THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

 

Annual Economic report 2015
May 16, 2016
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ECONOMY & FINANCE

  • HK retail sales plunge 13.6 per cent to record biggest slump since 1999
  • HK tourism shows signs of recovery after poor year
  • No plan to expand HK’s individual visit scheme to more mainland Chinese cities, says minister
  • HK finance chief keeping ‘close eye’ on labour market as unemployment rises to 3.4pc
  • HK’s membership of Asian Infrastructure Bank to boost city’s fund-raising profile
  • HK overtaken by Singapore as third leading global financial centre
  • Key HK economic indicator falls to seven-month low
  • Joint mainland-HK ‘smart city’ deal signed off
  • HK government to impose new rules on money lenders to combat illegal loans

DOMESTIC POLITICS

  • Radicals are breaking the law by calling for HK independence, says Beijing diplomat
  • Independence not an option for HK, says British foreign secretary
  • Despite growing interference from Beijing, most Hongkongers aren’t seeking independence, says city’s former No 2
  • HK independence not feasible ... for now, says new pro-democracy group Demosisto
  • Peaceful calls for HK independence are protected by Bill of Rights, ex-top prosecutor says
  • HK government sidesteps calls for action after revelations in Panama Papers
  • HK Airport Authority issues report denying any safety breach for chief executive’s daughter in left-luggage row
  • HK chief executive poll set for March 26 next year
  • Split emerges among HK rural leaders over plan for a new party

LEGAL AFFAIRS AND HUMAN RIGHTS

  • EU issues scathing annual report attacking Beijing on HK missing booksellers case and stalling of electoral reform
  • US State Department reports a fall in HK freedoms, points to mainland China
  • Equal opportunities chief vows to pursue equality for all Hongkongers
  • HK graft-buster ‘to probe conflict of interest allegations against senior civil servant’
  • HK security bureau won’t seek exit from UN torture pact

HEALTH

  • Independent HK committee to handle complaints against health firms, as well as private hospitals
  • HK voluntary health insurance scheme set to be watered down

ENVIRONMENT

  • HK government plans to prosecute over dumping case on protected New Territories wetland site
  • HK electric company plans floating LNG terminal near Soko Islands
  • Solar power breakthrough by HK Polytechnic University

CULTURE AND EDUCATION

  • HK University of Science and Technology comes in third in ranking of young institutions
  • More Ten Years fallout

MACAU

  • Macau moves to beef up casino regulation by appointing security minister to gaming watchdog

PRESS ARTICLES RELATED TO SWITZERLAND AND SWISS MATTERS

  • Police raid Uefa headquarters as Gianni Infantino maintains innocence
  • Art Basel set to launch new art initiative, but won’t expand fair venues, which include HK

Economy + Finance
HK retail sales plunge 13.6 per cent to record biggest slump since 1999: HK retail sales plunged 13.6 per cent year on year in the first two months of 2016 – the biggest slump since 1999 – and the worst may be yet to come. “Apart from the severe drag from the protracted slowdown in inbound tourism, asset market consolidation might also have weighed on local consumption sentiment,” a government spokesman said, adding that the near-term outlook for retail sales would still be constrained. Jewellery, watches and other valuable gifts, usually popular with mainland visitors, led the latest retail slump, recording a 24.2 per cent sales plunge in the first two months.

HK tourism shows signs of recovery after poor year: The recent slump in visitors to HK has slowed in the last two months, in a possible turning point for city's battered tourism industry. According to Commerce Minister Greg So, the year-long deterioration in tourist figures lessened in March, with total arrivals down 10.9 per cent on the same period last year, a slight improvement on the 13 per cent year-on-year fall in the first months of this year. April figures continued to show a gentler decline, So said.

No plan to expand HK's individual visit scheme to more mainland Chinese cities, says minister: A much-debated scheme that has opened the floodgates for mainland visitors to HK will not be extended to more cities, Secretary for Commerce and Economic Development Greg So said. Under the individual visit scheme, residents from 49 mostly tier-1 and tier-2 cities can visit HK as individual travellers instead of having to join tour groups. First launched in 2003, the scheme has not included any new cities since 2007. So said: “We have to avoid letting too many visitors come to HK which would affect residents' daily lives. We don't want conflicts to emerge. At this stage, we have no plans to open up the individual visit scheme to more cities.” The minister added that the government would instead focus more on overseas markets.

