CONSULATE GENERAL OF SWITZERLAND IN HONG KONG
|A condensed press review prepared
the Consulate General of Switzerland in Hong Kong
Economy + Finance
HK gets prized AAA rating: HK has been given its first ever "AAA" sovereign rating from Standard & Poor's (S&P) thanks to the territory's high degree of economic flexibility and healthy fiscal position. The agency expects HK to maintain a strong capacity to weather external shocks. Economists said the upgrade is given in recognition of the prudent measures taken by the government to temper runaway property prices. HK's credit strengths are its net external assets -which S&P predicts may exceed 300 percent of the local gross domestic product, the accumulated government fiscal reserves, and the above-average growth potential for a high-income economy.
No yuan conversion abuse in HK: No HK financial institution or hedge fund has abused the yuan conversion quota for trade settlements to speculate in currency appreciation, Monetary Authority chief executive Norman Chan asserted in Beijing. His remarks came after China Central Television and financial media website Caing.com repeatedly criticized HK for being a "hotbed" for yuan-related speculation in constantly using up its conversion quota. Chan led the local delegation of bankers to visit China and participants were pushing for the quota to be raised next year in keeping with expanding business.
HK tops world with US$48.6b in IPO deals: A buoyant equity market has catapulted Hong Kong to the top destination for initial public offerings this year with a total of US$48.6 billion raised until early Dec. 2010. Capital flowing into the city has been pushing up asset prices, especially property, leading the government to introduce various measures to curb speculation. Strong liquidity is evident in the local stock market. Main-board turnover has topped HK$100 billion 16 times in the past two months as investors pump liquidity into the stock market.
IMF backs measures to stabilise property market: The International Monetary Fund (IMF) said it supported recent moves by the HK government to stabilise the residential property market. “These measures are a proactive and a well-calibrated response to the current upswing in the HK property price cycle,'' the IMF said in its latest report on HK. “They will have an important impact in shifting the property market to a more sustainable path,” the report said. The measures to cool the property market were introduced by Financial Secretary John Tsang on November 19. They included the levying of an additional stamp duty of up to 15 per cent for flats sold within two years of purchase, and raising down payments for mortgages.
Budget surplus of HK$70b forecast: The government is likely to record a budget surplus of about HK$70 billion this financial year, according to consensus estimates by leading accounting firms. HK's reserves may balloon to a record of almost HK$600 billion -after officials had forecast a HK$25.5 billion deficit. The expected surplus has put the government in a more comfortable position to cope with the uncertain economic environment, especially in Europe and the United States.
HK's November CPI raises 2.9pc on year: A government spokesman said that underlying consumer price inflation went up in November, amid a faster increase in food prices and the continued feed-through of the earlier notable rise in private housing rentals. The average year-on-year rate of underlying inflation in the first 11 months of this year, 1.6 per cent. The spokesman added that given the currently brisk economic activity and the pick-up in import prices, inflationary pressure is likely to edge up further in the near term.
HK still China's most competitive city: HK continues to be the most competitive city in China, despite lagging in growth potential, according to a series of ranking lists prepared by a leading think tank. According to the China Institute of City Competitiveness, HK held its place for the ninth time in the annual list, ahead of Shanghai and Beijing. A ranking list of the overall competitiveness of global cities is included in the institute's research for the first time. HK ranks third among Asian cities, following Tokyo and Singapore.
Foreign consulates to be barred from 2012 Legislative Council election voting: The government is planning to amend a law to bar foreign consulates and international bodies from voting in Legislative Council functional constituency elections. "The rationale is that foreign governments [and] consulates should not participate in local politics," Secretary for Constitutional and Mainland Affairs Stephen Lam said. On the voting rights of foreign bodies, more than a dozen consular members of the HK General Chamber of Commerce are currently eligible to vote in the Legislative Council functional constituency election to select the chamber's representative. The Belgian consulate in HK said it took itself off the government's list of corporate voters a few months ago. "Consulates are observers of the local reality," Consul General Michel Malherbe said. "It is obvious that foreign consulates should not take part in the elections."
Minister 'made grave error' in job fiasco: An investigative committee slammed minister Denise Yue and almost all other government officials who approved the controversial employment of former housing director Leung Chin-man at New World China Land NWCL. The Legislative Council's report concludes "it was inappropriate" for Leung to take the job at NWCL after having been housing chief. "There is plainly conflict of interest for Mr Leung to take up employment with NWCL," it said. Yet the 12-member committee said the ultimate responsibility for the fiasco rested not with the developer nor even with Leung, but with Yue, the secretary for the civil service who was the final gatekeeper in vetting his application. It said she committed "a grave error of judgment". The report made 23 recommendations to improve the vetting of future applications. Chief Executive Donald Tsang noted the inadequacies in the authorities' handling of Leung's job application. "The chief executive has asked the Civil Service Bureau to be more prudent in handling applications for postservice employment by former directorate civil servants," Chief Executive's Office said.
