THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Economy + Finance
Derision and delight over budget U-turn: In an unprecedented U-turn, Financial Secretary John Tsang withdrew his controversial plan to inject HK$6,000 in each of four million Mandatory Provident Fund accounts, a move widely criticised as unhelpful in particular to the middle class. In its place, Tsang announced HK$6,000 cash handouts to about six million adult permanent residents, including housewives, retirees and even overseas emigrants. On top of that, salaried taxpayers will also get up to 75 per cent tax reductions capped at HK$6,000. Political observers and economists warned that the government had not only deviated from its commitment to financial prudence but had also eroded its authority. 
HK to feel disasters' financial punch: The fallout on the HK economy from the disasters in Japan will be greatest in the next three to six months, according to Edward Leung, the HK Trade Development Council's chief economist. Japan is HK's third-biggest export market. Exports to Japan were worth more than US$16 billion last year, or about 4.2 per cent of the city's total. "It'll not only affect HK's business in consumer goods. Because of the power supply shortages, transport chaos and damage to infrastructure, the entire manufacturing industry is going to face huge challenges as many electronic parts are produced in Japan," Leung said. Leung said the extent of the earthquake's impact would depend on how the radiation crisis was handled and when electricity supply returned to normal. 
HK offers shelter to expatriates fleeing Tokyo after disaster: HK has become a haven for expatriates fleeing Tokyo in the wake of the crisis in Japan - among them finance professionals in need of trading licences. The city's Securities and Futures Commission said it took the initiative, after the earthquake and the nuclear scare, to contact institutions that might wish to relocate trading staff and said it would grant them temporary or provisional licences. Although no international banks have closed their operations in Tokyo, some of their expatriate employees have left Japan. Not all who leave opt for HK. "Those who go to HK are senior bankers who work in equities, debt trading and other areas," a US bank manager said.
More heat on banks harbouring US tax evaders: A new law passed by the US Senate is destined to tighten the economic noose on banks involved in illegal financial activities in the city. The Foreign Account Tax Compliance Act (FATCA) is another US move to crack down on tax evaders, but it will also play a big part in catching out banks in HK that have been helping clients hide their wealth from US authorities. Combined with a US tax amnesty launched two years ago, banks in HK are under increasing scrutiny. The law will come into force on January 1, 2013, and obliges foreign firms to report offshore accounts and security trades by US clients that amount to more than US$50,000. If they fail to do so, they will be hit with a 30 per cent withholding tax penalty.
Jobless rate falls to 3.6pc: HK's unemployment rate continues to fall - dropping to 3.6 per cent for the quarter ending February 2011. New jobs were mostly found in insurance, food and beverage services, and retail sectors. Secretary for Labour and Welfare Matthew Cheung said the near-term outlook was generally positive. “But we must remain vigilant and monitor developments closely given the uncertainties in the external environment, including the possible economic impact from the earthquake in Japan and the political unrest in the Middle East,” he added.

Domestic politics
Election preparations get go-ahead: The government overcame the final hurdle in its preparations for next year's elections after three days of debate in the Legislative Council (Legco). Lawmakers voted 43-7 in favour of a bill setting out the government's detailed procedures for electing the next Legislative Council. All 10 amendments, from four legislators, were voted down. The Legislative Council also passed a bill to enact procedures for choosing the chief executive. Legislators approved increasing the number of seats in Legco by 10, to 70, with five of them directly elected and the other five in the functional constituency for district councils. Candidates for the latter seats will be nominated by elected district councillors and voted on by all those electors without a vote in any of the other 27 functional constituencies - a total of some 3.2 million.
Ballot rules favour rich and powerful, academics say: The government's electoral proposals for 2012 favours the rich and powerful and are unlikely to lead to genuine universal suffrage, a group of academics says. Under reforms passed in June, the number of seats in Legco will rise by 10, to 70, next year, five of the new seats will be in the district councils functional constituency, and 3.2 million electors will be eligible to vote on them. The membership of the Election Committee, which picks the chief executive, will increase by half, to 1,200. The academics said bloc voting to fill the seats for district councillors on the Election Committee, and the votes given to businesses in functional constituencies, would hinder democratisation.
Thousands march over budget: There were minor scuffles between police and protesters as over 10,000 people demonstrated in HK over the government's budget plan, with some calling it a “Bauhinia revolution”. The demonstration comes days after a U-turn by Financial Secretary John Tsang on the budget, with protesters demanding more public expenditure on retirement protection schemes, public housing and environmental protection. Chanting slogans and waving placards, political parties and citizens marched to government headquarters, accusing the administration of failing to address problems including runaway property prices and a widening wealth gap.

