think you very much

Patriot games


REGINA IP

Jul 16, 2007           
     
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If the hidden purpose of the controversial mother tongue policy was to promote patriotism and greater "sinicisation" of post-colonial Hong Kong, by all accounts the policy is a dismal failure.
First, it must be recognised that however ubiquitous Cantonese is in Hong Kong, it is but one of the many dialects of China, the mother tongue of no more than 100 million Cantonese speakers within China and in Chinese communities overseas. Cantonese is widely spoken in enclaves of Hong Kong emigrants in such cities as San Francisco, New York, Vancouver, Toronto and Sydney, but Hong Kong Chinese who have lived overseas will know that once outside these communities, Putonghua is the lingua franca which unites Malaysian and Singaporean Chinese, mainlanders and Taiwanese. .

  

In American universities, Chinese classes - be they classics, history or literature - are taught in either English or Putonghua, depending on the origin of the instructor, but never in Cantonese.

Our market-savvy pop stars have long grasped the key to success in the gigantic mainland market - the ability to sing in Putonghua like native speakers.

Thus in terms of convergence with the mainland, instruction in Cantonese serves no useful purpose. On the contrary, fluency in Cantonese at the expense of proficiency in Putonghua could enhance the risks of the marginalisation of Hong Kong -mentally, culturally and linguistically, vis-�-vis the rest of China.

Shrewd Hong Kong parents who are willing to pay a premium for a quality education have opted to place their children in pricey international schools or "private independent schools". In all these establishments, Chinese classes are taught in Putonghua. These parents know proficiency in Putonghua will put their children in a more competitive position in partaking of the unprecedented, unfolding story of China's breathtaking economic renaissance.

Compared to the colonial days, when erudite mainland Chinese teachers steeped in classics and love of Chinese literature were respected and given the opportunity to pass on their scholarly enquiry to Hong Kong kids, the Hong Kong Special Administrative Region government has taken a major step backwards in de-emphasising the study of classical canons and celebrated literary works which constitute the gems of Chinese literature. The narrow, shallow and unabashedly utilitarian focus on practical application of the Chinese language has drastically reduced students' stock of knowledge of Chinese culture, without improving the use of the language.

Even more egregious is the fact that since the turn of the century, Chinese history is no longer available as an independent school subject. It has been incorporated into a new course known as "integrated liberal studies". The amount of Chinese history taught varies from school to school, and the lack of continuity and a big picture militates against contextual understanding of this history. That is why you find many high school leavers ignorant about momentous modern historical events such as the May Fourth Movement of 1919, or the Xian incident of 1936, let alone early Chinese myths and cosmology going back into the mists of time.

This stands in sharp contrast to the practice of most self-respecting countries: Canadian or American history is taught to a high level of detail, analysis and interpretative theory in good high schools in both countries. The diminution of history in our school curriculum is nothing short of an assault on our national identity.

If any campaign has been afoot in the run-up to the change of sovereignty to shape Hong Kong children's sense of identity, the combined effect of the curriculum changes may be more aptly described as an insidious exercise in undermining national identity rather than enhancing patriotism.

In Hong Kong, despite much talk of enhancing locals' sense of national identity, there has been no clearly identifiable effort to integrate national identity enrichment with educational reform and curriculum design.

When it comes to the preservation of Chinese history, colonial Hong Kong beats the Hong Kong SAR hands down.

Regina Ip Lau Suk-yee is chairperson of the Savantas Policy Institute


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MPF reform needed to protect nest eggs


EDITORIAL/LEADER

Jul 17, 2007           
     
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The reasoning behind the setting up of the Mandatory Provident Fund almost seven years ago was sound: just one-third of the workforce at the time had retirement protection and with the population rapidly ageing, a social crisis was looming. Implementation of the scheme means that 85 per cent of workers are now saving for their old age. But the inadequacies are apparent and it is time for reform to ensure that we can live as rich a life as possible after ceasing work - and are not an excessive burden on the community.
A Consumer Council study shows that MPF management fees are cutting deep into the payouts people can expect to receive when they reach the retirement age of 65. The council's recommendation that employees should have a say in choosing which scheme they contribute to backed a similar call two months ago by the new head of the MPF authority, Henry Fan Hung-ling.

  

The authority is already investigating the worthiness of such a move. It should be implemented as soon as possible to correct a flaw that is preventing much-needed competition among the 19 MPF trustees offering about 300 funds. Such flexibility was not guaranteed when the MPF regulations were enacted. Employers choose which of the trustees receive the maximum monthly contributions of HK$2,000. Some employers care that their workers' retirement needs are best met by joining funds that are well managed and cost-effective. This is not always the case, however: some companies look for the most efficient route, which often tends to be the funds operated by their banks. As the council's analysis concludes, this is good for the fund managers, but not the employees.

Average annual MPF fees of 2.06 per cent - for management, trustees, accounting and the like - in Hong Kong are high compared with similar schemes elsewhere in the world; they mean that the amount workers will receive when they get their retirement payout is substantially lower than it might be if they were given a chance to choose their own fund. Such fees are also unfairly steep given that MPF funds are, by law, low- or medium-risk investments. Managers generally have a predetermined line of stocks and securities into which they channel funds - a service that requires little work. Similar easily managed portfolios in the commercial sector attract a fee of 0.5 per cent at best.

Given the strains that the rising number of elderly will bring to Hong Kong, such fees are undermining the very reason for having the MPF. The less disposable cash the future elderly have at hand, the more they will have to rely on the government for help. Authorities are unlikely to be in a position to offer a viable safety net. Last year's population survey showed that 12 per cent of Hong Kong people were 65 and over and this is expected to rise to 26 per cent in 2036. With the number of people able to provide support for each elderly person through taxes likely to drop in that period from the present six to two, the aged themselves will have to carry the burden.

The over-60s are several times more likely to need medical treatment than other members of society and health-care reform is now also a government priority. So, too, should be MPF reform in light of the strains being put on retirement funds by excessive fees. Allowing employees to choose their own funds will free up a market that could impinge upon our viability if it continues on its present track. Market forces will create competition that will bring fees down and force fund managers to work harder for their clients.

The MPF scheme was designed to ensure Hong Kong could better cope with the dilemma of an ageing population. With the benefit of now having seen it in action, it is clear the scheme could be functioning better. Reform to create greater competition among fund managers will put us back on the path that was envisaged.


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Logging success at home is not enough


EDITORIAL/LEADER

Jul 18, 2007           
     
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The mainland knows well that forests are more valuable when left standing than cut down for timber. Centuries of environmental abuse have led to spreading deserts, destructive floods, falling water quality and dust storms. Learning the lesson the hard way has resulted in aggressive forest-protection and tree-planting programmes in recent years. More land is now being returned to forest on the mainland than anywhere else in the world - an achievement the government has a right to crow about.
But leaders could be even prouder of their record if they extended their concern beyond the nation's borders to the world's rapidly diminishing tropical rain forests. The mainland's demand for timber - some of it cut illegally from these forests - means it is ideally placed to set an example to other governments.

  

Tropical forests are, after all, important to the world's future. That they cover vast areas of land in equatorial countries gives them a crucial role in the battle against climate change: their trees suck up the carbon dioxide that causes temperatures to rise, while rain clouds develop from the water that evaporates from the leaves.

The forests also have the world's richest ecosystems, supporting more than a million species of animals, plants and insects. They balance environmental systems elsewhere in the world and provide medicine and food. But because forests elsewhere have long ago been cut down, their wood is also eagerly sought. Despite protective national laws, there is a thriving international trade in illegally cut tropical forest logs - and the mainland - where construction is booming and which exports more furniture than any other country - is one of the main destinations for this timber.

Authorities yesterday played down the mainland's role in forest-clearing. Instead, they highlighted the success of afforestation at home and pinned the blame for the problem on the demand from the United States, Japan and other countries for Chinese-made furniture. They are, to a degree, right; no nation has enacted a law forbidding the import of illegally obtained tropical wood.

