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Friday, October 27, 2006

GOVERNMENT ARROGANCE
The perils of political petulance


STEPHEN VINES
   
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   Petulance is a familiar but unattractive trait in the behaviour of young children. When governments adopt it as a political tool, alarm bells start ringing. They were ringing last week as the government responded to the overwhelming vote in the Legislative Council against the proposed goods and services tax.
It is rare for all parties in the legislature to agree on anything, and when they do it might be assumed that they have good reason. But this was not the view of Financial Secretary Henry Tang Ying-yen: he could hardly wait to accuse honourable members of wanting to stifle debate on the GST and failing to understand the issues.


Mr Tang has been rushing all over town shaking his head and berating the GST's opponents for their lack of understanding and wilful refusal to accept the government's arguments.

No one should criticise a government minister for arguing his case. But Mr Tang and his administration colleagues tend to spend less time explaining the case for the new tax and far more on questioning the motives of its opponents. Were this an isolated case of government behaviour, the accusation of petulance would be hard to sustain, but this is not so.

Look at what happened after the chief executive's constitutional reform proposals were defeated, in December. Not only did Donald Tsang Yam-kuen lash out at its opponents as irresponsible, he went on to say that if they would not accept his plans he was in no mood to put forward any others.

Much the same kind of behaviour was seen in the Tung administration during the demise of the Article 23 legislation on national security. The bill's critics were roundly accused of both ignorance and opportunism - even though the overwhelming evidence suggested that they knew exactly what was at stake.

The great unwashed, sometimes known as the general public, are supposed to be the targets of government persuasion campaigns. Indeed, Mr Tsang speaks of the need for "consensus" with such frequency that it might almost be assumed that he means what he says.

Yet, the suspicion lingers that what he really means by consensus is agreement with the government. When that is not forthcoming, the public is patronisingly told that it simply does not understand the issues.

Hardly surprisingly, this does not go down too well. And political leaders often underestimate the public's acute sense for detecting petulance in their behaviour. Hong Kong's political elite is far from having a monopoly on this kind of behaviour: it is found throughout the world.

In Britain, for example, the leadership of John Major was arguably more damaged by his appearance of petulance than by the policies he was pursuing.

The same may be said of Al Gore's controversially ill-fated campaign for the US presidency. That was laid low not just by hanging chads, but to a greater extent by a feeling that many Americans did not want a petulant leader in the White House.

Both Mr Major and Mr Gore are essentially decent people who are said to be perfectly amiable in private. Yet, up there on the public stage when things start going wrong, they showed another side of their personalities - one that alarmed the public.

It must be assumed that Mr Tang is also a perfectly decent person. But that attribute is severely undermined when he dons his GST cap and confronts sceptics who simply cannot accept his arguments.

The root cause of this unacceptable behaviour generally lies with the arrogance of power. Mr Gore seemed unable to believe that an upstart frat boy and ex-governor of Texas could win over voters in such big numbers. Mr Major, who clawed his way to the top of British politics from humble origins, was dismayed by his grander - and often dimmer - colleagues who undermined his policies.

Here in Hong Kong, Mr Tang has armed himself with fancy PowerPoint presentations to sell the GST, yet keeps meeting resistance from all sorts of people - some of whom opt for just low-tech scribbles on a scrap of paper to present their response to the minister's arguments.

Stephen Vines is a Hong Kong-based journalist and entrepreneur.



[url]http://focus.scmp.com/focusnews/ZZZ9T1Q3PTE.html[/url]

Tuesday, October 31, 2006

EDITORIAL/LEADER
We must be told why ferry plan hit the rocks



   
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   The relevant figures suggest that a ferry service between Tuen Mun and Macau would make good social and business sense. Why it has failed to launch after repeated delays is a question to which the parties concerned owe the public an answer.
The service was first scheduled to begin in December 2004. For the 3 million people of the northwestern New Territories, it would have greatly cut travelling time to Macau, as they would no longer need to spend an hour going to Central or Tsim Sha Tsui, where existing services depart. Also, sailing time from Tuen Mun to Macau is 20 minutes shorter than the one-hour ride from those two points.

  
But operator Hong Kong North West Express failed to launch the service as scheduled. The company has since changed hands and is now controlled by Greek Mythology (Macau) Entertainment Group Corp. As late as July, it was very upbeat about setting sail to Macau in September. Once again, however, it has failed to honour its pledge.

The operator has refused to explain the failure. But a source close to the company said its boats had not been given permission to dock in Macau because of insufficient berthing space. It also suggested that a solution might lie in the company finding a new investor. The Macau Port Authority has confirmed that it had not given berthing permission to North West Express, but would not say why. The Hong Kong government would only say that it was liaising closely with the operator over the matter.

No one should underestimate the difficulties of launching a cross-border ferry service, especially on a route that is already serviced by two established operators. But the lack of transparency by the parties concerned is frustrating, as it bars public discussion on why a significant undertaking to improve cross-border transport services has hit the rocks.

For historical reasons, ferries bound for Macau and other ports in the Pearl River Delta estuary now depart from Central and Tsim Sha Tsui. For residents of the New Territories, however, these two locations have never made geographical sense. A cross-border ferry terminal in Tuen Mun will go a long way towards meeting demand in the region. Despite its setback in serving Macau, North West Express is set to launch a new service from Tuen Mun to Zhuhai on Friday. Hopefully, it would be able to provide services to other PRD ports over time.

Perhaps contractual arrangements with existing operators have barred the Macau authorities from allocating berthing slots to a new operator. But they owe the people of Macau an explanation as to how berthing rights at the terminals are parcelled out and how new operators will be accommodated. The Macau government should know that the interests of the city are best served by facilitating the arrival of the largest number of visitors, regardless of what boats they take.


[url]http://focus.scmp.com/focusnews/ZZZJZ7BYSTE.html[/url]

Wednesday, November 1, 2006

EDITORIAL/LEADER
HK consumers need to know what they're eating



   
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   The American fast-food firm KFC's decision to stop adding trans fatty acids, commonly known as trans fats, to its menu items is welcome proof that even the biggest profit-driven corporations are willing to put their customers first. It is a lesson Hong Kong's government and companies would do well to take note of and follow.
KFC's decision did not come off its own bat; pressure groups had been making the call for years and rival firm Wendy's took the plunge in June. There was also the scientific evidence: artificial trans fats substantially increase the risk of coronary heart disease.


Denmark effectively banned use of trans fats in 2003 when it became the first country to introduce laws regulating the sale of many foods containing them. As of January 1, companies in the United States have been required to label their presence in food produced or imported and the European Union is looking into legislation.

Restaurants in the US are not required to indicate the presence of trans fats in the food they sell, but concern about the health effects of food has prompted companies to be transparent - or suffer a loss of business. In the US, for example, a McDonald's fast-food customer can ask for a nutrition information sheet before making a purchase.

Such changes do not make the food more healthy. Rather, they merely give customers information to help them make healthier choices in what they eat - surely essential as the world is experiencing an epidemic of obesity and related diseases due to poor eating habits.

Our government seems to realise this, having promptly put in place laws requiring food producers and importers to label the ingredients on packaged goods. Before the end of the year, legislators will begin debate on a bill requiring nutrition facts to also be included. But if the law is passed, companies will still have a two-year grace period before they are required to comply.

The government's model on food safety is the EU, which is widely seen to provide an international standard. As with so much legislation here, however, there is a danger that pressure from the business community will cause the requirements to be watered down - or even ignored - as with the case of genetically modified (GM) food. The mainland, Japan and EU nations require mandatory labelling of GM food, putting public safety ahead of corporate profits. Hong Kong has, like the US, failed to implement this requirement.

Such an arbitrary approach must not be allowed when it comes to food labelling. It is in the government's interest that the health of the community is foremost, and information and transparency are key in this regard.

If KFC, a company not required by law to be open about its ingredients, can have a conscience on this matter, there is no reason why our lawmakers cannot also put the health of the community first.


[url]http://focus.scmp.com/focusnews/ZZZLXB7AYTE.html[/url]

Thursday, November 2, 2006

EDITORIAL/LEADER
Sino-US co-operation vital on North Korea



  
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   China's policy of non-interference in another country's internal affairs has served it well. It has been instrumental, for example, in securing resources deals with other nations that could have been derailed if it had taken an unwelcome interest in humanitarian issues.
That is a delicate balancing act. North Korea pushed it beyond its limits by conducting a nuclear test in defiance of international opinion and warnings from Beijing. China's rare show of anger with its old friend and neighbour and support for UN sanctions was evidence of that. Non-interference does not extend to nuclear proliferation on China's doorstep by a secretive, economically dysfunctional dictatorship that has turned its back on international agreements.


Thanks to some deft diplomacy backed up by pressure on Pyongyang, Beijing has emerged from this crisis smelling of roses. Within three weeks of the atomic explosion that shook the world, it has brokered meetings between United States and North Korean negotiators, and agreement from Pyongyang to return, without preconditions, to the six-nation nuclear disarmament talks.

US President George W. Bush has thanked China for its mediation, and chief American negotiator Christopher Hill said close co-operation between the US and China had been a key factor. At least something good has come out of a serious threat to stability and peace. An improved diplomatic working relationship between Washington and Beijing can only make the world a better place.

As Washington acknowledged with a slight but crucial relaxation of its inflexible approach to North Korea, China, as the North's economic lifeline, was in the best position to force Pyongyang back to talks. There is debate about how much significance to attach to statistics showing China sold no crude oil to North Korea in August. The apparent cut-off, after missile tests in July and before the nuclear test, is highly unusual. If repeated, it would cripple the North's economy.

More co-operation between Washington and Beijing adds a new dimension to the negotiations that lie ahead. The talks have already dragged on for three years. Last September, they resulted in a framework agreement under which the North would abandon its nuclear weapons programme in exchange for a range of diplomatic, economic and energy incentives. But the North disavowed it, citing financial sanctions imposed by the US, and the talks collapsed. It may be a hopeful sign that North Korea reportedly insists that this agreement should be the main focus of the renewed talks.

When the talks resume, Pyongyang may be expected to demand recognition as a nuclear power, and try to negotiate from a position of strength. The other five nations, which also include South Korea, Japan and Russia, must make it clear that this is out of the question. North Korea expelled International Atomic Energy Agency inspectors three years ago and withdrew from the Non-Proliferation Treaty. The least that should be expected now is that it agrees to scale down its nuclear activities and readmit inspectors. Given Pyongyang's record as an unreliable negotiating partner, the talks may be expected to run into deadlock sooner rather than later, perhaps on this issue.

On the sidelines of the six-nation talks, the US has agreed to discuss its sanctions against North Korea's international banking operations, in particular the freeze on funds in Banco Delta Asia, the Macau-based bank accused of helping the North launder the proceeds of drug smuggling and other illicit activities, and to pass counterfeit US$100 bills printed by the Pyongyang government. The US may be expected to take a tough line. After all, state-sponsored undermining of another nation's currency with counterfeit notes is an uncommonly hostile act.

Clearly, if North Korea is to be convinced that its negotiating partners are united and that disruption of the talks will only delay the lifting of UN sanctions, diplomatic co-operation between Washington and Beijing remains a key factor.


[url]http://focus.scmp.com/focusnews/ZZZ8MCX9YTE.html[/url]

Friday, November 3, 2006

GOVERNMENT INTERVENTION
Ashamed of its own achievements


STEPHEN VINES
   
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It was fortunate that Hong Kong government officials never thought of calling up some elderly American academics practising the religion of the free market when a massive fire swept through the Shek Kip Mei squatter camp on Christmas Day, 1953. Had they done so, they would have been assured that the 53,000 left homeless could look to the free market to find shelter.
Instead, it was decided that the state had better do something, so Hong Kong's first public-housing estate was built on the ruins of the squatter area. Now the ailing estate is about to be torn down. But public housing still provides homes for about half of Hong Kong's people - a far higher proportion of state housing than in most so-called welfare societies.

The presence of such an enormous public housing stock puts the current debate on the limits of state interventionism in some perspective. Chief Executive Donald Tsang Yam-kuen caused alarm in September by declaring that the government had abandoned its long-standing policy of "positive non-interventionism", and now favoured the principle of "big market, small government". As ever, the chief executive was being both honest and disingenuous.

The truth is that positive non-interventionism was never practised in a place that housed half its citizens in public-housing estates; where the government held a monopoly on land ownership; and was forever devising new schemes for state investment in everything from theme parks to exhibition halls. So it was just as well that Mr Tsang came clean on this point.

Yet, he only partially came clean. That's because he presides over an administration that has more big-government reflexes than most of its colonial predecessors. This is not always a bad thing. But fear of criticism from the true believers in free markets prevents Mr Tsang and his colleagues from making a coherent case for where intervention is appropriate and where it is not.

The demise of the Shek Kip Mei estate provides an opportunity to review these arguments. The myth about its birth is that it grew from a genuinely humanitarian response to a tragedy. But a new work by Alan Smart - The Shek Kip Mei Myth: squatters, fires and colonial rule in Hong Kong 1950-1963 - effectively destroys this. Professor Smart shows that the government was initially reluctant to do anything about the squatters' plight. It finally acted out of concerns for political and social stability.

Moreover, as the public-housing programme developed, it had the tacit support of Hong Kong's tycoons. They saw that, if the free market dictated housing prices, they would have to pay a lot more in wages. This highlights the big, dirty secret of the free-market debate: namely, that most actual market participants - as opposed to academics and think-tank members - are pragmatic enough to see the virtue of state intervention, especially where their own interests are concerned.

And there is a case to be made for the state to have a role in economic development, and even more so in social stability. This is why people like me, who basically believe in the virtues of the free market, are also aware that few markets are truly free and that the absence of state interventionism is far from being a panacea.

Why can't the government be proud of where it has intervened to good effect? The provision of housing is nothing to be ashamed of, even if the programme may have outlived its usefulness. Similarly high levels of health care provision are to be admired, as is universal access to primary and secondary education.

Yet government leaders are coy about proclaiming the merits of anything that looks like welfare-stateism. They fear that such proclamations could provoke rebukes from well-heeled professors in American Ivy League universities. But maybe they should get out more, possibly visiting places like Shek Kip Mei - where the difference between state interventionism and?inaction is the difference?between shelter and home-饊essness.

Stephen Vines is a Hong Kong-based journalist and entrepreneur.



[url]http://focus.scmp.com/focusnews/ZZZO1GX9YTE.html[/url]

good job, thank you.

:reading: :reading: :reading: Thank you. :applause:

Monday, November 6, 2006

EDITORIAL/LEADER
Why executing Hussein is not the answer



  
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   The death penalty handed down to former Iraqi president Saddam Hussein will, understandably, seem like justice to his many victims and critics. However, one of the aims of the trial should have been to help heal the wounds his regime caused. Sadly, the ruling will not achieve such an end, given the manner in which it was arrived at.
Nor is executing the ousted dictator going to move the strife-torn country forward. Instead, it will only deepen the religious and political rifts preventing the nation from finding its post-Hussein feet.