Relations HK-Mainland China
Five-year plan devotes a full chapter to HK, Macau: The five-year plan for the first time devotes a full chapter to HK and Macau - a development Chief Executive Donald Tsang hailed as "very exciting". It is only the second time the national blueprint for social and economic development has mentioned the two special administrative regions. Five years ago they earned only a brief mention. The section in the 2011-2015 plan reiterate previous pledges of support for HK to boost its status as an international financial, trade and shipping centre and develop its traditional pillar industries and its leading role in the financial system of the Pearl River Delta. Specifically, Beijing will encourage HK to become an offshore hub for renminbi business and an international centre for asset management. The plan also pledges support for developing the new pillar industries identified by the HK government. In his 2009 policy address, the chief executive named six new pillars for the city's economic development - education, medical services, testing and certification, green industries, innovation and technology, and cultural and creative industries. 
Five-year plan no threat to HK autonomy: The first inclusion of HK in the national five-year plan is consistent with the "one country, two systems" principle, Premier Wen Jiabao said. "The purpose of the central government in laying out such a chapter on HK and Macau in the 12th five-year plan is to support HK's development, and this arrangement will in no way replace HK's own plan," Wen said. He said the plan for HK not only respected "one country, two systems", but also recognised the city's autonomy and was in accord with the Basic Law.

International affairs
Manila welcomes HK findings in hijack case: Philippine authorities welcomed the "consistent" findings of a HK inquest into last year's deadly Manila hostage saga, saying victims' families could seek redress though the Philippine justice system if they wished. A five-member jury in HK found that Philippine police officers contributed to the deaths of eight hostages last August, ruling that they were unlawful killings. A HK government spokesman said the inquest had been open, fair and professional. It respected the findings but was "indeed very disappointed" that most of the key Filipino witnesses had not agreed to testify. Despite frayed relations between HK and the Philippines, Beijing's envoy to Manila Liu Jianchao said he hoped that relations would soon return to normal. "We would like to see more HK tourists coming to the Philippines." The HK government said a seven-month black travel alert for the Philippines would remain.

Transborder affairs
Mainlanders may face more curbs on births in HK: Mainlanders may face further restrictions on giving birth in HK, the health chief said. This comes amid growing concern that the flood of expectant mothers is placing undue stress on obstetrics and neonatal services in the city. Private doctors and hospitals have been asked to exercise "self-discipline" with maternity care for mainlanders, while public hospitals are to gradually cut quotas for mothers-to-be from across the border. Secretary for Food and Health Dr York Chow said that the problem was escalating. There is a shortage of obstetrics staff in HK, but the number of births has increased in the past 10 years. Births by mainland mothers made up 46 per cent of the 88,000 in HK last year.

Legal affairs and human rights
It's a duty to ask Beijing, court told: The government has made its strongest call yet for the top court to seek an interpretation of the Basic Law from Beijing on state immunity in HK. "There should be a reference under Article 13," Benjamin Yu SC, for Secretary of Justice Wong Yan-lung, told the Court of Final Appeal on the final day of a landmark case. "The power to interpret the Basic Law ... is vested in the NPCSC [National People's Congress Standing Committee]. The case involves FG Hemisphere Associates, a US-based vulture fund which buys cheap debt and then prosecutes those who owe it to turn a profit. It is seeking more than US$100 million in unpaid debts from the Democratic Republic of Congo, money it says is held by China Railway Group in HK. Congo argues that, as a foreign state, it cannot be sued in HK. The secretary for justice intervened in the case after deeming it in the public interest. Arguments have centred on whether HK needs to follow the state immunity practice of the mainland, where commercial deals by states are immune from prosecution, or can forge its own whereby they can be prosecuted, as the Court of Appeal ruled earlier. 
Wage rules still leave key issues unresolved: The government introduced guidelines for the imminent minimum wage law, but both labour and employers' groups said it left unresolved whether workers were to be paid for meal breaks and rest days. Commissioner for Labour Cheuk Wing-hing said the "Statutory Minimum Wage: Reference Guidelines for Employers and Employees" would assist employers and workers in understanding the practical application of the Minimum Wage Ordinance, which comes into effect on May 1. But both unionists and employers' associations said the government should offer further clarification on the law, which sets a floor of HK$28 per hour. The labour chief said neither the Minimum Wage Ordinance nor the Employment Ordinance prescribe that meal breaks and rest days should be paid.

