esday, May 9, 2007

EDITORIAL/LEADER
Rethink needed on 'golden weeks'


       

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           Yet again the "golden week" holiday circus across the mainland is ending amid calls for the concept to be scrapped. This time the central government should heed the message. Nearly a decade after their creation in 1999, the rationale behind creating three week-long national holidays - celebrating Lunar New Year, Labour Day and National Day - is ever harder to sustain. Far from promoting consumption amid the austerity of the regional financial crisis, which was the original idea, the weeks have become an impediment to an increasingly integrated, globalised economy.

Government offices shut for seven days, leaving domestic and international traders unable to clear routine customs, tax and licencing matters; retailers risk boom-and-bust cycles and factories struggle to meet orders before the shutdown and face a backlog on the return to work. Then there are the physical dangers as more than 1.3 billion people take a holiday at the same time. Tourist sites are crowded to dangerous levels; the death toll on the roads inevitably soars. Then there is concern about the spread of disease as so many bodies choke train stations and bus terminals as infrastructure is stretched to the limit.


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The Labour Day celebration that ended yesterday once again saw transport records broken. Some 5.2 million people poured onto the nation's trains in a single day on May 1. If the internet is any guide, there is little popular sentiment towards the breaks. Chat rooms and websites bemoan the damage to the environment, the traffic jams and the over-riding sense of disorder. There is an argument for keeping the Lunar New Year break, but week-long holidays in May and October appear increasingly absurd, a throw-back to the worst bureaucratic excesses of central planning.

Delegates to the Chinese People's Political Consultative Conference have previously proposed spreading the breaks across celebrations not currently accorded national holiday status, such as the Mid-Autumn Festival. Such ideas make perfect sense. The central government yesterday acknowledged the widespread calls to scrap "golden weeks". Let's hope they listen.


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Thursday, May 10, 2007

OBSERVER
No place for predatory trade policies


ROBERT SAMUELSON
   
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   It sometimes seems that almost everything Americans buy comes from China. This is, of course, a myth. Last year, imports from China totalled US$288 billion, 16 per cent of all imports, and equal to only 2 per cent of America's US$13.2 trillion gross domestic product. Does that mean the US does not have a trade problem with China? Not exactly.
China is the world's third-largest trading nation and seems destined to become the largest. On its present course, it threatens to wreck the post-second-world-war trading system. Built by the US, that system has flourished because its benefits are widely shared. Since 1950, global trade has expanded by a factor of 25. By contrast, China's trade is mercantilist: it is designed to benefit China even if it harms its trading partners.


There is a huge gap in philosophy. China has embraced export-led economic growth. The centrepiece is an undervalued exchange rate. The resulting competitive advantage props up exports, production and jobs. Since 2001, China's surplus on its current account - the broadest measure of its trade flows - has jumped from US$17 billion to US$239 billion. As a share of GDP, it has zoomed from 1.3 per cent to 9.1 per cent. These figures include Chinese firms and multinationals doing business in China.

Despite popular impressions, China's trade offensive has not yet seriously harmed most other economies. But what has been true in the past may not be true in the future. The huge US trade deficits, fed by Americans' ravenous appetite for consumer goods and heavy borrowing against rising home values, stimulated economies elsewhere, including China's. Now, that stimulus is fading, as US home prices weaken and consumers grow more cautious. For China to expand production, demand must come from its own consumers, other nations - or another country's production must be displaced. There is the rub.

Even Chinese officials favour higher local demand. But either they cannot or will not stimulate it. Personal consumption spending is a meagre 38 per cent of GDP; that is just over half the US rate of 70 per cent. The Chinese save at astonishingly high levels partly because they fear emergencies.

The surplus of personal savings, supplemented by business savings and foreign capital, means that Chinese and multinational firms can build more factories - and that raises the need to export. A low currency thus serves two roles: to attract foreign investment, and to balance the economy and check popular discontent. But for the rest of the world, the costs are potentially threatening. As China moves up the technology chain, it may become the low-cost export platform for more industries. This could divert production from the rest of Asia, Europe, Latin America and the United States.

It is not "protectionist" to complain about policies that are predatory; China's are just that. The logic of free trade is that comparative advantage benefits everyone. But the logic does not allow for one country's trade to depress its partners' production and employment. Down that path lie resentment and political backlash.

Everyone complains about America's trade deficits, but they symbolise global leadership. Access to the US market has promoted trade by enabling other countries to export. But the deficits cannot grow indefinitely. Nor are surpluses in China's interests. They drain too much of production from its citizens and contribute to growing domestic economic inequality. What everyone needs is more balanced Chinese growth, less dependent on exports.

Given the immense stakes - the future of the global trading system - the Bush administration has been too timid in pushing for change. The US Treasury will not even declare China guilty of currency manipulation. No doubt doing so would irritate the Chinese. But avoidance is no solution; the longer these problems fester, the more intractable and destructive they will become.

Robert Samuelson is a Washington Post columnist.


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Friday, May 11, 2007

EDITORIAL/LEADER
After a decade in power, Blair is right to quit



  
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   From a British perspective, Tony Blair's prime ministership had an ominous start, with his first major duty being to hand his nation's last major colony, Hong Kong, back to Chinese rule and a month later dealing with the death of Princess Diana in a car crash in Paris. A decade of highs and lows later, we are looking confidently forward, while the outgoing leader is contemplating a clouded legacy.
Just hours before the British flag was lowered and the Chinese one raised, Mr Blair cut his diplomatic teeth at a summit with then president Jiang Zemin . Since then, the prime minister has ridden a wave of popularity and repeated election wins, but as is the nature of democratic politics, he eventually wore out his welcome. It is time for him to go.


His decision to step down as prime minister is based on conviction; that same strong belief is what took Britain to war against Iraq in 2003. As he explained to his constituents yesterday: "I did what I thought was right."

Without doubt, Mr Blair's taking of office at the age of 43 after 18 years of Conservative Party government was a breath of fresh air. He pledged to make Britain prosperous, improve government accountability and restore the nation's position on the world stage.