Putting Hussein on trial was never going to be an easy process; the ruthless manner in which he had clung to power through more than two decades of rule was well documented and no Iraqi could be left with an unbiased opinion. That the US, which had ousted Hussein, was in the background of every decision made by the interim government muddied the waters of impartiality. The circumstances were not ideal as conflict was raging, but putting the past behind seemed imperative to many Iraqis. Still, a viable plan was formulated after the ousted leader's capture in which he would be tried under international law by a special Iraqi court.

If the trial had been carried out as promised, objectives could have been achieved; as it is, the proceedings were so flawed they made a mockery of the judicial system, and in the process, the government's ability to forge a united Iraq has been compromised.

Political interference, a lack of court impartiality and inadequate protection for defence lawyers and witnesses marked the proceedings. Each time a lawyer was assassinated, there should have been cause to evaluate whether proceedings should continue. Instead, the court went about its business as if nothing had happened.

The original chief judge was replaced on the pretext that he was unable to maintain order. True, Hussein had become adept at disrupting proceedings, but the new judge was perceived as overly US-friendly.

Throughout, politicians commented on proceedings. After yesterday's verdict, before an appeals process had even begun, their biased views were given freely. Prime Minister Nouri al-Maliki's spokesman was quick to weigh in: "This is the least that Saddam deserved because his crimes were great. No further punishment was possible." Mr Maliki is from Iraq's Shiite Muslim majority, which was stripped of many rights under Hussein, a member of the Sunni Muslim minority. Rivalry between Shiites and Sunnis is central to the insurgency threatening the country's future, and such remarks do nothing to bring about calm. Making Hussein a martyr by executing him would only further inflame passions.

There is a chance for hope, though: through a properly conducted appeals process, the injustices of Hussein's trial can be corrected. For the judicial system to do otherwise will be to ignore one of the basic foundations that the fledgling government claims to be so willing to build: a free and fair society.

That process should begin with a rethink of sentencing of Hussein and one of his co-defendants to death by hanging. While the execution of the former leader will be full of symbolism for the millions of Iraqis victimised by his regime, and in line with Muslim judicial practices, it does not establish a good precedent. Human life is foremost under international law. Execution should not be a sentencing option.

There is no doubt about the brutality and excesses of Hussein's rule. The crimes against humanity charges he was found guilty of and sentenced to hang for are the most serious that can be brought.

But no matter how grave the charges, a fair trial - which, as promised, meets international standards - has to be the basic principle followed by all courts. Hussein has clearly not been given such a trial and without amends, Iraq's efforts to move forward will be jeopardised.


[url]http://focus.scmp.com/focusnews/ZZZC0FSX1UE.html[/url]

Tuesday, November 7, 2006

EDITORIAL/LEADER
Problem of assaults on trains must be addressed



   
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   Dozens of women file official complaints each year about being indecently assaulted on our trains. The problem is an unfortunate reality in many of the world's cities, particularly during rush hours. But whereas authorities elsewhere have taken concerted action to prevent the activities of gropers and flashers, here there is little noticeable deterrence.
Anecdotally, the 74 reported cases last year and the 32 in the first nine months of this year are the tip of a far wider problem; a survey by one women's group in 2004 showed that two of every three women interviewed who used public transport claimed to have been indecently assaulted. Such difference in figures is well known to police: crimes of a sexual nature too often go unreported.


Yet despite the matter being of public concern since the 1990s, the only sign of action are posters in KCR ticket areas urging victims to report incidents. (The scheme has been discontinued by the MTR Corp, which had posters on platforms, but never allowed them in trains, where the crimes are committed.)

Stridently pushing such a programme has an obvious downside: too many posters in prominent places gives the impression that our train systems are rampant with gropers and women may be scared off. Nonetheless, women should feel as safe as men on public transport and the issue needs to be taken more seriously.

One concern group has suggested women-only carriages, a scheme that has already been introduced with mixed results in other places such as Taiwan, Japan, India, Mexico and Brazil. India's biggest city, Mumbai, has gone a step further by having four women-only trains scheduled each day on some lines.

Hong Kong is a relatively safe city and the scale of the problem here is not as bad as elsewhere; Tokyo, for example, reported 2,137 incidents of women and girls being groped or the subject of other lewd behaviour while travelling on trains last year, from which 1,853 men were arrested. New York police in June staged an undercover operation to stamp out rampant sexual harassment on the city's subway, arresting 13 men in 36 hours. Measures such as those taken in New York are extreme and may not be necessary here. But without properly knowing the real concerns of women commuters, it is impossible to formulate an effective strategy.

What is paramount, however, is that commuters should be able to travel without fear. A survey is clearly needed to gauge the true scale of the problem and when results are known, firm action taken. This may mean increasing penalties and shaming offenders who are caught, installing better surveillance equipment or even providing women-only carriages.

In the meantime, efforts by the government and transport companies to increase awareness must be stepped up. There cannot, under any circumstances, be any shying away from such a matter.


[url]http://focus.scmp.com/focusnews/ZZZR1WL47UE.html[/url]

Wednesday, November 8, 2006

EDITORIAL/LEADER
More cash needed to ward off desert threat



   
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   The world remains torn between the politics of economic development and dire predictions of global warming if greenhouse emissions are not reined in.
This dilemma was captured last weekend at China's summit with African nations in which generous no-strings economic assistance was offered to help secure the oil and other resources that China needs to fuel economic growth.


It is not uncommon to read of oil and gas deals that seem to guarantee jobs and prosperity, and the next day of a climate-change scenario in which rising oceans drive populations back on an environmentally stressed Earth.

The focus of the dilemma has shifted to the United Nations climate conference in Kenya, at which signatories to the Kyoto treaty on limiting greenhouse emissions will try to agree on the next steps to combat the worst effects of climate change. Warnings of global warming and climate change evoke a range of emotions from scepticism to a feeling of helplessness. Desertification does not get the same reactions. But it goes to the heart of climate change, as is evident from today's report on a smaller UN conference in Israel on desertification - or the spread of arid land.

Why Israel? Because it is recognised as a leader in innovative development of dry lands. But there is another reason. In the words of an official of the UN Convention to Combat Desertification, if current climate scenarios continue, conflict in the 21st century will be over water, not oil.

Indeed, China's vice-minister for water resources says the mainland looks set to use 89 per cent - if not all - of its water resources by 2030.

Deserts comprise about 18 per cent of the mainland's land area, and desertified land another 4 per cent. Northwestern deserts are advancing south and east at a rate of 3,650 sq km a year. Cultivation, grazing, deforestation and irrigation, and now a severe drought consistent with climate change, have helped giant dunes advance, forcing people to move. The UN has said 400 million Chinese live in areas threatened by desertification. Unless the trend is reversed, millions of people could be on the move in coming years, looking for new homes and livelihoods.

The deserts have given rise to another threat every spring across northern China, North and South Korea, Japan and sometimes even the west coast of North America - dust storms. Sand and dust carried by Siberian winds, often coated with industrial pollutants trapped in the atmosphere, are depositing grit that is causing economic damage and affecting the health of tens of millions of people.

The central government must allocate greater funds to preventing desertification and ensure they are effectively used. Sharing the knowledge gained with African nations could be a precious reward to that continent for helping fuel China's economic rise.


[url]http://focus.scmp.com/focusnews/ZZZ51RL47UE.html[/url]

Thursday, November 9, 2006

EDITORIAL/LEADER
Challenge now begins for Margaret Chan - and China



   
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   Margaret Chan Fung Fu-chun's achievement in being nominated as director-general of the World Health Organisation says much about the growing diplomatic muscle of China. Her personal attributes, especially the work she has done since joining the organisation, clearly played a part. But Beijing's strong support for Dr Chan was the crucial factor. The central government was determined to install its candidate as chief of this increasingly important international organisation.
China rightly saw the WHO opening as a golden opportunity and mounted an impressive campaign to achieve its objective. The timing of the Sino-Asean and Sino-African forums held over the past week may not have been coincidental. They provided a good chance for the leadership to quietly lobby for Dr Chan.

  

Following her expected confirmation today, Dr Chan will have a tough task ahead to build her credibility. As a public health worker who has spent most of her career in Hong Kong, her international working experience was the weakest of the candidates. It was only three years ago that she was plucked by her predecessor, South Korean Lee Jong-wook, to serve as one of the WHO's assistant directors. Few would have thought his unexpected death in May would catapult her to the top job.

Dr Chan must show she is capable of spearheading the WHO's efforts to achieve its mission - attaining the highest possible level of health around the world. Apart from demonstrating professional competence, it is essential that she makes good on her pledge to be independent. China's relationship with the WHO has not always been easy and transparency has been a key issue. Dr Chan must show that she is scrupulously transparent.

She must also work for the interests of all peoples, even though her support in the election has mainly come from China's friends in the developing world.

At a time when some of the world's greatest health threats are communicable diseases, Dr Chan's experience in combating bird flu and Sars in Hong Kong is her greatest asset. But although her professionalism caught the eye of Dr Lee, her performance during those difficult times was not flawless. Serious questions were raised about her handling of the outbreak. The reaction in Hong Kong to her elevation is, therefore, understandably mixed.

It is to be hoped that the tough, hands-on experience was a learning process for Mrs Chan that has boosted her ability to handle future crises, wherever they occur.


Securing the top job is a great achievement that shows what Hong Kong people are capable of. Hong Kong's return to China in 1997 has opened up new opportunities. But the real challenge now begins and the biggest test is for China. The country used its diplomatic muscle to secure the position for Dr Chan. Now it must show that it is up to the task by displaying a degree of transparency on health issues that too often has been lacking.


[url]http://focus.scmp.com/focusnews/ZZZ0K2M47UE.html[/url]

Friday, November 10, 2006

EXCHANGE FUND
Asking the 'wrong' questions


STEPHEN VINES
   
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   Every time Joseph Yam Chi-kwong, the chief executive of the Hong Kong Monetary Authority, announces the results of the Exchange Fund's investment earnings, I am uncomfortably reminded of a visit to a state-run steel mill in Hanoi.
The visit took place almost two decades ago, when Vietnamese authorities were trying to persuade a visiting journalist that the economy was in great shape. So I was ushered into a drafty meeting room and shown graphs proclaiming ever-rising steel production.


I am no steel expert, but I do understand that it's impossible to produce steel when the furnaces are shut down, as they were. However, the room was full of charts telling another story. The earnest official designated to dazzle me with figures said that production had doubled over the past year.

So, how many tonnes of steel did you make last year, I asked? Twice as many as the previous year, came the reply. Yes, but how many actual bars of steel are we talking about, I persisted. I was sternly informed that this was the wrong question. Mr Yam was lucky not to be asked any "wrong" questions on Monday, when he reported to lawmakers the third-quarter investment earnings of the Exchange Fund - the reserve backing the Hong Kong dollar. He, too, has a way with figures and had a great story to tell. He said earnings were up 79 per cent on the previous year and, as a result, a massive HK$67.8 billion was winging its way into government coffers.

Sounds good, does it not? Certainly, it's a better story than the one which says that the HKMA's great investment managers secured a paltry return of just under 6.3 per cent, a figure not mentioned on Monday. But Mr Yam conceded that the fund may not even manage to do that well by the end of the year.

Getting detailed information on how the fund operates is far more difficult than gaining the same amount of information about a privately managed mutual fund that is open to the public. Yet the Exchange Fund contains the public's money.

We are told that 77 per cent of its assets are invested in bonds, while the balance goes to the stock market. In the first three quarters of this year, the average return for bond funds ranged between 5 and 7 per cent. That places the HKMA in the middle of investment returns achieved by its private-sector counterparts.

However, a quarter of the Exchange Fund's investments are in equities, which have preformed far better. The bulk of these equity investments are in the Hong Kong stock market, which rose by some 15 per cent between January and September.

This suggests that even the dimmest fund manager should have managed something better than a single-digit increase in earnings.

And the record shows consistent underperformance by Hong Kong's custodians of the public purse. Last year, the Exchange Fund secured an underwhelming 3.1 per cent return; the year before, it was 5.7 per cent.

Yet every year (with the exception of 2004) the HKMA boasts of beating the benchmark. What, exactly, is the benchmark? The authority seems unable to say, referring inquirers to its annual report. But that gives no indication whatsoever of the benchmark figure. It notes only that the target is approved by the financial secretary after consultation with the Exchange Fund Advisory Committee.

The HKMA says that its objectives are to pursue a conservative investment policy and maintain financial stability. This may explain why the fund never produces spectacular returns - but it does tell us why its managers languish so low on the performance scale. Elsewhere in the financial world, benchmarks are specific figures against which performance can be judged.

The Vietnamese no longer show journalists around rusty steel mills to prove that the economy is booming: maybe the HKMA can learn something from Hanoi.

Stephen Vines is a Hong Kong-based journalist and entrepreneur.



[url]http://focus.scmp.com/focusnews/ZZZGSWL47UE.html[/url]

Keep on it!!!:applause::applause:

Monday, November 13, 2006

EDITORIAL/LEADER
Vigilance still needed on protecting harbour



  
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   Conservation groups yesterday focused their main activities for Harbour Week on the just-vacated old Star Ferry pier, which will soon be torn down to make way for a shopping mall and road as part of the Central waterfront reclamation.
Many people at the pier were there to take a last look at the site steeped in history and memories. It is a small reminder of the wider development that is taking place on our harbourside - and of the need to ensure that Victoria Harbour is both protected and enhanced.

  

Truth be told, despite a series of government schemes being proposed or under way on harbourside development, the steam appears to have gone out of the campaign for its preservation. Just 300 people showed up to voice disapproval with plans, compared with the tens of thousands who over the past decade have demonstrated or signed petitions.

This is, perhaps, a sign of calmer political times. But the need for vigilance remains, given the scale of what is in the pipeline and how it will indelibly affect Hong Kong. The disappearance of the Star Ferry and Queen's piers are just a small part of that - from Central, through the Tamar dock at Admiralty, Wan Chai and Causeway Bay to North Point, projects will change the way our famed skyline looks. On the Kowloon side of the harbour, the old Kai Tak airport site and West Kowloon will also change appearance under plans for a cruise ship terminal and sports complex, among much else, for the former, and an arts complex for the latter. There is much at stake.