Beijing may have done more than any other government to ban the trade. Agreements have been signed with Indonesia and Myanmar and environmental groups have noticed a measure of success. They stress, however, that what has been achieved is piecemeal and that much more could be done. A ban has been in place along the border with Myanmar for the past year, for example, but truckloads of logs still cross into Yunnan province because of poor enforcement, smuggling, corruption and companies taking advantage of loopholes. In Beijing, the desire is genuine; on the ground, though, as with so many central government policies, it is quite another matter. Yet within its borders, the mainland has shown it is capable of reversing deforestation. The limits imposed on logging in its own forests, and its tree-planting efforts, are reducing deserts by 1,200 sq km a year. Afforestation has meant the nation now has a sustainable paper-milling industry and plans are well advanced to use trees for biofuels.

Stopping illicit logging is labour-intensive and requires skilled inspectors. Patrolling borders, checking shiploads of imported logs and ascertaining the origin of the wood being used on construction sites and in factories is a costly business.

In light of the pace at which tropical forests are disappearing, though, making the effort is essential. The mainland is well placed to take that extra step - and show other governments the way forward.


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A battle for the hearts and minds of Afghans


Raymond Kendall and Norine MacDonald
Jul 19, 2007           
     

Despite considerable effort by the international community in Afghanistan since 2001 to eliminate the Taleban and al-Qaeda, the insurgency in the south of the country has gathered momentum at breakneck speed in recent months. Research shows that we are not winning the campaign for the hearts and minds of the Afghan people - the Taleban is.
Indeed, the international community's methods of fighting the insurgency and eradicating poppy crops have actually helped the insurgents gain power.

The international community has so far pursued policies of destruction, rather than the promised reconstruction. The aggressive United-States-led counter-narcotics policy of crop eradication has failed to win the support of Afghans, because it has triggered a chain reaction of poverty and violence in which poor farmers, with their only livelihood destroyed, are unable to feed their families.

This has been exacerbated by the failure to provide even the most basic aid and development in the country's poorest areas.

The Taleban has exploited the failures of the international community in extremely effective anti-western propaganda that has fuelled significant doubt in the minds of the public concerning the reasons justifying the international presence in Afghanistan. Sadly, our troops are often the first to pay the price - sometimes with their lives.

It is not too late to win back the hearts and minds of the Afghan people. International troops are excelling in an exceptionally hostile environment, but this is not a war that will be won by military means alone.

With public perception a crucial factor in winning the war, and the Taleban poised to launch a large military initiative next spring, failure to adopt a successful strategy could signify the last chance the international community will have to build a secure and stable Afghanistan.

But a successful strategy - one that responds to Afghanistan's extreme poverty crisis - requires that the international community reverse course on crop eradication.

Eradication will never be successful in Afghanistan, because it destroys the single crop that will grow in the south's harsh climate - and thus serves as the main source of income for millions of people. So, a new, long-term, economically sustainable solution is urgently needed.

As a way to address this, the Senlis Council is proposing to run scientific pilot projects to research an opium licensing system for Afghanistan, which would be a core component of the economic reconstruction process.

A system in which the poppy is cultivated for the production of pain-killing medicines, such as morphine and codeine, would allow farmers to pursue their traditional way of life and, more importantly, to feed themselves and their families. There is a global shortage of morphine and codeine, particularly in underdeveloped countries.

We must have the backing of the Afghan people if we are to defeat the Taleban. By endorsing such an initiative, the international community would demonstrate that it is in Afghanistan for the good of the local population, which would help farmers sever ties with the insurgency.

But for such a system to be successful, the extreme poverty in the south of the country must be our top priority. According to the World Food Programme, 70 per cent of the population lacks food security. An immediate injection of emergency food and medical aid is urgently needed to break the vicious circle of suffering and violence.

Only then can a new, long-term development strategy in Afghanistan - one that admits that the international community is not winning the war, and that the status quo is unacceptable - be implemented.

Raymond Kendall is a former secretary-general of Interpol and Norine MacDonald QC is the founding president of the Senlis Council, a security and development think-tank. Copyright: Project Syndicate



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Biofuel mania ends the days of cheap food


Gwynne Dyer
Jul 20, 2007           
     

The era of cheap food is over. The price of corn has doubled in a year, and wheat futures are at their highest in a decade.
The food price index in India has risen 11 per cent in one year, and in Mexico in January there were riots after the price of corn flour (used in making the staple food of the poor, tortillas) went up fourfold.

Even in the developed countries, food prices are going up - and they are not going to come down again.

Cheap food lasted for only 50 years. Before the second world war, most families in developed countries spent one-third or more of their income on food (as the poor majority in developing countries still do). But, after the war, a series of radical changes, especially mechanisation, raised agricultural productivity hugely and caused a long, steep fall in the real price of food. For the global middle class, food was taking only a tenth of their income.

It will probably be up to a quarter within a decade - and it may go much higher than that - because we are entering a period when several factors are converging to drive food prices up. The first is simply demand. Not only is the global population continuing to grow but, as Asian economies race ahead, more and more people in those countries are starting to eat significant amounts of meat.

Earlier this month, in its annual assessment of farming trends, the United Nations predicted that, by 2016, people in developing countries will be eating 30 per cent more beef, 50 per cent more pork and 25 per cent more poultry. The animals will need a great deal of grain, and meeting that demand will require shifting huge amounts of grain-growing land from human to animal consumption - so the price of grain and meat will both go up.

The global poor don't care about the price of meat, because they can't afford it even now but, if the price of grain goes up, some of them will starve. And maybe they won't have to wait until 2016, because the mania for biofuels is shifting huge amounts of land out of food production.

The amount of United States farmland devoted to biofuels grew by 48 per cent in the past year alone, and hardly any new land was brought under the plough to replace the lost food production. In other big biofuel producers, such as China and Brazil, it's the same straight switch from food to fuel. In fact, the food market and the energy market are becoming closely linked, which is very bad news for the poor.

As oil prices rise (and the rapid economic growth in Asia guarantees that they will), they pull up the price of biofuels as well, and it gets even more attractive for farmers to switch from food to fuel.

In the early stages of this process, higher food prices will help millions of farmers who have been scraping along on very poor returns for their effort because political power lies in the cities.

But, later, it gets uglier. The price of food relative to average income is heading for levels that have not been seen since the early 19th century, and it will not come down again in our lifetimes.

Gwynne Dyer is a London-based independent journalist whose articles are published in 45 countries


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The green giant?
Mega cities are the best way for China to contain damage to the environment without affecting growth, writes Andy Xie

Andy Xie
Jul 23, 2007           
     

The environment is emerging as a bottleneck in China's economic development. The algae booms in Tai Lake in Jiangsu province and Chao Lake in Anhui are symbols of the cumulative effects of water pollution over the past two decades. Air pollution levels are unacceptably high; emissions of sulfur dioxide are at least double the maximum safe levels. Incidences of cancer have been rising more than 30 per cent per annum. Respiratory diseases have become an epidemic. In particular, China's rural population has suffered disproportionately, as these people have benefited least from economic development and don't have the resources to protect themselves.
In the late 1980s, the eminent sinologist John Fairbank predicted great economic success for China, coupled with environmental catastrophe. He saw the potential for the mainland to reach extremes, in any direction, due to the concentration of power and the lack of individual rights within the system. The former allows China to move quickly in one direction; the latter implies a muted social response at such times.

A response comes when a catastrophe occurs and the authorities act dramatically by shifting direction, often taking the opposite path. The combination of an extreme concentration of power and the lack of individual rights mean that China is prone to revolution. But its leaders cannot allow this to happen again. By reforming the structure for incentives and using technology better, China can contain or even reverse the environmental damage, without harming economic development.

The current political system rewards regional leaders for increasing gross domestic product. This gives them incentives to create inefficient and unsustainable growth.

Two by-products of the system do particular damage to the environment. Firstly, regional leaders tolerate small factories that survive by minimising costs at the expense of the environment. Secondly, these same leaders pursue maximum growth in fixed-asset investment. As long as money is available, such investment is the easiest channel for creating GDP. That is why many local governments are like fund-raising specialists. Much fixed-asset investment is related to urbanisation. But, many places are not suitable for such development. Water availability and employment opportunities are binding constraints.

The implementation of fixed-asset investment creates temporary employment and profit. Yet many small cities are then unable to find the revenue for environmental services, such as recycling. Worse still, these inefficient cities try to create economic activity by allowing industries to cut corners on pollution control.

