[SCMP Column] Financial Services Challengers to Hong Kong

June 13, 2020
The reality is that China’s (and the world’s) reliance on Hong Kong as the indispensable conduit for financial services linking the Mainland with global markets remains as significant today as it was back in 1995 when Louis Kraar so erroneously predicted that “it’s over” for Hong Kong.
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[SCMP Column] Hong Kong job security

March 02, 2020
Since 1998, most Hong Kong people have churned with little dignity through four, perhaps five, job changes. With weak social safety nets, capturing a new job involved swallowing a lower salary. The result, 22 years later, is that for many Hong Kong families, salaries are barely changed from 1998, and confidence is poor that the job will continue to provide future security.
As families have struggled from pay-cheque to pay-cheque, savings have been a luxury most could not afford, which means that as more and more approach retirement and old age, the resources to provide security in later life are simply not in place. Job insecurity over decades has generated endemic insecurities for thousands of Hong Kong families. [ Read More ]

[SCMP Column] The sad slate of Hong Kong Happiness

January 20, 2020
Most useful to Hong Kong might be the OECD’s Better Life Index, which builds on eleven qualities essential to wellbeing: housing, stable income, secure jobs, community, education, environment, civic engagement, health, life satisfaction, personal safety and work-life balance. Hong Kong scores terribly by most of these qualities, so this index would provide an impeccable starting point both for explaining our miserableness, and for tracking progress towards more fulfilling lives.

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[SCMP Column] Hong Kong Port and GBA

January 11, 2020
The Chinese government says that in 2018, the Shanghai/Yangze region accounted for 47 per cent of China’s exports, followed by Guangdong with 27.5 per cent and the Tianjin hinterland with nearly 22 per cent, explaining the meteoric growth of the Yangze, and Bohai Bay ports, but to think of this growth as something that has emerged at Hong Kong’s expense is naïve. Remember that Hong Kong’s two biggest port operators – Hutchison Ports and Cosco – are also the world’s biggest port operators. Alongside its dominant position in Hong Kong, Hutchison runs Yantian in Shenzhen, and has stakes in Shanghai and Ningbo ports.

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[SCMP Column] Brexit lessons for Hong Kong

December 16, 2019
For Britain’s endangered democracy, the Johnson landslide is profoundly important. After the biggest victory since Mrs Thatcher in 1987, Britain’s Conservative government now has an 80-seat majority to act freely on its own mandate, for the first time since 2005. No fudge and muddle with uncomfortable coalition partners. No ruinous gridlock in Westminster, and mind-numbing obsession with constitutional protocols.
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[SCMP Column] A window of calm

December 02, 2019
Chinese officials have repeatedly emphasised that they intend to respect the “two systems”, and Hong Kong’s internationally trusted rule of law. But actions have spoken louder than words. Beijing pressure to introduce Article 23 addressing treason, and their support for the Extradition Bill, are among actions that have cut to the heart of concerns not just expressed by a huge majority of ordinary hard working Hong Kong families, not just Molotov-cocktail-wielding extremists. [ Read More ]

[SCMP Column] Tackling Inequality in Hong Kong

November 04, 2019
In the interest of full disclosure, I was part of the think-tank’s team shaping the report. On the one hand the study is controversial – David Akers-Jones was never averse to stirring a little controversy. But it is on the other hand painfully obvious, not just in view of Hong Kong’s awful summer of violent street violence, but also in view of upwellings across the world driven by rising concern over inequality. [ Read More ]

[SCMP Column] Crisis compared

October 21, 2019
Both crises have unveiled deep-seated problems in how a democracy should function. For Hong Kong, the “rotten borough” legislative system concocted by Beijing and Britain’s foreign office in a shared effort to avoid unleashing unfettered democratic forces across the community has come to haunt Hong Kong’s political climate. Each had their own reasons – Britain being anxious to prevent Hong Kong’s pro-China activists from steamrollering the political process; Beijing anxious to encourage political freedoms and expectations that might in due course become shared across the Mainland. Whatever their motives, they have created a political monster that has become almost inoperable. Significant political change must be inevitable in Hong Kong if the past summer’s strife is to be put behind us. [ Read More ]

[SCMP Column] Hong Kong Business as Usual

October 19, 2019
The IMF’s half-yearly World Economic Outlook released this week forecast global growth this year of 3 per cent – down from 3.6 per cent last year, with aggregate growth in high-income countries at 1.7 per cent. While Hong Kong’s growth is forecast to tumble from an April projection of 2.7 per cent to a new forecast of just 0.3 per cent, it is not alone. Singapore’s April forecast of 2.3 per cent growth has been revised down to 0.5 per cent, and Macau is now forecast to contract by 1.3 per cent this year, compared with an April forecast of 4.3 per cent growth. [ Read More ]

[SCMP Column] Rebuilding hope for Hong Kong

September 16, 2019
We need to recognise that there are no quick and simple solutions to the problems that have brought turbulence to Hong Kong streets in recent months, but that with careful attention paid to the many different forces at play, solutions can be found.
Whatever the “strongman” complaints about Xi Jinping, if he and his administration are serious that the “two systems” part of “one country, two systems” is indispensable for China’s successful reengagement with the global economy, then they too must play a constructive role – not hectoring critics, but showing a recognition of the unusual chemistry of Hong Kong’s citizenry. [ Read More ]

[SCMP Column] Not waste but resource recovery

September 14, 2019
Most of us still take a crude approach to rubbish, summarised as the 3Bs – bash, burn, bury. At the heart of Monday’s discussions was an effort to transform this to the 3Rs – reduce, reuse and recycle. Some quite persuasively argued that we should abandon the idea of “waste management”, and instead talk always about Resource Recovery Management, or “2RM”. Because the only way of building a truly circular economy which reduces “lap sap” to a minimum is to regard all waste as a resource that can be recovered. [ Read More ]

[SCMP Column] A first move to restore calm

September 07, 2019
Hong Kong’s awesome street protests (I can think of no other city worldwide whose compactness and excellent transport infrastructure would make it possible for so many hundreds of thousands of people to surge as fluently across the length of the city as we are seeing daily in Hong Kong), its ninja demonstrators acting out computer war games oblivious to the real dangers linked with real world violence, and the epic ineptitude of the administration’s responses to community concerns, may together make for marvellous “Breaking News” on the world’s media.
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[SCMP Column] Messages not messengers

August 26, 2019
It is true that poor communication can cause or aggravate crises. We have daily proof of this in Donald Trump’s foot-in-mouth tweets, or in Boris Johnson’s unanchored braggadocio on the Brexit crisis. But if ever there was an example of needing to shoot the message rather than the messenger, the Extradition Bill crisis must be the epitome. [ Read More ]

[SCMP Column] Getting out of the Bunker

August 05, 2019
As each of our four Chief Executives has taken up office since 1997, I have said to whoever in government was willing to listen that they must, absolutely must, in their “first 100 days” do something, anything, that sends a clear message that they stand up distinctly for Hong Kong people. None has done it. Today’s pickle is part of the price paid.
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[SCMP Column] Extradition Bill part two

July 13, 2019
Hong Kong people need Carrie to “speak truth to power”, and the sooner she is seen to do this, the sooner people in Hong Kong and around the world will see her without puppet strings attached.

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[SCMP Column] Life after the extradition bill

June 22, 2019
Our legal community, and the legal protections the government has provided, have put Hong Kong among the most trusted jurisdictions in the world, and all this has foolishly been put at risk. It is the integrity of our legal system that differentiates us from every other Chinese city, and sits at the core of the “one country, two systems” principle. It works as much to the advantage of China and Chinese companies as it does to the thousands of global companies based here. Urgent action is needed to restore faith.

