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Mr Tung Chee Hwa's resignation has been the most far reaching political development here since the 1997 handover. Chief Secretary Donald Tsang stepped in as acting Chief Executive. In presenting his budget to the Legco on March 16, the Financial Secretary, Mr. H. Tang, said that Mr Tung's selfless devotion and courageous commitment to HK was exemplary. The budget was largely well received.

Domestic politics
Tung steps down: On March 11, after many leaks and a long official silence described as unfortunate and disrespectful to the people of HK, the Chief Executive finally announced his decision to step down and was appointed Vice-President of the Chinese People's Political Consultative Conference. Most assessments of his tenure are highly critical accusing him to have sided with Beijing rather than Hong Kong. Many observers have pointed out that he rose with Jiang Zemin and fell with him.
Donald Tsang, new chief executive ad interim and favoured candidate to Tung's succession: As No 2 in Hong Kong, the Chief Secretary for Administration has taken Tung's place until July 10 when a successor is nominated by the 800 members' electoral college. Tsang is considered the favourite candidate of Beijing and has received support from many tycoons including Li Ka-shing who said that HK needs a leader with a noble mind, administrative ability and governing capability. Some observers have praised his first public speech because of its emphasis on what makes HK different as well as on the importance of tolerance and of accommodating different views. Others, because of Beijing's constant intermingling in HK's affairs, have welcomed him as the city's new mayor.
Row over possible Basic law interpretation: A row has erupted between the democratic and pro-Beijing camps because the Basic Law does not define the length of the mandate of the successor to a chief executive who steps down before the end of his term. Beijing has favoured a 2 years solution corresponding to the end of Tung's mandate rather than the full 5 years. Opponents have declared it is a blatant breach of Basic Law imposed by the central authorities that would rob the new chief executive of the little legitimacy he has got. It is a political decision which strikes at the heart of the “One country, two systems” concept, and it shows that HK has become little more than a Chinese city on the Pearl River Delta. For Tsang the two years term will lead to a more equitable method to chose the city's leader in 2007 and the next stage will be more democratic than it is now. A controversial legislative amendment stipulating a two year tenure for the next chief executive has been presented to Legco. If accepted, it could be subjected to judicial review. The Secretary of Justice said that the appointment of the chief executive was clearly the responsibility of the central government and an area outside the autonomy of the judiciary. The HK authorities plan to ask the central government for an interpretation of the Basic Law on this matter.
Tang takes name out of running as Tung successor: The Financial Secretary has declared that he would undermine stable transition if he ran.
HK needs a street fighting chief says Lee Kuan Yew. The Singapore elderly statesman defined the position of HK's chief executive as a very difficult task and a thankless job because you have a master in China and you have subsidiary masters in Hong Kong. He added that Beijing has no intention of allowing Hong Kong to be a pace setter or a Trojan horse to change the system in China.
Longer consultation on the cultural hub: It has been extended for three months.