HK finance chief keeping ‘close eye' on labour market as unemployment rises to 3.4pc: According to the latest government statistics, unemployment went up by 0.1 of a percentage point to 3.4 per cent in the first quarter of this year. “Unemployment rates in the retail, accommodation and restaurant sectors in particular have experienced [a] more significant increase ... I will keep a close eye on the decrease in demand for labour in relevant sectors,” Financial Secretary John Tsang said.

HK's membership of Asian Infrastructure Bank to boost city's fund-raising profile: HK will take a bigger role in the internationalisation of yuan and multi-billion fund raising when the city becomes a member of the Beijing-led Asian Infrastructure Investment Bank AIIB this year, Secretary for Financial Services and the Treasury Chan Ka-keung said. “This will be an important step for HK, allowing it to take a leading role as the international fund-raising centre for the many projects in the One Belt, One Road policy that need to be financed by the AIIB,” Chan said. “The financial sector, the professionals such as the lawyers and accountants, as well as traders or other companies will all benefit from these developments.”

HK overtaken by Singapore as third leading global financial centre: HK risks losing its competitive edge after being overtaken by Singapore as the third leading global financial centre, according to the latest survey by research institute Z/Yen Group. London remained in the top spot to lead New York, in the study based on 24,495 assessments by 2,520 financial professionals last year. A spokesman for the Financial Services and the Treasury Bureau pointed out that HK was still just behind Singapore by a very narrow margin. “It shows the competition is very keen in the financial services industry in the region.”

Key HK economic indicator falls to seven-month low: HK's private sector underwent its quickest deterioration in seven months as an industry gauge fell further in March, dragged down by faster declines in output, new orders and employment. The Nikkei HK purchasing managers' index, a survey of purchasing executives from more than 300 local companies, dropped to 45.5 in March, down from 46.4 in February. An index reading above 50 indicates an overall expansion, while a reading below 50 indicates an overall contraction.

Joint mainland-HK ‘smart city' deal signed off: Business groups from the mainland and HK, with the backing of their governments, signed an unprecedented deal to develop “smart cities” on both sides. The agreement included clauses for HK experts to be involved in setting standards for the evaluation of smart cities. Chief Executive C Y Leung said HK was well positioned to develop its internet economy by capitalising on its China connections under the “one country, two systems” policy.

HK government to impose new rules on money lenders to combat illegal loans: HK's government plans to introduce more stringent conditions for money lending licences, in its latest effort to combat the rise in illegal loans. But financial intermediaries – not money lenders – caused the most trouble, as they have been involved in over 500 illegal lending cases since the third quarter last year. The proposed measures will require potential lenders to report the identity of the intermediaries they appoint to the Registrar of Money Lenders, which processes their licence application, renewal and endorsements. Borrowers can check if the intermediaries dealing with their loans are trustworthy.

Domestic politics
Radicals are breaking the law by calling for HK independence, says Beijing diplomat: Hongkongers should realise that advocating for independence was illegal and calling for self-determination would lead the city nowhere, cautioned a Beijing diplomat in HK. Deputy commissioner Hu Jianzhong, the Ministry of Foreign Affairs office in the city, also cited the International Covenant on Civil and Political Rights and HK Bill of Rights Ordinance, saying there were clauses that placed restrictions on freedom of speech on grounds of national security. His remarks were swiftly dismissed by Legislative Council president Jasper Tsang, a heavyweight of the pro-establishment camp, who argued that restrictions could only be imposed after consulting public opinion and going through all legislative procedures – and they must abide by international standards. It was also not the right time to enact such restrictions, he said.

Independence not an option for HK, says British foreign secretary: The British foreign secretary Philip Hammond has emphasised independence is not a practical option for HK but found the recent discussion an inevitable consequence of frustration with the inability to move forward on political reform. Hammond underlined the importance of restarting the political reform process during his meeting with Chief Executive Leung Chun-ying. He said the British government was not convinced HK bookseller Lee Po was free of any duress or constraints. The UK minister called on Beijing to provide assurances that it was an isolated case and there would be no reoccurrence of such incidents.