What the waterfront will look like in a decade or so when ideas and paper plans have been turned into concrete and steel is largely guesswork; similarly, whether these projects combined will be beneficial or detrimental to our image remains unclear. The reason is that, despite plans drawn up for the various projects, no one in the government has a clear overall picture of how Hong Kong should develop. At least half a dozen government departments are involved in the projects being worked on and each scheme is being planned and funded separately. Roads may inter-connect and promenades join up, but there is no document that is a master plan to steer our development towards an eventual goal.

The piecemeal approach is not confined to the harbour. A report released last week by the private-sector think-tank Civic Exchange lamented that the government dealt with rural land, which comprises 30 per cent of Hong Kong's area, in the same disjointed way. Visitors to the New Territories can clearly see the result of the lack of co-ordination: fire-scarred hills, rubbish tips, rusting vehicle bodies, farms and in between, three-storey villas. In a number of places, it is an eyesore.

The harbour is the centrepiece of Hong Kong, so the same unappealing fate is not likely to be in store. Yet the danger of not having a single authority responsible for how it develops makes for an uncertain outlook. Officials in the Australian city of Sydney, also graced with a similarly stunning harbour, realised the importance of what their city had and seven years ago established the Sydney Harbour Foreshore Authority. By co-ordinating development and activities and helping stage concerts and other events, the people of Sydney can now experience and enjoy an asset that they would not otherwise have been so fully able to.

Our Town Planning Board in 2000 promised that the harbour would be "protected and preserved as a special public asset and a natural heritage of the people of Hong Kong". A 2004 Court of Final Appeal decision on the Wan Chai reclamation ruled that plans to reclaim 26 hectares were not in accordance with the Protection of the Harbour Ordinance, which limits the extent to which the harbour can be turned into land. But, according to a recent Civil Engineering and Development Department blueprint, 15 hectares of the harbour will be reclaimed under a plan to build a traffic bypass between Central and North Point by 2015.

Victoria Harbour is our foremost asset. If it is to be wisely developed for our best use, the government should establish a separate authority to ensure it is developed as it has pledged: with the people of Hong Kong foremost in mind.


[url]http://focus.scmp.com/focusnews/ZZZP54M47UE.html[/url]

Tuesday, November 14, 2006

EDITORIAL/LEADER
World must deliver on pledges to Afghan people



   
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   The international focus on Iraq's problems, as the country struggles for peace and democracy, has drawn attention away from Afghanistan, which is just as important an experiment in efforts to bring justice to people around the world.
Afghans are undergoing no less a harrowing experience as Iraqis and have been given the same promises to be pulled from decades of conflict and put on the path to stability and prosperity. Both nations deserve to have those pledges kept. To do otherwise would make a mockery of international honesty and will.


When a US-led military coalition ousted Afghanistan's Taleban regime five years ago, hopes were raised for a new beginning after years of foreign occupation, civil war, the rule of warlords and the constraints of Muslim fundamentalism. Billions of dollars of aid was pledged, and development agencies and charities stepped in to turn dreams into reality. Democracy was restored and women regained the rights that they had lost under the Taleban.

But what had been pledged was not backed by action. Only a fraction of the billions promised materialised and an international military force to provide security and fight off the remnants of the Taleban was too small. Even now, the Nato-led force numbers just 30,000, one-fifth the size of the strength of foreign troops in Iraq and 10,000 less than the Nato commitment in 1999 to Kosovo, which is much smaller in area.

The result is that the Taleban are resurgent and fighting has stalled development projects. Since the start of the year, at least 3,700 people have been killed, one-third of them civilians. For many Afghans, life is worse now than it was five years ago: they still do not have jobs, the cost of living has risen, infrastructure remains inadequate and security is lacking.

Iraqis are enduring the same hardships more than 3-1/2 years after a US-led coalition invaded and toppled dictator Saddam Hussein.

There are important differences between the countries: Afghanistan is the world's biggest producer of opium and its production and trafficking has empowered warlords, who ignore the laws and policies of the central government in Kabul. Afghanistan does not have the rich oil reserves that Iraq will one day use as the basis for its future growth.

These should be matters of concern for governments that have made promises that they have not kept. The world has to re-engage with Afghanistan in a concerted manner. An international conference must be held with all major powers attending to again assess the nation's needs and to offer fresh help. Thousands more troops are needed to ensure security.

These are matters of urgency given the difficulties and challenges Afghans face. And this time, the promises must be genuine and forthcoming.



[url]http://focus.scmp.com/focusnews/ZZZ4MMP47UE.html[/url]

Wednesday, November 15, 2006

THE RED LANTERN
Hugging the profit motive


DAVID EIMER
   
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   Love is in the air on the mainland. The recent Forum on China-Africa Co-operation saw the government lay out the red carpet for delegations from 48 African countries. Billboards, flags and flowers sprung up all across the capital, while the media published endless stories on African culture. Some serious business was done, as well: trade agreements worth US$1.9 billion were signed.
The government's new-found love for Africa and its resources stands in stark contrast to the reaction of the Public Security Bureau to a trend from overseas aimed at bringing Chinese people closer together. In recent weeks, a movement called "The Hug League", or Bao Bao Tuan, has taken to the streets of the mainland's major cities, offering free hugs to any passers-by who fancy one.


The idea behind the campaign is to break down barriers between people in an age when the nature of urban life encourages increasing alienation. "We simply want to bring warmth to people's hearts," one of the organisers told mainland media. So far, The Hug League has taken its message to the streets of Beijing, Changsha , Guangzhou, Hangzhou , Shanghai and Xian . But the police in most of these cities have been far from friendly. In Beijing, four huggers were taken in for questioning. Shanghai, supposedly the most westernised city in the mainland, was even less welcoming. Twenty minutes after the huggers arrived on Nanjing Road, 11 were in the local Public Security Bureau office. Public hugging wasn't "right", the director told them.

Nor have the huggers found much support from ordinary citizens. "Embracing is a foreign tradition," said one man in Xian. Online commentators were just as negative. "Hugging strangers is completely unacceptable to me", wrote one.

This is odd, given that on Valentine's Day, in February, shopping malls across Beijing staged kissing contests. There was no shortage of young couples willing to take part - despite the crowds that gathered to watch and the many press photographers snapping away. Nor did the police arrest anyone for snogging in public.

That might be because there was a commercial point to the kissing contests: the malls organised them as stunts to suck in more shoppers on a day when sales of chocolates, flowers and jewellery traditionally boom. But no-one accused the Valentine's Day kissers of acting in an un-Chinese fashion.

On the contrary, a recent online survey by Tencent, China's biggest online chat-service provider, found that Valentine's Day is now the third most popular holiday for young people - after the Lunar New Year and their own birthdays. In fourth place came Christmas. Halloween, too, has become popular: all the major web portals in the mainland offer e-greeting Halloween cards on their home pages.

Some commentators claim that the Cultural Revolution's attack on traditional Chinese culture allowed western festivals to gain a foothold on the mainland. But a more plausible reason for their rise in popularity is China's embrace of consumerism: western festivals offer more opportunities for people to spend money in shops.

The adoption of western festivals, and China's embrace of Africa, both show that outside influences are welcome on the mainland - even if they clash with traditional Chinese ideas - as long as they have a commercial purpose. The free huggers could learn from that. For their campaign to really take off, they must drop the "free" bit.

David Eimer is a Beijing-based journalist.


[url]http://focus.scmp.com/focusnews/ZZZJMPP47UE.html[/url]

Thursday, November 16, 2006

CHINA'S MONETARY POLICY
A big stride towards independence


MARVIN GOODFRIEND and ESWAR PRASAD
   
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   China's remarkable growth has been financed recently by a rapid expansion of money and bank credit, which is producing an increasingly unsustainable investment boom. This renews concerns that the country may not be able to avert a replay of the painful boom-and-bust cycle like the one it endured in the mid-1990s.
Monetary policy is usually the first line of defence in such situations. But Beijing's monetary policy has been hamstrung by the tightly managed exchange-rate regime. This regime prevents the central bank, the People's Bank of China, from taking appropriate policy decisions to manage domestic demand. That's because interest-rate hikes could encourage capital inflows and put further pressure on the exchange rate.


There is a vigorous, continuing debate about Beijing's exchange-rate policy. China's rising trade surplus has led some observers to call for a revaluation of the yuan, to correct what they see as an unfair competitive advantage that Beijing maintains in international markets. Others argue that the stable exchange rate fosters macroeconomic stability in China. But this debate misses the point.

What China really needs is a truly independent monetary policy oriented to domestic objectives. That would enable the central bank to manage domestic demand by allowing interest rates to rise in order to rein in credit growth and deter reckless investment. An independent monetary policy requires a flexible exchange rate, not a revaluation. But what could take the place of the stable exchange rate as an anchor for monetary policy and for tying down inflation expectations?

We recommend a low inflation objective as the anchor for monetary policy in the mainland. Theoretical research, and the practical experiences of many countries, show that focusing on price stability is the best way for monetary policy to achieve the broader objectives in the central bank's charter - macroeconomic and financial stability, high employment growth and so forth.

How could such a framework be operated effectively in an economy in which financial-sector problems have weakened the mechanism of monetary transmission?

This is a key concern because, despite recent reforms, the banking system remains fragile.

Nevertheless, we believe that a minimal set of financial-sector reforms - essentially, making bank balance sheets strong enough to withstand substantial interest-rate policy actions - should be sufficient.

Full modernisation of the financial sector is a long way off, even in the best of circumstances. But the minimal reforms that we recommend could strengthen the banking system sufficiently in the near term to support a more flexible exchange rate anchored by an inflation objective. Indeed, price stability - and the broader macroeconomic stability emanating from it - would provide a good foundation for pushing forward with other financial-sector reforms.


There is some risk that the appreciation of the exchange rate - if greater flexibility were allowed - could precipitate deflation. What this really highlights, however, is the importance of framing the debate about exchange-rate flexibility in a broader context.

Having an independent monetary policy that could counteract boom-and-bust cycles would be the best way for China to deal with such risks.

There are those who regard the discussion of an alternative monetary framework as premature. But there are good reasons, however, for China to begin right now to build the institutional foundation for the transition to an independent monetary policy.

Indeed, the early adoption of a low-inflation objective would help secure the monetary and financial stability that China needs as it allows greater exchange-rate flexibility.

Marvin Goodfriend is a professor at Carnegie-Mellon University. Eswar Prasad is financial studies chief in the IMF's research department. Copyright: Project Syndicate



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Friday, November 17, 2006

PETER KAMMERER
Say it in Putonghua



   
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   Putonghua is one of mainland China's big-growth exports. Beijing-backed Confucius Institutes, which teach the language, are cropping up by the score in a seemingly relentless linguistic march around the globe. Some may see this as a new form of imperialism - a central government plot to impart ideology - or merely as a passing fad. I prefer to think of it in terms of joint-venture opportunism.
My theory is simple, and uncluttered by dark mutterings of backroom schemes: where there is a buck, people tend to go for it. And there are certainly big bucks to be made from teaching languages, especially ones like Putonghua, which people think will advance their careers.


It was reported this week that there are now 120 Confucius Institutes in 50 countries on five continents, and a further 40 in the pipeline. Conspiracy theorists may see this as less a matter of learning than indoctrinating.

The institutes are set up jointly by the government's Office of Chinese Language Council International and foreign partners. Suspicions were doubtless confirmed when the office's director-general, Zhao Guocheng , noted that students not only learned Putonghua, but were likely to have their "misconceptions about the country" dispelled.

For conspiracy theorists, such remarks are proof that Putonghua teachers are using language as a vehicle to send out pro-communist, anti-western ideology. British academic Robert Phillipson took on board some of this thinking in his influential 1992 book Linguistic Imperialism, which expounds the theory that English has achieved dominance through a series of complex hegemonic processes.

With the British Council leading the charge, he asserts, English has been promoted as being God-given, interesting and a gateway to the world - which makes it widespread and therefore easier to learn. Other arguments are that English represents modernity, is the universal language of business and symbolises efficiency.

The Confucius Institute would seem to have a battle on its hands to compete with these perceptions - since English has had centuries of lead time. The rush to learn Putonghua would need to be more hectic and sustained to achieve dominance any time soon.

There is, after all, another truth. While an estimated 100 million around the world are taking Putonghua classes, six times as many mainland Chinese are learning English. This was pointed out yesterday by psycholinguistics expert Niu Qiang: for the past 20 years, she said, English has been compulsory for all students at the primary, middle, senior and college levels.

There are apparently 1 million native Chinese teachers of English on the mainland, 150,000 foreigners teaching the language legally and another 100,000 doing so without a permit. The publishing industry based around teaching English as a foreign language had gross revenues of almost US$2 billion last year.

I do not hear complaints from Beijing that learning English is bad because western dogma comes along with the linguistic package. In fact, it's quite the opposite: China's economic boom presents salient opportunities.

"To get a good job in a big company brings a big salary and high social status," said Dr Niu from her office in Chongqing . "While it's presently fashionable for young people to take English to learn about another culture, there is another, more important, reason: the financial aspect."

Her colleague Martin Wolff takes the English-versus-Putonghua debate a step further, wondering whether the world's estimated 420 million native English speakers stand much of a chance against China's 1.3 billion Putonghua speakers. He and Dr Niu have a theory of their own. "We predict an eventual regional English in China that will become the new global language of international communication," he said.

My experience with English on the mainland has not been good, and Dr Niu admitted that standards were not always the best. I'm not sure how comprehensible this form of English - with Chinese characteristics - will be.

Peter Kammerer is the Post's foreign editor.

[email]peter.kamm@scmp.com[/email]



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A nice collection and good effort!  :applause:

Monday, November 20, 2006

ENERGY TAX PROPOSAL
Fiddling while Hong Kong pollutes


PHILIP BOWRING
   
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   In January, before the budget, before the publication of the government's goods and services tax proposal, I proposed in this column the adoption of an energy tax. It would broaden the tax base, be easy to implement, be fair to all consumers and economically neutral.
It could also help the environment by cutting greenhouse-gas emissions.


Since that time, the argument for such a tax has increased dramatically. The GST proposal has been so strongly criticised by almost every political party that it is effectively dead. And now concern about climate change has moved to centre stage among global issues. It is likely to be with us a lot longer.

The mainland is increasingly focused on the damage to the health of its people being caused by air and water pollution. If for no other reason, Beijing is likely to agree to play a much larger future role in controlling emissions, and the search for low-cost alternatives to fossil fuels.

I am not suggesting that an energy tax would have a major impact on energy consumption in Hong Kong. But it would be a small contribution to the wider global issue and send a message that Hong Kong wanted to move from laggard to leader.

One may argue that Hong Kong does not need new taxes because it is flush with other revenue, including revived land sales. That is not the point. Such a tax would obviate the alleged need for a GST to broaden the tax base. It would produce a reliable revenue stream which could, depending on other circumstances, be used to finance cuts in other taxes or increase spending on the aged.

