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

CE POLICY ADDRESS

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.

TRADE

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!

 

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