Despite growing interference from Beijing, most Hongkongers aren't seeking independence, says city's former No 2: Former chief secretary Anson Chan decried the mainland's increasing interference in HK's domestic affairs but maintained that most of the city's residents are not seeking independence. Chan said that while the rights and freedoms guaranteed under “one country, two systems” are being eroded, the SAR government has ignored the problem as it is more “bent on pleasing the central authorities in Beijing than standing up for HK and its core values”. Chan, however, stressed that calls for independence were not supported by the majority of residents in HK, as most accept that separation from the mainland is neither a desirable nor realistic aspiration”. “They simply want to preserve the values, freedoms and lifestyle that make the city so special,” Chan said.

HK independence not feasible ... for now, says new pro-democracy group Demosisto: Demosisto, a new party launched by student activists who co-led the Occupy sit-ins in 2014, has pledged to advocate self-determination for HK and plans to field two lists of candidates in the upcoming Legislative Council polls. The new political party, chaired by former HK Federation of Students leader Nathan Law, said social movements should not be divided by ethnicity and that it would be insensible to ignore the China factor – in contrast to the stance of other emerging localist groups seeking independence. “We don't see ourselves as localists,” Law told a press conference, adding he did not see independence as a feasible way out in the short term.

Peaceful calls for HK independence are protected by Bill of Rights, ex-top prosecutor says: A former government chief prosecutor Grenville Cross has cast doubt on whether advocating HK independence in a peaceful way constitutes a criminal offence, saying it is protected under the city's Bill of Rights. His comments stand in stark contrast to those by justice minister Rimsky Yuen, who warned on April 23 the government would discuss with law enforcement agencies how best to deal with those advocating separation. Some pro-Beijing politicians have pointed to the Crimes Ordinance as a possible tool with which to ban the pro-independence HK National Party. The controversy was fuelled by an article in the state-run People's Daily newspaper calling on Yuen to take legal action against the party. Yuen said it was looking at whether the party had violated any ordinances, including the companies, societies, and crimes ordinances. “Independence advocacy is common in many free societies. All such activity is perfectly legal, provided, of course, it is conducted in a peaceful way which respects the rights of others,” said Cross, now a criminal justice analyst.

HK government sidesteps calls for action after revelations in Panama Papers: As European nations fast-track proposals to crack down on tax avoidance after the Panama Papers revealed how the world's wealthy hide their riches, the HK government sidestepped questions on whether it would take any action. HK was revealed in the leaked Panama Papers as having the most intermediaries offering services for the purpose of setting up offshore companies to help wealthy clients shelter money. The city was labelled a “top centre for secretive offshore financial services”. In a written response to questions from accountancy sector lawmaker Kenneth Leung, the government said such services were not illegal in HK. But he said the authorities would investigate any reports of suspicious financial transactions. Leung maintained HK had “a role and responsibility to tell the international business community and foreign governments that HK is not a tax haven nor a centre for money laundering”.

HK Airport Authority issues report denying any safety breach for chief executive's daughter in left-luggage row: The Airport Authority has tried to ease the controversy over Chief Executive Leung Chun-ying's daughter being delivered her left luggage in a restricted area by claiming that hundreds of such “courtesy deliveries” have been made over the past year at HK International Airport. The government published a report prepared by the authority categorically denying safety protocols might have been broken, or any special privileges granted, when Leung Chung-yan's baggage was delivered to her from a non-restricted area to a closed-off zone after her father spoke to airport staff last month. Dora Lai, executive member of HK Cabin Crew Federation, said she was disappointed about the report because it had failed to clear up the public's doubts over security loopholes at the airport. She said there were “courtesy services” for specific kinds of customers but they would not extend to VIP treatment involving luggage bypassing security checks. The union said it would discuss possible industrial action over the latest development.

HK chief executive poll set for March 26 next year: HK's next leader is set to be elected on March 26 next year. Before that, on December 11 this year, the 1,200- member election committee that will pick the next chief executive will be chosen. The voting dates were announced by constitutional affairs minister Raymond Tam as pan-democratic parties were gearing up for the coming Legislative Council elections, scheduled for September 4. Meanwhile, Executive Council convenor Lam Woon-kwong said that the current tense social atmosphere was unfavourable for the government to restart talks with Beijing over democratisation.

Split emerges among HK rural leaders over plan for a new party: In what is seen as the worst split in HK's rural force, leaders representing more than half of the rural committees in the New Territories have joined forces in a bid to block their fellow elders' plan to form a new political party. They accused the proponents of trying to hijack the Heung Yee Kuk – a government-recognised advisory body representing the interests of indigenous villagers – for their own political gain. The kuk is formed according to the Heung Yee Kuk Ordinance, which bars it from becoming a political party. It has a seat in the Legislative Council.