There is no argument about Britain's stronger economy, nor about the nation's monetary importance: it has moved up to fifth on the global economic league table. Britain now has a minimum wage. Scotland and Wales have their own elected parliaments. The prime minister brokered a landmark power-sharing deal for Northern Ireland, put global warming and African aid at the top of the global agenda and moved Britain closer to the European Union. Mr Blair also reshaped the national health-care and education systems, made conscious efforts to integrate immigrant communities into society and changed the political landscape by ridding his Labour Party of some of its hard left-wing elements, creating in the process the more centrist and electable New Labour.

Whether Labour will win the next election, likely to be held in 2009, is debatable; for all Mr Blair's achievements, there are as many, arguably more, question marks. Most irksome for Britons was his unpopular decision to partner the US in the war in Iraq, earning him the tag of US President George W. Bush's poodle. This was despite saying, shortly after taking office: "Mine is the first generation able to contemplate the possibility that we may live our entire lives without going to war or sending our children to war."

Mr Blair has repeatedly sent his nation's sons and daughters into combat: against the forces of Yugoslav president Slobodan Milosevic in 1999 and as part of the subsequent peacekeeping force in Kosovo; to Sierra Leone the following year, Afghanistan in 2001 and then Iraq.

The July 2005 suicide bombing on London's transport network that killed 52 people was a direct consequence of the Iraq involvement and revealed that integration of ethnic groups was not working; the attackers were British-born Muslims. Labour's "clean" government is also under scrutiny as an inquiry into whether honours and political favours were offered for loans.

Britons debate whether their health-care system is better, whether education standards have risen and the merits of having 20 per cent of the world's surveillance cameras trained upon them. Whatever Mr Blair's successes or failings, there can be no doubting his democratic principles; but when a leader has overstayed his or her time in office, it is time to step aside.


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Monday, May 14, 2007

EDITORIAL/LEADER
Not just poisoning our skies but our oceans too



   
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   For anyone looking skywards with alarm at Hong Kong's worsening air, it will come as no surprise that the situation is no better beneath the ocean that surrounds us. The latest report from the Guangdong Provincial Oceanic and Fishery Administration on the state of the seas off Guangdong is predictably stark. Waste discharges are up 60 per cent in five years; a sizeable majority of sewage outlets on the Guangdong coast far exceeded standards.
Adding to the concern is the long-term nature of the damage. It is not just sewage flowing down Guangdong's rivers into the sea but oil and heavy metals, including lead, arsenic and mercury.


Despite Hong Kong's own efforts to clean up its harbour in recent years, the city is not immune from the challenges raised by the report. Administration experts are warning that Hong Kong is being affected very badly as currents in both summer and winter sweep pollutants through from the heavily degraded Pearl River and Daya Bay respectively. Administration director Li Zhujiang rightly demands tougher standards for Guangdong compared with the rest of China, reflective of its industrial importance. While considerable effort has been made to improve sewage treatment in Guangzhou and Shenzhen, few improvements have been made in smaller industrial towns and cities.

As a first step, Hong Kong needs to get its own house in order while seeking to work more closely with Guangdong on a comprehensive solution to the region's pollution woes, driving a nexus between government and business. Many of the polluting factories across the border are Hong Kong owned, after all.

Improved sewage treatment in the eastern harbour has dramatically improved water quality in recent years. The waters are visibly brighter and anecdotal evidence suggests pelagic fish and sea birds are returning. The government should move quickly on a more comprehensive plan for the western harbour, where water quality has been deteriorating. This will require urgent implementation of the second stage of its sewage-treatment scheme for the harbour. It will cost more, but it is a price worth paying.


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sday, May 15, 2007

EDITORIAL/LEADER
Tough action needed to deflate mainland bubble


       

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           Investors in the Hong Kong stock market had reason to be grateful to the mainland authorities yesterday. The announcement last Friday that wealthy mainlanders are to be allowed to buy Hong Kong-listed shares through the Qualified Domestic Institutional Investor, or QDII, scheme helped push stock prices to record highs.

The benchmark Hang Seng index rose 2.5 per cent and the H-share index more than 5 per cent as buyers raced to position themselves ahead of an anticipated influx of mainland money. Despite yesterday's gains and the benefits that Friday's announcement will bring to Hong Kong, there is a need to sound a note of caution. Opening the Hong Kong market to mainland money further links share prices here to developments on the mainland, at least in the minds of investors. That may increase the potential returns of holding Hong Kong-listed equities; but it also substantially raises the risks.

With the Shanghai market up more than 50 per cent so far this year, and Shenzhen up over 100 per cent, share prices in the mainland look dangerously over-inflated. Unless the mainland financial authorities act now to let some air out of the bubble, investors in Hong Kong, as well as those on the mainland, could sustain punishing losses when it finally bursts.

Mainland share prices are shooting up so rapidly largely because the benchmark interest rates paid by mainland banks are lower than the rate of inflation. That means ordinary people who keep their money in deposit accounts are watching the value of their savings shrink in real terms. It is little wonder then that they are taking their money out of the banks - 167 billion yuan last month - and punting it on the stock market. Last Tuesday alone, investors opened 385,000 new stock trading accounts.

Those who bought into the bull market early have made handsome returns. But with mainland A shares now on average 60 per cent more expensive than equivalent Hong Kong-listed H shares, the danger of a crash is mounting. Inevitably, when it comes it will be the latecomers who get punished most; the millions of poorer, relatively unsophisticated savers who have plunged into the market in recent months.

For the mainland authorities, doing nothing is not an option. Delay will only exacerbate the eventual collapse. Verbal warnings have proved ineffectual, as have the central bank's attempts to manage liquidity by raising bank reserve requirements. Decisive action is needed. The best option would be for the central bank to raise interest rates more aggressively. Higher rates would simultaneously make bank deposits more attractive to savers and raise funding costs for listed companies, slowing earnings growth. And if investors fail at first to pay attention, then the authorities should step up the pace and magnitude of rate rises until they do, and the frenzy cools.

So far the authorities have shied away from such drastic action on the grounds that higher borrowing costs could put jobs in jeopardy and encourage greater inflows of short-term capital, increasing the upward pressure on the yuan.

Both effects are probable. But as the equity bubble continues to expand, those dangers are beginning to look secondary to the threat of a full-blown stock market crash. And with the extension of the QDII scheme, it will not just be mainland markets that suffer when the bubble bursts. Hong Kong share prices will plunge too.



