THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Introduction
As the year draws to a close, the enduring image is the tsunami tragedy “felt around the globe” according to the title of an editorial. In Hong Kong, December was marked by the legal challenge of a 67-year-old public housing tenant which derailed the Housing Authority’s HK$ 23 billion privatisation of shopping malls and car parks. In strong remarks seen by many observers as a dressing down of the Chief Executive, President Hu Jintao called on the Tung team to improve governance. Populism proves more and more a force to be reckoned with in a HK beset by government deficiencies and weak party politics.

Domestic politics
Asian Tsunami: Chief Executive Tung Chee-hwa vowed to do everything possible to help Hong Kong people stranded in places hit by the tsunami. The first Hong Kong casualty of the tsunami was confirmed on Dec. 28. Chief Secretary Donald Tsang Yam-kuen said 213 Hong Kong people were missing (an information which might not be accurate he stressed). An Immigration Department source said it was unlikely any of the missing would be found alive. Most were in Thailand when the tsunami struck. Three flights returned stranded tourists from Phuket to Hong Kong on Dec. 28. Mr Tsang confirmed that applications for government support had been received from Oxfam, Medecins Sans Frontières, the Hong Kong Red Cross and World Vision. He promised to give funds to the organisations as soon as possible. HK people are digging deep to help tsunami victims, donating at least HK$ 46 million.
Carrots and sticks for Tung: At the recent China-EU Summit in the Netherlands, Chinese Premier Wen was full of praise for HK’s advances saying the city had achieved an economic rebound while making steady democratic progress but a few days later President Hu told the Tung team in public to improve governance by identifying the inadequacies of its rule since the handover. Calling for strengthened unity and a more people oriented administration his harsh remarks were interpreted as a reaction to the Hunghom Peninsula, West Kowloon cultural hub and Link Reit listing controversies and as a sign that Beijing is not happy that his protégé has not been able to restore public confidence and trust in his administration. For most commentators this dress down of the chief executive will further undermine his credibility.
Trust Offering postponed: On December 19 plans were shelved to proceed with the listing of the Link Real Estate Investment Trust (Reit) amid the possibility that a 67-year-old public housing tenant, Lo Siu-lang, whose challenge twice has been rejected by the courts could make one final appeal. Mrs Lo, a gutsy elderly welfare recipient has been active in a tenant‘s right group and was backed by opposition politicians (which led to claims the legal system was being manipulated to ensure the listing could not go ahead). She argued that privatization would mean higher prices in shops because the store’s rents would rise. She was given a standard 28 days to consider making an appeal despite a government request to force her to decide immediately whether to appeal. HSBC, UBS and Goldman Sachs were the underwriters for the HK$ 23 billion offering in which the Housing Authority is selling 151 shopping centres and 79’000 parking-lot spaces to investors through the Link Reit. Failure to list what was to be the world’s largest initial public offering for a property trust casts a shadow on the HK Government. Critics charge that the Government could have better protected itself from legal action. According to a politician, the halt of the listing could give the community an opportunity to rethink the government privatization policy. The latter had to refund more than 500’000 investors who bought shares on offer as well as investment houses that agreed to buy 25% of the total offering. Two unhappy investors launched a new legal action seeking compensation from the lawmakers they blame for derailing the listing. According to an editorial, one of the litigants has admitted that compensation for his financial loss is not the main issue. He seems more interested in sending a message to those he regards as not having HK's best interests at heart
People power saves Hunghom flats: Last February a private consortium bought Hunghom Peninsula buildings from the Housing Authority which had left them empty on completion in a bid to boost the property market. Developers had planned to knock down the never occupied flats but were forced to scrap demolition following public outrage at the waste of money and environmental damage, the threat of a Legco investigation and letters showing that redevelopment was restricted to original plan for site. Lack of transparency by the administration has raised public concern about collusion between government officials and developers while the business sector will become more concerned about political risks of projects involving public property.
Democrats in need of rejuvenation: In the first genuine contest for chairmanship since party’s creation in 1994 veteran lawmaker Lee Wing-tat was elected new chairman. He urged dialogue and called for contacts with the central government without conditions. The party, once the biggest in Legco, has slipped to third largest and faces a string of problems including a drop in voter support, an ageing leadership and difficulties in positioning itself after the rise of pro-democracy independents.
Public consultation on West Kowloon cultural hub: A broad public consultation on the West Kowloon project is under way in the middle of a strong debate on the government’s option to realize the building of a world class cultural district through a specific package that demands performance spaces and museums all funded through commercial development and overseen by one or a consortium of developers. As some see the project as property development in disguise, the current debate is as much about use of public space as about the content of the future cultural district.
Consensus emerging on road to constitutional reform: In his presentation of the 4th report summarizing public views on constitutional reform Donald Tsang said that a public consensus was emerging towards expanding the size of the Election Committee to choose the next chief executive in 2007 from 800 to between 1200 and 1600 adding it was unrealistic to challenge last April’s decision of the NPC’s standing committee and press for immediate universal suffrage. He seems anxious to close the case for full democracy in 2007/08 and to focus discussion on incremental electoral changes.
Long Hair unveils bill to allow referendum on issues of public importance: The mechanism he proposes would not result in calls for HK’s independence as all issues put to a referendum must not contravene the Basic Law.
Meeting with Assistant Minister of Foreign Affairs: On Dec. 7, Mr Tung Chee Hwa and relevant Government officials met the Assistant Minister of Foreign Affairs, Mr Shen Guofang. They had an in-depth exchange of views on how to make use of the Mainland's diplomatic resources to support and assist the HK Special Administrative Region to expand external co-operation in various fields, including trade, economy, technology, culture, education and tourism, in accordance with the Basic Law, as well as to protect the legitimate rights of HK people abroad.

