to new low in global index: HK has hit a new low on the global rankings for press freedom amid concern Beijing is exerting control over the city, according to the annual report by international watchdog Reporters Without Borders. The Paris-based group placed HK 70th in its 2015 world press freedom index, the city's worst ranking since the index was first launched in 2002. The territory was ranked 61st last year, falling from 58th the year before.

Health
Top medical university to set up first overseas research centre in HK: One of the top medical universities in the world, the Karolinska Institute in Sweden, is planning to set up its first overseas research centre in HK. Professor Anders Hamsten, the university's president, said the centre, which aims to lure international talent in the field of stem-cell technology, would focus its research on three major disease areas - heart failure, liver diseases and neurodegenerative diseases such as dementia.
Scientists plan HK's own drug factory to end reliance on foreign suppliers: A group of scientists led by the world's top flu fighter are planning to set up a local pharmaceutical manufacturing plant to supply drugs and vaccines to HK. University of HK Professor Yuen Kwok-yung, a leading expert in microbiology, said the absence of local production had left the city vulnerable to a global pandemic, as it has to rely on foreign manufacturers to supply rapid diagnostics, antiviral medicines and vaccines. Yuen, along with scientists from Polytechnic University, Macau University of Science and Technology and another US institute, announced that they have formed an action group to build a non-profit manufacturing plant.
HK health minister warns that more deadly virus could emerge from bird flu and seasonal influenza: Health minister Dr Ko Wing-man raised his concern about the possibility of bird flu being mixed together with the seasonable influenza and produce a more deadly new virus. “If a person contracts two viruses, a gene recombination is likely to happen,” Ko said on Feb 8, as the city is battling against an unusual high numbers of seasonal influenza outbreaks.

Environment
Bus firms can't meet Green-zone deadline: Two of the city's three main bus companies have warned that they cannot meet the deadline set in Chief Executive Leung Chun-ying's policy address when public buses which do not meet low-emissions standards will be banned from Causeway Bay, Mong Kok and Central. A spokesman for both Citybus and NWFB added that they should be able to comply in the first quarter of 2016 by modifying the engines on some of its older buses. KMB has estimated that it can complete deployment of its low-emissions buses within the zones by the end-of-year deadline.
Pay-for-rubbish bill is likely to be aggressive, environment chief says: Aggressive recommendations on fees for waste are likely to be incorporated in full when the government submits its draft bill to the Legislative Council, the top environment official has hinted. Secretary for the Environment Wong Kam-sing said all recommendations gathered by the Council for Sustainable Development in its public consultation last year were "highly representative" of all stakeholders and that the government would respect this.

Culture and Education
West Kowloon arts hub CEO Michael Lynch resigns citing personal reasons: West Kowloon Cultural District Authority CEO Michael Lynch will step down in August for personal reasons, triggering a search for his successor at the arts hub. Chief Secretary Carrie Lam, who chairs the board, said the authority would create a committee - which she would also chair - to recruit his replacement. Lynch is the second arts hub CEO to resign before completing his contract.

Varia
HK takes second in Asia on list of sustainable cities: High property prices, long working hours and serious air pollution are the major factors threatening Hong Kong's rank as Asia's second-most sustainable city, after Seoul, according to a new ranking of the world's 50 leading cities. Hong Kong ranks eighth overall on the Sustainable Cities Index, compiled by the global design, engineering and management consulting firm Arcadis, which is based in Amsterdam.
HK in world's top 10 most expensive cities to live for first time in over a decade: The high cost of basic food items like bread and milk, coupled with a stronger US dollar, has pushed HK into the top 10 most expensive places to live in the world for the first time since 2003, according to a new survey. Singapore topped the list as the priciest city to live in, according to the Economist Intelligence Unit. In second place was Paris, followed by Oslo, Zurich, Sydney and Melbourne. Geneva fell one spot to seventh while Copenhagen moved up two spots to eighth. HK took ninth with Seoul rounding out the top 10.

Press articles related to Switzerland and Swiss matters
HSBC CEO Gulliver ties Swiss tax scandal to another era (SCMP, Feb. 26): HSBC CEO Stuart Gulliver told UK lawmakers that the scandal over the role of the Swiss private banking unit played in helping clients dodge taxes was the product of a different era. "We are now de-risking the firm," he said. Gulliver was called before lawmakers after the International Consortium of Investigative Journalists released details from client data stolen in 2008, showing how HSBC set up Swiss bank accounts for drug cartels, arms dealers and others, and advised its customers on how to evade tax.

This is a review of the Hong Kong media and does not necessarly represent the opinion of the Consulate General of Switzerland. The Consulate General of Switzerland in Hong Kong does not bear any responsibility for the topicality, correctness, completeness or quality of the information provided. Liability claims regarding damage caused by the use of any information provided, including any kind of information which might be incomplete or incorrect, will therefore be rejected.

5.3.2015

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