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Wednesday, May 16, 2007

Crossing the line


ROSANNA WONG
   
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   A student sex survey published by Chinese University's Student Press journal is still causing a furore. Some in the community are debating the purpose of the poll. Some are defending the right to free expression. Others are arguing for academic tolerance and editorial autonomy. There have even been accusations of disguised tabloid titillation.
There was an immediate reaction and response from the student-journalists concerned and the university powers-that-be. The students vigorously argue that they have done nothing wrong, simply providing a platform to discuss so-called taboo subjects. The university administration is counter-arguing that Student Press went "way beyond the commonly accepted standards of the community, leading to concern and unease" and must desist from publishing further indecent and offensive material in its journal.


Is it that simple to take such a black-and-white view? One could argue, on the one hand, that, of course, there is something to be said for university publications encouraging debate and discourse on various issues, popular or not. One could equally argue that there is also the wider concern for propriety and perhaps standards.

This situation offers an insight into the world of how some young people think. Conventional wisdom does allow for young people to use their time in higher education as a period of exploration and discovery. This is the time to expand and broaden horizons and, in a way, to test boundaries. Not just their own, but also those of the known world around them. There is, as well, the known youth element to be provocative. And this, too, is understandable.

But I ask myself, should this testing, this exploring, have limits? Have we reached a point in cultural evolution whereby anything goes? Should freedom of speech have confines? These are tricky questions that surely the editors of the student journal might also wish to consider.

Our world is getting more complicated all the time. We demand and fight for our freedoms, especially in speech and action. Yet we also know where to draw the line. For example, someone can still believe in freedom of speech and expression, yet refrain from using words that invoke racist, sexist, homophobic or any other offensive stereotype. Not resorting to verbal or actionable abuse very acutely takes into account public sentiment and commonly accepted standards, yet is not seen as a compromise to free expression or dilution of autonomy.

In the end, it does not really matter whether the student journal's series on sexuality and behaviour touched a sore point over bestiality and incest. It does not matter whether you are on the side of freedom of speech, editorial autonomy, encouraging discourse or, even, tabloid titillation.

What does matter is that an awareness of boundaries actually implies a sense of accountability - an accountability to the readership that there is value added to the material being circulated; accountability that the information is accurate and of course, accountability that the material will not incite or provoke violence or discord in society.

This is neither an argument for censorship, nor a curtailing of free expression at all. We cannot simply say that because we have a means through which we can communicate to a wider audience, we can write or publish anything on any subject without liability and care.

In the same vein that Hong Kong is a lawful society, with laws in place that establish boundaries for behaviour and social responsibility, surely then newspapers, journalists and even university publications must equally be held up to similar standards.

The controversy has now extended beyond the boundaries of Chinese University. There will perhaps be wider implications for the community.

Whatever happens next, I just hope that, as this issue raises certain questions about freedom of expression, it also ponders the concomitant responsibilities that come with such a freedom.

So in the end we really might ask, is it freedom of expression, or expressed freedom?

Rosanna Wong is executive director of the Hong Kong Federation of Youth Groups



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Thursday, May 17, 2007

EDITORIAL/LEADER
The Medical Council needs transparency



  
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   Hong Kong's doctors are governed by an international code of ethics that clearly lays out their duties and obligations. The self-regulatory organisation that ensures their compliance, the Medical Council of Hong Kong, does not so closely follow the rules, though.
Doctors, the code states, must "deal honestly with patients and colleagues, and strive to expose those doctors deficient in character or competence, or who engage in fraud or deception". The council does take disciplinary action against doctors it has determined to have failed their obligations, but the manner in which the process is carried out is so closed that the people of Hong Kong - whom it claims to have the best interests of at heart - are generally left in the dark about its decisions.


As we reveal today, transparency is so lacking that doctors found to have broken the code of conduct are not revealed for all in the community to easily see, let alone be shamed. While proceedings are open to the public, impending cases are indicated on the council's website only with the barest detail. No written judgments are released and there is no assurance that they ever will be, even if requested.

In essence, those doctors who have not been competent, honest or ethical - attributes essential for a profession with the power of life and death in its hands - are able to blend unnoticed into society despite their misdemeanours. They may be fined, suspended from practising for a time or struck off the council's list of registered medical practitioners - whichever, we, the people who should know which doctors abide by the regulations, are too often none the wiser.

Council chairwoman Felice Lieh Mak says it would be unfair to name and shame doctors found guilty of professional misconduct by posting their names and details of the cases on the organisation's website. This is the practice with many other medical regulatory bodies, though, and beyond exposing such doctors to the public, there is the good reason that it provides a rationale for rulings.

Such a practice is generally followed by the judiciary in Hong Kong, and it is this transparency that is partly the reason for our rule of law being so strong. Those found guilty are named and their sentence indicated. Judgments can be readily reviewed and compared with other cases to determine if they are fair. Through seeing how the system works and the reasoning for rulings, we know what is right or wrong. In the public glare, those found guilty will know the implications of again breaking the law.

The Medical Council performs a similar role to the judiciary when dealing with disciplinary cases in that it determines the guilt of doctors accused of misconduct, and passes sentence. Those found at fault have their names forwarded to authorities for publication in the Government Gazette, a volume that is too dense in nature for many in the community to bother with. But the exact reasons for a ruling are not generally available in written form, as they are in judicial cases. Requests for a written judgment, as this newspaper has found, may be months in coming, if at all. Patients of doctors dealt with by the council may wish to pursue cases for compensation or review, and the lack of documentation may affect their chances.

Such lack of openness is not becoming for so important an organisation. On its website, it states its aims are "ensuring justice, maintaining professionalism and protecting the public". Without transparency, there is no certainty the council is doing its job properly.



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Friday, May 18, 2007

EDITORIAL/LEADER
Korean peace train requires two-way track



   
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   Another cold war-era barrier has come down with the first trains running between North and South Korea since the nations went to war in 1950. As ground-breaking as yesterday's event was, however, it is merely symbolic; only the South is putting in the effort necessary to finally end the conflict that has dogged the region for so long and until matters change, such a link will have no real meaning.
This was just a trial run along tracks that have been in place since 2003, but unused due to claimed North Korean concerns about security. When the next train will run is unknown; yesterday's trips were possible only because the South agreed to give hundreds of millions of dollars in incentives to the North.