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[SCMP Column] Hong Kong's Skill Problem

June 01, 2019
A government, and a business sector, more clearly aware of the workforce challenges we face would be pressing hard for education reforms. Education budgets would be focused less on fact-based learning squeezed into our youthful years and based in big education institutions, and more on lifetime learning that is employer- or web-based, built around short, tailored courses and focused on learning-to-learn, digital literacy and social skills.

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[SCMP Column] Rattus rattus Hongkongus

April 08, 2019
And there is evidence that Hong Kong is home to a classier kind of rat. Pest controllers recently failed over a number of weeks to exterminate a rat in a Wanchai restaurant, because it refused to eat anything but mangos. All manner of baits and poisons were left, with no success. Eventually the sated rat was caught one morning, still asleep on the restaurant floor after an overnight mango feast.

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[SCMP Column] Death in the City

March 23, 2019
Accommodating our living is challenge enough, but accommodating our dead is creating challenges that governments worldwide are secretly sweating over. And squeamishness about discussing our dead means the challenge does not get the urgent attention it needs. As Caitlin Doughty author of “Smoke Gets in Your Eyes”, about the global cremation industry, complains: “People are being robbed of the dignity of death by a culture of silence”. [ Read More ]

[SCMP Column] Hong Kong in the Greater Bay Area

December 03, 2018
Surely for Hong Kong, the first challenge is to recognize the implied transformation from a specialized city economy that faces outwards, helping outsiders get access to the dark and mysterious Mainland markets, to a city beginning to look inward as part of a large and diversified regional economy that over the next decade is likely to grow to be as big as Germany. Should my ATM card not work on ATMs across the GBA? Should my Octopus card not serve me as well in Jiangmen as in Hong Kong? Should I not be taking weekend breaks in the Pearl River Delta just like a Londoner weekends in the Cotswolds or Cornwall?

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[SCMP Column] Ding Uk challenge

October 15, 2018
Over the decades all sorts of proposals have made to wind up the scheme, and so far, all have been undermined. But a smart set of new ideas crossed my desk last week from David Webb of fame: “Given the long queue and uncertain prospect of a claim, some would surely be willing to surrender their ding “rights” for a cash payment from the government.”

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[SCMP Column] Cross harbor tunnel fees

October 13, 2018
I have always queried how strongly the different cross harbour tunnel charges influence which tunnel a car-owner chooses (around three quarters of all vehicles using the tunnels are private cars). After all, for most car owners, paying average annual car-operating expenses of over HK$160,000, and using a car because they prefer to, not because they need to, I have always been tempted to think they are more driven by convenience and speed than the dollar cost of a tunnel fee.

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[SCMP Column] Mangkhut and the next crash

September 22, 2018
The contrast is clear. Hong Kong’s relative resilience, and likely rapid recovery, contrasts sharply with the dreadful failure to anticipate the 2008 crash, and the slew of emergency measures that had to be thrown into place in almost-panic circumstances – measures that together almost certainly sowed the seeds of the crash that many are saying is soon to come.

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[SCMP Column] Liveability indices

August 16, 2018
It does not matter how “liveable” Vienna or Calgary may be. If a company’s business is driven by activity in the US or China or the EU, your staff are never going to be sent to such liveable places. Rather than tantalise us with the idea of balmy lives in lovely quiet backwater cities, surely someone at the EIU ought to be noting that a huge proportion of international companies are in reality only choosing between a handful of “cities that count”, and devoting time to comparing liveability between this handful.

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[SCMP Column] Aging opportunities

August 13, 2018
Workplaces need restructuring to make it easier for older staff with creaky joints or poorer eyesight to function efficiently – as BMW has done with its production lines in Germany. As we demand barrier-free access around the city for people who are wheelchair-bound or have other physical infirmities, why should older people expect less?

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[SCMP Column] Land supply challenge

July 21, 2018
Power to release such military land sits with Beijing, doubtless on the recommendation of the PLA, but surely there can be no harm in requesting. After all, Article 13 of the Garrison Law says that if military land is no longer needed for military purposes, it “shall be turned over without compensation to the HKSARG for disposal.” If that is not an open invitation, I don’t know what is.

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[SCMP Column] Mosquito season

June 25, 2018
With so much scientific brainpower and money being spent on eliminating the threats from mosquitoes, I sense that significant progress is being made. But that raises a separate, distinct question: would it actually be a good thing to exterminate all mosquitoes?

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[SCMP Column] Supercharging baby

May 28, 2018
Take the “Babypod”, examined by science writer Erik Vance in this month’s Scientific American, which is among dozens of devices that plays music to your still-unborn child with the aim of giving the fetus a head start: “Our initial hypothesis suggests that music... activates the brain circuits that stimulate language and communications. In other words, learning begins in utero,” Babypod’s website says. And they mean that quite literally: it is a bulb-shaped silicone speaker that is inserted inside a woman’s vagina.

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[SCMP Column] Pensions and savings

May 21, 2018
The titans of global finance were gathered for the World Bank meeting in the newly-opened Convention Centre. The auditorium was packed, and on the podium the heads of the world’s leading fund management houses were gunning for one thing alone: for Hong Kong to establish a compulsory pension scheme.

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[SCMP Column] Sharing economy

May 12, 2018
Uber and Airbnb may have started life as icons of the “sharing economy”, but today they are simply large and powerful international businesses fighting about regulatory hurdles to their new business model against similarly powerful local entrenched business interests. The idea is long faded of Uber enabling car-pooling or letting car-owners earn some money on the side, or of Airbnb letting families earn some pocket-money by letting out a spare bedroom – in Hong Kong at least. I don’t agree with the Hong Kong government blocking these companies’ development, but let’s not get bamboozled into thinking this is anything to do with the “sharing economy”.

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[SCMP Column] Liveable smart cities

April 23, 2018
In many ways, Hong Kong is the perfect template for liveable city planning, with its world-beating Mass Transit System, the integrative potential of a compact high-rise city dominated by just a small number of developers, just two vertically-integrated power suppliers, one of the world’s best and digitally integrated healthcare systems, and one of the world’s best-endowed digital infrastructures.

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[SCMP Column] Li Kashing and old age

March 19, 2018
In a fast-ageing society like Japan, demand for baby diapers is in sharp decline as fewer and fewer children are being born. Demand for women’s napkins is static, as the country’s female population is static. But demand for adult diapers is booming, as the over-65s account for more than a quarter of the country’s population. They now outstrip baby diaper sales.

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[SCMP Column] Hygge and Expensive Cities

March 17, 2018
It seems that Singapore (not conspicuously happy) ranked the world’s most expensive city for the fifth consecutive year mainly because it is the world’s most expensive place to run a car, with clothes and food also very expensive. But the EIU offers consolation in that domestic helpers are cheap. Hong Kong ranks up there for lots of reasons we know well, linked with the costs of owning a home, and petrol prices more expensive than anywhere in the world except Oslo. It seems, like Singapore, our groceries are also immensely more expensive than elsewhere.

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[SCMP Column] The temptation to squander

February 26, 2018
In light of a fast-approaching “future jobs” crisis, significant billions should be reserved for radical change in the education sector – not just in curriculum change to build digital literacy, and better kit for our kids in schools, but in new investment in mid-life learning programmes, and a transformation in the way we deliver vocational training. Funding for companies to drive extensive in-company career training would be a valuable complement. Nothing could be more clearly in the interests of Hong Kong’s future, and would make barely a dent in our current HK$1.7tr reserve pool.