Health
HK bans Japanese dairy, vegetable imports: HK said it is slapping a ban on a wide variety of Japanese food imports after radiation contamination was found in vegetables shipped from the quake-stricken country. The Food and Environmental Hygiene Department said that three samples of vegetables showed radiation contamination, while local radio reported that the readings were as much as 10 times above safe levels. The HK ban applies to dairy products, fruit and vegetables from five prefectures near the Fukushima nuclear plant. 
Observatory says radioactive dust levels safe: The HK Observatory detected radioactive dust from Fukushima in HK, but levels had been extremely low, it said. The observatory rejected suggestions it had delayed releasing the results, saying it needed time to verify the samples collected four days ago before making the data public. Ma Wai-man, acting assistant director of the observatory, said the dust had travelled a long way around the world via the westerly wind belt and its radioactivity had been greatly diluted to almost negligible levels.
Hospitals chief draws up plan to halt exodus of doctors: Prenatal screening for Down's syndrome and community healthcare programmes will be scaled down at public hospitals in response to the manpower shortage crisis, the Hospital Authority chief executive Dr Leung Pak-yin revealed. Dr Leung said that his team was working out a package of financial incentives as well as initiatives to reduce doctors' hours which he hoped would receive a positive response and stop the exodus of doctors from public hospitals. Doctors have threatened to take industrial action if the authority fails to solve the crisis and have called on the authority to stop increasing the number of beds and to cut non-core services.

Environment
HK to re-assess nuclear energy plans: The government would re-assess Hong Kong's future energy strategy in light of the nuclear crisis in Japan, Environment Secretary Edward Yau said. HK currently meets 25 per cent of its energy needs with nuclear power from the mainland. Last year, the government unveiled plans to increase the proportion to 50 per cent by 2020. This is to lower the city's carbon emissions and to combat climate change. At a Legislative Council meeting, some lawmakers urged a re-think on the strategy. Yau replied that the government acknowledged people's concerns. “We will take into account the Fukushima incident and future safety measures for nuclear power in China when reviewing our energy strategy,” he said.
Daya Bay operator reassures HK: The operator of the Daya Bay nuclear power plant has gone on a public relations blitz to reassure Hongkongers a nuclear accident similar to Japan's present crisis is virtually impossible. The plant was built to stringent designs and standards, which enabled it to withstand a powerful earthquake, the operator said. Moreover, its location meant tidal waves were highly unlikely. The assurances were made during a visit organised for journalists through the central government's liaison office in HK.
HK on course to reach emission-reduction target: HK looks likely to reach or even surpass air pollution-cutting targets under a cross-border pact - a payoff for retrofitting the city's largest coal-fired power plant with emission control devices, said Edward Yau, secretary for the environment. But it remains unknown whether neighbouring Guangdong has achieved the targets agreed with HK in 2002. The two sides aimed to cut emissions of major pollutants by 20 per cent to 55 per cent below 1997 levels by 2010. While HK and Guangdong were still discussing how to further reduce emissions in the next decade, Yau said the next steps for local power plants were stricter emission caps and a greener fuel mix.
Legislative Council finally passes ban on idling engines: Environment chief Edward Yau achieved a symbolic victory with the passage of a much-watered-down law banning idling engines, but lawmakers urged him to set tougher targets for curbing air pollution. The law has 20 exemptions. Some lawmakers said the exemptions had made the law meaningless. Drivers caught parked with their engines running will face a fixed penalty of HK$320.

Culture and Education
Second time lucky for Foster in West Kowloon arts hub: Almost a decade after British architect Norman Foster won the competition to design the city's arts hub with his huge but never-built canopy, he was named victor of a new contest to design the attraction. The West Kowloon Cultural District Authority's announcement matched the results of a public poll and seems the popular choice. But architectural professionals said the decision reflected the government's usual conservatism. Announcing the choice of Foster's plan over two other designs, one by Dutch architect Rem Koolhaas and the other by local architect Rocco Yim, the authority's chairman Henry Tang praised it for allowing the highest degree of flexibility. The project's cost risks exceeding the approved budget of HK$21.6 billion, given rises in construction costs for many projects elsewhere in the city.

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