  
Each train carried 150 invited guests and, based on the deals struck to make the journeys happen, every ticket was in effect worth more than US$2 million. South Korea, which financed the rebuilding of the two tracks and has led efforts to reunify the countries, cannot continue pouring such amounts of money into the endeavour or other cross-border projects without greater returns from the North.

There are good reasons why the North should comply. South Korean companies are eager to take advantage of the nation's cheap labour and need a speedier way of moving freight than the roads that cross the border. Tourists from the South are just as interested in heading North. The financial returns would quickly resolve North Korea's economic, energy and humanitarian problems.

For South Korea and East Asia, the result of greater co-operation and eventual unification are as worthwhile: peace and stability. These will remain elusive, however, as long as Pyongyang continues its diplomatic games and uses military threats for advantage. The tussle among six nations to get the North to scrap its nuclear programme is a prime example: a deal has been struck, but excuses have been found to not comply with it.

Reconciliation is, like a rail track, a two-way matter - and in the case of the Koreas, the South is doing the leg work and paying the costs, while the North makes demands. If the process is to have any meaning, the North has to match its words with actions.


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Monday, May 21, 2007

EDITORIAL/LEADER
Imbalance of influence must be addressed



  
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   Mainland leaders are traditionally not known for poignant historical reflections after retirement. But Lu Ping's concession yesterday in a television interview that Beijing had not done enough for the middle class and grass roots in the run-up to the handover is an interesting admission indeed. The rare remarks by the now retired head of the Hong Kong and Macau Affairs Office speak to both the past and the future.
A decade since the handover, it is perhaps easy to forget just how volatile the 1990s were. The atmosphere of relative co-operation in the 1980s between China and Britain over the future of Hong Kong was replaced by tension and mutual suspicion. The Tiananmen crackdown in 1989 changed the underlying dynamic, adding to pressures on both China and Britain amid renewed international and domestic concerns over Hong Kong's fate. Those pressures were reflected in the appointment of Chris Patten, one of Britain's leading political figures, as Hong Kong's last governor, signalling a more assertive stance from London on democratic issues.

  
Mr Lu yesterday spoke of Beijing's need at the time to placate the business community, fearing an outflow of capital from Hong Kong. The prevailing view from Beijing was that addressing the concerns of the tycoons would also help stabilise the wider community. "Looking back, we should have attached more importance to the middle class and the grass roots," he said. "Although we had paid attention to them at the time, it was not enough."

Hong Kong's entrepreneurial class, of course, was already well used to considerable political and social clout under British rule, with the representatives of leading firms and banks prominent on the Legislative and Executive councils. Reflecting Hong Kong's entrepot role and its faith in "business first, politics second", it was not a system replicated internationally.

China continued the tradition in its own way, with the Basic Law providing for a so-called executive-led political system that mirrors the colonial governmental system. It is a system in which the commercial classes are more generously represented than other social sectors. This is reflected by the composition of both the 800-strong Election Committee responsible for choosing the chief executive and the Legislative Council. In the former, tycoons and the business sector wield disproportionate influence compared with other sectors; in the latter, their interests are protected by the functional constituency system.


Ten years on, Hong Kong's situation is far less volatile than the days of the Sino-British tensions of the mid-1990s. Yet still there are complications. The yearning for democracy and broader representation continues to grow - a fact recently acknowledged by both the Beijing and Hong Kong administrations. Fears of collusion between government and big business remain close to the surface in wider political, social and commercial debates.

Mr Lu has rightly highlighted an issue that now needs to be dealt with. It could be argued that the traditional clout enjoyed by Hong Kong's leading entrepreneurs has served Hong Kong well through the decades. Now it must adapt to a new stage of development. Broader representation must form a key part of the government's green paper on democratic development later this year. Developments over the past decade have shown that Hong Kong's further progress is being hampered by a political system that does not adequately reflect the general will.



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Tuesday, May 22, 2007

EDITORIAL/LEADER
Beijing's market foray is step in right direction



  
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   Set against the mainland's foreign reserves of more than US$1.2 trillion, the US$3 billion placed by Beijing with US private equity giant Blackstone Group looks pretty small beer. But the stake, confirmed over the weekend, carries wider financial and political significance.
Engineered by Hong Kong's former financial secretary Antony Leung Kam-chung, who now heads Blackstone's China business, the deal is the mainland's first foray into diversifying its escalating foreign reserves. The move confirms that Beijing wants to join the likes of Singapore and South Korea in exploiting the potential of modern markets with state assets.


While the timing of the move into the currently hot private equity market could be debated, the overall policy direction is welcome, as it helps to further cement the mainland's emergence as a modern economy. The diversification of assets traditionally held in unexciting bonds is set to accelerate once the new state investment agency is finalised. The body, announced in March, is eventually expected to manage about US$300 billion in foreign reserves.

There is more than a prudent investment strategy to the Blackstone decision. The timing is no accident, coming just ahead of the opening this week of the second meeting under the Sino-US Strategic Economic Dialogue banner.

Both Vice-Premier Wu Yi and US Treasury Secretary Henry Paulson find themselves under pressure as the talks start. Protectionist instincts, never far from the surface across the lobby-ridden US political system, are on the ascendancy in the new Democrat-dominated Congress. The vast imbalance of trade in China's favour is increasingly under the microscope and pressures are again mounting for Beijing to allow the yuan to strengthen against the US dollar.

The administration of US President George W. Bush appears to sense the pressures that any drastic appreciation of the yuan would place on Beijing, given the central government's habitual concern for social stability in a fast-growing economy.

The US Congress, however, is another matter. As we report today, Mr Paulson is facing increasing domestic pressure to produce results as some question the worth of talking to Beijing. Last Friday's triple measures - increasing interest rates, raising bank reserve requirements and broadening the yuan trading band - may be too little to dampen the mainland stock-market bubble, much less ease Sino-US economic friction.

From Beijing's perspective, a sweeping revaluation of the yuan is just not going to happen, particularly given the internal challenges ahead of the leadership changes later this year and the desire for stability ahead of next year's Olympic Games. Then there is the fact that the trade imbalance is now so vast that there is not one simple cure-all that can fix it in the short term.

Instead, Beijing should take a broader, more creative approach in wooing the US. There is plenty of room for manoeuvre over the questionable enforcement of intellectual property rights. Fresh policy initiatives and active follow-through is vital to avoid further damage to the reputation of the mainland market.