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[SCMP Column] About Pandemics

February 03, 2018
Whatever the shortcomings of the present treatments for our annual flu seasons, they are light-years superior to the treatments known or deliverable in 1918, so mortality rates should be significantly lower. But we have to remember that even if survival rates are higher, the sheer size of the world population today would make for sobering mortality rates. As the Centres for Disease Control in the US noted recently: “Even with modern antiviral and antibacterial drugs, vaccines, and prevention knowledge, the return of a pandemic virus equivalent in pathogenicity to the virus of 1918 would likely kill more than 100 million people worldwide.” [ Read More ]

[SCMP Column] Progress for Women

January 14, 2018
Note the current controversy in the UK over the BBC’s China Editor, Carrie Gracie, who in Beijing earned £135,000 (US$185,000) a year, compared with the £200,000 earned by her male counterpart in New York, and Prime Minister Theresa May’s preposterous distinction between “boy’s jobs” and “girl’s jobs”. [ Read More ]

[SCMP Column] HK's Iconic Waterfront

December 10, 2017
The importance of this site simply cannot be underestimated. By 2050, what is being created today on Site 3 will define how the world perceives Hong Kong. It will be on postage stamps, and will provide the backdrop to international TV broadcasters as they talk to the world about Hong Kong. Whether Hong Kong stands out as “Asia’s World City” or by then is just another Asian or Chinese city, will be determined by what we create. [ Read More ]

[SCMP Column] Cities at risk

December 04, 2017
Among 301 cities surveyed, Hong Kong ranks fifth among cities most exposed to natural or man-made risk. It is the most exposed worldwide to pandemic risk, and the second most at danger from nuclear accident risk. Lloyds puts the total GDP at risk in Hong Kong at US$74 billion – about a quarter of that due to pandemic risk. [ Read More ]

[SCMP Column] Health alarum

December 01, 2017
Take the obesity numbers. If it is true that 29.9 per cent of Hong Kong people are technically obese (using the World Health Organization measure, that means having a body mass index of 25 or above), then according to WHO data, that puts us among the four or five most obese populations in the world – behind the US, Mexico and New Zealand, but ahead of Australia, Canada and the UK [ Read More ]

[SCMP Column] All for the Greater Good

November 06, 2017

It is nevertheless fair to recognize that the level of economic interconnection remains constrained – by the boundary, by “One Country, Two Systems” distinctions, and by the practical challenges of incentivizing rivalrous governments to cooperate. Too many Hong Kong people still see “Chinese interference” at every turn, and see any Hong Konger looking to build links as brown-nosing Beijing or compromising our hard-fought separateness. As we now turn in earnest to the task of building our role in our hinterland region, much valuable time has been lost.

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[SCMP Column] A Better Quality of Life

October 16, 2017

In theory, the Government has had an “ageing in place” policy on the statute book since it established the Elderly Commission 20 years ago. At that point, the proportion of Hong Kong’s population aged over 65 was below 10 per cent. Today, this has grown to 16 per cent, and before 2040 it will sit at 25 per cent. With half of our population expected to live beyond the age of 100 – compared with just 5 per cent 50 years ago – the need to prioritise this issue ought to be self-evident. 20% of households are now elderly with as many as 250,000 currently inadequately housed, and 20,000 more homes projected to be occupied by the elderly in the next decade alone. Already Hong Kong has around 100,000 people suffering varying stages of dementia, and domestic helpers (with not even minimal medical training) are providing care to 40,000 elderly people who live at home alone, and this number is set to explode.

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[SCMP Column] Colourful Life Lived Well

September 02, 2017

Perhaps inevitably quoting Churchill, David said at the FCC: “Churchill was supposed to have said that “democracy is the worst kind of government, except for those others with have been tried. I should like to think that Hong Kong is the worst kind of place in which to live, except for those others which have been tried.” He defined the “Holy Trinity” that protected Hong Kong and underpinned its unique value: “its decent judicial system, its fairly uncorrupt community, and genuine freedom.”

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[SCMP Column] Co-location Conundrum

August 14, 2017

The fact that similar co-location arrangements work fine elsewhere – US immigration officials co-locate in Vancouver processing passengers travelling into the US; British immigration officials work in France processing travelers into the UK from the European continent – counts for nothing. The fact that we already have co-location arrangements on Hong Kong’s western land crossing into Shenzhen provides no confidence that our border security people can work effectively together. The fact that thousands of Mainland troops have for two decades been based in Tamar, Stanley, and other locations inside Hong Kong without bursting out onto the Hong Kong streets and harassing us similarly counts for nothing. The fact that they have done nothing for two decades does not mean we can sleep safe in our beds tomorrow.

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[SCMP Column] Humanity's Fat Challenge

August 05, 2017

Susan Roberts, senior scientist at the Tuft University’s Energy Metabolism Laboratory at the Human Nutrition Research Centre on Ageing, is even more blunt – and specific: Obesity is “one of the greatest health challenges facing humanity.” She says 600m people – about 13 per cent of all adults – are obese. That’s double the number in 1980. And the crisis pays no regard to wealth or poverty. Mexico is the “world champion” for obesity levels, just ahead of the UK. And in Malaysia, approximately half of the population suffer diabetes. In China and India, obesity levels have tripled in three decades.

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[SCMP Column] Cities Steer Man's Future

July 31, 2017

Cities have come to dominate our economies. MacKinsey has estimated that 600 urban areas account for 60 per cent of world GDP. Drill down a little, and the evidence is even clearer. In Korea, Seoul and Incheon together account for 47 per cent of the country’s GDP. In Holland, Rotterdam and Amsterdam account for 40 per cent. In the Philippines, the Manila metropolitan area accounts for 37 per cent of the country’s economy. Tokyo – the world’s biggest city with a population estimated at more than 37m – makes 34 per cent of Japan’s GDP.

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[SCMP Column] Ageing Challenges

July 15, 2017

Most important, since a rising proportion of our 350,000 foreign domestic helpers are by default becoming the foundation of our elderly carer network, Dr Law is talking about ensuring they can get basic medical and elderly care training.

How refreshing it would be if Carrie Lam’s team could begin its term by making headway in a socially critical area like this – after years of filibuster and perpetual mastication over issues.

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[SCMP Column] Swept Up in the Storm

July 01, 2017

What a shock it was, barely a month later, to watch the “Black Monday” stock market crash wipe US$2.9bn off Hong Kong’s stock market capitalisation, and the HK$ peg to the US$ come under ruthless assault from a number of powerful US predators. Even more of a shock to see property values crash to 30 per cent of 1997 values. The sobering lesson was that Hong Kong, with no local market of consequence, was an economy that depended on flows – and when the flows dried up as the crisis deepened, so Hong Kong rapidly joined the wounded.

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[SCMP Column] Get on with Running This City

June 26, 2017

Hong Kong has gone through a very tough couple of decades since the 1997 handover, but this has little if anything to do with the transfer of power. Much more it is to do with the Asian Financial crash of 1998, the crash in 2000, SARS in 2003, and the global financial crisis of 2008 – and the perverse impacts on property and share prices of the low interest rate universe in place since then.

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[SCMP Column] Bridging the Skills Gap

June 17, 2017

In APEC for the past five years we have been trying to persuade the Hong Kong government to provide data into a region-wide skills database that would help us see the skills shortages as they emerge across the region (not just in the medical profession). Still the Hong Kong government has failed to provide input. If it is so robustly reluctant to provide data for APEC’s skills map, why is it suddenly likely to discover enthusiasm for data in the medical sector where so many vested interests have scant interest in tackling our skills shortages?

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[SCMP Column] Dangerous Portents

June 03, 2017

Compared to fish, very little is known about squid and their lifestyles. But there is a dangerously naïve belief that it is impossible to overfish them. Why? Because almost all squid have an astonishingly short life-span – rarely more than two years. Like octopus and cuttlefish, they race to maturity with barely decent haste, predate ferociously on fish and other cephalopods, mate, nurture their eggs, and die.