International affairs
Interpol to assist at WTO summit: The head of Interpol said that Hong Kong would receive the same level of security support as a G8 country when it hosts the sixth World Trade Organisation ministerial conference at the end of the year. The international law enforcement agency's secretary-general, Ronald Noble, guaranteed Interpol would give the highest priority to all intelligence relating to the December 13 conference. "If Hong Kong asks us for name checks, phone number checks and fingerprint checks, we will give [them] the highest priority," he said. Meanwhile, the Democratic Party, Liberal Party and Democratic Alliance for Betterment of Hong Kong have thrown their weight behind proposed legislation to grant privileges and immunities to WTO delegates during the ministerial meeting. The subsidiary legislation will exempt attendees from direct taxes and duties, and give the WTO freedom of communication and immunity from the legal process. But the head of the Sixth Ministerial Conference Co-ordination Office, Janet Wong Wing-chen, promised legislators that WTO delegates would respect Hong Kong law. "If anyone abuses the power the law grants them, we can negotiate with the UN to waive the privileges," she said.
WTO protesters fail to guarantee peaceful rally: Anti-globalisation activists said they could not guarantee that there would be no violence at a protest to coincide with a World Trade Organisation meeting in Hong Kong in December. The Hong Kong People's Alliance on WTO, which will co-ordinate the protest against the global trade body, hopes to stage a rally in Victoria Park, but has not decided on a march route. About 250 activists from around the world gathered at City University to draw up action plans to protest against the WTO's sixth ministerial meeting to be held in Hong Kong in mid-December.
HK & Multilateral trade: The Director-General of Trade and Industry, Mr Raymond Young, gave an overview on HK's position on multilateral trade and regional trade agreements (RTAs). Speaking at the WTO and Greater China Economic Area Law Conference organised by the City University of Hong Kong, he said multilateralism had all along been the cornerstone of HK's economic and trade policy and RTAs would remain at best a supplement to the benefits that HK could gain from a truly open multilateral trading system. Commenting on the coming Ministerial Conference, he said WTO Members had to attain substantial outcomes at the Conference if they were to achieve the objective of a timely and successful conclusion of the negotiations under the Doha Development Agenda by 2006, and an early and successful conclusion of the Doha Round would help restore confidence in the multilateral trading system.
US requests in trade sector: US Consul General hopes that HK will use the hosting of the WTO ministerial conference in December to improve its trade relations with the US. He urged the government to remove civil aviation barriers by signing an open sky agreement with Washington. He also wants HK to strengthen efforts in tackling piracy, especially of optical discs and pharmaceuticals, and lift the ban on the import of US beef that has been in place since December 2003.
Diplomat pushes Japanese links: Japanese Consul General is keen to lure more Japanese students to study in HK.
Interpol Symposium for Heads of Police Training: Some 170 delegates from 55 countries including world police training leaders and prominent police scholars have come to Hong Kong to attend the 15th Interpol Symposium for Heads of Police Training (the first of its kind being held outside of France) , co-hosted by Interpol and the Hong Kong Police Force, from March 15 to 17.

Transborder Affairs
The labour shortage in the Pearl River Delta (PRD) has worsened, despite measures by the Guangdong provincial government to alleviate the problem. The chairman of the HK Toys Council, estimates that Guangdong is short between two and three million workers, higher than the official estimate of one million. Official numbers released last month by the Guangdong Statistics Bureau pegs the shortage at 1.01 million workers, specifying a shortage of 468,000 migrant workers needed at Hong Kong, Macau and Taiwanese-invested firms. Another article mentions that, by contrast, the Yangtze delta has a surplus of workers and that it is stealing workers from would-be Pan PRD provinces (HK, Macau and nine southern Chinese provinces) such as Guizhou. A recent survey by the Guizhou Statistics Bureau found 33 per cent of migrant workers from the province went to Zhejiang province while only 13 per cent sought work in Guangdong.
Visit to Guangxi: On March 29, government officials left on a four-day visit to Guangxi autonomous region. The visit's major objective is to enhance understanding and foster closer working relations and communication between the two governments, with a view to enhancing co-operation in the Pan-Pearl River Delta (PPRD) region. This is the sixth such visit made by the HK Government to the PPRD region. The first five visits to Hainan, Jiangxi, Sichuan, Fujian and Hunan provinces took place between December, 2004, and March, 2005. The PPRD region includes nine Mainland provinces/autonomous region - Fujian, Jiangxi, Hunan, Guangdong, Guangxi, Hainan, Sichuan, Guizhou and Yunnan - and Hong Kong and Macao SARs.