Allowing foreign firms to enter its brokerage industry is another carrot to the US that could also help the mainland's market development. The Blackstone deal is a step in the right direction in broadening China's economic relationship with the world's largest economy, but more efforts are needed.


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Wednesday, May 23, 2007

EDITORIAL/LEADER
Trust the key word in running for the top



  
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   Ahead of the publication this summer of a green paper on political reform, pro-Beijing voices are trying to dampen any expectations provoked by the chief executive election in March between incumbent Donald Tsang Yam-kuen and his Civic Party rival Alan Leong Kah-kit.
That Mr Leong snared the 100 nominations from the Election Committee members needed to run apparently surprised Beijing, even if he had no chance of winning. Even though they couldn't vote, the public warmed to the spectacle and the chance to indulge in healthy discussions of candidates and policies. The televised candidates' debate in particular was a welcome taste of the possibilities of universal suffrage - the local desire for which has been recently acknowledged by both the central and Hong Kong governments.


Any residual goodwill, however, has not lasted long. Amid the clamour to contain hopes, warnings have been sounded in Beijing, where sources said this week that central government officials were now scrutinising nomination procedures for candidates in future chief executive polls. The issue has been couched in terms of avoiding a constitutional crisis whereby Hong Kong elected a candidate considered unacceptable by Beijing, which then refused to appoint him. It now seems clear that Mr Leong could have provoked such a reaction.

The central government's power of appointment is found in Article 45 of the Basic Law. Beijing has previously stated that this is substantive and not merely procedural. Article 45 also contains the requirement that candidates are selected in Hong Kong by a "broadly based" nominating committee "in accordance with democratic procedures". The provision also states that the ultimate aim is the selection of the chief executive by universal suffrage. Plainly, that power of appointment is not a power of selection.

If it was lightly handled, tinkering with the nominating mechanism could be a pragmatic move to speed the introduction of universal suffrage, easing Beijing's fears of a political system vastly removed from its own Communist Party traditions.

The "if" looms large, however. While it is natural to screen out extremist or frivolous candidates, it is all too easy to see any new mechanism degenerating into a Beijing beauty pageant, where only a narrow band of figures is ever likely to succeed. This would snuff out the spirit of universal suffrage even before Hong Kong people have had the chance to vote. It is hardly a recipe for ensuring Hong Kong will be served by the best and most popular leaders. With polls showing the majority of Hong Kong wants universal suffrage, such a move would risk considerable public backlash.

Any mechanism must ensure that candidates from the broad spectrum of Hong Kong politics are able to stand, not acting as a brake on universal and equal suffrage. It is worth noting that, by and large, that spectrum currently comprises responsible people committed to the prosperous and stable future of the mainland and Hong Kong.

There is no one demanding independence, or suggesting radical changes to the values Hong Kong people have come to cherish. This is visible in the fact that a candidate's political popularity in Hong Kong can be clearly linked to acceptance by Beijing. Hong Kong people can be trusted to understand that relations with Beijing are a core part of the chief executive's role. Any future nomination procedure must put faith in that trust.



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ursday, May 24, 2007

EDITORIAL/LEADER
Civil service merits pay rise, in return for reform


       

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           If you asked the public whether they would prefer smaller class sizes in schools, better health care or fatter pay packets for civil servants, our government workers would inevitably be the losers. But in these days of surpluses and with an economy that is humming along, it isn't necessarily an either/or situation.

The results of a government-commissioned survey made public this week, which suggests its 155,000-strong workforce is due a pay rise of 4 to 5 per cent, has been met with quiet acceptance by most political parties. The first pay rise since 2001, it is subject to approval by the Executive Council and Legislative Council.

The rise would be based on the government's annual pay trend survey, which this year found better-than-expected increases in the private sector. On balance, while the pay rise looks a little on the high side, a rise is justified after the pay freezes and pay cuts of recent years - with some important caveats attached.

A rise should not be used to divert attention or energy away from the continued need to create a leaner civil service. Greater use needs to be made of technology and outsourcing and considerable reform of what is a bloated organisation is still needed.

The establishment is well down on the 198,000 civil servants the government employed in 2000, and the remuneration bill has fallen; spending has dropped 5 percentage points in the past five years, to 31 per cent of total government spending. Still, the proportion is more than twice that spent by wealthy countries.

While pay rises may be granted, pay cuts must also be accepted. Raising civil servants' pay will add billions of dollars to recurrent expenditure; that is hard to manage when revenue drops in a downturn. Granting pay rises adds to inflationary pressures because the recipients have more disposable income, and risks a widening of the rich-poor gap.

Three pay cuts between 2002 and 2004 sparked unprecedented tensions between the government and civil servants, triggering protests and court cases. Five judges of the Court of Final Appeal - Hong Kong's top court - eventually ruled the reductions lawful. If pay needs cutting in future, more efforts need to be made to ensure cuts are implemented smoothly.

A government committee uses three means to review the way pay scales are adjusted, and is now fine-tuning the system. That is a welcome move. The government uses a pay-level survey - which compares the pay of civil servants with different groups of private sector employees - and the annual pay trends survey. Every three years, it reviews the salaries the private sector pays university graduates in entry-level positions. The government has commissioned only two pay-level surveys in 21 years. The first, in 1986, found that the salaries of civil servants far exceeded those in the private sector. But the findings were contested by the unions. The second, carried out by a consultant last year, found most civil servants' salaries were within 5 per cent of those of private sector counterparts and the government decided no change was needed.

Close attention is needed to the methodology of the pay-level survey, but conducting it every six years, as the government committee plans, is sensible. It should be remembered, too, that civil servants enjoy benefits open to few in the private sector. Colonial-era perks are being phased out, but they still enjoy job security and stable hours, which many in private employment can only dream of.

While a budget surplus makes a rise affordable, surpluses should produce better administration, not just better-paid administrators.


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Friday, May 25, 2007

Between two worlds


CHAN KWOK-BUN
   
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Hong Kong is an immigrant society. All who live here know that and do not pay it much attention any longer. The city's most valuable assets are its millions of hardworking immigrants. And that includes me. I was born on the mainland, grew up in Hong Kong and left the city in 1969 as a naïve 18-year-old. I studied and worked in Canada until 1987, when I moved to Singapore. Only in 2001 did I return to Hong Kong, to head the sociology department and the David C. Lam Institute for East-West Studies at Hong Kong Baptist University. So what does that make me?
I'm a return migrant, an immigrant in my home town.