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[SCMP Column] Obsessive Addiction

May 27, 2017

This irritates Greenpeace campaigners because of the waste. Apparently, it takes 5,000 gallons of water to make a T-shirt and a pair of jeans – which means China’s garment-makers discharge over 2.5 billion tonnes of waste water every year. In Hong Kong, they say we send 253 tonnes of textiles to landfills every day – the equivalent of 1,400 T-shirts being thrown out every minute.

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[SCMP Column] A City Unwell

May 06, 2017

For a country that is supposed to be among the most advanced in the world, the US is burdened with a seriously malfunctioning healthcare system – egregiously expensive, with large parts of the population lacking insured access to medical care, and eroding health demographics that would rank the country among many developing economies. The OECD says US health care costs amount to US$8,713 per person (about 18 per cent of GDP), compared with an OECD average of US$3,453 (8.9 per cent of GDP). One recent study of cancer care costs put median monthly costs in the US for eight different cancer drugs at US$8,694 – compared with US$2,587 in the UK and US$2,741 in Australia. Recent international comparisons of the cost of an overnight hospital bed put New York at the top, at between US$16,000 and US$21,500, with Canada second at US$10,000 and France and Germany not far behind at US$9,500.

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[SCMP Column] Arduous Flight Ahead

April 17, 2017

But the challenge is not small. The competitive backdrop is ferocious as Mainland airlines become stronger and more ambitious. Revenues from business travelers will continue to be squeezed as the post-2008 contraction of the financial services industry continues unabated. Profit margins will continue to be horribly mean.  And the splenetic outbursts of us armchair experts must be recognized as a constant while international air travel remains so intrinsically stressful. Welcome to the unfriendly skies.

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[SCMP Column] Beyond the horizon

April 01, 2017

This “internationalness” (forgive me, a horrible word) is pivotal for Hong Kong’s successful future – and is likely to be valued as much by Mainland companies listing here or setting up international headquarters and fund-raising operations here as it is by companies from Germany, France, Singapore or the US. It involves widespread fluency in English and Mandarin. It should include the Hong Kong University being China’s strongest English-language university. It involves cross-cultural tolerance that has been a hallmark of Hong Kong for most of my working life here.

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[SCMP Column] Where the City Fell Short

March 18, 2017
We were right to see the transformation of Hong Kong from an entrepreneurial to a managerial economy, as middle class parents pushed their kids into the professions. We were right to see Mainland entrepreneurs coming to settle in Hong Kong to keep the entrepreneurial flame alive, but overestimated their stimulus. 
But there was so much I failed to see. First, and perhaps worst, was the failure to notice shortcomings in Hong Kong’s political institutions. When Britain’s colonial rulers walked away, they left behind a competent and honest administration, but departed with the strategic policymakers, who had always been seconded to Hong Kong from ministries in Britain’s government. Administrators were excellent at administering, but were untrained and ill-equipped to forge the policies to be administered. 
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[SCMP Column] Projects for the people

February 11, 2017

The first shock on reviewing Donald’s project list was to see just how glacially these plans have moved. Among the six transport-related plans, the South Island Line is at last open (though it was scheduled to begin operations in 2015). The Shatin-Central Link is not expected to be finished until 2021. The High Speed Rail link to Guangzhou may begin operation late in 2018 if we are lucky – against an original opening date targeted for 2015. The Hong Kong-Zhuhai-Macau bridge should open in 2018, against an original target of 2016. And the bridge to Tuen Mun from the Airport – linked to the Zhuhai bridge – is inevitably also delayed. The fast train to Shenzhen airport has been abandoned altogether.

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[SCMP Column] An Unbreachable Chasm

January 21, 2017

The challenge is not that people are poor, even though Hong Kong has always been home to a significant number of poor people. Nor is it that the gap between Hong Kong’s rich and poor is wider than it has ever been – and wider than in most economies in the world. No, the challenge is that the chasm between Hong Kong’s poor and rich feels unbreachable. It no longer seems possible that we can start dirt poor like Li Kashing, and a generation later feel affluence as a reward for our steady and uncomplaining labour.


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[SCMP Column] Praise Whistle-blowers

January 14, 2017

Whether Hong Kong truly needs a specific whistleblower law is open to debate. The ICAC, which brought the cases against both Donald Tsang and Raphael Hui to court, depends heavily on the Prevention of Bribery Ordinance and carefully created whistleblowing arrangements, and has over its 43 year history built a formidable reputation worldwide for cracking down effectively on corruption.

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[SCMP Column] Challenges of Aging

November 26, 2016

So far, so obvious. Except that this is precisely not what our own Hong Kong government is doing. In 2014 (the latest year for which we have numbers) 90% of the 46,000 people who died did so in a hospital bed. Over 40% of our 38,000 hospital beds are occupied by elderly patients. As the Hospital Authority makes the case for a HK$200bn programme to build more hospital wards and add elderly care homes, so the Housing Authority says it does not have the funds to build more housing for the elderly, nor to “retrofit” existing homes to make them safe and livable for the elderly infirm. We are failing to build convenient community clinics embedded close to peoples’ homes. We are actively ignoring the role that private sector care homes might play. And we are head in the sand in terms of training carers in the numbers that will be needed for our rapidly ageing society.

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[SCMP Column] Shopping City Losing its Sheen

November 14, 2016

If this change is indeed structural, then we in Hong Kong face a significant social and economic challenge. We have a large proportion of our workforce facing a stagnant and declining future. Significant policy attention must be paid to finding the well-paying job opportunities of the future. Noteworthily, Shenzhen may be leading the way, with an economy being built around innovative green and high-tech activity – from Huawei’s telecoms to DJI’s world-leading drones.

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[SCMP Column] Stretching the Limits

November 05, 2016

But where are equivalent Hong Kong regulations limiting such monstrous abuse by developers? Bear in mind that a typical car parking space is 160 sq ft, and shipping containers are 200 sq ft (containers are being fitted out and used as temporary student housing in Holland). If they exist, it seems major property groups are taking scant notice.

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[SCMP Column] Much Ado about Tattoos

October 29, 2016

In some ways, the corporate prejudice seems odd. After all, tattooing has been around for a very long time. Oetzi the Ice Man discovered high in the Alps a few years ago carried tattoos from 5000 years ago. Mummified remains sporting tattoos have been discovered from as far afield as Alaska, Siberia, Egypt, the Philippines and the Andes. And the earliest residents of the UK were called “painted people”, or  Pritoni – from which the word Britain comes. The word tattoo comes from the Tahitian word “tatau”, meaning “to write”. Through time immemorial, Maoris from New Zealand have carried their “moko”, or unique facial tattoo as a sign of their unique identity and bravery. They even signed treaties with faithful renditions of their unique moko. No wonder the New Zealand All Blacks sport so many acres of finely-honed body art.

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[SCMP Coumn] Wage Talks cannot Fix ‘Real’ Problems

October 10, 2016

In truth, there are few major economies worldwide that are not currently wringing their hands over the challenges facing their communities’ poorly paid, and how most appropriately to respond. In Switzerland, this took the form of a formal referendum on whether to introduce a national basic wage to all citizens, regardless of whether they work or not (voters firmly rejected the idea). In the UK and the US where the travails of the blue-collar middle – who have seen so few improvements in their livelihoods over the past three decades – have poisoned local politics, the arguments have moved on from minimum wages and welfare measures to job-protection and barriers against foreign workers.

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[SCMP Column] Appeal of ‘sin taxes’

September 19, 2016

I see sin taxes falling into three clear areas: biasing tax charges onto items that are self-indulgent wants rather than basic needs; disincentivising spending that harms our health; and punishing spending that harms our environment (or contributes to global warming). At the heart of such a system would need to be a fundamental and controversial shift in our tax system, away from taxes on salaries and towards VAT- or GST-type taxes on spending.