A 30 per cent tax on electricity and gas usage would raise some HK$15 billion a year, or the same as a 3 per cent GST. About 25 per cent would fall on households, where energy spending is roughly proportionate to household income.

Most of the burden would be borne by the commercial sector which, in summer, tends to overdo the air conditioning in offices, malls and hotels.

The impact on prices would be reduced if the energy tax were phased in with a new scheme of control for power companies - one that reduces their allowable rate of return on capital from 15 per cent to the (still very generous) 10 per cent or so likely to be set when the current scheme ends in 2008.

Unfortunately, it is difficult to be optimistic. I have been unable to elicit any contrary arguments about an energy tax from the government. It stays quiet, parroting its continued belief in the merits of a GST, and unable to consider alternatives to what is clearly a failed proposal.

Hong Kong's overpaid bureaucrats have never shown much ability for original or lateral thinking. The problems this creates are compounded by the way that ministers, such as Secretary for Environment, Transport and Works Sarah Liao Sau-tung, appear to be the glove-puppets of vested commercial interests.

What chance is there for an energy tax when Dr Liao makes so little effort to address pollution issues - other than with words and promises - as we lag far behind many other Asian cities in reducing urban pollution. Only last week she was quoted as warning that emission controls could endanger energy security and raise power costs.

In a classic bit of bureaucracy-speak which doubtless pleased business interests, Dr Liao said it would take two years to compile information and a plan on greenhouse-gas emissions. "We have to make an assessment first", she said. As though it isn't plainly obvious what is happening here, and what could be done if the government could be bothered to force spending on cleaner sources.

If you want to be a leader, chief executive, it is well past time to be serious about the top global and local issue. A first step: sack Dr Liao.

Philip Bowring is a Hong Kong-based journalist and commentator.



[url]http://focus.scmp.com/focusnews/ZZZSAOM47UE.html[/url]

Tuesday, November 21, 2006

EDITORIAL/LEADER
Good start, but more must be done on rights



  
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   A senior official of the Supreme People's Procuratorate has confirmed what everyone has long believed - torture is widespread on the mainland.
The revelation by deputy procurator-general Wang Zhenchuan that many of those wrongfully convicted had been tortured has lent credence to the findings of an investigation by the United Nations' special rapporteur on torture, Manfred Nowak. When the report was released in March, the Ministry of Public Security denied "inappropriate" means were used to make suspects talk.


China has been a signatory to the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment since 1986. Yet, law enforcement officers using inhuman ways of extracting confessions from suspects has remained a serious issue. Mr Nowak rightly noted in his report that a number of systemic factors contributed to the practice of torture on the mainland - rules of evidence that create incentives for interrogators to obtain confessions, excessive length of time that criminal suspects are held in police custody without judicial control, absence of a legal culture based on the presumption of innocence (including the right to remain silent), and restricted rights and access of defence counsel.

Mr Wang's statement at a conference on combating illegal interrogation and wrongful conviction was the clearest admission so far that torture was indeed a problem. It was also a welcome sign that the procuratorate would be making a serious effort to address it. Under the mainland's judicial system, a major function of the procuratorate is to supervise the work of public security and to decide whether to press charges against suspects. For too long, however, guided by the mistaken view that it is their duty to protect the interests of the state, prosecutors have tended to side with public security. That has led them to turn a blind eye to the use of improper methods to extract confessions from suspects.

The procuratorate's vow to give due respect to the rights of suspects marks a long overdue change of emphasis. It is also a step that is in line with the leadership's policy of fostering a harmonious society. Among the measures the procuratorate has taken to check abuse is requiring the videotaping of interrogations in major cases - a move pioneered by Hong Kong's Independent Commission Against Corruption. That is a good start. But more will have to be done to address problems highlighted by Mr Nowak, so that the rights of all suspects, not just those allegedly involved in major crimes, are protected.

That would be a difficult undertaking, as the mainland's legal and judicial systems remain underdeveloped. The saying "leniency to those who confess and severity to those who refuse to" is one that continues to hold sway in the mindsets of many law enforcement agents. To check the tendency to prosecute and convict at all costs, it would not be enough for prosecutors to apply tougher standards in supervising the work of public security. All officers of the law would need to be trained to appreciate that respect for due process of the law is just as important as achieving justice. They would also need to be taught to enhance their investigation techniques, relying more on objective evidence than confessions.

Even if all the agents are well-trained, the possibility remains of over-zealous officers taking the law into their own hands and using extra-legal means to force suspects to "come clean". Proper procedures would also need to be put in place to check against abuse, both from within and outside the law-enforcement agencies. Allowing a free and investigative press to expose wrongful acts would help, as would the establishment of citizen-based independent human rights organisations. A system of allowing impartial monitors to visit detention centres, similar to Hong Kong's practice of allowing justices of the peace to tour prisons and hear detainees' complaints in private, would go a long way towards protecting inmates' rights.


[url]http://focus.scmp.com/focusnews/ZZZWXPM47UE.html[/url]

:reading: :reading: :reading:   :applause:

Wednesday, November 22, 2006

THE CASINO RESORT SCHEME
A sure-fire winner for Hong Kong


JAMES TIEN
   
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It would be a safe bet to say that the debate in the Legislative Council today about the possibility of opening a casino resort in Hong Kong is likely to be extremely lively.
By proposing that we look into the possibility of a resort and casino complex on Lantau Island, the Liberal Party is challenging two fixed ideas in Hong Kong's mentality.

The first of these is that we should leave casinos to Macau, and that it would be wrong to compete with our neighbour for the gambling dollar.

The second is that, by opening casinos, we will corrupt young people and create more problem-gamblers.

So why are we courting unpopularity by making this proposal? We are doing it because we strongly believe it is for the good of Hong Kong, and because we believe that our city is capable of creating an upmarket casino resort that will pay guaranteed dividends.

We also strongly believe that, by shutting our ears to the idea of casinos, Hong Kong risks being left behind by regional competitors and losing out on a potentially rich stream of tourism, job creation and tax income.

The problem with fixed ideas is that they are inflexible and impervious to changing circumstances. Many people have a concept of casinos that appears to be rooted in the past, when Macau's gambling establishments were seen as disreputable haunts of loan sharks and triad gangsters.

Anyone who still thinks that way should visit Macau today, and see how its sophisticated new casinos have transformed the city into the Las Vegas of the east - generating huge growth in tourism and tax revenue.

So far this year, visitor numbers are up at least 15 per cent; casino revenue for the first nine months of the year was HK$38.56 billion - more than on the famous Las Vegas Strip. Macau has already begun to "out-Vegas" Vegas itself. Hong Kong will not, and should not, be a rival to Macau.

Even if we decide to go ahead with a casino resort, it would be eight to 10 years before the place opened. By then, Macau can expect to be firmly established as the world's No1 gambling destination.

We are not jealous of Macau's success: we applaud it. Neither would we seek to mimic it. Instead, we want to offer a distinctly Hong Kong alternative that could bring us benefits of our own.

Ominously, rival tourism destinations around the region are waking up to the lesson of Macau, and preparing to open casino destinations of their own. South Korea, the Philippines, Malaysia, Vietnam, Cambodia and Australia already have them. Singapore will open two in 2009. Japan, Taiwan and Thailand are looking into setting them up.

There are legitimate concerns about the impact of casinos and the problem-gamblers it might create. I do not, however, accept that a well-run casino resort will present the social danger that some people suggest. Hongkongers should be trusted to act sensibly, even if the casino might be seen by some as a temptation to the weak-willing to gamble beyond their means.

After all, why should we have less trust in the people of Hong Kong than those other Asian governments have in their own people?

You may remember a similar controversy over the introduction of soccer betting three years ago. Yet its arrival passed without incident. A casino resort would have even less social impact.


A casino and hotel resort on Lantau could create 20,000 new jobs in the low-skilled area - where our employment shortage is most acute - and create a niche for Hong Kong in an expanding global market for gaming.

Macau shows what can be achieved in a relatively short period of time. Its unemployment rate is down to 3.8 per cent, and the government has been able to announce ambitious plans to extend free education and to give more allowances to students.

Macau's budget for next year has been increased to 30.8 billion patacas, up 22.1 per cent on this year. Its social security spending is to be doubled to a record 5.1 billion patacas.

New infrastructure investments are being launched, such as a 4.2-billion-patata elevated railway due to be completed within four years. Medical facilities are being improved in hospitals and surgeries across the city.

Macau Chief Executive Edmund Ho Hau-wah has also announced plans to build 4,000 social housing units over the next three years, to cut stamp duty and to increase the pay of people working in the public sector.

All the while, Macau's citizens are enjoying further tax cuts. Salary tax is being cut by 25 per cent and a business tax exemption is to be extended - all thanks to the huge sums generated by revolutionising the city's gaming industry.

At a time when our government is struggling with a narrow tax base and considering a hugely unpopular goods and service tax to broaden it, can we really afford not to even consider such a venture?

The motion before legislators today is for a feasibility study into such a development. If we ignore the economic realities of what is happening in Macau and the region, I believe we will be taking a rash and unnecessary gamble with Hong Kong's economic future.

James Tien Pei-chun is chairman of the Liberal Party.



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Thursday, November 23, 2006

EDITORIAL/LEADER
African nations point the way for China in Aids fight



   
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   Smallpox is one of the few scourges of humanity to have been eradicated. Others not only remain, but at times are rolling back the achievements of medical science. Tuberculosis and malaria, for example, have thrown up a new challenge with resistance to the drugs used to fight them.
The emergence of resistance to antibiotic drugs has assumed epidemic proportions, highlighted by the fact people are being infected with bacterial "superbugs" in the general community rather than in hospitals, the usual breeding ground.


How much more concern should there be, then, about a deadly modern pandemic for which science is still to find a cure or vaccine and which is staging a resurgence in some countries that were thought to have contained it?

The disease in question is, of course, HIV/Aids. Reports that the pandemic is growing in all areas of the world, and that recorded cases in the mainland have risen nearly 30 per cent so far this year, are cause for grave concern. After all, HIV/Aids is a disease of unprotected sex, shared drug needles and tainted blood. Education and prevention therefore save lives and, theoretically, could eradicate new infections. But they are failing even to stem the growth of the disease.

Asia generally and the mainland in particular have become a focus of concern. Culturally driven antipathy towards homosexuals and drug abusers prevailed over the early opportunity to combat the threat with serious attempts at education. As a result, the virus has spread into the general population as young Asians embrace more liberal moral values. Southeast Asia now accounts for the highest number of new infections through a combination of risky sex practices and injected drug use. That scenario is magnified on the mainland. The United Nations agency UNAids says the drug-fuelled epidemic has reached worrisome levels, despite efforts by top state leaders to remove the social stigma of the disease and increased spending on prevention programmes.


Until scientists find a vaccine or a cure, there are no new answers or short cuts to dealing with HIV/Aids on the mainland. There is just education and prevention, but on a scale commensurate with the problem. An effective national programme will require a massive budget increase. But that should not be too much of a problem for an economic juggernaut that produces a big enough trade surplus to finance a large chunk of America's profligate borrowing.

There is a ray of hope in the fight against HIV/Aids. It is to be found in Africa, where efforts to halt the frightening spread of the disease among heterosexuals have focused on education and prevention. From 2000 to last year, UN officials say, the prevalence of HIV declined among young people in eight African countries.

That is a textbook goal that China should aim at.


[url]http://focus.scmp.com/focusnews/ZZZAAXM47UE.html[/url]

Friday, November 24, 2006

EDITORIAL/LEADER
Public schools must be publicly accountable



  
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   The Court of First Instance has, sensibly, ruled against the Catholic Church's contention that a government initiative to enhance the governance of aided schools is unlawful. While the church's initial response yesterday was mild, it has not ruled out launching an appeal. Looking back, perhaps officials underestimated the sensitivity of the church towards school-based management reform. But it is difficult to see how they could have done more to pacify opponents.
Under the reform, all publicly funded schools are required to set up a statutory board, 40 per cent of whose members must be elected representatives of parents, teachers and alumni. This moderate measure to enhance democracy was aimed at enhancing the accountability of schools' management. It is hardly revolutionary, as the sponsoring body still retains majority control of the school board and there are provisions preventing the board changing the school's mission.


The reform is aimed at raising the transparency of schools' management as they are given greater discretion to manage public funds. That it has emerged as a concern in post-colonial Hong Kong has to do with latent fears that the government, now under the aegis of a communist sovereign, might be moving to suppress the churches' propagation of their faiths.

A peculiar feature of Hong Kong's public school system is that the government runs only a small number of schools directly and relies on non-governmental organisations to operate most. As a former British colony, this city has a preponderance of religious organisations running schools. The Catholic Church and its congregations are among the biggest school sponsoring bodies, running 221 aided primary and secondary schools out of a total of 935.

Under the leadership of Cardinal Joseph Zen Ze-kiun, the Catholic Church saw the reform as a government conspiracy to undermine the church's total control of its schools. A vocal champion of a fully democratic political system, Cardinal Zen enlisted the support of the pro-democracy camp of legislators to oppose the legislation. Having failed to stop its passage, the church launched a judicial review that led to yesterday's judgment.

Among other things, the church argued that the school-based management reform ran contrary to the Basic Law, as it constituted a major change to the "previous educational system" in place before 1997 and was a dilution of the church's autonomy in running its schools. Mr Justice Andrew Cheung Kui-ning has, rightly, rejected these arguments.

If they were valid, it would have meant that a government or legislature which had freedom to change the way religious organisations ran aided schools before July 1, 1997 were deprived of that freedom after that date. This clearly would not be right. Nor can the autonomy of publicly funded schools be absolute, as that would allow them to block legitimate moves by the government to hold schools' management accountable.

State interference in the freedom of religious belief and the internal affairs of religious organisations is a potential threat against which any society must guard. Yet it would be wrong for religious bodies to cite that right to oppose legitimate and narrowly defined efforts by the government to regulate parts of their operations that are publicly funded.

Elsewhere, Hong Kong's practice of using public money to fund faith-based schools would be considered as improper for breaching the church-state divide. That has not become an issue here, as these schools are already well-established and highly regarded for the high-quality education they offer.

It would not be in the interests of religious organisations to invite far more scrutiny than they really want by opposing a moderate measure to enhance public monitoring of schools that are funded by taxpayers' money. After all, the religious bodies have the option of ensuring total control by pulling their schools out of the public system and going private.