Environmental protection is first about charging the full cost of economic activities. When a business or government project damages the environment, it must be required to meet international standards. Chinese businesses avoid pollution controls and pass the savings on to consumers - mostly foreign - by cutting prices. Appreciation of the yuan has also put pressure on many export industries. Some try to compensate for the rise in costs by cutting other expenditure, including environmental controls. If environmental standards could be vigorously enforced across the nation, all businesses would pay the same costs, and could pass on savings to consumers. This would be the equivalent of a currency appreciation; I believe that enforcing international standards would be equivalent to a over 10 per cent yuan appreciation.

Beijing should also discourage the urbanisation of unviable areas. Indeed, a good urbanisation strategy is at the heart of meeting China's environmental challenges. The best way to protect the environment is to limit human activity. The population is spread out on mostly unfertile land and people try to improve their livelihood by engaging in non-agricultural activities in unsuitable areas.

The correct strategy is to build mega cities. China needs to urbanise quickly but has a low level of wealth to support demand. Thus, urbanisation must be highly efficient to lower the cost of building, working and living. Only scale can achieve such efficiency. Shanghai has become a model of urban efficiency. It is building over 500km of subways and when the system has been completed, the city could easily accommodate more than 30 million people. Its size and density keep logistics and job-creation costs low. China should concentrate its resources to build up to 30 such mega cities in the next 20 years.

The next priority is for the mainland to increase the price of energy, to decrease emission levels and foster a culture of frugal living. Japan has demonstrated the viability of such a policy; its energy consumption per capita is less than half that of the US, because its energy price is more than twice that of the US. China should aim for a 100 per cent energy consumption tax, to be phased in over the next 10 years. Revenue from this could reach 3 trillion yuan per annum and be used for more public transport, low-cost housing and pollution control. Such a policy would be equivalent to a 5 per cent appreciation of the yuan.

If the current trend continues and environmental degradation makes normal life impossible, popular sentiment may turn against development and China may head towards another extreme. But, limiting development will only worsen environmental degradation as more people try to improve their living standard through small-scale production. The mainland must avoid this trap and pre-empt a backlash against development.

Andy Xie is an independent economist



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Thanks for your effort

If other governments invest, why not Beijing?


EDITORIAL/LEADER

Jul 24, 2007           
     

There is a measure of disquiet in Europe with the announcement that a mainland bank has bought a chunk of Britain's Barclays Bank and that if the world's biggest-ever banking merger goes ahead, it will be a significant shareholder in the resulting firm. Banks, in some eyes, are a national asset, and these are deals that can be perceived as not being in the public interest.

Such a perception ignores the realities of a globalised world and suggests that China cannot be trusted with the family jewels. An American or European government participating in such ventures would not have raised an eyebrow, but the investment by China has prompted some concern.

Those with knowledge of the banking sector, however, know otherwise; the global economy means that the driving force of international finance - banks - are no longer the domain of nations, but the world. HSBC (SEHK: 0005, announcements, news) may have been founded in Hong Kong, but it is a British bank with its headquarters in London and global interests.

Barclays is a British bank through and through. With branches on virtually every British high street, it appears to be a matter of lost pride for some account-holders that China could help Barclays' bid on ABN Amro, the largest bank in the Netherlands. If that bid succeeds, China could have up to a 7.7 per cent stake.

So for the bank's board, the move is necessary for the next stage in Barclays' evolution, which could make Barclays Europe's second largest bank after HSBC.

Barclays has also just been granted regulatory approval to buy almost 20 per cent of one of the mainland's oldest trust firms. This will invite speculation that it was a case of quid pro quo. Whether or not that is true, it does show that such investments work both ways.

Foreign shareholdings are as true for China as the rest of the world; opening up national banking sectors is a prerequisite of World Trade Organisation membership. The Royal Bank of Scotland is among stakeholders in Bank of China (SEHK: 3988), for one.

But there is a greater impetus for Beijing to buy into foreign banks than WTO rules: investment. With US$1.3 trillion in foreign cash in hand, US securities alone do not provide the returns that a nation with China's social challenges needs. Wise investment in foreign companies, does, though - and banks are generally a safe bet.

This is what the investment company that the central government is setting up with US$200 billion in capital is about. Getting sound returns is the aim, not infringing national interests, as was the claim in 2005 when the US Senate blocked the mainland's state oil firm from buying Unocal, America's ninth largest oil and gas company.

That theory could not be used when China's Lenovo (SEHK: 0992) purchased IBM's personal-computer business. Nor was anything but strong returns on the state investment company's mind in May when it bought a stake of just under 10 per cent in the US private equity group Blackstone; it does not get a say in the running of the firm.

The central government is adding an extra US$1 billion every day to its foreign currency nest egg. Mainland firms are becoming richer as the home market grows, as are joint venture companies making goods for a world clamouring for their output.

As the mainland grows more financially powerful, finding good investments is a matter Americans and Europeans will have to get accustomed to.

Having reservations about China's rise and trying to stop its investments is not only wrong, but will also harm global integration.


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In Iran, intellectuals are the new terrorists


Ahmed Rashid
Jul 26, 2007           
     
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My friend, the intellectual Kian Tajbakhsh, is in jail in Iran for, well, being an intellectual. He has not had access to a lawyer or any visitors since being jailed for espionage and undermining the state. In short, if you live in Iran nowadays, intellectuals are the new terrorists.
As in Hitler's Germany and Stalin's Russia, purveyors of ideas, information and emotions are the enemy in President Mahmoud Ahmadinejad's Iran, especially if the people espousing such ideas happen to work for a foreign organisation.

  

Tajbakhsh, an internationally respected scholar, social scientist, urban planner, and dual citizen of Iran and the United States, has languished in Tehran's Evin Prison - notorious for its documented cases of torture and detainee abuse - since May 11.

I was shocked last week to see him on Iranian TV, pale and wan, giving the kind of faked confession that would have made Soviet prosecutors blush.

Tajbakhsh was arrested along with other leading Iranian-American intellectuals, including Haleh Esfandiari of the Washington-based Woodrow Wilson International Centre for Scholars. Esfandiari is a 67-year-old grandmother - just the right age to set about undermining Iran. Her lawyer, Nobel Peace Prize laureate Shirin Ebadi, has been denied access to her.

You would think Tajbakhsh's record in Iran would rule out an accusation of treason. He has been a consultant to several Iranian ministries on urban planning, and helped the government in major rebuilding projects after the devastating earthquake that destroyed the ancient city of Bam in 2003. Last year, he completed a three-year study of local government in Iran - hardly the stuff of insurrection and regime change.

But Tajbakhsh was also a consultant to the Soros Foundation, which, according to the government, has worked against Islam. That idea is preposterous. In fact, the foundation's many contributions to the Islamic world include help following catastrophic natural disasters in Pakistan and Indonesia, providing medical supplies to the Palestinians under blockade, and allowing scholars and intellectuals to learn from each other by translating and publishing works from English into local languages and vice versa.

In its Muslim era, Iran has boasted of some of the greatest poets, writers and scientists in the world. None of this would have been possible if Iran's ancient Muslim rulers had not allowed academic freedom and the free exchange of ideas and expression - something that is sorely missing in today's Islamic Republic.

Other autocratic rulers in the Muslim world are learning from Iran's example, cracking down hard on intellectuals, journalists, lawyers, women activists, or just about anyone who has ideas and wants to exchange them with others. And my friend Kian Tajbakhsh - alone in his cell wondering what he has done wrong - is the face of this new form of repression.

Ahmed Rashid is the author of the books Taliban and Jihad. Copyright: Project Syndicate

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Greater integration will benefit our city


EDITORIAL/LEADER

Jul 27, 2007           
     
  |   

  



A proposal to liberalise entry to Hong Kong for the 2 million permanent residents of Shenzhen may seem to many to be ahead of its time. But it tackles the question of how to secure the city's future under the "one country, two systems" concept.
The detail and timing of such a step calls for careful consideration to avoid a huge influx. It is, however, a sensible idea in principle, with more to be gained than just the immediate economic benefits to Hong Kong.

  

Our city has to integrate with the mainland sooner or later. The border with Shenzhen will disappear anyway in 2047. But integration should be incremental in order to safeguard Hong Kong's stability and prosperity. We cannot wait another 40 years and then hope for the best. Nor, for the same reason, can we tear down the border overnight. The barrier to unrestricted movement is there for legitimate reasons, such as wide disparities between the standards of living in Hong Kong and the mainland.