A more united Democratic Party predicted as Young Turks leave: Thirty radical members left the Democratic Party, accusing their leaders of betraying the people and slowing the pace towards universal suffrage. The split means the loss of about 4 per cent of party members, including seven district councillors. However, party elders did not lament the departure of the so-called Young Turks. Independent observers said far from being a blow to the party, the move might actually help unify the remaining Democrats. The mass resignation puts an end to a power struggle between mainstream leaders and party reformists that predated the party's support for the government's political reform package in the summer.
Relations HK-Mainland China
Cut the criticism, Beijing tells HK: The controversy over the sentencing of tainted-milk activist Zhao Lianhai took a political twist, as Beijing's new man overseeing HK affairs warned against interference with the mainland judiciary under the "one country, two systems" principle. The activist's conviction by the Beijing Daxing District People's Court and imprisonment for 2-1/2 years sparked outcry in HK and internationally, with local NPC members speaking out and 28 of them signing a letter to the Supreme People's Court calling for his release. Responding to the criticism in Beijing, Wang, who assumed office in October as director of the State Council's HK and Macau Affairs Office, said that others should not interfere. Asked whether the joint letter from the HK NPC members to the court amounted to interference, the official said: "It depends on the way of expression. Under 'one country, two systems', well water should not intrude into river water." The expression, derived from a Chinese proverb was used by the former Communist Party general secretary Jiang Zemin in the aftermath of the 1989 Tiananmen crackdown as a warning against HK meddling in mainland politics.
Chief Executive shares hopes for HK's role in five-year plan: HK proposed some ways it could play a bigger role in the mainland's next five-year plan - and received a promise from President Hu Jintao that the city's views would be included in it. "President Hu pointed out the central government would have high regard for HK's opinion in the drafting of the 12th national five-year plan," Chief Executive Donald Tsang said. The chief executive received a big political boost at his meeting with Hu. Not only did the president note Hong Kong's quick recovery from the global financial crisis, he also hailed the passage of reforms to the way the chief executive and Legislative Council will be elected in 2012 as "an important step forward" in the city's political development.
Premier Wen tells HK to be prepared: Premier Wen Jiabao told Chief Executive Donald Tsang to "prepare for tough days while times are good" and find solutions for HK's social and economic contradictions. It is the third time Beijing has asked Tsang to pay attention to internal conflicts in the city. Spelling out three tasks for the city's administration, the premier said HK should boost its financial competitiveness, improve citizens' livelihood, and plan ahead for its long-term prosperity and stability.
Trust in central government drops after refusal to release activists: Hongkongers' trust in the central government dropped after Beijing refused to release Nobel Peace Prize-winner Liu Xiaobo and melamine milk activist Zhao Lianhai, a study found. In a random telephone survey by the Chinese University of HK between November 29 and December 2, only 30.4 per cent of the 774 respondents said they trusted Beijing, down 6.6 percentage points from the previous poll in August. It was a record low since the university first included the question, in November last year. "This may be related to the way the mainland handled the Zhao Lianhai case and the award of the Nobel Peace Prize to Liu Xiaobo," the survey report said.
Manila to send fraction of witnesses requested: The Philippine government plans to send considerably fewer witnesses than sought for the February coroner's hearings into the Manila hostage tragedy -about 20 instead of the 116 requested by HK. Critics in HK said Manila was sending the witnesses as a sop to HK instead of genuinely co-operating with the Coroner's Court, as pledged by Philippine Tourism Secretary Alberto Lim during a visit this month. In replying to HK's request for witnesses, Philippine Justice Secretary Leila De Lima said she had told President Aquino that "we should insist on the application of the [Mutual Legal Assistance Treaty]", which ensures that "witnesses shall not be prosecuted based on their testimonies, except for perjury or contempt", she was quoted as saying.
New visa rule to bring HK$5.6b windfall: HK could see a rise in mainland visitors, when a new visa rule makes it easier for four million more migrant workers in Shenzhen to travel to the city. From December 15, restrictions are relaxed for almost all migrant workers in the special economic zone travelling to HK. The travel industry speculates the change could see the city reap an extra HK$5.6 billion a year. In the past, non-permanent residents of Shenzhen had to apply in their home province for visas. Professor Francis Lui, head of the economics department at HK University of Science and Technology, estimated the measure could bring a 0.5 per cent rise in local gross domestic product.
Legal affairs and human rights
New legal challenge on maids' residency: A human rights law firm is launching a legal challenge on three fronts to HK's denial of permanent residency to domestic helpers. If the moves -on the grounds that the policy is unconstitutional under the Basic Law -are successful, 250,000 domestic helpers could apply for permanent residency once they have been in the city for seven years continuously. Article 24 provides that non-Chinese who have entered HK with a valid travel document; have ordinarily resided in HK for a continuous period not less than seven years; and have taken the city as their place of permanent residence, are entitled to right of abode. However, a section in the Immigration Ordinance excludes both foreign domestic helpers and persons in detention from being "treated as ordinarily resident in HK".