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Thanks for sharing

Monday, November 27, 2006

MAINLAND ECONOMIC REFORM
Beware of foreign advice on the yuan


STEVEN SITAO XU
   
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   Many distinguished foreign commentators continue to argue that the world economy is suffering from major imbalances and that China, with its huge current-account surplus, holds the key to correcting them. For instance, the broad policy response recommended by many foreign pundits is a Chinese domestic spending surge characterised by an expansionary fiscal policy and a much stronger yuan. But such moves would do little to restore global payments imbalances, and would actually jeopardise China's economic reform.
The biggest imbalance most foreign observers refer to is the one between China and the US, which is a consequence of excessive American consumption and excessive Chinese saving. Indeed, they say it is not just Chinese consumers who save too much but also Chinese companies - and, indirectly, the government (as the owner of many of the country's largest firms).


Therefore, Beijing could easily dip into this pool of money by requiring dividend payouts from profitable state-owned enterprises (SOEs) and then spending it on, say, public-welfare programmes - to help spur consumption. Meanwhile, a dearer yuan would prompt consumers to open their wallets and increase their purchases of imported goods and services. And China could reduce its excessive savings, currently being exported to the tune of over US$100 billion a year.

Such seemingly sensible policy responses, however, may not work for several reasons. First, with both China and India integrating into the global economy, a deflationary trend has been unleashed with such powerful force that certain imbalances are here to stay for a long time. Second, Beijing's channelling of the massive pool of savings through banks into public works has sparked an investment boom. China has no choice but to rely on investment as a key driver of high growth until there is a genuine takeoff of private demand.

Third, it is politically easier to maintain a loose fiscal policy during a wrenching economic transition. However, a crucial objective of Beijing's economic reform is to increase the role of the private sector, so that the role of the state sector can be reduced.

The shift from public demand to private demand requires political compromises with vested interests, and continued financial-sector deregulation. Beijing has correctly identified banking reform as the catalyst for overall financial-sector liberalisation.

Now, China is about to face an even bigger Big Bang. Next month, full competition from foreign banks at home will be unleashed, as Beijing dismantles the last regulatory hurdles in accordance with its World Trade Organisation obligations. Successful banking reform must be accompanied by continued restructuring of SOEs - banks' biggest borrowers. That means the last thing the government wants to do is to siphon off large SOEs' profits and force them to take on excessive debt.

Meanwhile, it is true that China's widening income disparity is increasing the pressure on the government to deploy more resources into hitherto neglected areas, such as education and basic medical coverage for the poor. But it is not true that the government is saving too much. Anecdotal evidence suggests plenty of extravagant official spending.

In sum, China needs more fiscal discipline, not less. And a relatively undervalued yuan is necessary to help cushion the impact of China's sweeping financial-sector reform. The best foreign-exchange policy for China is not one that leads to arbitrary adjustments in the yuan's value, but one that accelerates the marketisation of its exchange-rate mechanism. In other words, Beijing should pursue precisely the opposite of the policy prescriptions being offered by some overseas pundits.

Steven Sitao Xu is the Economist Intelligence Unit Corporate Network's director of advisory services in China.



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Friday, December 1, 2006

EDITORIAL/LEADER
PCCW saga a blow for HK's credibility



  
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   Richard Li Tzar-kai's grand plan to retreat from the telecoms industry has hit the rocks, leaving behind a litany of questions about political interference, family discord and corporate governance. They cast a long shadow over Hong Kong's image as a credible centre of international finance.
Australian investment bank Macquarie and US buyout firm TPG Newbridge had proposed separate bids to acquire PCCW's key assets. China Netcom, PCCW's second-largest shareholder, decided against selling and enlisted Xinhua, the state-run news agency, to issue a press release to publicise its desire that PCCW should remain in local hands. The unusual arrangement speaks volumes about the nature of the opposition to the deal. Beijing was firmly against allowing what it considers to be a strategic asset of Hong Kong to fall into foreign hands.

  
Francis Leung Pak-to, an investment banker with strong ties to Li Ka-shing, Hong Kong's richest tycoon and father of Richard, then emerged as a white knight to block the foreign bids. In July, Mr Leung put together a deal to acquire Richard Li's 23 per cent stake in PCCW, held through his Singapore-listed vehicle Pacific Century Regional Development.

Quizzed at the time, Mr Leung denied that the elder Mr Li was among his backers. It turned out that this was a technical denial. The tycoon was not an investor at that stage, but he was the source of a HK$500 million loan that Mr Leung drew on to pay a deposit to PCRD. The Li Ka-shing Foundation, the tycoon's vehicle for charity work, has since taken a 10 per cent stake in Mr Leung's consortium.

Mr Leung appears to have been acting as the front man for the elder Mr Li. It looks as if the tycoon, with extensive connections in Beijing, engineered the deal to resolve the political problem his son had caused. Father and son, it seems, did not communicate over the matter. When Richard knew of his father's involvement in Mr Leung's bid, he was so angry he reportedly said last week that he would rather PCRD's minority shareholders vote it down. Now that the younger Mr Li's reported wishes have come true, following the vote in Singapore yesterday, Hong Kong's reputation for having a level playing field for business has suffered a severe beating.

It would be naive to think that politics never plays a role in business here. British interests once dominated key sectors in Hong Kong, relinquishing their firm grip only in the last years of colonial rule. Indeed, politics was believed to be behind the sale by Cable & Wireless HKT - renamed PCCW by Richard Li - in 2000, three years after Hong Kong's return to China.

Beijing was widely believed to have an influence over the choice of Richard Li as the buyer, in preference to a strong rival bid from Singapore Telecom. No wonder Beijing was taken aback when he decided to sell his stake to foreigners.

But the way in which the planned sale of PCCW's assets was handled in recent months, both in Beijing and Hong Kong, has dealt a heavy blow to our city's reputation. It has done so in two key areas. The first is the blatant interference by Beijing in a proposed business deal which was really not important enough to justify such attention. This was done in an underhand way and it has gravely damaged Hong Kong's image as a city that offers fair treatment to all businesses, wherever they may come from.

Since the handover, there have been few occasions when Beijing has so obviously interfered with Hong Kong affairs. We have had a pretty good nine years. But that record has now been seriously dented. The blocked PCCW deal is a signal moment that has been watched with consternation both here and around the world.

The second concern is the failure of Hong Kong's regulators to do anything about it. This has shown them to be ineffective when faced with a series of events that raises serious questions.

The vote in Singapore might bring the whole sorry affair to the end. Now, it is hoped, we can move on. But the damage has already been done.


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Monday, December 11, 2006

EDITORIAL/LEADER
China must now tackle its next WTO challenge



  
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   When China gained membership of the World Trade Organisation five years ago, some observers worried that the perceived benefits would be vastly outweighed by the potential disruptions to the nation's economic, political and social development. Such scepticism was unwarranted as the extraordinary success of accession to the global trading body has since shown.
The achievements are testament to the vision of the chief proponents of China joining of the WTO, former president Jiang Zemin and ex-premier Zhu Rongji . Their hopes that desperately needed reforms would be spurred have been proved right and a path unimaginable a decade ago has been forged.

  
This is not to say that all is rosy; serious failings remain, most notably when it comes to transparency and intellectual property rights. Nonetheless, a remarkable transition has taken place and China is moving forward in leaps and bounds.

Such an outcome was unthinkable in the 1990s when talk turned to the WTO and the benefits that might be gained from membership. Towards the end of the decade, the reform process to keep stimulating economic growth and usher in an era of modernisation was petering out; agricultural changes had been implemented and the Asian economic crisis in the latter quarter of 1997 had buffeted the financial and industrial sectors.

The WTO's promotion of lowering and eventually eliminating trade barriers among member nations fitted perfectly with plans by the mainland authorities. Membership rules meant that a strict process of reform would have to take place in all sectors to ensure that requirements were met.

Those goals were achieved and as a result the process of reforms has been taken to a new phase. There is no better evidence of the commitment by leaders to drag China from being a poverty-stricken backwater as it was when economic reforms were implemented in 1978 to a prosperous industrialised nation.

The ramifications of that decision have been stunning. China is now the world's third biggest trading nation and fourth largest economy, and a burgeoning middle class has emerged. As significantly, the mainland has arrived on the international diplomatic stage and carries great influence in determining global decisions.

While the commitment for reform is strong, though, the process has not always been as smooth as it should be. Today marks not only the fifth year of ascension to the WTO but also the end of a grace period during which most of its concessions were to have been implemented - and there are still glaring gaps.

Most pressingly for the WTO is the opening of the banking and financial services sectors to foreign firms. Some barriers are still in place and only with their removal will China have complied with its pledges of half a decade ago.

For the US and Europe, though, the large number of counterfeit goods being produced on the mainland violates any agreements signed. The problem is a global one but especially problematic for Chinese authorities, whose efforts to clamp down on infringements of intellectual property rights have so far made little dent on the problem.

Similarly, opening up all sectors to public scrutiny has been done so with obvious reluctance. Only with transparency can China truly move forward, and this cannot happen until steps are fully implemented to make the economic, judicial and political systems accountable.

Until such matters are resolved, other WTO nations will continue to raise objections over the mainland's trade imbalances, currency valuation and human rights violations. Tariffs will remain a weapon against perceived disadvantage.

Given the magnitude of China's difficulties and the challenges posed by the WTO's demands, the government has done extraordinarily well in meeting its pledges.

This is the end of only the first phase, though. For the success story to continue, China must make a concerted effort to fill the gaps to fully meet its WTO obligations.


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:reading:           Thx

Tuesday, December 12, 2006

EDITORIAL/LEADER
Election result sends important message



  
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   The success of pan-democratic candidates in the Election Committee poll on Sunday raises a real prospect of the first contested race for chief executive since the handover. That would be a welcome development.
But the significance of the results announced yesterday lies in the message they send about the aspirations of Hong Kong people. There is a very strong desire for democracy. This is now evident even in a poll that restricts voters to a tiny, privileged proportion of Hong Kong's population.

  
The target set by the pan-democrats is a modest one. Civic Party challenger Alan Leong Kah-kit has no realistic chance of winning the race. His aim is to secure the 100 nominations needed to stand against Chief Executive Donald Tsang Yam-kuen. He went a long way towards achieving that goal on Sunday. Of the candidates who won places on the committee that will pick the next chief executive, 114 were those who stood on a pan-democratic ticket. They have all indicated they intend to nominate Mr Leong. Add to this the 20 or so pan-democrat legislators who are guaranteed places on the committee, and the chances of Mr Leong securing the sufficient number of nominations look healthy.

In seven sub-sectors, all the pan-democrats' candidates were successful. This is the first time the camp has made such in-roads in this election. In the past, they have tended to shun it on principle, pointing out that it excludes the vast majority of Hong Kong people.

Even Sunday's record turnout was only 27 per cent of registered voters, much lower than that achieved in direct elections for district and legislative councillors. The 56,000 people who voted constitute about 1.2 per cent of Hong Kong's voting-age population.

Sunday's results, however, justify the decision of the pan-democrats who chose to contest this election. They build on the limited success the pro-democracy camp enjoyed in similarly constituted functional constituency elections for the Legislative Council in 2004. There is a point they can make by playing the game, even if the odds are stacked against them.

The election for chief executive early next year is now set to be a little more interesting than would otherwise be the case. Mr Tsang, expected to declare his intention to stand soon, need not fear defeat. But if he faces a challenger in the form of Mr Leong, or another candidate, there will be more reason for Mr Tsang to spell out his blueprint for the future and to tackle challenges to his platform. This will, it is hoped, lead to an informed and rational public debate about the issues facing Hong Kong.

More important, though, is the call for democracy that has been sounded through the success of the pan-democrats in Sunday's elections. Hong Kong people want more democracy. This is not just evident in Sunday's results; it has been shown in direct elections over the years, where the pro-democracy camp has consistently secured the majority of votes.

Beijing may be concerned to see the pan-democrats making headway in the Election Committee poll. But it need not be worried, as this is a natural development as Hong Kong matures politically and political awareness grows. Certainly, it would not be wise for the central government to react by seeking to further block democratic reform. Sunday's result shows that the desire for democracy in Hong Kong has not diminished. It will not do so in the future.

The best way of ensuring stability and prosperity in Hong Kong is to make real progress towards the Basic Law's "ultimate aim" of universal suffrage. Work to this end is going on in the government-appointed Commission for Strategic Development. A plan for democratic reform is due to be released by that committee early next year - hopefully to be followed by a timetable.

The gains made by the pan-democrats on Sunday are modest, but significant. They are the latest evidence of the need for progress in Hong Kong's long journey towards democracy.


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Wednesday, December 13, 2006

EDITORIAL/LEADER
Avert aged-care crisis with sound pension plan



  
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   The worldwide trend of ageing populations has generated a lot of debate about the economic problems they throw up. But it has so far failed to attract wide attention. Hong Kong's consultation on a goods and services tax was evidence of that. It fizzled out without too much concern about broadening the tax base to meet the future needs of a growing retired sector.
Pension scandals get more headlines than the question of where the money will come from in the years ahead to fund the needs of more retirees. An example is the ever-widening probe into misuse of pension funds by senior officials and others.

  
But Beijing is trying to focus attention on the real issue, and with good reason. Our report today on the State Council's white paper on care of the aged is a reminder that the ultimate welfare nightmare is to be found on the mainland. The mainland has already lost the race to become rich and modernised before it becomes an ageing society. It remains among low- to middle-income countries in terms of per-capita gross domestic product. But it expects the number of "elderly" - people over 60 - to rise from 144 million last year in a population of 1.3 billion to 248 million by 2020. It will grow at an increasing rate thereafter, peaking at 437 million, or 30 per cent of the population, by 2051.

Thanks in part to restrictive child-birth policies, the ratio of working people to retirees will drop sharply, leaving fewer younger people to finance the care of a growing number of older people. The ballooning welfare bill will not be cushioned by extraordinarily high savings, which the government wants to convert to higher consumer spending as an engine of economic growth and greater wealth. Thus, in the space of 25 years of reform, the mainland has gone from having a womb-to-tomb socio-economic regime to having a frightening welfare overhang.

Escaping the shadow of that overhang goes to the heart of Beijing's emphasis on the maintenance of social stability and harmony. The discontent of hundreds of millions of elderly people with little left to lose could prove more than a little troublesome. Therefore, the central government can well do without an aged-welfare black hole at the end of people's working lives. Just how hard it will be to avoid one without a crippling increase in financial provision for social security is graphically illustrated by the white paper.

The mainland's aged population accounts for one-fifth of the global total and half of Asia's. About 60 per cent of people over 60 are to be found in the countryside, where social welfare lags far behind. This is compounded by the migration of young workers to urban areas and an increasing trend of old people living on their own. There is a huge shortage of aged care, with only 1.49 million beds for old people in welfare institutions, or 10 beds per 1,000 old people. By 2010, the mainland wants to add 2.2 million beds for poor or disabled old people in rural areas.

The critical year, according to state officials, will be 2030, when less than half the population is expected to be in the workforce. The acknowledgment that providing a welfare system for the aged in line with the nation's socio-economic development will put a strain on government finances is an understatement.