But Hong Kong should be open to increasing the pace of integration, while maintaining a step-by-step approach. It is time to consider a more open-minded approach to immigration issues.

Already, Hong Kong people can visit Shenzhen freely, while Shenzhen residents can visit Hong Kong under the mainland's individual travel scheme, which many do frequently. Thousands of children living in Shenzhen cross the border by bus to attend schools in the New Territories.

A case for a faster pace of integration is to be found in Hong Kong's aspirations to match the world's leading financial centres. In an interview to mark the 10th anniversary of the handover, Chief Executive Donald Tsang Yam-kuen said the city should aim at a population of 10 million, compared with 7 million now, in order to match New York and London. He rightly emphasised that an adequate supply of talent from around the world, particularly from the mainland, is crucial to that aspiration.

But that does not mean we need to think about how to physically squeeze 10 million people into Hong Kong, already one of the most densely populated places in the world. By making the existing rules more flexible, we can effectively expand Hong Kong's working population without having to allow a lot of people to live here. After all, Central is only an hour by public transport from Shenzhen, and the north of the New Territories half that. People on both sides should be able to easily cross the border for leisure, shopping, business or work.

Shenzhen is a logical starting point for integration, with its relatively high standard of living and better educated population. Over the longer term, we should be thinking about widening integration into Guangdong. Again, timing and detail will be crucial to avoid a huge influx. The speed with which such a plan should be implemented depends on how fast the wealth gap between Hong Kong and the mainland narrows.

Many Hong Kong people may not agree that we are ready yet for greater cross-border integration. Concerns include an influx of Shenzhen criminals and chaos on our roads. Security issues must be resolved, but they are a two-way street. Shenzhen officials have every reason to be alert to penetration by Hong Kong triads.

If Hong Kong wants the advantages of greater integration, it must also accept the drawbacks. With foresight and planning they are not insurmountable. The potential benefits far outweigh them.


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Our charitable heart needs looking after


EDITORIAL/LEADER

Aug 20, 2007           
     
  
Hong Kong people are generous, as donations to disaster relief on the mainland and tragedies elsewhere such as the Asian tsunami in 2004 ably attest. That willingness to give is a key reason why hundreds of new charitable organisations are being established here each year.
Such fondness for heartfelt giving in a world that has become so materialistic is laudable. Given that there is so little regulation of charities here, however, it could also be said that we are an unthinking or even impulsive society.

It is therefore good that our top judge and secretary for justice have called on the Law Reform Commission to look into the matter and, if necessary, go the route of Britain and other nations in putting regulatory laws in place. We should, after all, be able to open our wallets and purses with confidence each time a cause tugs at our charitable heartstrings.

Charities are being founded for a plethora of reasons that governments do not or cannot cater for. They can be easily set up; the biggest hurdle for organisers is convincing the Inland Revenue Department that they represent a cause worthy of exemption from paying tax.

Not counting the difficult-to-monitor charity boxes on shop counters or the collectors who take small sums or sell handicrafts on city streets, we gave almost HK$5.2 billion in tax-exempt donations to charitable causes last year. That is a tidy sum for a city of 7 million people - yet none of the organisations which so gratefully took our donations are required by law to regularly account for even a cent of that largesse.

In the interests of openness and transparency, some charities detail their activities, showing how much was spent on administrative costs, salaries and, most importantly, what went to the needy. A large number do not make such an effort, however.

Such a loose, almost unregulated, system that takes in a vast amount of money is an anomaly for a financial centre such as Hong Kong. We insist on the high standards of accountability and transparency for which we have gained an international reputation for listed companies, but not when it comes to registered charities that rely on generosity.

Such circumstances leave the door for abuse wide open for the people who have set up charities. As we report today, some stack their boards with family and friends as directors, leaving little room for checks and balances. Unscrupulous people can then direct our generosity to their own benefit.

There is also the matter of people who claim to represent charities collecting in the streets or offering items for sale to raise money that they say will go towards a worthy cause. We do not have the time to check out their claims as we rush by; it is much easier to not ask questions, trust them and let our sense of giving take over.

Legal measures would prevent this from happening. By defining what a charity is, making charities prove that they exist for the public benefit and establishing a commission to monitor and regulate their operations would ensure that we can donate with as much confidence as we invest in shares on the stock market.

We must be careful not to over-regulate. Too many rules and standards that are too high will prevent some people who truly want to help the needy from getting projects off the ground. Nevertheless, it is essential that the authorities look into our charities and ensure that the dollars we so generously give are going where we are told they are.


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Pilot scheme should be seen as long-term boost


EDITORIAL/LEADER

Aug 21, 2007           
     

After a week of stock market turmoil, Hong Kong investors deserved some good news, and it came yesterday courtesy of the mainland's currency regulator. The announcement that mainlanders will be allowed to buy shares here under a pilot scheme naturally improved sentiment and spurred a rise of more than 1,200 points in the Hang Seng Index.
When the trial will begin was not made known, nor was there certainty whether it would become a permanent fixture. Given financial realities, though, what is clear is that, for now, the decision is of great symbolic importance, rather than a guarantee that billions of dollars will soon start pouring into Hong Kong.

The scheme is, after all, akin to the individual travel permit system announced after the Sars outbreak in 2003. At first, there was a trickle of mainland visitors, but as word spread and circumstances improved, numbers grew to 1 million-plus a month at present.

For now, the strength of the yuan compared with the Hong Kong dollar as well as the vibrancy of the mainland stock markets will limit the worth of the scheme, despite the price A shares on the mainland generally being higher than the equivalent H shares in Hong Kong. Many mainland investors will also want to become more familiar with our city's exchange before buying.

Some of these factors will, however, change over time. The move is the latest measure which, sensibly, aims to widen currency outflows in an effort to improve the mainland's international balance of payments and increase returns on individuals' foreign currency holdings. The scheme alone, though, will not end pressure from the US and European governments for revaluation of the yuan.

Mainlanders will, in time, gain more knowledge of the Hong Kong exchange and be more willing to invest. Also, the relative lack of volatility on the mainland markets cannot be guaranteed in the long term.

Just as the number of mainland tourists grew from a trickle to a flood, so, too, will the investment in our stock market. There is a pool of 17 trillion yuan in household savings to tap into. The benefits, though, will not be instant, but long-term.

Such has also been the case with allowing mainland companies to sell yuan-denominated bonds here and our banks to offer yuan services. Hong Kong, as an international financial centre with the region's premier stock market, is ideally suited to be a testing ground for mainland financial innovations.

That the city of Tianjin will be the centre for the new venture and the Bank of China (SEHK: 3988) the sole vehicle for moving the capital between the mainland and Hong Kong need not be of concern. Shanghai does not have to dominate the mainland's financial markets, and there is always scope for enlargement of the scheme through other banks.

Hong Kong's status as the mainland's financial window to the world shows Beijing's faith in our city's capabilities and expertise. The benefits will, in time, help our growth and development. As welcome as the decision is, though, we must bear in mind that it is the next stage of a burgeoning process, not the signal for an instant monetary flood.


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City should be proud of its role in Olympics


EDITORIAL/LEADER

Aug 22, 2007           
     
  |  
An unconvincing performance in a small part can detract from the whole show. When it comes to organising the equestrian competition for next year's Olympic Games, Hong Kong is unlikely to let host city, Beijing, down. Top Olympic and equestrian officials heaped praise on Hong Kong's preparations after the test event earlier this month at the Games venues of Sha Tin and Beas River.
There is more to hosting the Olympics, however, than technical and administrative expertise, even though they pose extraordinary organisational, security and financial challenges for the host nation. The Olympic spirit of fair and friendly competition is what sets the Games apart.

The Beijing Games will mark China's coming of age as an emerging superpower. To be chosen as an Olympic satellite city is therefore a great honour for Hong Kong.

But the Olympic spirit has yet to seize the public imagination as it has in Beijing. That was never going to happen overnight. The city is strongly associated with the better-known equine sport of horse-racing. But equestrian competition is virtually unknown here. One would not expect even the premier event for the world's best dressage, show-jumping and cross-country horses and riders to spark the same spontaneous anticipation as international horse-racing day at Sha Tin in December.

Nor would anyone be expected to get too excited about the organisational task, given that the city hosted a World Trade Organisation conference in 2005 with minimum disruption despite violent protests.