Legal affairs and human rights
EU issues scathing annual report attacking Beijing on HK missing booksellers case and stalling of electoral reform: In a highly critical annual report on HK, the European Union urged Beijing to restore the trust placed by the city's residents and the international community in the “one country, two systems” policy following the case of the missing booksellers. The EU called on Beijing and the HK government to resume the political reform process that was shelved after the government could not secure enough support for it in the Legislative Council. The EU described the case of the five booksellers who went missing late last year and later surfaced on the mainland as “the most serious challenge” to one country, two systems since the city's handover to China, and warned it could undermine HK's standing as an international business centre. The disappearance of the booksellers, two of whom hold EU citizenship, had called into question the functioning of the formula under which Beijing pledged a high degree of autonomy for the former British colony, the report read. Beijing “strongly opposes” the European Union making what it called irresponsible accusations about HK affairs and warned foreign governments not to interfere in the city's affairs. The HK government also warned foreign governments not to interfere in the city's affairs, saying “one country, two systems” had worked smoothly since 1997.

US State Department reports a fall in HK freedoms, points to mainland China: “Credible reports” point to the involvement of “mainland security officials” in the disappearance of five booksellers from HK, according to the US Department of State's latest report on human rights practices around the world. The annual report also cited other human rights concerns in the city such as declining academic and press freedoms as well as the “limited ability of citizens to participate in and change their government through free and fair elections”. In response, a HK government spokesman said law enforcement officers outside the special administrative region did not have authority to enforce laws locally, unless properly authorised. The spokesman added the government was firmly committed to protecting freedom of expression and freedom of the press.

Equal opportunities chief vows to pursue equality for all Hongkongers: Newly appointed Equal Opportunities Commission (EOC) chairman Alfred Chan has rejected concerns about his suitability for the job and commitment to advancing the rights of sexual minorities, promising that he will push all equal rights to the forefront of government policy making. Policies such as integrated education for children of different ethnicities, currently being handled poorly, lacked genuine consideration of the issues, he said. The gerontology professor said he also wanted to battle age discrimination by maximising work opportunities for senior citizens. “No discrimination against anyone for any reason is acceptable – so discrimination against sexual minorities isn't acceptable either,” Chan said.

HK graft-buster ‘to probe conflict of interest allegations against senior civil servant': HK's Independent Commission Against Corruption ICAC will investigate conflict of interest accusations against a top Home Affairs Bureau civil servant, a pan-democrat activist said. League of Social Democrats chairman Avery Ng filed a complaint to the ICAC. Ng's disclosure came hours after Chief Executive Leung Chun-ying promised to handle­ ­alleged graft cases “strictly and seriously”. News portal HK01 reported that, in 2013, Fung signed an agreement with a company run by Cheyenne Chan. Under the deal, Fung swapped her One Robinson Place property in Mid-Levels for the company's two properties in Happy Valley. Fung would pay Chan's company HK$6.5 million. Chan is a shareholder of another company, Sky Shuttle, a commercial helicopter operator, while Fung's husband, Wilson Fung, was a civil servant in charge of aviation affairs from 2003 to 2006. In a statement, Fung dismissed HK01's report as untrue.

HK security bureau won't seek exit from UN torture pact: The Security Bureau says it has no plans to ask Beijing to declare that the United Nations Convention Against Torture does not apply to HK but wants to instead broaden the maximum penalty against snakeheads smuggling migrants into the city. The city faces a backlog of more than 11,000 applications on asylum or torture grounds , with more than half of the applicants being illegal immigrants. The government expects related expenditure this year to balloon from HK$644 million to HK$1.4 billion.

Health
Independent HK committee to handle complaints against health firms, as well as private hospitals: An independent committee to oversee private hospital complaints is also set to cover health firms as part of a drive to improve regulation of the private sector. Hospitals, day procedure centres and clinics run by medical chains would come under the tougher rules, as would some beauty centres that perform high-risk procedures. The Food and Health Bureau proposed 19 areas for regulation, including the standard of facilities, clinical quality and price transparency. A bill will be introduced to the Legislative Council in the next session, which starts after the Legco elections in September.