There are many return migrants in Hong Kong. In the face of the anxiety about the 1997 handover to China, thousands of Hongkongers left for the west. A bulk of these people went to Canada and many have since returned. I have spoken in-depth with those who have returned from the United States, Canada, Europe, England, Australia, New Zealand and Sweden. They come from a cross-section of age groups and most stayed abroad for more than five years. Some had even returned a second time, their restlessness manifesting in what I call "circuit migration".

More on that later. For now, I want to discuss the tensions that return migration generates. Most noticeable is conflict between husbands and wives, the gender politics within the family and marriage. A husband who returns to Hong Kong because he cannot develop a satisfactory career in the west because of racism could bring with him a reluctant wife. She misses the quality marital life in the west, where her husband had shorter working hours. She has made a sacrifice for her family.

There is a paradox - the wife's sacrifice has become a powerful motivating force that pushes her husband to work hard, but in doing so he spends increasingly less time with his wife and children. So the wife and husband collude in the wife's misery. Not surprisingly, there is an ongoing drama of conflict among returnees between husbands who want to stay in Hong Kong and wives who want to leave.

More widespread is the conflict between movers and stayers, which is often generational. Sons and daughters who have returned to Hong Kong realise they have changed, but their parents, and others of their parents' generation who stayed behind, have not.

This occurs with friends, peers, and elementary and high school classmates. Returnees are frequently treated by the locals as "different", and they oscillate between the familiarity of home and the strangeness of the west.

This often leads to nostalgia for the life they left behind. Returnees tend to live in their memories. They miss the democracy, transparency, quality family life, and cultural and artistic climate of the west. They miss the interpersonal intimacy between people and families, clean air, proximity to nature, abundant leisure and family time, and the physical space. They spend their time flip-flopping emotionally between here and there.

The future, and with it the promise of yet another return, is always uncertain and unsettling. Yet there are moments of delight, and this is largely a positive force. Returnees are hybrids, commanding competencies in both cultures, and they possess local knowledge in both places - they get the best of both worlds.

Extended cultural horizons often make returnees more socially intelligent, more able to understand complexities; they can harness some of the conflict they feel each day.

But hybridity also has a darker side. If the returnee is not in a position of power, their hard-won creativity can be shackled. Managers identify difference and stigmatise it. So what do stigmatised returnees do? Some of them hide. They try to pass as stayers, but often not successfully. They form hybrid ghetto communities, they swap jobs often, or they move on.

And that brings me back to the concept of "circuit migration". Some of the returnees I have spoken to have come back twice or even three times, caught in a cycle of racism and dismay at the glass ceiling in the west, and the economic pull of Hong Kong, where they no longer feel at home.

It is likely that some will be posted to the mainland in the future, taking with them local knowledge of Hong Kong and the west. Perhaps they could be seen as path-breakers, but they will probably just be displaced again.

These returnees seem destined to be eternal drifters, which reminds me of two classic 1960s essays by sociologist Alfred Schutz: "The Stranger" and "The Homecomer". He pointed out that the return migrant has often become a stranger in his birthplace. He has a hard time facing up to modernity.

Homecoming is not such a heart-warming experience after all.

Chan Kwok-bun is head of the sociology department and director of David C. Lam Institute for East-West Studies of Hong Kong Baptist University.


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Monday, May 28, 2007

REGINA IP
Low-tech thinking



   
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   The government speaks with forked tongues on bureau  re-organisation. Senior officials insist that removing "technology" from the title of the proposed Commercial and Economic Development Bureau, which will still have oversight on technology, does not signal a belittling of the importance of the hi-tech sector in the government's economic vision. However, executive councillor Anthony Cheung Bing-leung rightly said in a recent article that the reorganisation as a whole reflects the administration's concepts of governance.


Sure, one can say: "What's in a name? A rose by any name smells as sweet". But whether on a personal, corporate or governmental level, a name change usually signifies a new direction, a policy shift, or a new ideology. Such changes often spark strong emotions. The debate in Taiwan over the renaming of the National Chiang Kai-shek Memorial Hall is a case in point.

Our history offers plenty of examples of name change and restructuring presaging a major policy initiative. In the 1970s, the establishment of the Independent Commission Against Corruption marked the government's determination to wipe out graft. The firebrand approach of the first generation of leaders, commissioner Sir Jack Cater and operations director John Prendergast, who took up their task with messianic zeal, together with the tough legislation, made a world of difference. More recently, though with much less fanfare, upgrading of the commissioner for administrative complaints to the status of the Ombudsman was partly to strengthen Hong Kong's accountability system. A name change is never simply a matter of semantics.

In the light of these precedents, critics may be forgiven for concluding that the disappearance of "technology" from the title of the new bureau responsible for technology matters is no accident, but betrays a subconscious, yet definite, downgrade of the hi-tech sector in the overall scheme of things. It also reflects the difficulty decision-makers have long had in coming to grips with technology's place in our society: in the past two decades it had been placed in the recreation, culture and broadcasting branch; the information technology and broadcasting bureau; and now the commerce, industry and technology bureau. In the worst configuration yet seen, technology is banished from the title.

This runs counter to national trends and to global developments. As a clear indication of technology's importance to China's future development, Beijing has not one but two agencies - the Ministry of Science and Technology, and the Ministry of Information Industry. Other countries have adopted similar measures. Finland, which makes innovation its national credo, has a Science and Technology Policy Council headed by its prime minister. Ireland set up Science Foundation Ireland in its 2000-06 National Development Plan. The policy emphasis on science, technology and innovation of dynamic Asian economies such as South Korea, Singapore and Taiwan is well known. Among developed economies, Hong Kong stands alone in its underemphasis on technology and innovation as the driving force of growth and is ruling itself out as a possible player.

This is bewildering and disappointing. Global developments in recent decades have shown technology moves the world. Technology underlines the competitive advantages not only of industry, but also of services and of the economy as a whole. All industries, be they logistics, retail, tourism, transport or the much-touted financial services, need to constantly make greater use of technology to improve productivity. With the exception of Hong Kong, technology is seen by developed or developing economies with international savvy as the defining asset of any society aspiring to be creative, inventive and vibrant.