International affairs
HK and United Kingdom renew MOU on ICT co-operation: On Dec. 10, HK and the UK signed the second Memorandum of Understanding on co-operation in information and communications technology (ICT). It includes co-operation in electronic government, electronic commerce, multimedia content creation and digital entertainment, software applications and product, Internet and broadband networks and applications, wireless and mobile applications an IT manpower development.

Transborder Affairs
HK lures investment from Mainland enterprises: InvestHK (the HK Government’s investment promotion agency) held its first large-scale investment promotion road show to key Mainland cities (Tianjin, Beijing, Shanghai, Hangzhou and Shenzhen) since the issuance of investment facilitation policy by the Ministry of Commerce (MOC) in September, to meet with Mainland enterprises and encourage them to establish businesses in HK. According to InvestHK Director-General, HK serves as an ideal platform for Mainland companies aiming to expand overseas. “The city provides an excellent investment environment for Mainland firms to become familiar with international corporate practices and markets to prepare for growing regionally and globally" he said. According to MOC, the accumulated outward direct investment by Mainland companies at end-2003 amounted to US$33.2 billion, 74% of which went to HK. During the first half of this year, the MOC approved twice as many applications for investing in HK compared with the same period in 2003.
Pan-Pearl River Delta Development Forum: On Dec. 13, more than 200 academics, researchers, government officials and leaders in business sectors took part in the Pan-PRD Development Forum organised by the Central Policy Unit and the HK Institute of Asia-Pacific Studies of the Chinese University of HK. In the two-day forum, participants from nine provinces/autonomous region and the HK and Macao Special Administrative Regions exchanged their views on how to expedite economic and social developments in the region.
Shenzhen crime spree escalates: The opening of a Shenzhen subway station has been delayed after an armed gang raided the construction site and stole the escalator.
Crackdown at airport to trap fake passport holders from mainland: mainlanders as well as other Asians fly into HK with genuine travel documents and receive at the airport forged Singaporean, Japanese and South Korean passports to go to North America and Europe. In the first 10 months of 2004 more than 2’000 fake passports have been seized.
Huge surge in HK migrants to Pearl River Delta: Most of them young men. About 200’000 Hongkongers work in the mainland.
Oil spill highlights lack of cross-border team work: Following a large oil spill at the mouth of the Pearl River Delta the mechanism for joint action that exists on paper between HK, Macau and Guangdong has not been put into practice. HK says it has not received any response to its offer to help Guangdong and the mainland says they have not received such an offer.

Legal affairs and human rights
New EOC boss: On December 15, Mr Raymond Tang Yee-bong was appointed as Chairperson of the Equal Opportunities Commission (EOC) for five years with effect from January 12, 2005. He follows Patricia Chu Yeung who was appointed after Michael Wong resigned, following a controversy over his sacking of an EOC employee. According to a commentator, Mrs Chu's departure came at a time when the EOC is undergoing a number of reviews and investigations and morale at the anti-discrimination body remains low. An internal review was recently completed and results are expected to call for major structural changes, including the splitting of the chairman's post into two jobs - those of a chief executive officer and a figurehead chairman.
Let’s keep pirates out of HK: HK government wishing to remain a role model in the region has released a consultation document on certain provisions of the Copyright Ordinance. Its aim is to improve the regime for the protection of copyright especially taking into account new types of piracy activities on the internet.
Law Reform Commission proposals on press controls: The Commission’s recommendation that a new Press Council be created to regulate the print media and that victims of privacy breaches could be given more judicial protection should be dealt with great caution since HK is a city where there is a need to be particularly vigilant with regard to potential threats to freedom of expression.