So it is not surprising if Hong Kong's role has not made a big local impact.

But just as Hong Kong can be expected to show signs of Olympic fever and a feeling of national pride in the Games as the opening ceremony approaches, our small but important part in showcasing China through the Games and contributing to Beijing's Olympic legacy will loom large too.

For the sake of its own reputation as well as justifying Beijing's faith, Hong Kong has a responsibility to put its best foot forward as an Olympic city, and not just as an accomplished big-event organiser. The legacy will be enhancement of its profile as host of the 2009 East Asian Games.

It is good news therefore that moves are afoot to mobilise an Olympic civic spirit.

As we report today, a government source has foreshadowed a campaign next year to stimulate public pride in Hong Kong's Olympic role, highlight our commitment to the Olympic spirit and promote the city to a global audience. Permanent Secretary for Home Affairs Carrie Yau Tsang Ka-lai is expected to spearhead a government working group to oversee and organise the campaign. Some activities will bear some similarities to last month's handover celebrations.

There is no question about the city's expertise in staging big sports events nor about Hong Kong people's enthusiasm for watching some sports. But there is room for development of sporting culture, excellence and team spirit that would give an extra, healthy dimension to the city's competitiveness.

The Olympics have proved a springboard for sporting achievement by host nations. Perhaps, even if only in a small way, hosting an Olympic event could inspire Hong Kong too.


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Consensus vital on population policy


EDITORIAL/LEADER

Aug 23, 2007           
     

Population policy is crucial to Hong Kong's development. Our population is lagging expected growth, and ageing. The proportion of the working age will become smaller and older and that over 65 greater. This raises economic, quality-of-life and health issues for young and old alike that call for consensus in policy development.
The Council for Sustainable Development seemed to have this in mind when it launched a consultation on population policy. It collected views from 26 public meetings and nearly 1,700 comment cards. Polytechnic University analysed them as a basis for recommendations to the government. The findings included 60 per cent support for encouraging people to retire later to bolster the workforce, and support for civil service paternity leave as an incentive to families to have children and to encourage other employment sectors to follow suit.

Such specific contributions from the public, however, are missing from the council's final report. So is a suggestion from experts who helped draft the consultation document of flexible hours for working women as an incentive to have children. Instead of making specific recommendations, the report generalises about what the government can do to make Hong Kong a more attractive place to live, lift the fertility rate and cater for an ageing population. Examples are promoting family-friendly employment measures, encouraging retired people to work part time, reviewing immigration policies, promoting community health and increasing open space.

Few would disagree with the sentiments, but they lack detail and the context of public opinion. This has surprised some members of a council subcommittee that ran the consultation exercise. Experts on a support group have complained to the council that the report does not fully reflect public opinion.

This situation is disappointing. The council is to be commended for adopting a bottom-up approach to policy consultation that is consistent with Chief Executive Donald Tsang Yam-kuen's pledge to listen to the public.

Few policy areas lend themselves as readily to consultation with the public as population - or people policy. We all have to live with the outcomes. It is a pity, therefore, that the final report did not embrace specific suggestions that appear to enjoy a measure of public support. That does not mean, however, that the government has to ignore them.

The Census and Statistics Department estimates that within 30 years 26 per cent of Hong Kong's population - projected to be 8.57 million on current trends - will be over 65 and only 12 per cent below 15, with a median age of 46.1 compared with 39.6 last year. That will increase the emphasis of health care on chronic and disabling conditions. But at the same time older people are expected to be healthier and wealthier. Ways must be found to keep them active and productive for the benefit of the community.

Mr Tsang has unveiled a vision for Hong Kong as a world financial centre with a population of 10 million. We cannot achieve that without attracting quality young migrants - especially from the mainland - and lifting the fertility rate. That calls for consensus on population policy. We must ensure that our city is an attractive place in which to live, work and do business - and raise children, for those already here as well as newcomers. Consultation must not only start at the bottom but be heard at the top. That would help restore confidence in a consultation process.


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Unity is key in the fight against disease


EDITORIAL/LEADER

Aug 24, 2007           
     

The rise and spread of increasing numbers of infectious diseases is an inevitable result of globalisation. If the threats are to be contained, eliminated or prevented, the only viable response is, as the World Health Organisation rightly contends in its annual report, a globalised one.
WHO director-general Margaret Chan Fung Fu-chun knows this better than most international officials: her first-hand experiences with bird flu and Sars as Hong Kong's director of health put her in the front lines to combat diseases that the world had never before encountered. The response to these, as with any other virus outbreaks, is the same then as now. Success depends on high levels of co-operation.

It is a lesson that mainland authorities ignored when refusing to share H5N1 samples with the WHO for a year. They now recognise the importance of making the samples available and are doing so.

Indonesia is still trying to comprehend this. The argument that the vaccine and treatments that the samples are being used to develop will be too expensive for people living in developing countries simply does not wash in a world that realises its past mistakes and the reality of the threats it faces. Ever-expanding global air links and trade mean that viruses have the potential to spread rapidly. We saw that with Sars, and if the H5N1 strain of bird flu is able to mutate to move easily among people, we will see it again.

H5N1 or any other number of diseases that have emerged could cause the next global pandemic; it is not a question of if, but when. There are threats from global warming, food-borne diseases, biological, chemical, or nuclear accidents or attacks and pollution. As Dr Chan says in the report: "Vulnerability is universal."

Such circumstances make preparedness essential. Only this way can the right prevention systems be put in place and medications developed. Doing so, though, requires health authorities the world over to talk candidly to one another, share information, know-how and technology and be as transparent as possible.

Joining hands will win the fight that lies ahead. Selfish disregard will put the world at risk.


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Hong Kong vs Singapore: vive la différence
OBSERVER
Kent Ewing
Aug 27, 2007        
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Perhaps we should all relocate to Singapore. Judging by a number of key indicators - for example, the cost of living, environmental policy and, perhaps most tellingly, investment in research and development - the Lion City has surged ahead of Hong Kong. And now our city seems also to be losing its edge in the area that matters most to many of us: freedom of expression and tolerance of political diversity. Why is it that Hong Kong officials appear to be emulating everything that is wrong with their regional rival, but not enough of what is right?

Hongkongers want air that is as clean as Singapore's and also the kind of forward-looking economic planning for which Singaporean leaders are famous. Singapore long ago implemented a simple electronic road-pricing scheme to reduce traffic during peak hours and thus cut pollution. Meanwhile, in Hong Kong, peak-hour traffic remains a maddening, choking entanglement of largely unnecessary vehicles.

Moreover, Singapore has become a world leader in research and development, while Hong Kong's efforts in this field rank alongside those of Poland and Mexico. A city that, not so long ago under former chief executive Tung Chee-hwa, aspired to be the research and technology hub of Asia has settled comfortably into mediocrity.

On at least one score, however, we appear to be catching up with our neighbour. With Chief Secretary Henry Tang Ying-yen warning Hongkongers against civil disobedience last week, shortly after Chief Executive Donald Tsang Yam-kuen denounced the "barbaric acts" of those who dared to protest against his government, there is a chilling message coming from our top officials. That is: be quiet, especially on the divisive topic of a timetable for universal suffrage, and get back to the primary business of making money.

But the presumption that the people put monetary concerns above all else has always been an unfair stereotype. When 1 million people poured into the streets in the wake of the 1989 Tiananmen Square debacle, were they putting Mammon first? The 500,000 people who demonstrated against the proposed national security legislation in 2003 also clearly had higher ideals in mind. More recently, the rising number of protests involving our environment and heritage further shatters the old stereotype.

Indeed, Hong Kong is a practical-minded financial centre. But it is also a city whose people have developed a civic conscience and a lively tradition of dissent. What is alarming is that its leaders do not appear to care about - or even to comprehend - this development.

We all understand how annoying it can be when "Long Hair" Leung Kwok-hung throws camphor balls of protest your way, an experience to which the chief executive can testify. But that is the price our leaders must pay for maintaining a free society.

It is time to forget the aloof protocol of the colonial past and accept the fact that this type of street theatre is part of the new Hong Kong. Outside elite circles, there are a lot of people who think that Mr Leung has been a boon to the city.

The most important lesson that events of the past 10 years have taught us is that Hong Kong's civil society has developed too far to be turned back. The rising tide supporting heritage preservation, cleaner air and real democracy all serve to illustrate the point.