Sure, Hong Kong has had its fingers burned in several forays into technology and innovation. But there are many ways to skin a cat and past misadventures should not rule out a possible brave new future.

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


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This column will be suspended in this week until Friday as I am going to fly to Beijing for a business trip...

So long...

We must do more to save our planet
EDITORIAL/LEADER

Jun 01, 2007        
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Disregard for the environment is not a matter to be taken lightly, as the residents of the Jiangsu provincial city of Wuxi can attest. Algal growths in the main water source, Tai Lake, have reduced quality to the point that the city of 5 million people now has to rely on bottled water for drinking and bathing.

There can be no more pertinent example of what awaits communities which take what they have for granted. Without due regard for what nature provides, what we have today can just as easily be taken away tomorrow, no matter whether it is Wuxi or Hong Kong.

Wuxi's authorities blame the algae on high temperatures and a lack of rainfall, which they say has caused the lake's level to fall to its lowest in 50 years, making the water undrinkable and smelly. But there are other factors likely, such as pollution, overfishing and reclamation of the lake to create more land.

Whatever the reason, the dilemma residents face is hitting home hard: bottled water prices are rapidly rising. Water is, after all, the most vital resource to sustain life and when it is in short supply, hardship results.

Wuxi's residents may not be entirely to blame, either. The world over, weather patterns are changing as a result of emissions of so-called greenhouse gases, which are causing temperatures to rise.

For China, climate change means worsening drought in the northwest, melting ice and less snow in Tibet - and this year, predicted heavy rain that will result in flooding in the Yangtze River for the first time in nine years. Storms are increasing in intensity, the polar ice caps are melting, causing sea levels to rise, and deserts are spreading.

The challenges were central to the just-completed International Conference on Climate Change, which Hong Kong hosted. Throughout, the message was plain: everyone, in developed and developing countries alike, has to do their part to cut the pollutants that are causing temperatures to rise.

In the closing address yesterday, Chief Executive Donald Tsang Yam-kuen rightly said achieving a more sustainable pattern of development had to be the goal. Hong Kong, he said, was in the forefront, with among the lowest per capita emissions of pollutants that cause global warming among developed societies. As if to back his claims, the sky throughout the gathering was unusually clear and blue, devoid of the usual grey pall, due to a wind change and daily series of thunderstorms.

Mr Tsang reeled off a list of projects under way, from the wind turbine on Lamma Island to the use of methane as a fuel at landfills. There is no doubt about the worthiness of such schemes. But Hong Kong is not in the forefront of resource sustainability. Our society is highly wasteful and Hong Kong-owned factories in the Pearl River Delta are greatly contributing to air pollution in the region.

While these are points Mr Tsang neglected to mention, he was accurate in his conclusion to delegates: that every individual can and must play a part to protect the environment for future generations.

The message is one we clearly understand as a result of the poor air quality we experience so frequently. Wuxi's residents are also now coming to terms with it.

But words are meaningless without concerted action. The world over, greater effort is needed to prevent further destruction of a resource we have so badly mistreated - the environment.

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Best chance to beat poverty


EDITORIAL/LEADER

Jun 02, 2007           
     


The Commission on Poverty held its last meeting yesterday and, as of the end of the month, the body will be no more. The government has insisted that the dissolution of the commission will in no way mean that it is keeping less of an eye on the least advantaged in society. It remains to be seen whether it will live up to its pledge.
So far, it is heartening that officials have said the right things. Chief Executive Donald Tsang Yam-kuen made poverty reduction a key plank of his election platform, in which he said "the widening wealth gap is a critical social problem in Hong Kong". He listed poverty, along with the environment and education, as issues high on his agenda, and promised to take charge of promoting initiatives aimed at alleviating poverty, such as setting up social enterprises in communities with high concentrations of low-income families to create employment opportunities.



His raising of the latter issue at a forum yesterday would seem to indicate that he means business. Given the scale of the problem, however, he has much work to do.

Hong Kong's ever-evolving work environment and ageing population means that some people are losing their jobs and lack the skills to find new ones. The situation has always been problematic for the disabled or those leaving school with poor marks. As there is no minimum wage, rising living costs can add to the stress.

A series of schemes has been set up by the government, but those formulated by the commission aimed at encouraging companies and non-governmental groups to establish social enterprises are where most impetus is being placed.

Many would argue that any business that does not put profit ahead of everything else is doomed to fail. To them, the notion that a socially responsible business goes out of its way to employ workers suffering from various disabilities or a lack of skills is simply preposterous. However, with the success of such ventures elsewhere, including Britain, there is good reason for optimism.

In Hong Kong, there are about 200 such enterprises, training and employing thousands of people in ventures including repair work, mushroom farming, landscape gardening, school canteens and convenience stores. Many are manned by a mix of disabled and able-bodied workers, who are all paid market rates for their labour. Though their margins are relatively low, what is important is that they are profitable and their workers do not have to depend on government handouts.

Admittedly, not every social enterprise succeeds. Non-governmental organisations may have the heart to help the weak and the poor, but they lack the business acumen to ensure the ventures' survival. This is where successful businessmen could chip in to make a contribution. Social enterprises that can tap their expertise are more likely to fly.

Until now, the focus of poverty relief efforts has been on providing welfare to the needy. While such assistance must continue, a far better way of helping the poor is to create suitable employment opportunities.

With our ever-widening wealth gap, the social welfare challenges of an ageing society and an increasingly competitive business environment, Hong Kong has a considerable task ahead in its fight against poverty and unemployment. Apart from attracting more companies and encouraging new ventures, social enterprises offer a viable solution.


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Buying up America, Chinese style


Bradford DeLong
Jun 05, 2007           
     
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When China national Offshore Oil Company tried to buy America's Unocal in 2005, it set off a political firestorm in the United States. When Dubai Ports World bought Britain's Peninsular & Oriental Steam Navigation Company, the fact that P&O operated ports inside the US led to more controversy. Americans evidently hope for a world in which they can have feckless deficit-generating fiscal policies, a very low private savings rate and a moderate rate of investment - all financed by foreign capital whose owners are happy to bear the risks yet have no control over their assets.
One might think that foreign investors would reject these terms and shy away from US-dollar-denominated assets. But high oil prices have created huge export revenues for Middle Eastern governments, which still want to park their earnings in American assets. The same is true of Russia.