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[SCMP Column] HK’s deepening inequality

September 12, 2016

As I have already written three times so far this year, the deepening inequality that has been marked worldwide, but nowhere more than Hong Kong, has poisoned democratic politics in all corners of the globe – from the US, to the UK, to the Philippines. The fact that the world’s top-earning 1% - a total of 70m families that earn US$71,000 or more a year – have walked away with most of the economic gains delivered by the growth of the past three decades – has created deep resentments across the world’s middle classes, who have felt income stagnation and job uncertainty throughout this long period and see no future prospect of improvement.

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[SCMP Column] Political Mess

September 10, 2016

Interestingly, we have a younger, more militant and confrontational set of Legislators. The youngest Legco member in our last Legco was 35, and the average age of Legislators was 58. Today our youngest member is 23, and 8 are younger than 35. We don’t yet have the average age of our 70 new legislators, but it will be significantly below 58. The youthfulness of geographically elected members contrasts sharply with the greyer age profile of functional constituency members. (Should we not feel embarrassed that every single functional constituency member is a man?)

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[SCMP Column] Building Blocks

August 20, 2016

An alarming aspect of recent political developments like Brexit and Trump – and Hong Kong’s Occupy movement no less – is the erosion of trust they imply. So too with controversy over registration requirements for Legco election candidates. It is only a small step from distrust in our ruling elites to distrust in the legal systems that they have designed. This is doubly true when the cost of access to the law is prohibitive for ordinary Hong Kong people. Access to legal protection has become a privilege of the wealthy Hong Kong elite – as a result of which trust in our rule of law is debased and undermined.

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[SCMP Column] City of extreme inequality

August 01, 2016

It is worth remembering the extremity of inequality in Hong Kong. According to economist Branko Milanovic in his recent book “Global Inequality”, for a household to sit among the 70 million households worldwide that occupy the “evil empire” – the “Top 1%” that have captured most of the economic gains achieved in the world economy over the past three decades – that household has to earn US$71,000 a year. That is about HK$46,000 a month. Take a quick look at Hong Kong’s household income statistics and you discover that over 23% of Hong Kong families have household incomes above that level. By comparison, just 12% of American families have household incomes above this level, and in Japan and Switzerland just 9%. That makes Hong Kong an extraordinarily lucky and privileged place for the richest quarter of the population.

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[SCMP Column] Turning the Tide

July 16, 2016

Back in 2003, some Chinese neighbours gathered a large mountain of leaves on the jetty in front of my house after an energy-sapping day of chopping overgrown trees. They then set light to the mountain, and wandered off leaving it smouldering into the sunset. Inevitably, the tide washed in, doused the fire, and swilled the loose par-burned leaves into the water. Today, 13 years later, those leaves still swill back and forth from the beach to the jetty. They have not decomposed. They have not gone anywhere. Lesson 1: once rubbish washes into your beach, it is going to stay there for far longer than you can dare to imagine. My village neighbours were not lacking energy, nor lacking concern to keep the village trim. But in spite of perhaps 150 years living on the sea-edge overlooking that beach, they had failed to recognize that waste dumped into the water stays in the water. It seems that still today they believe that the ocean is an infinitely huge dumping ground where lap sap can be swallowed and forgotten.

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[SCMP Column] Realities for Retirement

June 20, 2016

These simple demographics put a devastating time-bomb under just about any pension scheme in place anywhere in the world today, and underscore why so many state pension schemes worldwide are unsustainable and close to bankruptcy. A fictitious Jimmy, aged 40 today, would need to save 17% of his income every month to be able to retire at the age of 65 with a retirement income of 50% of his present salary (most people polled worldwide seem to agree that 50% is the minimum they would like to cope on in retirement, assuming they already own their own home). And our fictitious Jimmy has only one response to this savings news: dream on! He sees no realistic possibility of saving so much on a regular basis, without the help of Mark 6. If he chooses to work on until he is 77, then his savings rate could fall to 8%. Even that would be a challenge.

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[SCMP Column] Code Matters

June 11, 2016

With delivery of letters being a declining global industry, some would argue that it will get easier, not more difficult, to deal with future volumes of postal traffic – and hence less important to introduce postal codes. The Universal Postal Union says that the global volume of letters fell 2.6% in 2014 – the latest year for which we have data – to 327.4 billion, with international traffic, which accounts for just 1% of all letter traffic, falling by over 6%. Pressures in Asia are also insignificant by comparison with the US and Europe, where 301 letters per capita are posted every year. The comparable number for Asia is less than 6 per year. The same picture emerges with parcel delivery. While parcel deliveries grew by 3% in 2014 to 7.38 billion, by far the majority of pressure is in the US and Europe, with 7.5 parcels delivered per capita per year – 100 times more than in Asia. So the comparatively massive volumes of letter and parcel traffic in Europe and the US mean that the case for postal codes there is clearly more powerful.

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[SCMP Column] Driving towards Driverless Cars

June 06, 2016

But higher ambitions are going to take years. Amend that: decades. Main barriers are going to be regulators and safety experts who insist that automated driving systems, once unleashed in our communities, will be no less safe than human drivers – which means bettering the current situation where a fatal crash occurs one in every 3.3 million hours of driving, and where crashes resulting in injury occur once every 64,000 hours of driving: “Reaching this level of reliability will require vastly more development than automation enthusiasts want to admit,” says Shladover.

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[SCMP Column] Unsung Advantage

June 04, 2016

Today, China is home to close to 200 million cars – over 5 million of them clogging the boulevards of Beijing. Only the US is home to more cars (around 260 million). Its auto industry is one of the largest in the world, making 24.5m vehicles a year (twice the total made in the US, and four times the output of German carmakers). More than 24 million vehicles were bought last year, compared with 17.5m in the US, 3.5m in Germany 2.3m in France. And that is just new vehicles. China’s car ownership is such a recent phenomenon that the second-hand car market (which accounts for two-thirds of the US car market for example) has barely begun to develop. Only in recent weeks has the Government lifted laws blocking the sale of second hand cars between provinces. China’s streets are set to become as aggressively gladiatorial as the worst in the world, with congestion matching Mexico City, Istanbul and Bangkok.

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[SCMP Column] Closed for Business

May 30, 2016

The reality seems to be that the recent global regulatory overkill defined by Dodd-Frank and other legislation in the US and elsewhere is forcing banks sheepishly to refuse accounts to even long-standing and trusted clients. Shellshocked by the US$200 billion in fines imposed on financial institutions since 2008, and the ongoing fear of regulatory witch hunts that might arise if you fail to “know your customer”, banks are finding the cost of achieving regulatory “comfort” too burdensome and onerous to achieve for all but the most globally established enterprises.

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[SCMP Column] China: pollution beater

April 25, 2016

A recent study on China’s resource efficiency funded by the UN Environment Programme, the Commonwealth Scientific and Industrial Research Organisation in Australia, and the Chinese Academy of Sciences is frank about China’s responsibility for rising demand for, and pressure on, a wide range of natural resources over the past decade and a half, and summarises China’s  challenge well: “It is unrealistic to expect China to achieve the extremely high apparent resource efficiency levels of those countries which have transferred most of the materials and energy intensive production processes to external jurisdictions.

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[SCMP Column]Monarch's lasting legacy

April 23, 2016

Like Kissinger or Carter, Elizabeth is also a living reminder of how in general terms the world has changed for the better – and of how so many of today’s terrible problems have all been tackled – and overcome – before. The damage wrought by the First World War as still strongly felt in the UK and across Europe. Times were hard and turbulent. As she was being born on that dull London day in 1926, so trade union militants launched a 10 day General Strike across the UK that led to the imposition of Martial Law. She was just three when the Great Depression engulfed the US and Europe’s economies. I wonder what parallels she might draw as we enter the 8th year of our “great recession”.