HK voluntary health insurance scheme set to be watered down: The city's first government-subsidised voluntary health insurance scheme is being watered down, with health officials saying the first phase will not cover high-risk people or those with a medical history. They may also shelve plans for legislation to back up the scheme, meaning that it would be implemented on a voluntary basis with insurers. A decision on legislation will be made in June. Critics lashed out at the government for backing down under pressure from the insurance sector and questioned whether the scheme could still serve its purpose of reducing the burden on the public health care system by encouraging the middle class to switch to the private sector.

Environment
HK government plans to prosecute over dumping case on protected New Territories wetland site: Environment authorities are taking action over a case of dumping of construction waste and filling in the northwest New Territories, part of which belongs to an ecologically sensitive wetland that is protected by an international convention. This comes about four months after the landfilling activities were reported in Tsim Bei Tsui. The affected area covers about one hectare.

HK electric company plans floating LNG terminal near Soko Islands: CLP Power is eyeing the eastern waters of the Soko Islands, off southern Lantau, for a floating liquefied natural gas (LNG) terminal that will enable it to tap more gas from international markets. The project will help it meet new requirements for half of the city's electricity needs to come from natural gas after 2020. The company will be submitting a project brief to the Environmental Protection Department in due course. From there, an environmental impact assessment will be conducted.

Solar power breakthrough by HK Polytechnic University: Researchers at the HK Polytechnic University claim they have created the most efficient solar cells of their kind in the world. After three years of research, Professor Charles Chee Surya from the university's Department of Electronic and Information Engineering claimed that their hybrid solar cells can convert up to 25.5 per cent of solar energy, beating the previous record of 22.8 per cent set in Switzerland last September. Researchers said a timetable on when the technology can go into mass production remains to be seen, owing to numerous problems which have yet to be ironed out.

Culture and Education
HK University of Science and Technology comes in third in ranking of young institutions: The 25-year-old University of Science and Technology has risen one place to third among young universities in a British ranking. The annual ranking, which started in 2012, lists the world's top 150 universities under 50 years of age. It rates universities based on their teaching, research performance, cited research, international outlook and industry income.Switzerland's Ecole Polytechnique Federale de Lausanne, established in 1969, kept its position at the top of the list, while Nanyang Technological University in Singapore jumped three places to second.

More Ten Years fallout: HK movie producer threatens awards boycott unless voting is changed: Award-winning movie Ten Years has stoked fresh controversy after one movie maker threatened an awards ceremony boycott in the wake of its winning best picture at a recent industry competition. The low-budget production – which depicts a dystopian future with diminished human rights as Beijing exterts greater control over HK – won best picture at the city's annual film awards. Since its triumph, it has been at the centre of a divisive debate that continued when Daniel Lam, head of Universal International film production company, called for a review of what he described as an “irrational” film awards voting system. The film has also drawn heavy criticism in state-controlled media such as Global Times.

Macau
Macau moves to beef up casino regulation by appointing security minister to gaming watchdog: Macau has moved to centralise and boost control of its troubled casino industry by beefing up a regulatory body which has effectively been dormant for years. Wong Sio Chak, Macau's secretary for security, has been appointed a member of the former Portuguese enclave's gaming commission. The move will tighten Beijing's grip on the sector, which is suffering massive losses as it attempts to reinvent itself amid rising crime rates and falling gaming revenues.

Press articles related to Switzerland and Swiss matters
Police raid Uefa headquarters as Gianni Infantino maintains innocence: Swiss police raided the headquarters of the European soccer body Uefa on April 6 to gather information about a contract signed by Gianni Infantino, now head of the global soccer body Fifa that was reported in the Panama Papers. The Swiss attorney-general's (OAG) office said the search in Nyon, Switzerland, was part of “ongoing criminal proceedings” and had been launched because of “suspicion of criminal mismanagement and ... misappropriation”.

Art Basel set to launch new art initiative, but won't expand fair venues, which include HK: Art Basel will strengthen its dominance in the art world with a new initiative that will allow the Swiss fair giant to have a presence outside of its current locations. Fair organisers said the new initiative, called Art Basel Cities, was not being created just to tap into the China market. They said the initiative featuring a star-studded line-up of advisers was a global partnership with cities from around the world that had a burning desire to cultivate their local cultural and artistic scenes, which would also drive local economic development. Fair organisers were determined not to stage a new fair outside of its current locations in Basel in Switzerland, Miami Beach in the US and HK. Art Basel is not just the world's largest art fair but also an economic driver. HK is also experiencing a new level of art market boom since the fair landed in the city four years ago.

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.

30.4.2016

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