Economy
Christmas trees: It is estimated about one in every 10 artificial trees going up around the globe is made by Boto a HK based Company with its factory in Shenzhen. As probably the world’s largest artificial tree maker, the company has sold more than 5 million trees to North America, Europe, Japan and elsewhere this year. The company designs and produces more than 200 types of artificial trees. Despite intensifying competition, Boto – who holds 10-12% of market around the world - expects sales to increase 10% by the end of next year.
Mainland’s flats: There has been a sharp rise in the number of HK people buying second hand flats on the mainland, with transactions up 24% this year. In comparison, there was a mild growth of 6% in the market for new flats, which has been attributed to central government policies aimed at preventing the economy from overheating.
Continuous Linked Settlement (CLS) System: The HK dollar has been included in the CLS System from Dec. 6 on. The CLS System is a global clearing and settlement system for cross-border foreign exchange transactions operated by CLS Bank International (CLS Bank). The inclusion of the HK dollar into the CLS System enables foreign exchange transactions involving the HK dollar to be settled through the CLS System on a payment-versus-payment (PvP) basis, thus removing the settlement risk in these transactions. Together with the existing 11 eligible currencies (including the Swiss franc), there are now 15 currencies eligible for settling through CLS Bank.
Classification for import and export declarations amended: Importers and exporters were reminded that import and export declarations for shipments on or after January 1, 2005 must be completed in accordance with an amended classification made to the current edition of the HK Imports and Exports Classification List (Harmonized System). These amendments, published in the Gazette on December 10, will take effect on January 1, 2005 and involve 129 commodity items, mainly including textiles and clothing, food and beverages, pharmaceutical products as well as plastic and metal products.

Health
An alarming increase on the use of party drugs Ketamine and Ecstasy by young people was revealed by the Security Bureau’s narcotics division. Unemployment, School failures, easy access, cheap prices and a huge supply of Ketamine were blamed for worsening the problem among young abusers. Meanwhile, cocaine will be a key focus of the narcotics bureau next year as the drugs’ popularity grows.

Macau
Fifth Anniversary of Macau’s return to the Motherland: Before President Hu Jintao arrived on Dec. 19, security officials refused entry to HK activist-turned-lawmaker Leung Kwok-hung (Long Hair) who hoped to stage a protest coinciding with Mr Hu's visit. The latter proclaimed that Macau has been thriving since the gambling enclave of about 450,000 people rejoined China on Dec. 20, 1999. He held up Macau Chief Executive Edmund Ho Hau-wah’s rule as a model for “one country two systems” and outlined 4 suggestions for the city which should improve its administrative abilities, ensure the sustainability of its economic growth, invest in education and unite under the banner of loving China and Macau. Various articles praised the Chief Executive who has presided over a period of political harmony and soaring economic growth and whose re-election for a second term this year was strongly supported by the people of Macau. Under his leadership, Macau’s two biggest headaches of colonial times appear to have been cured. Gang violence was quickly eradicated soon after the handover, and years of a shrinking economy were reversed into an unprecedented boom. Various observers said that one of Ho’s biggest achievements was liberalising gambling. Beijing's strong support has also been a big factor in his success. However some observers warned that if Ho can take pride in his achievements, his second term may prove to be more testing than his first. A commentator noted that Macau's biggest asset also poses its greatest challenge saying that much of Macau’s appeal rests on a unique cultural identity and qualities which need to be carefully safeguarded amid the rampant push for gambling-orientated growth but which are already coming under pressure today. In a speech, Mr Ho said that “Macau must prepare for rainy days”.

Environment
Environmental chiefs from HK and Guangdong met in HK to review progress of the implementation of the Pearl River Delta Regional Air Quality Management Plan and to discuss a detailed action proposal for next year. They include an air-quality monitoring network with 16 monitoring stations to come into operation in the first quarter of next year, a new cross-border panel to promote energy saving in factories, an emissions inventory, and development of an emissions trading scheme for fuel-burning power plants

Varia
Fast Food: HK has the highest percentage of fast-food addicts in the world, with 61% of people eating at least once a week in fast food restaurants. In the first nine months of this year, Hongkongers visited fast-food restaurants on average seven times a month, spending HK$ 160.—.
The Basic Law Library: A joint project of HKSAR Government and the Basic Law Institute opened to the public on Dec. 20. The collection at the opening will be 8,000 items, of which 4,500 items were bought by the Basic Law Institute. A total of 3,500 items originally housed in the Hong Kong Central Library have been transferred to the library. The reference materials include books, journals, multimedia information, CD-ROMs, online databases and newspapers clippings. The Basic Law Library will organise book displays, exhibitions on special topics, visits and talks to enhance the public's understanding of the Basic Law.
Police bid farewell to oldest Police Station: The Commissioner of Police, Mr Lee Ming-kwai, and members of the Force bade farewell to the Central Police Station Complex at a decommissioning ceremony. It had been used by the Force for more than 140 years and had housed both the Hong Kong Island Regional Headquarters and the Central Police Station. The Complex, a declared monument, should be handed back to Government.
Drug barons target HK market: Police raid has seized 400 litres of cocaine smuggled from South America. A massive increase in cocaine seizure in 2004 has led police to believe South American drug dealers are now targeting HK and other Southeast Asian cities.
 

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