Legal Affairs and human rights
Nigerian Fraud Scam: On March 2nd, a man involved in a so-called Nigerian fraud scam, arrested on May 14, 2004, was the first person to face prosecution in Hong Kong for such a fraud. In what was described by the District Court's prosecutor as an elaborate deception, e-mails touting an opportunity to “inherit” a US$ 26 million deposit left by a dead South African businessman for a US$ 24'000.- fee were sent out in March last year. The maximum penalty for the offence – obtaining property by deception – is 10 years jail.
Sexual orientation and antidiscrimination Law: Mentioning that there is a debate in HK about the necessity of enacting such a law a campaigner for Amnesty international wrote that bringing in such legislation would make HK one of the first governments in Asia to recognize and take action on this form of discrimination.
Women's Day 2005:The Women's Commission (WoC), celebrated International Women's Day 2005. A WoC member said that advancement of women's status, rights and opportunities was a long-term process. And that the commission would press on with its work and is confident of meeting challenges ahead in promoting mutual respect and harmony between the sexes.
Anti-racism legislation: The Bar Association has warned the government that the proposed anti-racism legislation should not exclude immigration policies and foreign domestic helpers from its scope. In a delayed submission to the government's consultation on the law, which ended in February, the Bar called for a wide-ranging bill without proposed exceptions. In its submission, the Bar also welcomed the government's plan to enact the law, saying it was more than the colonial administration had done despite Hong Kong being a signatory to the International Convention on the Elimination of All Forms of Racial Discrimination since 1969.
UN officials to hear list of HK failings: UN Committee on Economic, Social and Cultural Rights HK's hearing of more than 50 NGO's is being prepared and will take place next month. Main issues raised: lack of independence by a panel investigating the Equal Opportunity Commission, consultation on the anti-racism law, domestic violence, education and sex workers' rights…
Beijing not living up to Basic Law: the annual US State Department report questions Beijing's willingness to allow HK to function with the autonomy promised in the Basic Law.

The Financial Secretary, Henry Tang (T) delivered his second budget speech on March 16; highlight: Rosy economic report: Real economic growth was 8.1% in 2004. Forecast is 4.5%-5.5% in 2005. Exports of good and services surged by 15%. Unemployment fell from its peak of 8.6% in 2003 to 6.4% earlier this year. CEPA: domestic exports of 1 108 products to the Mainland are enjoying zero-tariff treatment; liberalization of trade in services has been extended to 26 sectors. Visitor' arrivals reached an all-time high of 21,81 million. A 68-month-long deflation ended in July 2004. CPI Inflation in 2005 is expected to be 1.5%. Successful issuance of $26 billion in bonds. Public Finances: The Consolidated account is estimated to have a surplus of $12 billion in 2004-05, the first surplus since 1999-2000 (the government ‘s income has surged because of the recovery; land premiums alone accounted for more than HK$ 31 billions). After discounting proceeds from bond issuances, a deficit of $13.4 billion remains. A consolidated deficit of $10.5 billion is estimated for 2005-06, and this will gradually decline. Fiscal balance will be achieved in 2007-08, a year earlier than the original target. Moderate Tax concessions: T. proposed to introduce basic and additional allowances at $15,000 a year for taxpayers caring for dependent parents or grandparents aged between 55 and 59. About 100'000 taxpayers will benefit from these measures which will cost the Government $450 million a year. He also proposed to Increase the child allowance from $30,000 to $40,000 per child. About 300'000 taxpayers will benefit and cost to Government will be $620 million a year. New Initiatives: HK$ 500 Millions has been earmarked to promote the tourism industry through measures expecting to bring over 1,2 million additional visitors in the next 2 years; another HK$ 500 Millions to help SME, and HK$ 830 Millions for the removal of unauthorized structures, the improvement of old buildings, and creating job opportunities. A HK$200 million Partnership Fund for the Disadvantaged will be set up.
Estate Duty: T proposed to abolish it to help attract investors to HK (the duty targets the wealthy . But the problem is that most of them can easily find ways of avoiding it. It is a pointless tax.). Green Tax: Authorities are studying the introduction of a product responsibility scheme for waste tyres and the feasibility of introducing tax or fees on plastic bags. Good and Services Tax: the Government has carried out a GST study; a public consultation will be conducted on this subject. Alcohol duties: the status quo is maintained. ”At least this part of the speech provided a little humour, as the finance chief is a wine enthusiast” said an editorialist. T., tipped as a possible contender for the Chief Executive denied it was an election budget.
Banking (Amendment) Bill 2005: The Chief Executive in Council approved the Banking (Amendment) Bill 2005 or introduction into the Legislative Council on April 6 2005. The main purpose of the Bill is to amend the Banking Ordinance to provide for the implementation of the revised international capital adequacy framework promulgated by the Basel Committee on Banking Supervision in June 2004, commonly known as Basel II, in Hong Kong.
Mainland talent: The Immigration Department admitted 3745 professionals from the mainland last year, up from 1428 in 2003. The increase followed a launch in 2003 of a scheme to attract professional and talented mainlanders. Most of the mainlanders coming to HK work in academic research and education, trade and commerce, the arts and financial services. According to a government labour study, HK will face a shortage of more than 100 000 highly educated people by 2007. The deputy chairman of the Federation of Hong Kong Industries said there was a shortage of product designers in HK.
Unemployment: the seasonally adjusted unemployment rate decreased from 6.4% in November 2004 - January 2005 to 6.1% (provisional figure) in December 2004 - February 2005, the lowest level since September - November 2001.