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[SCMP Column] What third runway? Hong Kong needs another airport

April 18, 2016

My sense is that Hong Kong’s air services negotiators will need to be endowed with magical powers of foresight to know how best to negotiate rights from Mainland cities to and from Hong Kong, and to best capture passenger flows onward to destinations worldwide. With close to 20 Mainland cities now handling 20 million passengers a year or more, surely only a magician can work out how to assign the burgeoning passenger services from these cities onto Hong Kong’s two runways. The question we need to ask is not whether we need a third or fourth runway. It is where do we put the next airport.

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[SCMP Column] Four amazing things I learned about China’s top leadership this week

April 16, 2016

Of course, as the former dean of Qinghua University’s Law faculty, it is reasonable to raise an eyebrow and say “Wang would say that, wouldn’t he”. He is almost certainly talking his own profession’s book to depict the coming three decades in China as being defined by the “Rule of Law”, since I am sure Beijing has other strategic priorities that might equally well describe the aspirations of the coming three decades.

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[SCMP Column] The Offshore Case

April 11, 2016

So let us focus on what should be focused on: the opacity that disguises the flight of corrupt money, the financing of terror, and illegal manoevres circumventing legal obligations. Expecting banks to “know your customer”, and enabling them to share information on suspect movements of money, would be helpful. Governments can also help here by making tax systems more simple. This might not be as glamorous as a peek into the lives of the super-rich, or of Putin’s favourite Cellist, but it would be a good start.

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[SCMP Column]Dumbing Down

April 09, 2016

But a successful democracy needs more than just well educated and well informed people. We have shockingly realized since the “great recession” engulfed us eight years ago that politicians need growth to get elected. No politician ever got elected promising “less bad” than his rival. Growth in an economy allows politicians to promise new and exciting goodies. It generates the wealth needed to invest in communities and to improve the amenities we value. Growth fundamentally underpins a mood of optimism that encourages cooperation and compromise.

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[SCMP Column] Confidence Crisis

April 02, 2016

So perhaps the Lee Bo mess was the result of some unapproved overzealous overreach on the part of local security personnel in Guangdong. If that was so, would it not be wonderful if Beijing officials could have the confidence and modesty to say as much? Clearing the fog would do much to restore badly damaged business confidence.

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[SCMP Column] Why Go Glum

March 26, 2016

Over the past four years, according to the OECD’s World Happiness Report, Hong Kong has tumbled from the 46th happiest place in the world to the 75th happiest. That makes us happier than Indonesians(79th), Filipinos(82nd) and Chinese (83rd), but significantly less happy than Singaporeans (22nd), Taiwanese (35th) and Japanese (53rd).

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[SCMP Column]Harbour Matters

March 19, 2016

To see the harbour abused, degraded and neglected at the hands of uncoordinated piecemeal policymaking by successive administrations through the last decades of the 20th century was particularly painful and regrettable. It has been similarly painful to watch the glacial progress of efforts to regain planning control of the harbour, and with it progress in enabling ordinary Hong Kong folk to regain access to this shoreline that inspires our sense of community.

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[SCMP Column] Paying the Price

March 12, 2016

In short: as many women graduate with honours from Hong Kong universities as do men, but social and cultural attrition means that a decade later they are massively under-represented in the skilled areas of the economy. And even where women persist, they on average earn 17% less than their male counterparts for the same work. This discrimination is particularly apparent in the “STEM” area of the economy that is playing such a massive role in driving the digital economic revolution. Even a modest reversal of these imbalances is likely to drive massive rewards in future economic competitiveness.

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[SCMP Column] Eyes Wide Shut

February 27, 2016

In Hong Kong, where “localist” xenophobes are railing against the Mainlanders in our midst, the seeming indifference of our administration to these rising pressures is a source of serious concern for our future competitiveness. A recent survey by the HK Institute of Human Resource Management reported that already today 90% of surveyed companies find it quite difficult or extremely difficult to find the right talent to fill vacancies. This must get worse. Shortages are most acute in logistics and transport services, IT, business and professional services, wholesale import and export trading, and restaurants and catering. Talk to most of these companies about their efforts to bring skilled people in from outside Hong Kong after local recruitment efforts have failed, and most boil with frustration at government reluctance to hear their cries for help.

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[SCMP Column] Keep on Pushing

February 22, 2016

Low birth rates mean that there will be fewer and fewer working people carrying the cost of supporting people in retirement. While we in Hong Kong (where we have about 15% of our population over the age of 65) are far better off demographically than a country like Japan, where today 26% of the population is over 65, and a shocking 38% will be over 65 by 2055, we are worse off in terms of retirement security because our official pension scheme – the MPF – is underfunded, and was only introduced in 2000. People retiring today have just 16 years of contributions – far too little to provide financial security through a retirement that might stretch for 30 years. And even in 2040 when people will be retiring with a longer lifetime of contributions, the amount saved will last most families for little more than 5 years.

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[SCMP Column] Milk for Life

February 20, 2016

China is of course hugely important for baby milk formula, accounting for sales worth $14.8bn in 2013 – three times bigger than the US market, and six times larger than Indonesia. Interestingly, Hong Kong has become the world’s fourth largest market for baby milk formula – not because of demand from Hong Kong mothers, but as a proxy for Mainland demand. Boosting China’s birth rate by 2m a year will only augment this huge demand.

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[SCMP Column] Weird Weather

February 13, 2016

As the US reported 10 different “weather and climate disaster events” in 2015, each costing US$1 billion or more in damage, the National Oceanic and Atmospheric Administration (NOAA) announced that 2015 was the warmest year on record – and that 15 out of the 16 warmest-ever years have occurred since 2000.

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[SCMP Column] Tourism Gold Mine

February 06, 2016

China’s capacity to transform the shape of international tourism is considerable. Hong Kong’s opportunity to benefit from this is clear. If we don’t benefit in the process, it will be our own fault.

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[SCMP Column] A New Pandemic

January 30, 2016

In all societies, including Hong Kong, there are people with cherished prejudices who do not want those prejudices ruffled. They constantly seek the anecdotes that support their prejudices and allow them to enter discussions with “Ah, but…” They are supporters of Donald Trump and subscribers to Fox News. They are voters for Marine Le Pen in France, and the Independence Party in the UK. They sit at both ends of the political spectrum, and the challenge facing our “fifth estate” is to stay above those prejudices, and to try to make sure the wider truths are heard. The challenge facing our politicians and leaders is to hear those wider truths, and adjust their prejudices accordingly.

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[SCMP Column] Putting the PR Spin into Trust

January 25, 2016

Oxfam shockingly calculates that the world’s 62 richest business leaders control as much wealth – about US$1.76 trillion – as the 3.6 billion people that count among the poorest half of the world. While the wealth of the top 1% has jumped by 44% in the past five years, the “wealth” of the poorest half of the world has shrunk by 41%. Of the wealth accrued since 2000, half has gone to the richest 1%, and just 1% has gone to the poorest in the world.

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[SCMP Column]Political Eclipse

January 16, 2016

CY’s legacy is not yet set in stone. Like Obama, he has been dogged by global recession, and against this recessionary backdrop has had to wrestle with the awesome centripetal forces of China’s awakening economy – but if he harbours hopes of staying in office to 2022, he must surely harbour hopes that his final years will see an economic upswing that will lift spirits, reduce the xenophobic partisanship of “localist” political forces, and leave him with a creditworthy legacy. That is perhaps why he devoted so much of his mind-numbing two-hour presentation to property, to Hong Kong’s role as the One Belt One Road “superconnector”, and on innovation.

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[SCMP Column] Saving for Old Age

January 09, 2016

The crude arithmetic is simple, but almost always terrifying. If you earn the average Hong Kong household income of HK$24,000 a month, and want to maintain that level of income after you retire, then your savings at retirement will need to be HK$24,000 times 12 months times 20 years – which comes to almost $5.8 million. That is a number that makes most families turn white: it means that you have to save HK$128,000 a year, or just under over HK$10,000 a month for the whole of your working life. What family do you know that earns HK$24,000 a month and can afford to save almost half of it?