Sure, just like the self-selected elites who run the heavily censored show in Singapore, Mr Tsang and Mr Tang can tell people to pipe down and get on with their business. Unlike their Singaporean counterparts, however, Hongkongers will not heed that message.

Vive la difference! Singapore's leaders dictate, and the people follow. In Hong Kong, thankfully, it does not work that way. Here, eventually, the government will be compelled to follow the people.

Kent Ewing is a teacher at Hong Kong International School. This is a personal comment.


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HK must be wary of bubble trouble


EDITORIAL/LEADER

Aug 28, 2007           
     
  
If a week is a long time in politics, then two weeks may be an eternity in the stock market. Yesterday, both the Hang Seng and the China Enterprises indexes hit new heights. Analysts believe the surge was mainly the result of Beijing's decision, announced last week, to allow mainlanders to invest in the local stock market in a scheme which had been expected to open yesterday.

Hong Kong investors were naturally euphoric about the dramatic rises yesterday, especially after this month's turmoil in global markets. But the irony is that the local market was getting both behind and ahead of itself.

Investors have had a week to absorb the news of a potential massive influx of capital from the mainland after the State Administration of Foreign Exchange announced on Monday last week that investors with a minimum of 100,000 yuan would be allowed to buy stocks in Hong Kong without a quota or purchase cap. The local market seemed to have taken its time to digest the news, judging by yesterday's surprising surge, although news of the measure did contribute to a rise last week.

Just a fortnight ago, global markets tumbled on concerns about the subprime mortgage crisis in the US and the general credit crunch it has created. They later recovered, following a US Federal Reserve discount rate cut.

H shares, expected to attract the most interest from mainland retail investors because they are sold at a steep discount to their companies' A shares, have gained more than 27 per cent since August 17. Could the fundamentals have changed so quickly to warrant a complete turnaround in market sentiment after seeing so much fear, panic and unprecedented volatility? Investors should be careful.

As for getting ahead of itself? This came about when dozens of would-be mainland investors were disappointed when they travelled to the Tianjin branch of the Bank of China (SEHK: 3988) yesterday on news that the bank would start accepting orders for Hong Kong shares. A bank spokeswoman said while its offices were ready, final authorisation from headquarters had not arrived.

A new report by investment bank Morgan Stanley estimated there could be US$100 billion of mainland capital flowing into Hong Kong under the scheme. But since there were no mainland buy orders yesterday, the surge was driven wholly by euphoric expectations.

The mainland should be applauded for taking steps to loosen capital controls. Opening the door for people from the mainland to invest directly in the Hong Kong market is a move of great symbolic significance. However, there is also a need for some caution. The new scheme will put the local market increasingly under the influence of market conditions on the mainland. Luminaries from former US Federal Reserve chairman Alan Greenspan to tycoon Li Ka-shing and investment guru Jim Rogers warned months ago of a massive bubble building on the mainland.

Bear in mind mainland markets have been largely immune to the global plunges this month. With the new expected capital inflow, Hong Kong is likely to be caught up in an ever bigger bubble from the motherland.


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Home-alone tragedy shames our city


OBSERVER
Michael Chugani
Aug 29, 2007           
     

Before we become outraged over home-alone cases that end in tragedy - like that of the young Tuen Mun couple whose unattended children ended up being seriously burned - we need to ask ourselves why such parents behave the way they do. It is easy to impulsively condemn them, but are they all irresponsible? Or do some have no choice but to lock their toddlers at home while they go out to earn a living?
From what we know so far, the latest such tragedy involved two struggling parents who had to work different shifts at bakeries to support themselves and their two children. One worked nights and the other days, each waiting for the other to come home before setting off for work. They took turns caring for their two-year-old girl and three-year-old boy.

It was a risky schedule prone to disaster, and that's exactly what happened when the mother apparently couldn't wait for the father to come home before rushing off to work. On the face of it, this couple seems different from the duo who locked up their children at home so they could go for a fun weekend on the mainland, some time ago.

Whenever home-alone youngsters get hurt, the natural first instinct is to accuse the parents of callous negligence. I'm not saying the parents in the latest tragedy are blameless, but the case has thrown up larger issues that we have ignored for too long.

We are quick to condemn the parents in such cases, but we need to be equally quick in asking why they left their children alone in the first place.

If both parents have to work to make ends meet, what choice do they have? Hiring a domestic helper is clearly an unaffordable option.

There's the choice of one parent giving up his or her job to look after the children, but that would lower the overall income and presumably put the family on welfare. We would then have the business lobby screaming about Hong Kong being on a slippery slope towards a welfare state.

We live in an age where many couples, even in rich societies, have to work to make ends meet. But other places at least have safety nets like fair pay and a minimum wage, which make day care for their children affordable.

Many US companies now actually provide on-site day care for working parents. Hong Kong is a rich society, too. But we are also a society where super-wealthy tycoons fiercely oppose a minimum wage of a paltry HK$5,000 or so a month. The ongoing metal workers' strike is but one example of property tycoons refusing to share the wealth.

We must no longer buy the argument that helping the most vulnerable in our society will lead to a welfare state. We need to ask ourselves why the wealth gap here is widening faster than in most other societies. It is clearly a failure of government.

There is no passion or urgency within the government to work towards a fairer society. Unelected bureaucrats, who face no risk of being thrown out for mediocre performance, like to boast that Hong Kong's economic recovery has borne fruit for most. They don't like talking about the fact that a large minority has not benefited at all.

The parents of the two toddlers in this case will have sleepless nights. But so should our policymakers. Their failed policies created the circumstances that made this tragedy possible.

Of course, there are couples who neglect the safety of their children, and they should be punished. But there are also many parents who simply don't have a choice but to leave their youngsters home alone.

We are a city reeking with wealth. The government's coffers are full. Why, then, do we still have elderly men and women scavenging for a living, workers toiling for HK$4,000 a month, so few day-care centres, and a government quota on how many children from poor families can receive day care?

Michael Chugani is a columnist and broadcaster. mickchug@gmail.com


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Arch rivals


Greg Barns
Aug 30, 2007           
     

One wonders what possessed Japanese Prime Minister Shinzo Abe to call last week for the creation of an "arc of freedom and prosperity" involving his country, the United States, India and Australia. It appears a needlessly provocative act, given that it is clearly aimed at containing China. And it certainly doesn't help a nation like Australia, which carefully balances its relationships in Asia.

No doubt Mr Abe's brand-new idea will get some airplay, even if informally, at next week's Apec meeting in Sydney, which President Hu Jintao will attend along with US President George W. Bush. So it's an ideal chance for the host of that meeting, Australian Prime Minister John Howard, to use his influence to persuade Mr Abe to drop the concept.

It appears that an opportunity will arise for Mr Howard to do exactly that. Australian Foreign Minister Alexander Downer said in an interview on Monday that Australia, Japan and the US are considering holding a separate meeting when the Asia-Pacific Economic Co-operation forum gathers on September 8 and 9.

He was asked: "What signal does it send to China if this meeting of three of the leaders goes ahead, particularly considering China's suspicion of an American policy of containment to which Australia could be seen to be a part?"

His reply was enlightening: "Well, the Chinese know we're not part of it, and we don't support containment."

Mr Downer said "a policy of containment is wrong" and "a policy of engagement is right", in his view.

So if anyone is going to kill off Mr Abe's proposal it has to be Australia, because it has the most to lose from being associated with it. India and the US have their own domestic and strategic reasons for wanting to be seen as counterpoints to China, and if Japan wants to provide a vehicle for them to do that, then they might find it difficult to resist. But Australia, a middle-ranking power of some influence in the Asia-Pacific region, has a lot riding on stability and harmony in this part of the world, from both a self-interested, and a broader, regional perspective.

Mr Howard and Mr Downer have cleverly cultivated Beijing over the past few years, while at the same time deepening Australia's commitment to both Japan and the US. And Australia recently proposed a free-trade agreement with India and a bilateral, uranium sales agreement.

So with the leaders of China, Japan and the US all in one room at Apec, Mr Howard and Mr Downer have an ideal chance to get the ball rolling on trying to change the atmospherics in northern Asia.