$254m boost planned for flu-drug stockpile: The government is to spend $254 million stockpiling flu drugs which could treat an estimated 1 million people in the event of a pandemic. In a paper to be discussed, the amended flu preparedness plan calls for the phased stockpiling of 20,568,00 doses of the Tamiflu treatment in six to 12 months. A spokesman for the Health, Welfare and Food Bureau said it planned to increase by 5.5 times the current stockpile of 3.7 million capsules in line with the recommendations of the World Health Organisation. The measure would also contribute to "a more favourable perception of Hong Kong as a safe place for the international community to do business". Scientists and WHO officials have warned that H5N1 bird flu is the most likely strain to cause the next flu pandemic.
Health Centre issues flu season warning: The Centre for Health Protection called on people to take precaution measures against respiratory tract infections. The warning came after its surveillance systems indicated that Hong Kong had entered the peak flu season.
Bird flu may spur Vietnamese ban: Vietnamese travellers could be banned form entering Hong Kong and other travellers returning to the SAR form Vietnam may face compulsory screening should a human-transmittable strain of bird flu found in that country, the government said.
Live chicken numbers to be cut in half: The government plans to cut the population of chickens in Hong Kong in half as part of its contingency plan to deal with an outbreak of H5N1 bird flu. Permanent Secretary for Health and Welfare and Food Carrie Yau Tsang Ka-lai said it could take less time to cull all chickens in an event of an outbreak if the live poultry population could be strictly controlled. There are 3.7 million chickens in Hong Kong. Mainland farmers exports 30'000 to 50'000 live chickens to Hong Kong every day.
Cases of brain cancer up 200 % in 11 years: The number of Hong Kong People being treated for brain cancer has tripled over the last decade, with doctors saying the high proliferation of mobile phones in the city could be to blame. Doctors cautioned, however, that a number of other factors could be blamed for the increase.

Appointment: On March 4, the Government announced the appointment of the membership of the Council for Sustainable Development for its second two-year term. The Council for Sustainable Development was established in March 2003 to advise the Government on issues relating to sustainability in HK. Its terms of reference include advising on the preparation of a sustainable development strategy and promoting public awareness of the principles of sustainable development.

The cost of living in HK has dropped significantly thanks to a low inflation rate and the pegging of the dollar to the weakening American currency. In the latest Economist Intelligence Unit's(EIU) survey of more than 130 cities, HK fell five places to become the 12th most expensive city in the world(with a rating of 111). The EIU conducts the global cost-of-living study twice a year, using New York as the baseline of 100. Like last year, Tokyo (141) is the world's most expensive city to live in. Beijing (87) ranks 44, Shanghai (86) came in at 46 and Taipei (87). Sixteen of the top 20 cities on the list are in western Europe.

Press articles related to Switzerland
See document (pdf, 52 kb) presenting a “Switzerland greets Hong Kong” Media Coverage (Part 1; Part 2 will follow with our April issue).

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.


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