Hong Kong's Policy Address

Thursday, January 19, 2017 // Written by Enzio von Pfeil

The Chief Executive's final policy address was conspicuous in what it omitted


Hong Kong’s Chief Executive CY Leung has given his final policy address before he retires in 5 months’ time. In his speech in which he argued that all his election commitments had been implemented, he set out a range of policy initiatives covering housing, livelihood issues and the environment.

In a widely-anticipated decision, he announced that the controversial MPF offset mechanism, whereby employers can pay redundancy and severance costs out of employees’ pension contributions, will be gradually phased out. However, no start date was provided for its implementation. In addition, the government will lower the minimum amount of severance and long-service payments that employers must pay.

CY Leung, also announced several measures to boost the "Belt and Road" initiative, aimed at fostering closer ties between Hong Kong people and those living along the Silk Road. This included relaxing immigration requirements and more student exchanges.

He made available another HK$500m to subsidize technology projects saying that HK was lagging behind the mainland in innovation and technology.

He also proposed an exchange of land at country parks to address the chronic housing shortage. He plans to include more land with high ecological value into country parks in exchange for developing on the periphery of parks that have relatively low ecological value.

  1. Implementation?
    1. I have my doubts as to whether these things really will be implemented: he is leaving office, after all. It’s like Obama giving a policy address just ahead of Trump’s inauguration!

                                         i.    Who is to say that his :”initiatives” won’t be overturned by

  1. The incoming CE
  2. LegCo?
  3. Instead, Leung was more in the business of patting himself on his own back for his tepid policy initiatives involving housing, livelihood and the environment. 

                                         i.    But the end-user, the little guy, is not feeling any positive effects; hence our “anger” votes here, aka Occupy Central.

  1. MPF offset mechanism
    1. Phasing-out.  The emphasis is the word “gradual”.  Everybody seems to be so scared of one another in HK!  Why not put in place a bold time table for phasing it out?

                                         i.    Instead, he cannot even provide a start date for its implementation!

  1. Severance and long-service pay.  By lowering this, he has negated the positive impact of diluting this offset mechanism.
  2. Maldistribution of income. Thus, by not providing a clear implementation timetable and by lowering severance and long-service payments, he is contributing to our ever-increasing income divide.

                                         i.    è The result has to be even greater anger among HK’s working population at large.  

  1. Belt and Road initiative
    1. Effective measures?  I hardly think that relaxing immigration requirements and increasing student exchanges is going to make us more competitive, do you?
    2. Contracts awarded.  It’s great that some of our leading companies have been awarded contracts; the question is whether “trickle-down” economics is going to work so that
    3. èEmployment. peoples’ livelihoods are improved by virtue of increasing employment opportunities in HK herself.
  2. Subsidizing technology projects
    1. Effectual?.   We are NOT a tech hub and never can be!

                                         i.    Our education system is not training kids for employment, for problem-solving and technical skills; instead, it relies on pleasing the teacher and rote – learning.

                                        ii.    Where we lag the mainland. We lag in so many ways, ways that make us uncompetitive:

  1. Anachronistic cartels and closed labour shops, resulting in uncompetitive cost structures and lack of choice for the consumer
  2. Rotting standard of English. How on earth can we compete globally if our future labour force cannot even speak the simplest of English, and
  3. Wobbly legal system. By wasting money on white elephants, the government is not directing money which is crying-out for funding, such as  increasing the attractiveness of employment in our judiciary.
  4. è the result is that we are losing out in competitiveness big time via
    1. An anachronistic educational system in which educators don’t talk with employers
    2. An uncompetitive cost structure, and
    3. A legal system that is hollowing-out from the inside on account.
    4. Thus, spending need not be increased, just re-directed to more effective projects!
  5. Housing in country parks.
    1. Surplus exists. But we have 300,000 empty flats already!
    2. Implementation. The measure is so fuzzy that it won’t even get past first base, what with HK’s powerful vested interests surely opposing such measures.


Incoming US commerce secretary Wilbur Ross has labelled China the “most protectionist” major economy in the world. That follows President Xi Jinping’s opening address at the Davos World Economic Forum where he defended free trade and globalisation. Mr. Ross told the Senate Commerce Committee that “they talk much more about free trade than they actually practice.”

However, Mr Ross said the Trump administration’s first focus on taking office would be the North America Free Trade Agreement between the US, Canada and Mexico. He said Mr Trump would start renegotiation of the pact within days of taking office.