Legislative Council passes tougher drink driving bill: The Legislative Council passed amendments to the road traffic safety law, introducing tougher drink driving penalties and a new offence of dangerous driving causing grievous bodily harm with a maximum penalty of seven years in prison. The new law, which would be enforced from December 17, would institute a three-tier penalty system. The higher the alcohol concentration level of the drunk driver, the longer would be the minimum disqualification period. Six types of drugs -heroin, ketamine, methylamphetamine, cannabis, cocaine and MDMA -would be listed in the new law.
Public health warning on bird flu lowered: The government lowered its public health warning on bird flu, less than a month after it announced its first human case of the illness since 2003. Officials scaled down the avian influenza warning to “alert” from “serious” because no new cases had been reported since authorities reported on November 17 that a 59-year-old woman had contracted the disease. Officials have said last month's case was “imported and isolated” as the female patient -who was later taken out of intensive care - visited several cities in the mainland before becoming sick.
Air pollution may cause brain drain, study finds: Poor air quality could lead to an "alarming" exodus of highly-educated and highly-paid Hongkongers, a survey showed. More than a quarter polled in a study commissioned by public policy think tank Civic Exchange said they were seriously considering leaving the city because they found the air quality unbearable. This was up from a fifth in a similar poll two years ago. The Environmental Protection Department said the government attached great importance to improving the air quality in HK, citing its past efforts.
Culture and Education
Top court allows new legal tilt by Catholic Church: The government's school management reforms suffered a fresh setback as the Court of Final Appeal gave the Catholic diocese leave to mount a legal challenge to them. The government faces a campaign of defiance from three religious sponsoring bodies and 375 schools against the legislation, which requires all aided schools to set up incorporated school management committees. Civic Party lawmaker Ronny Tong said there was a chance that the court case could drag on beyond the July 1, 2012 deadline. Usually it took about a year for a case to be heard by the Court of Final Appeal.
Peking University out to lure HK's brightest: Peking University, once the natural choice for China's elite students, launches its biggest recruitment campaign in recent years in HK. "A world-class university is marked by rich diversity and different origins of students it attracts. We have stepped up the recruitment of students in HK to strengthen that diversity," said Dr Qin Chunhua, director of the admissions office. "Recruiting more HK students will benefit both students from HK and those from the mainland, as HK students tend to be more open-minded, vigorous in logical thinking and have a strong sense of responsibility." Qin said Peking University was particularly interested in promoting a scholarship scheme to HK secondary students.
Macau challenging HK as great mall of China: Tax-free status and an abundance of luxury shops have turned HK into the great mall of China. But nearby Macau is fast emerging as a rival as it builds a reputation as one of the world's hottest luxury markets. Unlike in HK, where local consumption accounts for around 20 to 30 per cent of luxury retail sales, Macau depends almost entirely on tourists from the mainland. Macau's retail sector is starting from a small base and still only rakes in around one tenth of HK's HK$300 billion-plus in annual sales. In Macau, luxury goods are tourists' main target. Watches and jewellery make up the city's single biggest retail segment, with sales rising 62 per cent from a year earlier in the third quarter and accounting for a whopping 25 per cent of all retail sales.
Working poor to get HK$600 a month: As many as 330,000 workers on low pay are in line for a HK$600 monthly transport allowance under a proposed relief programme aimed at encouraging workers daunted by the cost of travelling to work. But while the programme is termed the "work incentive transport subsidy scheme", it will not restrict how a recipient uses the allowance. It will also be granted regardless of what form of transport an applicant uses or where he or she lives or works, as long as family income and assets do not exceed the prescribed limits. The Labour and Welfare Bureau estimates that it will cost the government HK$3.9 billion for the first three years.
Pledge to push Asian Games bid: The secretary for home affairs vowed to go ahead with a controversial bid for the 2023 Asian Games despite a divided public, opposition from big political parties and fierce competition from overseas. The government faces significant challenges to bring the Games to the city. It will have to secure majority support from 58 lawmakers on the Legislative Council's Finance Committee for funding approval. Despite a much-reduced budget, many lawmakers are still opposed to the HK$6 billion the government is seeking.
Press articles related to Switzerland and Swiss matters
Package bombs hit Swiss and Chilean embassies in Rome (SCMP, 24-12-2010): Italian police were checking all embassies in Rome after two people were injured in separate explosions at the Swiss and Chilean missions in what Rome's mayor called a "wave of terrorism". Police said the injured Swiss embassy employee had been taken to hospital in central Rome suffering serious wounds to his hands after he opened a package in the mailroom. Italian Foreign Minister Franco Frattini condemned the incident at the Swiss embassy. "We express our full solidarity with the Swiss ambassador and with all the personnel of this diplomatic representation, which has been the target of a deplorable act of violence."
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