The mainland needs to develop a coherent national pension plan under rigorous independent supervision that actually invests money across an appropriate range of securities and generates healthy but secure returns, rather than being looted by state officials. The national social security system is now forced to pursue super-conservative investment policies that won't generate the needed returns.

Meanwhile, the policy of stimulating private consumption could help strengthen government finances if it unlocks savings to help build a bigger domestic economy. Private consumption has been growing in real terms at about 10 per cent a year. But mainland households may need to be assured of affordable health care, education and housing before they will spend much more.


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Thursday, December 14, 2006

EDITORIAL/LEADER
Urgent action required to save the Yellow River



   
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   The Yellow River is dying. Despite exhortations by state leaders to put the environment first, the amount of untreated sewage dumped into China's "mother river" has increased instead of fallen in recent years.
In the 1990s, 40 per cent of the river's water was drinkable. Now, the figure has dropped to 33.3 per cent. Moreover, the river is also suffering from a dramatic decrease in water flow because of low precipitation and overuse. So much so that it has become a regular occurrence for parts of the river to dry up.

  
For the 5,464 km-long waterway that is known as the cradle of Chinese civilisation, that is a tragic development that illustrates what is so wrong about China's preoccupation with growth. Years of emphasis on getting rich first have blinded many cadres to the byproducts of industrial development.

While polluting factories that provide jobs and profits are given a licence to use the dirtiest production methods, they are not held responsible for the pollution they cause. Even in places where sewage treatment plants have been installed, they are not always turned on in order to save money. So many local governments have an interest in keeping afloat factories in their jurisdictions that they are held hostage by the plant operators.

To tackle the problem, the State Environmental Protection Administration has set up regional offices to strengthen its monitoring of local breaches. Hopefully, with backing from Beijing, these outposts will be able to turn things around over time. But more will need to be done to avert the environmental and human catastrophe that experts say a worsening shortage of clean water would do to the nation.

More intelligent and rational use of water should be a first priority. In China, as in many other countries, governments are loath to charge users the full costs of treating and piping water. In some cases, that is justified as a strict application of the user-pays principle would deprive many people of access to an essential necessity. However, it would be wrong to keep rates artificially low just to keep the masses happy, as is still the case in many parts of the country.

China is not richly endowed with water resources on a per capita basis. It is therefore important to set water rates at realistic levels that encourage conservation and investment. Rates should go up in line with economic growth, so users will think twice about letting their taps run and investors see a reason to put their money in building water supply facilities.

The present sorrows of the Yellow River are the result of millenniums of human interference. Deforestation along its course accounts for the heavy soil content of its water - and hence its colour. Over the past century, industrialisation has turned it into a giant sewer. It is time urgent and bold action was taken to avert its death and restore it as a source of life.


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Friday, December 15, 2006

EDITORIAL/LEADER
Iran using Holocaust conference in power play



   
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   Since Iranian President Mahmoud Ahmadinejad triggered international outrage more than a year ago by calling for Israel - a fellow member of the United Nations - to be "wiped off the map", the method in his rabid anti-semitism has become more apparent. Within months he expressed doubt that the Nazis murdered 6 million Jewish people, which soon hardened into denial of the Holocaust, seen as a myth concocted to help justify the founding of the Jewish nation of Israel on Muslim lands.
This week Iran has hosted a conference on the Holocaust that has provided a rare platform for deniers from nations afar. That includes champions of free speech, such as Germany, France and Austria, who have made Holocaust denial illegal, and others where deniers have been muzzled by popular revulsion.


Far from being worried about condemnation of his conference, Mr Ahmadinejad has relished the chance to point to what he sees as double standards. And he has not missed the apparent hypocrisy in the free-speech defence of cartoons lampooning the Prophet Mohammed published in Europe last year that caused deep offence in the Muslim world.

But that is a sideshow. The Iranian leader is not playing to a western audience. His high profile on the issue of Israel, the Jewish people and the homeless Palestinians and his defiance of the United States over his nuclear programme is aimed at the Muslim rank-and-file throughout the Middle East. This being an audience already warmed up for him by anger at the disastrous invasion and occupation of Iraq by Israel's superpower ally. It has played well in the streets and given him pan-Arab recognition that is the envy of other regional leaders.

Middle East observers fear the strategy behind the denial of Israel's right to exist is more about spreading Iran's influence than about the Palestinian cause. If it succeeds, Iran would be poised to exploit a post-Iraq regional power vacuum.

The same man who has promoted Holocaust denial to advance what he sees as a just cause expects the world to take him at his word when he says Iran's pursuit of advanced nuclear capabilities is for peaceful purposes only. Ironically, western nations presented him with an opening on Israel by outlawing Holocaust denial. Some of those laws raise serious free-speech concerns, but they were passed because denial of the genocide perpetrated by the Nazis has been promoted by racist groups and can easily be used as a form of anti-semitism.

Mr Ahmadinejad himself faces a moment of truth today when Iranians go to the polls to elect city councils. Reformist candidates hope it will be a referendum on his failure to keep the promises on which he was elected to tackle chronic poverty, unemployment and corruption. These are issues he should be focusing on, rather than devoting time to a distasteful conference on Holocaust denial.


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Monday, December 18, 2006

OUT OF THE BOX
Fighting the destruction of memory


KITTY POON
   
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   From the government's perspective, the protest against the demolition of the old Star Ferry pier last week emerged from nowhere. But, looked at closely, the incident reflects the rise of a new civil activism - a revolt against Hong Kong's uncharted and relentless modernisation.
This new movement aims to halt the city's rapid decline into a place without history, and underlies a deep-rooted, collective anxiety among Hongkongers over the loss of identity. It is new in the sense that its support base extends far beyond that of typical political activism. Also, its spontaneity and strength seriously challenge the conventional consultative and decision-making processes. The government seems ill-prepared for such movements.


The unfolding of the new civil activism began a few years ago. The protests against urban renewal in Wan Chai, rallies to oppose the government's Central reclamation project, and the call to preserve the old police station in Central are all examples of it. These efforts have drawn support from students, teachers, artists, lawyers, environmentalists, architects, urban planners and housewives - among others. There are no institutional channels in place to understand and accommodate their collective concern over the downside of modernity.

The landscape of a city is associated with residents' hardships, happiness, romances and other experiences. It breeds a sense of intimacy - and consequently a sense of security and identity. The buildings, streets and signposts provide a mental map that lets Hongkongers trace where they came from and who they are. The demolition of old buildings and streets is like erasing a spiritual path, sparking anxiety over the loss of identity and future direction.


Think about it: skyscrapers like Two IFC and steel constructions like Cyberport can only provide a sense of imprisonment, not intimacy. Shops inside Pacific Place and Festival Walk impart only the awareness of relative poverty rather than satisfaction. These modern constructions create a feeling of alienation because they make people feel like mere instruments of business and commerce.

Evidently, neither the Legislative Council, district councils nor the Antiquities Advisory Board is capable of sensing Hongkongers' collective anxiety. Architectural authenticity is not at the core of the concern, and many legislators themselves might also be insensitive to the issues caused by modernity. The government's consultation through the conventional channels, hence, is bound to result in wrong decisions regardless of the length of the process.

The rise of a new civil activism has to be understood in the context of the rapid socio-political transformation that has unfolded in the past few decades. Hong Kong's loss of competitive edge in the region has had an irreversible effect on Hongkongers' pattern of living. The handover introduced unsettling political disputes which, in turn, is reshaping the experience of human relations.

The continuing makeover of the city's landscape furthers the irritation and frustration. It accentuates the discontinuity and uncertainty in everyday life in Hong Kong, while undermining the sense of belonging.

In view of this, the government has to prepare itself for the rise of a new type of social activism, and to pay close attention to the preservation of social continuity in the community.

Kitty Poon, an assistant professor at the Hong Kong Polytechnic University, is a part-time member of the government's Central Policy Unit.



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You are hard-working...please keep going
I like it
THz

Tuesday, December 19, 2006

OBSERVER
Living with borrowed characters


FRANK CHING
   
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   Young Japanese are finding it difficult to learn kanji - characters borrowed from Chinese - and Japan may eventually replace them with easier-to-learn syllabic characters, according to an article at the weekend. It blamed this trend partly on the increasing use of computers and mobile phone texting.
If so, it would be a major development in the evolution of Japanese writing. Japan will, no doubt, consider this very carefully before making any decisions, since such a drastic move would sever future generations of Japanese from their past, which is mostly recorded in Chinese characters.


About 1,600 years ago, Japanese began borrowing Chinese characters, as their own language had no written form. For well more than 1,000 years, those characters have served a useful purpose. Is that usefulness over?

Japan was not the only East Asian country to use Chinese characters. Others include Vietnam and Korea, but those nations, for various reasons, gave them up in favour of their own, invented written systems. But Japan has held on to kanji, and thinks of them as very much part of Japanese tradition and culture.

Even when relations with China were badly strained in recent years, there was no thought in Japan of giving up Chinese characters.

Vietnam and Korea took a different approach. Vietnam used Chinese characters until France invaded the country in the 19th century, and French replaced Chinese as the official language.

It wasn't until the 20th century that Vietnamese became the country's official language. The written language in use today is a version of the Latin alphabet developed by western missionaries. Chinese characters are no longer used.

Korea used Chinese characters until the 19th century but, after its colonisation, Japanese became the language of official documents. After Japan's defeat in the second world war, Hangul - a script created by a Korean king in the 15th century - became the official language.

Today, Hangul rather than Chinese characters is used in both North and South Korea. It is interesting to note that North Korea - which like China is run by a communist party and is supposedly its close comrade-in-arms - has gone to great lengths not only to eliminate Chinese characters, but has eradicated all signs of its Chinese cultural heritage.

South Korea, on the other hand, still teaches its schoolchildren some Chinese characters, and is proud of its traditional culture.

Unlike Vietnam and Korea, Japan has not tried to get rid of Chinese characters but, rather, has considered them part of its own cultural heritage, changing and simplifying them - and even inventing hundreds of new characters - to suit its needs.

Today, modern Japanese is written in a combination of kanji and two phonetic alphabets. Japan is the only country outside of China that still uses large numbers of Chinese characters.

Meanwhile, the use of characters in China itself has changed: communist authorities have tried to make literacy universal by simplifying characters and introducing the pinyin phonetic system. However, radical proposals such as eliminating characters entirely have won little support, since this would mean cutting off modern-day Chinese from their own history, which is all recorded in those characters.

That situation already confronts people in Vietnam and Korea, where ancient texts are written in Chinese characters - no longer accessible to most of their people.

And so, if Japan one day decides to take the plunge and get rid of Chinese characters, it must realise that it is not just distancing itself from China by no longer sharing a written language, but actually cutting itself off from its own past.

Actually, characters are not the exclusive possession of any country. It is the common heritage of the peoples of East Asia - just as English today is the heritage of people in North America, Australia and other countries rather than an exclusively British possession.

Languages grow and change - and should be seen as a tool to be used rather than as chains that bind us.

Frank Ching is a Hong Kong-based writer and commentator.

[email]frank.ching@scmp.com[/email]



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Wednesday, December 20, 2006

EDITORIAL/LEADER
New defence chief must learn from US mistakes



   
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   New US Defence Secretary Robert Gates has ascended to a powerful role: America's annual military spending is more than China's entire budget, so he has the resources at his disposal to have a considerable impact on the world. Given the poor performance of his predecessor, Donald Rumsfeld, in waging war in Afghanistan and Iraq, he has to approach the job cautiously and with emphasis on consensus building.
While US President George W. Bush has the final say on military matters, his defence secretary has the important position of advising and formulating policy. That is where Mr Rumsfeld faltered; by ignoring the advice of those around him, particularly generals in the war zones, he missed the flaws in his nation's strategy.


Dr Gates has been quick to promise a change, saying at his inauguration that he will consult top military officers in Iraq at the earliest opportunity. Such an approach is welcome, although this has to be the rule, not the exception, in carrying out his duties.

The new defence chief fortunately has a reputation for consultation before reaching a decision, but it must be remembered that he is in a job where he is also required to be hawkish. The US military is, after all, dedicated to national defence and in the post-September 11 terrorism environment, a combative approach is deemed necessary to eliminate threats. Under Mr Rumsfeld, that stood the US in good stead, preventing further terrorist attacks on American soil. Beyond US borders, though, it has proved disastrous, creating global instability.

For the people of Afghanistan and Iraq, the Bush administration's deafness to criticism has meant that promised peace and stability has become a hope rather than reality. In both nations, the number of attacks on foreign soldiers, national security forces and civilians has been increasing, rolling back the achievements in building democracies and economies.

Achieving consensus amid such complications is not easy, as diverse views among politicians in the US, Iraq and Afghanistan toward finding solutions proves. If the threats are to be eliminated, majority opinion will have to hold sway.

Dr Gates faces significant challenges. He has to walk a tightrope of politics, military strategy and appeasement, all the while knowing that with the lives of American soldiers at risk, failure is not an option. As he pointed out on Monday, losing in Iraq would be "a calamity".

Many options have been put forward, some by a blue ribbon panel on Iraq that Dr Gates sat on before taking up his new post. He will be instrumental in helping Mr Bush reach a decision early next year on which way to proceed.

If a calamity is to be avoided, the US must adopt a measured defence policy involving consultation with as diverse a spectrum of partners as possible. Dr Gates, in the driving seat, must set the tone with Iraq.


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Thursday, December 21, 2006

DISCRIMINATION II
Migrant workers have rights, too


BILLY HUNG
   
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Migration has always been integral to the human condition; individuals and societies have moved in search of social, economic and cultural opportunity, or to escape conflict and persecution. Current estimates are that there are 175 million migrants - roughly 2.8 per cent of the world's population.
The daily reality for many migrants around the globe is bleak. Often subject to discrimination and human rights violations, many live at the margins of societies unwilling to recognise the economic contribution they make, and to give them the same basic human rights that their nationals enjoy.

Working conditions are poor for millions of migrants, with long hours, low wages and unacceptable circumstances. A 24-year-old Myanmese migrant described his work at a wool factory in Thailand, where he had been employed for two years: "I worked from 8am to 9pm - sometimes until midnight with no overtime pay ... Thirty of us men lived in a hall, about 30 feet by 10 feet [nine metres by three metres], sleeping side by side." He earned 3,000 baht (HK$658) per month.

Eight Thai women working at a Korean company, Donghwa Digital, suffered serious injuries as a result of prolonged exposure to the toxic chemical n-hexane, used in the manufacture of liquid crystal display monitors. Female migrants are particularly vulnerable. Many migrant women in Asia work as domestic helpers in private homes, where they are often invisible and isolated from the rest of society, and may be subject to sexual harassment or rape by their employers.