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[SCMP Column] Light without Progress

January 04, 2016

The lesson for us in Hong Kong? That 30 years of perpetual haggling over constitutional architecture has disserved us horribly. Our politicians should not measure themselves in terms of progress towards “one man, one vote”, but in terms of improving our health care system, of giving security in old age to our elderly poor, of giving us access to affordable housing, or giving us clean air. Until we start measuring our political representatives – and our government officials – in terms of “performance legitimacy”, then we will get what we deserve – pretentious political posturing, and procrastination. If we want our “one country two systems” arrangement to live beyond 2047, we have to do better than this.


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[SCMP Column] No Consensus Please

January 02, 2016

Without really being sure, I have wondered whether the obsession with “consensus” has its roots in Confucian thought. Whether yes or no, the reality is that there is no place for consensus in politics. I repeat today what I said a year ago during that tracking exercise: “Modern complex societies are riddled with large and perfectly reasonable differences of opinion, and the very essence of democracy is to broker those differences… The concept of democracy is fundamentally founded on a recognition that there can never be consensus – and that to be held hostage to it can only cripple decision making and lead to political inertia.”

To make the tough decisions and compromises that political leaders have to make in the interests of our society, a leader – whether CY Leung, or Barak Obama, or Xi Jinping – has to roll up sleeves, arm-wrestle compromises with different interests, and broker plans that are in the interests of the majority. In a democracy driven by party politics, this messy process happens naturally: political parties build coalitions of support around a compromise policy document – a manifesto – and if they win an election based on that manifesto then two things naturally happen: the government has a mandate to act, even in the face of opposition; and the groups that signed on to the coalition of support that forged the manifesto are bound to lobby in support.

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[SCMP Column] Cartel Conundrum

December 19, 2015

Perhaps the single most important conundrum for me is something the government has always stayed silent on: in a small city market like Hong Kong, how will you define the relevant market? No-one will ever be able to prove abuse of market power if in the first place you can’t define the market in which abuse has allegedly occurred. In a large country like the US or China, defining the market may be easy. But in Hong Kong, this is not so. For example, is Hactl or Cathay Pacific, which handle the huge majority of Hong Kong’s air cargo, capable of abusing local market power if their true competitors are in Singapore, Shenzhen and Guangzhou? Can Hong Kong’s port operators truly be tried for abuse of market power if their competitors are ports in Shenzhen and dispersed across the length of Asia. And could Hutchison Telephone or PCCW be credibly scrutinized for market dominant behaviour when Mainland mobile operators already hover over the local market with customer bases 100 times larger than our local “behemoths” could ever dream of? The work of our competition regulator is likely to be fascinatingly complicated by the increasing “fungibility” of the Hong Kong and Mainland markets.

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[SCMP Column]The Art of Innovation

December 07, 2015

Most business chambers – including most in Hong Kong I presume – would be arguing for tax breaks, subsidies and various cash incentives for bright-idea start-ups. But the data worldwide suggest that regardless of what tax breaks or subsidies you provide, 80-90% of start-ups fail. Therefore, lots of money goes down the drain. Many argue that this is an inevitable fact of life, and governments should shower water on a hundred flowers in confidence that a dozen or so will bloom. Measure the gains from the successful dozen they say.
These advocates have a case, and many governments follow that principle - though the rules they then set for how a bright entrepreneur, might qualify for support seem to baffle and frustrate even the keenest and most creative innovator. And there seems to be a very poor correlation between the amount of funding disbursed in a country, and the level of innovation. A Economist report claimed the best link with innovation was gross R&D spending: “Innovation-led “smart” growth has occurred mainly in countries with a big group of medium to large companies, and a small group of SMEs that is spun out from (them) or universities.”

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[SCMP Column]Tip of the Melting Iceberg

December 05, 2015

With global commodity prices at their lowest levels for over a decade, almost without exception, many of you might dismiss my concern. Oil and coal prices, coffee and sugar prices, soya and wheat prices, are all down 50% to 70% from their post 2000 peaks. But I am not sanguine. The price collapse is a direct result of the global recession that began 7 years ago, and it may still be several years before the global economy begins to recover. But if we assume recovery will begin in earnest by 2020, with consumers in China and then later in India adding literally billions of people to our “stuff” consuming classes, then pressures on these resources will immediately soar. I am still betting that conflicts linked with competition for resources in increasingly short supply will create serious global conflicts long before we begin to pay any serious price for our failure adequately to address the climate challenge.

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[SCMP Column] Gucci Set is Here to Stay

November 30, 2015

On the back of this explosion, the world’s luxury goods industry has flocked into China. Brand names like Louis Vuitton, Chanel, Prada and Gucci have proliferated across China’s top cities. But paradoxically, in spite of explosive sales growth for most of the past decade, these China-based stores have struggled. This is because over 65% of the US$65 billion luxury goods bought by Chinese in 2014 were in fact bought outside China – either during overseas holidays (there were 120 million overseas visits by Chinese last year), or through a shadowy “daigou” network. These “daigou” are people who base in key cities like Paris or Milan, take orders for whatever the Chinese tai tai demands, and then mail the goods back to China below the radar of frustrated tax and customs officials. Fascinatingly, one response has been to go “virtual”, with some luxury goods companies foregoing the posh high-street shop, and focusing all efforts on selling on-line.

The canny Chinese habit of buying tax free overseas has for many years enormously benefited Hong Kong, which is of course normally the first overseas destination for China’s international travelers. But this Hong Kong windfall has faltered – not just because Hong Kong people have proven so xenophobically unwelcoming to Mainlanders in recent years, nor because bankers’ bonuses have withered as 325,000 banking jobs have been shed worldwide – but because so many of China’s increasingly sophisticated travelers are now choosing to do their shopping further afield – in South Korea and Japan, or directly in Europe. Bain predicts that luxury goods sales will contract in Hong Kong by 25% this year. And with this, jobs are being cut, and stores being closed – most recently Coach, TAG Heuer and Burberry.

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[SCMP Column] It's Time to Bridge the Gap

November 28, 2015

But without a Zhuhai bridge, Hong Kong has never been able to perform the same catalytic role for Zhongshan and Jiangmen. The drive from Hong Kong was too long for a factory boss to go and return in a single day. And the task of getting freight from the west Pearl River Delta either by small river vessels, or along traffic gnarled roads was troublesome and uncompetitive.

The bridge to Macau and Zhuhai can be transformative even today for the western PRD – if we can ever get our act together and built it. Cargos could be moved swiftly to the Hong Kong port, and the travel time from Hong Kong would be more than halved.

So why the procrastination? Undoubtedly the task of agreeing construction plans between at least three governments (Hong Kong, Macau and Zhuhai), and sometimes Guangzhou and Beijing too, was always going to be challenging. But the reality is that still today many in our administration have only a half-hearted interest in stronger integration with the Pearl River Delta, even though it is our natural market today and the richest and most dynamic part of a Guangdong economy that is about the size of Spain.

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[SCMP Column] Not Welcome Here

November 23, 2015

And the extent to which this has created wealth for those inside the banking sector can only be imagined. This thought occurred to me last week as I read that Barclays Bank faces new fines of around US$100m for electronic trading abuses – which follows a $485m fine paid in May to New York’s banking regulators for manipulation of forex spot trading. Moody’s says that bank litigation costs since the 2008 crash have reached almost US$219 billion – led by Bank of America which has paid out US$70 billion. As I read these numbers wide-eyed, I ask a single simple question: What on earth were the profits these institutions were sharing amongst themselves before 2008 if they are able now to afford to pay fines of US$219 billion, and still be in business? Financial rape and pillage comes to mind.