Former Australian prime minister Paul Keating, who was instrumental in the establishment and early years of Apec almost 20 years ago, said as much last week. Australia, he said, needs to use the Apec meeting to "encourage China to include a future for Japan in its regional view of things, and to oblige Japan to include a point of accommodation with China which goes to Japan's economic future, its declining population and some real recognition of the none-too-laudable parts of its 20th-century history.

"In the first instance, all will resist it," he said. "The Chinese won't like it; the Japanese won't like it; and the Americans would probably regard it as an intrusion into the international game they usually conduct."

But Australia must still try.

And what better way to show leadership than for Mr Howard to kill Mr Abe's idea stone dead by announcing that Australia will have no part of it?

Finally, there are two fairly practical reasons for Australia to kill off Japan's "arc of freedom and prosperity" concept.

Mr Abe's political future, or lack of it, must be considered by Australia. Unlike his predecessor, Junichiro Koizumi, Mr Abe has proved to be a lacklustre performer since he took office last year. His ruling Liberal Democratic Party just got thumped in recent upper house elections, and there is no guarantee that the stridently nationalist Mr Abe will be around in six or 12 months' time.

And then there is the question of Australia's forthcoming election, due to be held sometime over the next two or three months. It would be dangerous in such a climate - and particularly with the likelihood of a change of government now a real possibility, as Mr Howard's popularity sags - for a government to commit Australia to any controversial foreign-policy initiatives.

Greg Barns is a political commentator in Australia and a former Australian government adviser


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hy containing China makes no sense for India
Prakash Metaparti
Aug 31, 2007        
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On his recent visit to India, the Japanese prime minister proposed a scheme for "broader Asia" co-operation that many saw as an attempt to exclude or contain China. Beijing's official reaction to Shinzo Abe's proposal was to welcome "friendly ties of co-operation" among all countries of the region. But the opinion of mainland scholars was markedly negative: they saw the plan as everything from a reflection of Japan's "cold war mentality" to another attempt at creating an Asian version of Nato.

The perception that Japan, the United States, Australia and India are ganging up against China is the result of increased military interaction among these four countries as well as the large-scale naval exercises scheduled in the Bay of Bengal next month.

These exercises, by the above four countries and Singapore, are being called the largest naval manoeuvres in that area in recent times. This has caused concern in Beijing, resulting in a diplomatic demarche to the four countries seeking to know about the purpose of the military exercises.

Further, the recent India-US nuclear co-operation agreement and the move towards an Indo-US strategic partnership has strengthened the impression that India is moving towards being a counterweight against China.

Apart from mutual distrust resulting from a bloody border dispute in 1962, India and China also have a history of moves and countermoves in each other's backyards. From the 1960s to the 1980s they accused each other of supporting rebels in Tibet and in India's northeastern provinces. Although both countries have agreed to resolve border disputes through negotiations, the progress is somewhat marred by new developments.

India sees the Chinese military help for Pakistan, and its listening posts in Myanmar, as inimical to its interests; China feels the same way about India's defence relations with countries including Vietnam and Mongolia.

Despite these differences, the likelihood of India abandoning its independent foreign policy to join a bloc against China is quite low. One strong reason is the trade ties linking China, Japan and India.

Mainland China is Japan's largest trade partner, with trade valued at roughly US$200 billion, while annual India-Japan trade is worth only US$6.5 billion. India has more, and faster-growing, trade with Hong Kong than with Japan.

China-India trade was worth nearly US$18 billion last year, and grew at 30 per cent.

Japan's investment in India is only a fraction of its investment in mainland China, and trails its investments in other Asian countries such as Vietnam, Thailand and Indonesia. Similarly, Australia's economic links are far stronger with China than with India.

Apart from economic ties, India's government is unlikely to have enough political support to abandon its current independent foreign policy and firmly align itself with the US and Japan in order to contain China.

The last few Indian governments were formed by coalitions, and had only limited room for policy changes. The era of coalition politics in India is unlikely to end soon.

Further, New Delhi has clearly said that its defence interactions with the US and Japan are not aimed at China. On the eve of Mr Abe's visit, the Indian foreign secretary Shivshankar Menon said that China-India-Japan relations were not a zero-sum game.

It must also be remembered that India and China have conducted bilateral military exercises in recent months and have had several high-level defence interactions, as well.

An Asian version of Nato aimed at containing China is no closer to becoming a reality now than when it was first heard of, some five years ago.

Prakash Metaparti is researching maritime security at the Centre of Asian Studies at the University of Hong Kong. He is a former commander of the Indian navy and a master mariner


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China's rise just needs some understanding


EDITORIAL/LEADER

Sep 03, 2007           
     

Beijing frequently argues that its growing might should not be feared by other nations. Its peaceful intent has been revealed through participation in UN peacekeeping forces, being a key mediator in the nuclear disputes involving North Korea and Iran, and in showing a concerted desire to end its rift with Japan.
Such moves are not sufficient for doubters like the US, those who have been, or continue to be, involved in territorial disputes or those who mistrust communism. For the US, China's rise is a matter of rivalry to its superpower status; the wounds of war and heated rhetoric are not easily healed; and the mainland's mix of capitalism with communism remains confusing to some.

If proof is needed of Beijing's benign intent, though, it will be plainly on show this week during President Hu Jintao's visit to Australia. In meetings with Australian leaders, at the Asia-Pacific Economic Co-operation summit and in talks with counterparts, China's cards will be on the table for the world to see.

Last week, it became Australia's biggest trading partner. Increasing numbers of Chinese students, government officials among them, are earning degrees from Australian universities.

For the mainland, the attraction is mostly Australia's vast natural resources and, to a lesser degree, diplomatic ties with a nation that strategically straddles the Pacific and Indian oceans.

Australia's surging economic growth of the past decade owes much to the trading ties. But like the rest of the world, the nation has also benefited from the inexpensive products mainland factories turn its raw materials into. Australian companies have found new business on the mainland, just as the reverse is true. A free-trade agreement is nearing conclusion.

The relations are growing ever warmer. Chinese and Australian leaders meet at least once a year, sometimes more.

This is despite contentious issues - Australia's security agreement with the US and Japan, and concern about human rights. After the killings at Tiananmen Square in 1989, Australia gave residency to 40,000 Chinese it considered were being persecuted. Australian Prime Minister John Howard met the Dalai Lama in Sydney in June despite objections from Beijing.

Such issues do not get in the way of the relationship. It is not purely because of greed for wealth or convenience; rather, it is because the nations understand and accept one another's positions. Doing so is mutually beneficial and the consequent respect gives leverage to candidly discuss all matters.

At Apec, Beijing's concern for the environment will be on display. A carbon-trading scheme being floated has in principle won its backing; its signing up would enhance efforts already being made under the Kyoto pact on climate change, which Beijing has agreed to despite not being required to do so as a developing nation.

Mr Hu's meetings on the sidelines of the summit with US President George W. Bush and Japan's Prime Minister Shinzo Abe will attempt to iron out differences over tainted food and toys and firming diplomatic ties.

The mainland's economic rise is beneficial to Australia, but also good for the world. There is nothing sinister in Beijing's intent; it is showing, and will continue to prove, it is working for international peace, stability and development.

As the ever-improving relationship with Australia shows, all that is needed is understanding.


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China's legacy: the thoughts of Lao Tzu


James Dorn
Sep 04, 2007           
   

Lao Tzu, thought to have been an older contemporary of Confucius (551-479BC), may have been the first libertarian. In writing the Dao De Jing he argued that if governments followed the principle of wu-wei (non-action), social and economic harmony would naturally emerge and people would prosper.
The essence of this liberal vision is concisely stated in Chapter 57: "The more restrictions and limitations there are, the more impoverished men will be ... The more rules and precepts are enforced, the more bandits and crooks will be produced. Hence, we have the words of the wise [ruler]: Through my non-action, men are spontaneously transformed. Through my quiescence, men spontaneously become tranquil. Through my non-interfering, men spontaneously increase their wealth."

That passage, written more than 2,000 years before Adam Smith's call for a "simple system of natural liberty", is a reminder that China's legacy is not the commands of Mao Zedong Thought but the freedom of Lao Tzu Thought.

Although Lao Tzu did not have a fully developed theory of the spontaneous market order, he clearly recognised the importance of limited government and voluntary exchange for the creation of wealth.

The corruption that plagues China today stems from too much, not too little, intervention. When people are free to choose within a system of just laws that protect life, liberty and property, then social and economic harmony will occur naturally. Top-down planning cannot impose spontaneous order; that can evolve only from decentralised market processes.