That news has sent the Mexican peso tumbling on foreign exchange markets close to new record lows

  1. Labels.  Ross is just towing Trump’s dangerous party line, one that will result in ugly and uncommercial trade wars.
  2. NAFTA.  With Trump’s and Ross’s arrogance of ignorance, it is likely that they haven’t a clue as to just how intricate and time-consuming a re-negotiation will be.
    1. The Apprentice. Trump acts as if all of his Cabinet and all foreign governments wil be his Apprentices in his reality TV show conducted out of the White House.

                                         i.    Who’s the real Apprentice?  Trump or his Cabinet and foreign powers?

                                        ii.    He will be taught lessons himself….

  1. Backfirings. With the Mexican peso tumbling even more, surely that has made America LESS competitive vis a vis Mexico – quite the opposite from Trump’s intended effect…
You can listen to the RTHK podcast here. Enjoy!


Share this post:


The information, including but not limited to, text, graphics, images and other material contained on this blog are for informational purposes only and do not necessarily reflect the views or Enzio von Pfeil. The purpose of this blog is to promote broader understanding, knowledge and awareness of various financial and economic topics. It is not intended to be a substitute for regulated professional investment advice. Always seek the advice of your a regulated investment advisor with any questions you may have regarding your specific investment needs or concerns.

Enzio von Pfeil does not recommend or endorse any strategies or ideas mentioned in this blog. Reliance on any information appearing in this blog is solely at your own risk.


Any information provided to you by us, including any promotional material such as photographs, written descriptions, any plans or models, any income estimates or projections (“Information”) have been provided to us by other sources and although we aim to perform due diligence on all information we provide to our Blog subscribers, the Information is provided for general purposes only, we cannot guarantee the accuracy of the Information and we do not make any representations, either express or implied, as to the accuracy as to the Information. We recommend that our Blog subscribers undertake their own due diligence in relation to the asset they are considering purchasing, including seeking independent legal and financial advice in relation to their own financial objectives and personal circumstances, prior to signing any agreement or contract with any third parties.

No representation or warranty is given as to the accuracy, likelihood of achievement or reasonableness of any figures, forecasts, prospects or returns (if any) contained in the message. Such figures, forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies. The assumptions and parameters used by www.enziovonpfeil.com (evp.com) are not the only ones that might reasonably have been selected and therefore evp.com does not guarantee the sequence, accuracy, completeness or timeliness of the information provided herein. None of evp.com, its members or any of their employees or directors shall be held liable, in any way, for any claims, mistakes, errors or otherwise arising out of or in connection with the content of any form of communication, documentation included in the Blog, via e-mail or any other form of communication.

You are reminded that the content is for personal use and general information only. Under no circumstances is the content intended for and hence the content should not be regarded as an offer or solicitation or recommendation to dispose/sell, an offer or solicitation or recommendation to subscribe in, nor an offer or solicitation or recommendation to buy/acquire and under no circumstances should the content be constituted as provision of any recommendation or investment advice on any securities, investment products, investment arrangements and any other form of investments or legal, tax or other professional advice and therefore should not be relied upon in that regard for making any decision. Unless specifically stated, neither the information nor any opinion contained herein constitutes as an advertisement, an invitation, a solicitation, a recommendation or advice to buy or sell any products, services, securities, futures, options, other financial instruments or provide any investment advice or service by evp.com.

Unless stated otherwise, any opinions or views expressed in this communication may not represent those of evp.com. Opinions or views expressed in this communication may differ from those of other departments or third parties, including any opinions or views expressed in any research issued by evp.com.

Any e-mail and any accompanying attachments are not encrypted and cannot be guaranteed to be secure, complete or error-free as electronic communications may be intercepted, corrupted, lost, destroyed, delayed or incomplete, and/or may contain viruses. EvP.com, therefore, does not accept any liability for any interception, corruption, loss, destruction, incompleteness, viruses, errors, omissions or delays in relation to this electronic communication. If verification is required please request a hard-copy version. Electronic communications carried within the evp.com system may be monitored. Any communication or message in email form or otherwise may contain confidential information. Any use, dissemination, distribution or reproduction of the relevant information outside the original recipients of any messages  is strictly prohibited. If you receive a message by mistake, please notify the sender by reply email immediately and permanently delete the emails and its contents. Unless otherwise stated, any communication provided is solely for information purposes only.