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[SCMP Column] World City? Not Any More

November 21, 2015

PwC’s 2015 “Building Better Cities” study*, released this week at the APEC meetings in Manila, should provide a powerful wake-up call for anyone in Hong Kong who cares for our future. This survey of the livability of 28 cities across the APEC region puts Hong Kong a drab 11th, with shocking ratings for culture and “social health”, health and welfare, and environmental sustainability. We might not be surprised to see Toronto and Vancouver up in the top two places, but it is irritating to see us lag behind Singapore (3rd), Tokyo (4th), Seoul (7th) and Osaka (10th).

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[SCMP Column] Hong Kong ignores food security at its own peril

November 14, 2015

While Hong Kong’s fleet is negligible, we nevertheless have a huge stake in the vitality of the South China Sea. Hong Kong is one of the most “food insecure” communities in the world. Over 90% of our foods are imported, and our obsession with seafoods is legendary. We may only have a population of 7.2 million people, but our appetite for fish, crabs and lobsters, and a wide range of shellfish makes us one of the world’s highest consumers of seafoods per capita, and the world’s 10 largest importer of marine products (much of the value of this is accounted for by sharks fin, but that is an embarrassment for another day).

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[SCMP Column] Hong Kong: a feisty city on ‘borrowed time’

November 02, 2015

Today, I have the rare opportunity to begin a new column for the SCMP. In broad terms it will aim to understand and describe the Hong Kong that has been home for over 30 years. It will explore the forces that are changing Hong Kong, both from the outside in, and from the inside out. – hence the name of the column.

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[SCMP Column] The top 10 fixes needed if Hong Kong is to be Asia’s world city

July 02, 2015

This might be a vain hope: too many legislators – shame on them – seem interested to focus on nothing except electoral “architecture”. It is to their eternal shame that they have so neglected the very real challenges that face Hong Kong people, like improved housing, better health care, improved care for the elderly, improved education…

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[SCMP Column]MERS - taking the fear and putting it in perspective

June 17, 2015

A true global pandemic is likely to cull millions – maybe hundreds of millions. For example the Black Death that raged across Europe between 1346 and 1353 killed an estimated 75 to 200 million people. The good news is that MERS is probably not “the one”.

And in the course of research it seems I have discovered something new, which I am calling SYPPS: the Six Year Pandemic Panic Syndrome. Exactly six years ago today, I was writing about panic over Swine Flu (H1N1); and six years before that trying to dampen hysteria over SARS.

Of course six years before that we had those graphic photos of mountains of chickens being disposed of in efforts to snuff out Avian Flu. Gosh, we have had a torrid time since Hong Kong reverted to Chinese sovereignty in 1997.

I know I should not jest over something as awful as a global pandemic – especially since I only recently stumbled upon, and disposed of, the large stock of Tamiflu pills that I panic bought in 2003. But it really does take a good pandemic panic to remind us of how badly we judge the life-threatening risks around us.

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[SCMP Column] Mainland Wife migration flow about to return?

June 04, 2015

My guess – and at this point it is only a guess – is that many tens of thousands of those women who have arrived in Hong Kong since 1995 through the one-way permit process will in the coming decade be strongly tempted to return to the PRD as the ties to Hong Kong loosen. The death of the husband will be key.

So too will the emergence of their children from the Hong Kong school system. The Hong Kong hospital system may still attract them to stay. So too might our rule of law and comparative absence of corruption.

But the desire to be close to ageing parents will be increasingly important. And as communities in the PRD become more prosperous, so Hong Kong’s comparative attractiveness will weaken.

If I am right, and we have reached a migratory tipping point, then a number of positive changes may occur. First, links between Hong Kong and the PRD will strengthen as families buy homes in the PRD while retaining rights to be in Hong Kong. Second, many who find it tough to get good jobs in Hong Kong will have a chance to find better careers. Pressure on Hong Kong’s welfare system will be reduced, as will housing pressures.

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[SCMP Column] Why is Jetstar so keen on becoming a Hong Kong airline

April 08, 2015

What is the prize that so powerfully motivates Jetstar – or its bankrollers, Qantas, China Eastern and Shun Tak - to bleed so heavily and for so long? For low-cost carriers like Jetstar, Hong Kong can offer only lean pickings. Competition is ferocious on almost all routes. Access to landing and take-off slots is a nightmare at any reasonable time of day. As a fast-turnaround, low-cost carrier Jetstar will have no capacity to capture cargo revenues, which so bolster the earnings of full-service competitors operating wide-bodied fleet through Hong Kong. Access to mainland cities (the holy grail for future airlines perhaps) is fraught with delays that take a savage toll on cost control.

In Asia as a whole, just Air Asia out of almost 20 low-cost carriers has in recent years reliably made money. Jetstar’s sister airlines in Japan, Vietnam and Singapore all appear to be struggling to keep their heads above water. And as the sorry plight of the now-bankrupt Oasis Airlines reminds us, the ferocious competition through the Hong Kong hub makes it one of the toughest hubs in the world through which to earn money.

So where is the logic to make all this pain worthwhile? Having sat through the tedium of the ATLA courtroom drama, with Jetstar and its Qantas lawyers pitching barristers against the arrayed objections of Cathay Pacific, Hongkong Express and Hong Kong Airlines, there seems only one thing: the right to sit alongside the Hong Kong government in its many air traffic negotiations, with the government negotiating on its behalf for air traffic rights to international destinations in Asia and further afield.

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[SCMP Column] Polarising media just feeding prejudices

March 11, 2015

Hong Kong’s upheavals are uncomfortable, but they are not difficult to understand, and the causes of unrest are clear. Any youngster joining the Hong Kong workforce since 1998 has felt only stagnant earnings, job uncertainty, an absence of any bright light in the future, and home prices rising up into the unreachable stratosphere. By now, those youngsters will be in their mid-30s, and will be unable to paint any optimistic scenario for the decades ahead – for themselves, for their parents, or (if they have them) for their children.

Our task is not to punish and corral those at the heart of current protests, but to start building a strategy that restores a sense of purpose and hope. Most likely, our futures are going to be entwined with those of our Pearl River Delta neighbours, so the sooner we see them as neighbours and not enemies the better. The polarising media must meanwhile realise the harm they are inflicting on a community that remains still today among the most cohesive, cooperative and tolerant in the world.

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[SCMP Column] Hong Kong has much to gain from a higher minimum wage

February 24, 2015

For Hong Kong too, the message should be clear. This is a high-price, high-cost economy which will never win a game based on low-wage competition. If a company depends on such low wages, it has no place in Hong Kong, and should migrate elsewhere. A higher minimum wage will do Walmart no harm. And it will do Hong Kong no harm. On the contrary, slightly more youngsters might then one day be able to afford their own home.

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[SCMP Column] Stop consulting, just do it!

January 13, 2015

In light of the sobering lessons of the recent months’ Occupy Central activity, our leaders’ interest in inequality and youth is telling. In nine years in office, Tung mentioned the word “inequality” just twice in his policy address. Tsang paid little more attention to the problem – except in 2011 when he used the word nine times as he wrung his hands about improving people’s well-being, reflected on the unaffordability of housing, and introduced his “My House Purchase” scheme.

In his three policy addresses, amounting to a total of more than 50,000 words, Leung has never used the word. If any lessons have been learned from the alienated youngsters at the heart of the Occupy demonstrations – and from the embarrassing influence-buying revelations of the Rafael Hui Si-yan corruption trial – then surely this must change, and fast.

Tung by and large ignored the issue of youth – except in his 1998 policy address when he used the word 18 times as he talked about raising education spending, committed the government to whole-day schooling for all, funded the introduction of information technology in schools, and established the Employee Retraining Board.


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