Good government must be in harmony with each person's desire to prosper and expand the range of choice. By emphasising the principle of non-intervention, Lao Tzu also recognised that when government leaves people alone, then "without being ordered to do so, people become harmonious by themselves". He thus understood, at least implicitly, that central planning generates social disorder by destroying economic freedom.

Disorder arises when government oversteps its bounds - when it overtaxes and denies people their natural right to be left alone to pursue their happiness, as long as they do not injure others.

Mao's disregard for private property and human rights still haunts China. Conflicts between developers and farmers over land-use rights are causing social turmoil today. Hong Kong's motto - "small government, big market" - is in tune with Lao Tzu Thought. His advice to China's early rulers is pertinent today: "Governing a large country is like frying a small fish. You spoil it with too much poking".

Freedom requires some boundaries or rules if it is to be socially beneficial and not lead to chaos. Lao Tzu understood the need for rules but, unlike later liberals, did not develop the ideas of private property and freedom of contract that underpin a  market-liberal order.

China's present leaders are calling for a "harmonious society", but this is impossible without widespread freedom and a rule of law that limits the power of government to the protection of people and property. They could learn much from the teachings of Lao Tzu and the legacy of liberty that his precepts embody.

James Dorn is vice-president for academic affairs at the Cato Institute


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Too hot to handle
The disaster in Iraq looms large over this year's 9/11 anniversary and the Bush administration's 'war on terror', writes Hagai Segal

Hagai Segal
Sep 05, 2007           
     

On the 11th of this month, the US public will remember those who fell on that fateful day six years ago. The nation will also be remembering the thousands more who have fallen since, in the name of defeating the perpetrators of September 11. While in past years that "sacrifice" was accepted by a great many Americans, this year's anniversary, particularly, will be observed in the dark shadow of the nightmare that has become Iraq.

The Iraq policy - establishing a stable and viable democracy in that country - emerged as a vital part of the Bush administration's post-September 11 agenda. Four years on from the invasion, however, that policy has created the possibility of al-Qaeda claiming a major victory: US withdrawal from Iraq in circumstances of total failure.

The planning for the 2003 war concentrated on the conflict, not on the subsequent rebuilding of Iraq. It was predicated on the assumption that toppling Saddam Hussein would be a difficult and casualty-intensive endeavour but that, once he was deposed, the situation would quickly revert to normal.

This assumption was based on "dictator logic" - that dictators care only about staying in power, not what will happen once they're gone - and an absurdly simplistic view that, once the dictator fell, all of Iraq would quickly accept the new regime.

Compounding the lack of planning and resource allocation, the US immediately removed all those connected with the previous regime. This not only created a skills vacuum, but also drove many people into the growing insurgency.

When all is said and done, the bill for post-September 11 operations in Iraq and Afghanistan alone will exceed US$1 trillion: yet both states, and especially Iraq, will remain in turmoil, as strongholds for radical Islamist terrorists. When added to the huge and rising US death toll in Iraq - the total stood at 3,739 troops as of Saturday, with a further 298 coalition allies dead - plus the thousands of seriously wounded, Iraq has become an unmitigated disaster.

The record of the "war on terror" is by no means all negative. There have been a number of successes against al-Qaeda: the US-led action in Afghanistan has denied the group an operating base. As a consequence, it must function on a smaller and less adventurous scale, from the shadows.

But Iraq is likely to prove the most enduring legacy of the anti-terror effort. The United States and its allies have failed to achieve a single one of their main post-war objectives, and Iraq is in the stranglehold of civil war. Yet the US will in all likelihood withdraw many or most of its troops during the next presidential term, whether a Democrat or Republican prevails in next November's poll.

The US committed unprecedented resources to the project of establishing a stable, single-constituency democracy in Iraq - with Shiites, Sunnis and Kurds living together in a single political entity. But once American forces withdraw, Iraq will be in grave danger of breaking into a set of competing entities.

If it breaks apart on sectarian lines, what will likely emerge is a Kurdish entity in the north, a Shiite one in the south - and a battle-royal between Sunnis in central Iraq and Kurds for control of disputed oil fields bordering the Kurdish-dominated north.

That would immediately result in a set of regional dynamics deeply troubling for Washington. Turkey, a key military ally, remains vociferously opposed to any autonomous Kurdish entity in the region: the Turkish army threatened this year to intervene militarily in Iraqi Kurdistan if need be. Meanwhile, a Shiite state in the south would gravitate towards America's arch-enemy, fellow Shiite Iran.

Iraq has rendered the Bush administration as impotent, domestically and internationally, as any US administration in living memory. This ensures that many tangible and genuine victories against al-Qaeda, and Islamist terrorism in general, have been lost amid the daily diet of death from Iraq.

The No1 challenge for the next president will therefore be how to throw off the political albatross that Iraq has become, in a manner that the extremists cannot claim as an al-Qaeda victory. Only then can the campaign against global Islamist terrorism - and the process of ensuring that a second September 11 never comes to pass - once again can be put back on track. Republican and Democrat presidential candidates are already devising strategies for doing this in the post-Bush era. For now, though, the policy remains stubbornly unchanged - the president fiddles as Baghdad burns.

Hagai Segal, a terrorism and Middle East specialist, lectures at New York University in London


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The high cost of our 'free' education


OBSERVER
Alex Lo
Sep 06, 2007           
     


Whenever there is market inefficiency, there is someone ready to exploit it. That's how all capitalist markets work. Our supposedly "free" public education is such a glaring example of inefficiency that it has made many people rich.

So, a new school year, another record profit year for private tutorial schools? Well, I don't know that for sure, but I would bet on it. A Primary Two, high-scoring student I know at my son's so-called elite local Chinese school has three private tutors every day - for English, Chinese and maths. For their services, his parents pay up to HK$6,000 a month. And his case is not all that unusual.

You have probably heard of such tutors, who enjoy pop-star status in the media, with their opulent lifestyles featured, interestingly, in society and investment magazines instead of educational ones. They have inspired legions of publicly employed, de- motivated teachers to follow their example.

But the people who own these schools make even more money. One can imagine that, by the size and scope of their services and the numbers of people employed, private tutorials amount to a sizeable industry that makes a significant contribution to the overall economy.

There are 393,000 primary school students and 467,000 secondary-school pupils who are locals, as opposed to expatriates. For argument's sake, suppose 50 per cent of them take at least one outside-school tutorial class or hire a private tutor for a key academic subject, averaging HK$1,000 a month. (These figures are surely conservative, and we are not including extracurricular sports and music.)

This translates into HK$5.16 billion a year. That is equivalent to more than 19 per cent of the HK$26.7 billion the government spent on primary and secondary education in the past financial year. But ask yourself this: if our schools are working properly, why should parents be paying through the roof for their children to attend private tutorials? A decade of education reforms does not seem to have made any difference to this systemic dysfunction.

In February, the then Education and Manpower Bureau - since restructured as the Education Bureau - released a paper saying there was no conclusive evidence in favour of small classes. Based on the preliminary results of a four-year study at 37 primary schools, it said there was "insufficient evidence to demonstrate that pupils in small classes fared better ... in terms of academic performance and motivation". This conclusion was counterintuitive, and most people simply dismissed it at the time. But, within the narrow focus of the study, it makes perfect sense that small classes do not automatically mean better grades, at least not in the Hong Kong context.

At most of the so-called elite and "better" schools - which are essentially cram schools - class sizes don't matter. The top half will score "As" whether you have 20 or 40 students per class; the parents and their hired tutors will make sure of that. What the teachers teach in class - especially in a large one - is often lost on young pupils, but no matter: the students absorb their lessons and prepare for continuous tests and exams through a massive amount of nighttime homework and outside-school tutorials.

Though home schooling is illegal in Hong Kong, I would argue that our dysfunctional public system is only sustained by what amounts to de facto home schooling, with help from private tutorials at great cost to parents. If tutors are not hired, it is usually because the parents or other relatives serve as full-time tutors themselves.

Just as our high property costs are the indirect, de facto tax we all pay for our supposedly low-tax regime, our public education is not "free". For a middle-class family, the mandatory nine-year "free" public education may cost as much as a private or international school education, and this is not counting the psychological cost.

Alex Lo is a senior writer at the Post


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