A large number of workers are "undocumented" or "irregular" migrants, who lack legal status in the country where they work. In June, out of a total of 360,000 migrant workers in South Korea, at least 189,000 were believed to be irregular workers. Such workers are especially vulnerable to abuse. Even when they lack legal status, migrants are still entitled to have their basic human rights protected.

Many countries detain irregular migrants, to deter others from coming. In South Korea, Amnesty International has received persistent reports of poor conditions and abuse by security personnel in detention facilities used to hold migrant workers. In Malaysia, severe overcrowding, poor hygiene and sanitation, outbreaks of contagious diseases, poor nutrition and verbal and physical abuse - including beatings - have been identified as serious problems. Immigration policies can make it difficult for migrant workers to collect pay that is owed, or to seek redress for human rights violations.

In South Korea, if workers are refused contract extensions and are unable to find other work, they are required to leave the country within one month. In Hong Kong, foreign domestic workers are required to leave within 14 days of the termination of their employment contract. In this situation, they may consider that they have no choice but to accept poor working conditions and rights abuses. Many incur large debts to employment agencies, which they cannot repay if they have to return early to their countries of origin.

Monday was International Migrants Day: the recognition that migrants' rights are human rights is long overdue. States have the right to manage migration, but the management policies and practices should not put migrants at risk of abuse.

National governments are entitled to determine immigration programmes and policies, and to take steps to minimise unauthorised migration. But they must ensure that the laws, policies and practices relevant to the entry, stay and return of all migrants to their homelands are consistent with the principles of international human rights law. Entry and removal procedures should conform with human rights standards. And the basic human rights of all migrant workers, regardless of their status, should be protected.

Billy Hung is campaign manager of Amnesty International Hong Kong Section.



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Friday, December 22, 2006

EDITORIAL/LEADER
Time to consider all options for airport



  
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   The Airport Authority has formally put a long anticipated issue on the public agenda - does Chek Lap Kok airport need a third runway? The question is one the community needs to consider because it is a vital issue that impinges on Hong Kong's future.
As the authority rightly points out in its 20-year plan, airports are as important to economic development today as highways were in the 20th century, railways in the 19th century and ocean ports in the 18th century. As an economy that depends on the free flows of people, goods, capital and information, Hong Kong needs an airport that facilitates their seamless passage.


Although Chek Lap Kok opened merely eight years ago, projections have already shown that its capacity may be stretched to the limit sooner rather than later. As originally envisioned, the airport was expected to handle 87 million passengers, 9 million tonnes of cargo and 380,000 aircraft movements by 2040. Current estimates are that it is likely to process 80 million passengers, 8 million tonnes of cargo and 490,000 aircraft movements by 2025. This year, the airport handled 45 million passengers, 3.5 million tonnes of cargo and 280,000 aircraft movements. Their growth rates have ranged between 7 and 10 per cent a year. If current trends continue, the authority's projections may be realised.

Hong Kong needs to start debating the need for a third runway now, not just because it would be a costly project with significant economic and environmental implications. More importantly, it would also be a cross-border issue central to this city's position in the Pearl River Delta, which has four other airports. Although Chek Lap Kok is currently the undisputed leader of the pack, the airports in Guangzhou, Shenzhen, Macau and Zhuhai all aim to expand their shares in the region's expanding aviation pie.

From Hong Kong's perspective, we would like Chek Lap Kok to maintain its hub status as it is a pillar of our competitiveness. Our continuing role as a gateway to the mainland must hinge on a strategy of boosting our international and national transport connections and linking the two networks. Hong Kong must remain a convenient stopover for traffic to and from the mainland.

That does not necessarily mean our airport will continue to overshadow the developments of other airports. Guangzhou's Baiyun airport has made no bones about its intention to rival Chek Lap Kok's status as the region's premier air cargo hub. As the international networks of Baiyun and Shenzhen's Baoan airports grow, Chek Lap Kok's ambition to expand its catchment to the whole delta might also be stymied. Indeed, how rivalry among the region's airports will develop is a big unknown.

A point to note is that the Airport Authority's initiative to engage the four other airports through the A5 Forum has met with a lukewarm response. So far, the authority has managed to secure the co-operation of only Zhuhai airport. That was achieved through a joint venture deal under which the authority would manage it for 20 years. It was made possible only because the moribund airport is heavily in debt and seriously underused.

Arguably, expanding Chek Lap Kok's capacity by building a third runway does not have to be the only option to meet surging demand. With the planned construction of the Hong Kong-Macau-Zhuhai bridge, the Zhuhai and Macau airports would be only half an hour away from Chek Lap Kok by bus. Airlines, travellers and even the Airport Authority may find it in their own separate interests to make complementary arrangements that would obviate the need for a third runway. With technological advances that could greatly increase the capacities of aircraft and existing runways, it is also possible that the need for a third runway may, over time, become not as urgent as it seems now.

Even so, these considerations are only reasons to keep an open mind on the issue, not ones to avoid doing the necessary forward planning.


[url]http://focus.scmp.com/focusnews/ZZZV52N9UVE.html[/url]

Wednesday, December 27, 2006

EDITORIAL/LEADER
Keep door open for a moderate Iranian leadership



   
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   The United Nations Security Council's unanimous vote at the weekend to apply sanctions to Iran follows two months of negotiations that failed to force Tehran to clarify its nuclear ambitions. The watered-down resolution bans the export of nuclear and missile- related materials and technology to Iran and freezes the assets of 10 Iranian officials and 12 companies linked to the nuclear programmes. Iran has been given 60 days to suspend its nuclear enrichment programme and reprocessing of spent nuclear fuel or face tougher economic sanctions.
It is thus essentially an interim measure that anticipates its own failure to influence Iran's policies. If anyone has emerged a winner it is Iran's ally Russia, which succeeded in getting an exemption for a nuclear reactor it is building for Iran and headed off a travel ban on officials with nuclear links. These concessions, and the haggling over sanctions, were a case of President Vladimir Putin putting his country's interests ahead of non-proliferation and international security.


Predictably, Tehran has ramped up its defiance, condemning the UN, vowing to accelerate enrichment and threatening to suspend International Atomic Energy Agency inspections. There are reports that Iran's 3,000 enrichment centrifuges have gone into full operation already.

Also worrying, however, are messages from the west that do nothing to ease the isolation of the ultra-conservatives, led by President Mahmoud Ahmadinejad, who hold the political reins in Iran. US President George W. Bush has ruled out talks with Iran over the dire security situation in neighbouring Iraq - one of the main recommendations of the influential, bipartisan Iraq Study Group that included his new secretary of defence. And British Prime Minister Tony Blair wound up a tour of the Middle East and the Gulf by denouncing Iran and calling for an alliance of moderate Arab states to confront the "threat" it poses.

The study group's report recognised the importance of including Iran in any attempt to address the region's troubles. This sentiment has been reinforced by elections held since in Iran. They were for municipal councils and the Assembly of Experts, which selects and oversees the nation's supreme leader. A swing to moderate and reformist candidates delivered a strong rebuke to Mr Ahmadinejad. Prominent among the winners was the president's predecessor, Hashemi Rafsanjani, who favoured talks to restore relations with the US, and former nuclear negotiator Hasan Rowhani, whom Mr Ahmadinejad has accused of making too many concessions to the Europeans.

The results reflect concern with domestic economic issues, a shift of opinion back towards the centre and rejection of international confrontation. The west should therefore be careful to leave an opening for more flexible, pragmatic leadership from Tehran over time.


[url]http://focus.scmp.com/focusnews/ZZZF40OQ3WE.html[/url]

Thursday, December 28, 2006

EDITORIAL/LEADER
Crash reveals internet's vulnerabilities



  
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   Technological advances have made the internet such a ubiquitous presence that it has become a clich?to say it is hard to imagine life without it. But that scenario did almost come true yesterday, when e-mails arrived only intermittently, web connections were down and search engines failed to scour.
The disruption stemmed from an earthquake that hit Taiwan on Tuesday night, on the second anniversary of a far more powerful quake off Sumatra in Indonesia two years ago. Compared with the 2004 disaster that is believed to have killed 230,000 people around the coastline of the Indian Ocean, the quake this week fortunately caused only two deaths.


But in knocking out a number of cables that form the information super-highway that we have come to take for granted, Tuesday's quake unleashed a powerful impact of a different dimension. The breakdown in telecommunications that it caused was serious enough to create real problems to operations dependent on internet connections. And with no clear indication of when repairs may be finished, extensive hiccups to business and social life are likely to continue to be felt across the region.

Critically, financial data services provided by Reuters and Bloomberg were down in some countries. That brought many financial transactions, notably foreign currency dealings, to a halt. Companies that rely on dedicated cables to link their operations around the globe suddenly realised that their contingency plans were not as effective as imagined, as they had failed to factor in the simultaneous severing of multiple cable links.

The internet was first conceived in the 1960s as a means of linking up computers to allow computing power to be shared among researchers hundreds of kilometres apart. The cold war between the west and the former Soviet Union was still raging then. A distinctive feature of the internet is that it is designed to withstand the gravest physical attack, such as a nuclear strike. This has been achieved by linking each point in the network using multiple paths through different nodes. If any connecting nodes between two points fails, the transmitted data will automatically find an alternative route.

That was how it was supposed to work yesterday. Alas, that was not to be. As several cables that criss-cross the sea floor of the region were down at the same time, the capacities of ones that remained operational were fully stretched in no time. There was an insufficient number of alternative nodes to enable the smooth rerouting of internet traffic. As a result, serious congestion brought traffic to a standstill.

If nothing else, the turmoil should prompt us to think through the implications of a meltdown of the internet, the tool on which our so-called knowledge economy has come to depend. As we become ever more reliant on the internet, it is important for us to plan for the eventuality that we might have to do without it.

For example, many companies' contingency plans for dealing with a pandemic involve arranging for their employees to work from home, using computers with secure connections to their offices. But a physical breakdown of the internet would render such plans ineffective. On a broader scale, security of the world's telecommunications infrastructure is an issue that does not seem to have received adequate attention. Who will ensure the private companies that own and operate those cables have sufficient spare capacity to maintain vital international telecommunications links in an emergency?

One effect of the disintegration of cyberspace yesterday should be appreciated, however. With instant messaging systems down, offices came alive as workers actually had to walk and talk to one another, instead of tapping messages even to those sitting nearby. The burst of physical activity and old-fashioned verbal communication was a reminder that the internet has both the power to shrink physical distance as well as create virtual ones, with all their implications for human ties. The internet is a supreme communication tool; we should put it to good use but stop it from commandeering us.


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Friday, December 29, 2006

EDITORIAL/LEADER
New thinking needed on managing our waste



  
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   A clean harbour for just an extra 10 cents a day. That tantalising prospect has been put forward by the government as it tries to dig deeper into people's pockets to finance an expanded sewage treatment scheme.
Officials have obviously taken great care in packaging their proposal to make it acceptable. After all, who would oppose the application of the polluter-pays principle if charges are going to go up by just 10 cents a day for most households? That is until a careful scrutiny of the figures reveals that charges will actually rise by much more.


There will not be just a one-off increase but continuous upward adjustments for the next 10 years. At present, the average household pays about HK$11 a month, and about 90 per cent of households pay no more than HK$20. By 2016-17, the average household will pay about HK$27 a month. Households will see their sewage charges going up by between 7 and 29 per cent, depending on their amount of discharge.

The seemingly steep rates of increase should not blind us to the fact that Hong Kong's sewage charges will remain low by international standards and small in absolute terms. Even so, it is still important to get the principles right.

Officials have decided that the public purse should bear the HK$8 billion cost of building the sewage treatment facilities. We agree, as the facilities constitute an essential infrastructure.

A strict application of the user-pays principle in recovering the construction bill would have imposed an unbearable burden on the average household. But the decision to recover only 80 per cent of the facilities' operating costs is debatable. That is especially so because the government has maintained its adherence to the principle of recovering the full costs.

It is apparent that the decision is politically motivated. Under the current proposal, charges will go up by just over 9 per cent a year. Full recovery would have meant a double-digit rate of annual increase and made the package less palatable. Given the political circumstances, officials probably feel that the current package would stand a better chance of sailing through the Legislative Council.

In particular, the government is planning to introduce the increases by way of legislation. A bill setting out the yearly sewage charges over the next 10 years will be tabled for vetting. Legislators will no doubt query the accuracy of the government's projections about operating costs. Setting the recovery rate at 80 per cent would therefore seem prudent. At worst, if costs turn out to be not as high as expected, then 100 per cent cost recovery might be achieved without having to raise charges further.

What is disappointing is that the government has proposed no measures to reduce the amount of sewage through conservation. Statistics reveal that per capita domestic consumption of water has risen steadily over the past two decades. The annual rates of increases ranged from less than 1 per cent to almost 5 per cent. The cumulative increase was more than 30 per cent. Officials say that was because water and sewage charges had not been raised for so long. They hope that higher sewage charges will act like a virtual green tax to encourage conservation.

That may well be true. But a more aggressive approach should be adopted if we are really serious about conservation. Currently, Hong Kong releases about 340 billion litres of waste water into the sea each year.

In September, the Toilet Association estimated that amount could be reduced by 170 billion litres if old cisterns and pipe systems in buildings were altered and flushing habits changed. Elsewhere, bath water has been recycled for irrigation and even human consumption.

Hong Kong has been planning its water and sewage infrastructures according to demand - a strategy that means ever more resources being consumed to meet surging usage. It is time we introduced demand-management measures to reduce the wasteful consumption of a precious resource and thought about recycling it.


[url]http://focus.scmp.com/focusnews/ZZZWODPD9WE.html[/url]

thank you very much

Tuesday, January 2, 2007

EDITORIAL/LEADER
Vulnerability of telecoms links must be addressed



   
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   A week after an earthquake off the coast of Taiwan disrupted internet traffic in the region, life for users of cyberspace has not returned to normal, but nor has it been as unbearable as initially feared. Overseas calls to most places and instant messaging systems have largely been restored, although browsing of overseas websites and e-mails to foreign countries remain slow.
Luckily, the disruption came at a time when many parts of the developed world were closed for the Christmas and New Year holidays. However, its full impact will only be revealed today, when most people return to work and offices become fully functional again.


Repairs to undersea cables damaged in the earthquake have been delayed by technical problems and bad weather. The cables are now not expected to be back in service until the end of this month. Last night, the Office of the Telecommunications Authority disclosed that access to data services through the internet remained slow. The public are advised to cut down on non-essential use of the internet.

It is to be hoped that our usually efficient telecommunications links will be able to provide an acceptable level of service to keep us connected to the outside world. Even so, there is no question that the authorities should take serious steps to map out contingency plans to ensure our telecoms companies have sufficient back-up capabilities.

This major disruption has shown that the region's information infrastructure is highly vulnerable. Technically, internet traffic can be directed into various networks via terrestrial and submarine cables or by satellite. However, experts have noted that the region has fewer cables linking its power centres. Nor are alternative satellite links readily available.

In the wake of the disruption caused by the earthquake, a large share of traffic that cannot transit the damaged submarine cables has been rerouted as an emergency measure to servers in the United States. In practice, traffic is directed to the state of Virginia, which has a large concentration of root routers and whose maritime terminals account for about 50 per cent of the world traffic.

This is a highly unsatisfactory situation for Asia, where internet traffic is growing at a terrific rate. On the mainland, for example, the number of internet users already tops 123 million, but the growth potential remains huge for a country that has 1.3 billion people. Already, telecoms companies are laying more cables to meet projected demand. But they alone decide the provision of back-up capacities.

Many countries already regard their own information infrastructures as strategic. But their shared concern to remain connected with one another has not been complemented by a regional protocol to ensure the infrastructure's reliability. It is time governments in the region addressed such an important issue.


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Wednesday, January 3, 2007

SADDAM AND CASTRO
When dictators meet their deaths


JIM HOAGLAND
   
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   Dictators die harder than most of us. Having wielded unlimited power in life, they seem to be sustained by a stubborn belief in their ability to stare down death, too. But secret police, arbitrary executions and torture finally provide no lasting defence against their own date with the grim reaper.
That lends a particularly morbid, even pathetic, quality to the last days of Saddam Hussein and Fidel Castro, as it did to those of Francisco Franco and of many other tyrants-in-extremis before el rais Saddam and el jefe Fidel were confronted, respectively, with a hangman's rope and the withering ravages of disease.


Survival is the dictator's primary occupation - as well as his justification for ruthlessness. "His main contribution to life, finally, is fear; but fear such as thunder, cancer or madness may provoke," author William Kennedy wrote of the fictional caudillo that Gabriel Garcia Marquez created in The Autumn of the Patriarch. Facing death, the dictator is "the embodiment of egocentric evil unleashed", Kennedy continued in a masterful 1976 book review for The New York Times.

The year before, Garcia Marquez was in Madrid, as was I, for Franco's 40 days and nights of dying, centimetre by centimetre. Moreover, meetings I had with Hussein around the same time and later with Castro instantly gave me the impression that neither intended to go into the night quietly - or at all. They could not and would not let others pretend to command their people, or allow history to tamper with the image they willed for themselves.

When he ruled Iraq, Hussein left nothing to chance. A visitor who might greet him had to wash his or her hands with a mysterious blue liquid and pass through a maze of metal detectors in his vast palace.

For years after that encounter, I published open letters to Hussein urging him to get out of the dictator business, or at least quit slaughtering his nation's Kurds, Shiites and Sunni dissidents. I can stop. The approach of the hangman's rope finally focused his mind on my point.

Or so it seemed in the farewell letter that Hussein's lawyers claim the deposed tyrant wrote. Released one day after Iraq's highest court upheld his death sentence last week, the letter urges Iraqis "not to hate, because hatred does not leave space for a person to be fair ...." Even US troops should not be hated.

The lawyers would have us remember Hussein as a pious, forgiving ruler concerned about his people's welfare. They see this as a useful legal tactic. But I doubt it is the way Hussein wanted us to remember him. On the witness stand in his two trials, he remained generally fierce and defiant, refusing to be anything other than a man whom others must fear - or else.

Those who would blame all of Iraq's current evils on the American occupation are already busy airbrushing Hussein's image. But we cannot let death obscure his role in creating the inferno that is Iraq today. He leaves behind a country successfully recast in his own ferocious image to a degree far greater than I had imagined.

Before 2003, I believed that Iraqis were largely a people held hostage by Hussein, his murderous clan and the Baathist machine. But far more Iraqis turned out to be like Saddam - ready to use torture and assassination in the pursuit of wealth and power - than the world's best intelligence agencies had predicted. These Iraqis are Husssein's enduring legacy.


Cuba's situation after Castro will not be as traumatic or bloody as Iraq, in large part because Castro did not feel it necessary to rule as harshly and sadistically as did Hussein. As Marquez, Castro's friend, has written: "The Latin American reality is totally Rabelaisian." It misshapes Latin dictators in ways different than do the blood feuds of the Middle East.

But both dedicated their lives to what Garcia Marquez calls "the solitary vice of power". Their deaths will lighten their crimes and responsibilities not a whit.

Jim Hoagland is a Washington Post columnist.



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:reading: :reading: :reading:
Thanks.

Thursday, January 4, 2007

MAINLAND CHINA IN 2007
Year of the three big headaches


LAURENCE BRAHM
   
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   This year may represent a crossroads for China. Last year's trade volume and foreign exchange reserves reached historic highs - US$1.4 trillion and US$1 trillion respectively - and presented China's newest generation of leaders with some new equations.
They face two economic problems with potentially explosive social impacts just a year before the Beijing Olympic Games. First, the income gap between the mainland's haves and have-nots is more than three times the average in other developing countries. Second, Beijing's inability to control the rate of growth shows that the macro-economic control mechanisms relied on by the previous administration no longer work.


Retooling the mainland's economic structure, so that it's driven by consumption rather than exports, may be the key challenge that Premier Wen Jiabao faces this year if he is to assure the sustainability of China's economic model.

People in the street take a raw, practical view, reflected by the popular saying: "People cannot [afford to] see a doctor or receive education, and we have no place to live." Those are the three basics than any government - socialist or otherwise - must provide if it is to retain power.

That popular saying suggests mainland society is far from harmonious. Since President Hu Jintao is promoting social harmony as mainland China's new economic and social ideology, he has his work cut out for 2007. That is because the Beijing Olympics will offer mainlanders an unprecedented opportunity to stage social theatrics for an international TV audience if they are not adequately harmonised by then.

Instead of former president Jiang Zemin's "three represents", people are talking about Mr Wen's "three big headaches": controlling an excessive property boom that provides no housing for the poor; establishing broad-based medical services for what will be a rapidly ageing population; and providing education for young people - who will have to compete with other regional economies that the mainland can no longer undercut with cheap labour.

While China's property prices continue to skyrocket, the provision of medical care and education are in free fall. The two problems are intricately linked. Waiting lines to see doctors in any hospital can be a day long. Doctors are overworked, overstressed and underpaid, making the profession undesirable.

China can deal with the impending pressures of its rapidly ageing population only by comprehensively restructuring its medical-care system - probably involving some return to socialism. Further, the greying population will leave the mainland without enough cheap labour in 20 years. That means it will have to compete with the world as a hi-tech - not low-cost - labour provider.

But the education system, still locked in both Confucian and communist models, is not up to the task. This adds weight to the view of South Asian economists that India will overtake China in the coming decade or two.

So 2007 will be the year when economists start asking whether the mainland's hyper-economic growth model, driven by exports and infrastructure projects, has peaked. For the first time, the think-tanks that feed ideas to top leaders have begun questioning the model's sustainability.

Driven by such concerns, the Communist Party's Central Committee Economic Working Group met late last year to discuss remedies. They managed to produce only the most obvious suggestions, such as that growth rates need not be so high and that the quality of life should improve.

Achieving it this year with slogans alone may prove difficult. Local governments are still fixated on high-growth targets: career promotions and the mechanics of corruption depend on rapid growth. It usually involves spending on property or the construction of infrastructure, perpetuating Beijing's headache of imbalanced growth.

Mr Hu ended last year with a demonstration of toughness: he sought to rein in local government excesses by purging Shanghai party secretary Chen Liangyu and weeding out his cohorts. But the effects of combating corruption may be limited, as local officials see it as a purely political purge.

One solid new programme planned for 2007 is the New Village Movement - xin nongcun yundong. Despite its retro- socialist name, this scheme simply involves basic infrastructure funding to connect remote villages with decent roads. Local road networks will offer income to villagers participating in the construction. The easier transport of goods will help improve rural lifestyles. But local corruption, invariably connected with such projects, may also be stimulated.

Will the New Village Movement promote rural social harmony? Or will people just use the new roads to leave the countryside - where corruption is even more intolerable than in cities - in their quest for urban employment?

Laurence Brahm is a political economist, author, filmmaker and founder of Shambhala Foundation.



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Friday, January 5, 2007

EDITORIAL/LEADER
Rising yuan has serious implications for HK



  
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   Retailers in Shenzhen have long regarded it as a fact. Now some Hong Kong banks have followed suit. With the yuan yesterday closing at 7.8090 to one US dollar, compared with the fixed rate of 7.8 for the Hong Kong dollar, the day when the two currencies reach parity is likely to come in weeks, if not days.
While the development has long been anticipated, Hong Kong people are still likely to feel more than a little jolted as the effects of the renminbi being a "more valuable" currency than the Hong Kong dollar begin to sink in.


For weeks, the yuan has been traded at slightly more than one Hong Kong dollar at money exchanges in Shenzhen. That has prompted shops there to stop accepting Hong Kong dollars for yuan-denominated trades, as they can no longer pocket a small exchange rate gain by doing so. Now that even some banks regard the Hong Kong dollar as "cheaper" than the yuan, the former's popularity on the mainland can only decline further.

The yuan reaching a higher exchange rate with the US dollar than that for the Hong Kong dollar is a significant landmark. In terms of economic well-being, however, Hong Kong is still far ahead of every part of the mainland.

In 2005, Hong Kong's per capita gross domestic product was US$25,500, which was still several times more than that for the most affluent mainland cities. The comparable figures for Beijing, Shanghai and Shenzhen were US$5,500, US$7,600 and US$7,300 respectively. For a long time to come, Hong Kong people will flaunt their wealth across the border. But they will now find it less easy to avoid the trouble of changing their Hong Kong dollars into renminbi notes. Previously, using Hong Kong dollars on the mainland meant accepting a small exchange rate loss. That difference has now all but disappeared - but the number of mainland traders willing to accept Hong Kong dollars is also diminishing.


What Hong Kong people really have to come to terms with are the economic repercussions of an appreciating yuan. According to Xinhua, a report compiled by 80 mainland economists says they expect the yuan to appreciate by about 5 per cent this year. As a result, the yuan's exchange rates with the greenback and Hong Kong dollar will certainly rise, although by how much is difficult to predict. Officially, the yuan's exchange rate is set in relation to a basket of currencies and the precise composition of each currency is a secret.

Because of the nature of our economy and currency system, the effects of a rising yuan and a falling US dollar are two trends that will impinge on us sharply. Theoretically, they should mean higher inflation here. As the value of the Hong Kong dollar declines relative to the yuan and other foreign currencies, it will cost more for this import-dependent economy to buy from overseas. In practice, the inflationary effects are not evenly distributed.

The falling dollar is one of the forces that have driven up the prices of blue-chip stocks and top-end properties as these assets become more attractive to overseas investors. For Hong Kong-based multinationals, this city has become cheaper as rents have fallen after adjusting for the exchange rate. The tourism and retail sectors are also benefiting from the weaker dollar as visitors find Hong Kong more affordable.

Ordinary people, however, have seen no rise in the value of their dwellings, whose prices remain way down from their peak in 1997. Even though their wages have gone up, the price of imported food and other daily necessities have risen even more. Overall, skilled professionals stand to gain more from a weaker dollar than less skilled members of the workforce, whose jobs are priced out by the forces of globalisation.

The polarising development is emerging as a serious social issue. Already, confrontation between business and labour over a minimum wage has intensified. As the wealth gap widens, social harmony - or the lack of it - will become more of a problem. Looking ahead, it is imperative that policymakers come up with innovative solutions to narrow that gap.


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Monday, January 8, 2007

EDITORIAL/LEADER
Swift action must follow new strategy on heritage



  
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   The government's answer to critics of its approach towards preserving Hong Kong's past will be unveiled today with the announcement of the new-look Antiquities Advisory Board and new proposals for public consultation on heritage conservation.
While these measures are, in part, aimed at appeasing the anger sparked by the demolition of the Star Ferry pier in Central, the government should not think that the matter will quietly go away.



Instead, as the discontent over the decision to remove without consultation yet another of our dwindling number of longstanding landmarks reveals, a better method than the piecemeal policy in place is needed - and quickly. The regrettable attitude of the past three decades in which heritage sites were preserved on a case-by-case basis - assuming there were public concerns raised in time - can no longer apply.

Promises that places of importance would be saved marked the coming into effect of the Antiquities and Monuments Ordinance and establishment of the Antiquities Advisory Board and Antiquities and Monuments Office in 1976. Evidence of their combined ineffectiveness is all around: The charm and memories of bygone eras have been torn down and replaced by modern buildings, shopping malls and roads.

One reason is that the government has no control over privately-owned buildings. Although it has declared 78 buildings, rock carvings, forts and archaeological sites as monuments - providing a measure of legal protection - more than 400 other structures put up before the second world war remain vulnerable.

There have been times when the government has not seemed to appreciate the need to protect Hong Kong's past. Kom Tong Hall, the Mid-Levels colonial mansion that was bought in the nick of time from its owners and is now the city's first museum to modern China's founding father, Sun Yat-sen, is the exception rather than the rule. A string of other sites have been destroyed, ranging from the Walled City in Kowloon to the Tiger Balm Gardens in Tai Hang.

With the disappearance of each memory, Hong Kong has matured. There is more to progress as a society than replacing the old with the new. Quality of life is as much about having a perspective on how we have arrived at where we are and being mindful of how that was achieved, as it is about modern amenities.

That was what the protests at the Star Ferry pier and adjoining Queen's Pier were about and the call was loud and clear: This must not happen again. Nor can it be allowed to, now that the matter has been so passionately debated and demands for action so unequivocally stated.

The decision to enlarge and revise the membership of the city's top body advising the government on conservation of important buildings and sites, the Antiquities Advisory Board, is a welcome step. So, too, is the beginning of another round of discussions to toughen the weak system that fails to protect the places that are important to this city. The revelation that officials are considering the establishment of a heritage trust to preserve sites shows that a fresh approach is being considered, and that is good.

These steps move Hong Kong in the right direction, but we are still waiting for the new policy on preservation to be put in place. Time is fast running out for the dwindling number of sites that remain, among them the Wan Chai and Central markets. With the consultation process already three years old, the time for defining which aspects of our cultural heritage should be preserved and how this can be done is long overdue.


As the vigils and outbursts of emotion at the Star Ferry pier last year showed, further delays should not be countenanced. Cities the world over have kept their past intact, so there is no shortage of approaches that could also be applied here.

The case of the Star Ferry pier has been the impetus for action. The proposals for a new strategy should set Hong Kong on the right track - and they need to be swiftly followed up with action.


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