As for Asia's governments, with China in the lead, the US remains the importer of last resort. The key to their development strategy is to put migrants from the countryside to work making exports for the US market. Thus, the real values of their currencies must be kept low relative to the US dollar, which means that their reserves now invested in the US must continue to grow.

Someday, of course, this will end. Perhaps Asian real currency values will rise sharply as a result of a burst of inflation in Asia. Perhaps the US dollar will collapse and inflation will rise in America, as the Federal Reserve Board decides that temporarily abandoning its price-level peg is a lesser evil than the unemployment fallout that will result. In these circumstances, prudent foreign governments would find some way to diversify.

But how? Buying other countries' bonds would mean abandoning the goal of keeping real currency values low against the US dollar. Buying up whole enterprises triggers angry speeches in the US Congress. What are needed are intermediary organisations that grant a measure of control to foreigners, allow diversification across a wider range of US-located assets and yet still appear 100-per-cent American to US politicians.

Enter the Blackstone Group. China's US$3 billion investment in Blackstone, while insignificant relative to Beijing's US$1.3 trillion of reserve assets, is a test run. At the start of the process, China will have small and indirect ownership stakes in a great many US enterprises. China will gain a measure of risk diversification, reduce the price pressure that has kept earnings on its foreign exchange reserves low, and avoid running into political trouble. Blackstone will gain extra cash to deploy and extra fees.

Some observers think that the US political backlash against foreigners "buying up America" is what will bring the current configuration of global imbalances to an end. Deals like China's investment in Blackstone postpone that backlash, but not for long. The question is: how far can this process go? And how much control will US investors ultimately find they have given up?

Bradford DeLong is a professor of economics at the University of California at Berkeley. Copyright: Project Syndicate


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New thinking on climate change offers hope


EDITORIAL/LEADER

Jun 06, 2007           
     
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World climate-change politics are entering a decisive phase. A United Nations climate summit has concluded it is not too late to introduce measures that will head off the most calamitous future scenarios and turn the tide of climate change. Beyond that, consensus has been stalled by the conflicting interests of developed and developing countries and the want of political leadership on how to reconcile them. An opportunity to advance it comes at this week's enlarged meeting of the Group of Eight countries in Germany, at which China will be a key participant.
Climate change will be one of the key topics for leaders of the world's richest nations, plus Russia, and their guests. It is already shaping up as a contentious political issue. Europe, the United States and China each go to the meeting with their own proposals. These may be seen as safeguarding their own interests. But they should also be seen as welcome signs that after so many years of no leadership, politicians are recognising that ways must be found to make economic development environmentally sustainable. It is therefore important that debate does not degenerate into a political standoff. Countries must be prepared to balance short-term national interest with the long-term goal of limiting the global economic dislocation from climate change.



Almost on the eve of the G8 meeting, Beijing defined the politics of climate change by unveiling its first national plan to combat it. China rejects mandatory caps on developing countries' emissions as unfair and counterproductive to economic development, with the risk of consequences even greater than that of climate change. Instead the plan promises administrative, economic and legislative measures to cut emissions through increasing power efficiency and promoting renewable energy. The target is to reduce energy consumption per unit of gross domestic product by 20 per cent from 2005 to 2010.

The plan includes key pledges to enlist the support of local authorities to cut emissions and use innovation as an alternative to mandatory emissions cuts. The first pledge means bringing regional and local administrations to heel and weaning them off the mantra of industrial development at any cost, often including disastrous damage to the environment. This will be no mean task, but one at which the central government cannot afford to fail. The second pledge means the use of new energy-saving technologies. It is such technologies that offer China and other developing countries the best hope of meeting economic goals without overshooting emissions targets. The most likely source of cutting-edge technology is the US, where venture capital is already taking up the challenge and the prospect of business opportunities. It is here that international co-operation could be crucial. Indeed, Ma Kai , minister in charge of the National Development and Reform Commission, has called on developed countries to provide financial support and allow technology transfer to developing countries.

The prospects for such co-operation are promising. For example, Washington and Beijing are exploring the possibility of energy consultation that would also cover related environmental issues. If developing countries become markets for advances by the US and other developed countries in energy-saving technologies that cut emissions without harming economic growth, the world could look forward to a better chance of avoiding the worst effects of climate change, and a new source of conflict.


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Island mentality


Kevin Rafferty
Jun 07, 2007           
     
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Heads have already been beaten, windows smashed, hundreds of police officers and protesters hurt - surely it is time to end the annual charade that is called the Group of Eight summit meetings, where life in the chosen city grinds to a halt and police draw up battle lines?
All this so that the leaders of the United States, Russia and six other declining countries can strut on the world's stage as if they own it. This year it is happening in Germany; next year it will be Japan.



When I began to write this column I was going to bemoan the fact that the so-called "summiteers" always miss the point, because they represent only the vested interests of the old western world in decline, plus hanger-on Japan.

Why should a meeting of these eight countries be regarded as a global summit? How did Canada get to sit at the top table? Is Italy's presence a tribute to the Roman empire? How about Britain? Is that a tribute to the British empire? And France? Possibly to keep Anglo-French rivalry alive and kicking?

The European Union likes to boast that it is the world's biggest trading bloc, so how does it get four out of eight seats at the top table, plus another one for Russia, North America gets two seats and the rest of the world - comprising 4.5 billion of the 6.6 billion world population - gets just one, through Japan, which increasingly seems to be in competition with Britain for the title of Washington's most faithful poodle.

Yes, of course, the grouping describes its meeting as the summit of the world's leading industrialised nations. But this has become a joke now that China is the workshop of the world, and Britain and other G8 countries (except Japan) are in competition to hollow out their industries and become financial and service supermarkets.

China now has the third-largest economy in the world, after the US and Japan. India is rapidly catching up. Both China and India serve as exemplars of the new economic order and how it may go wrong. This year, more than ever, the G8 meeting is a mockery of the emerging world order. Leading items on the agenda include environment change, where Washington seems again ready to give a lesson to the rest of the world that, frankly, it doesn't give a damn about them.

US President George W. Bush surprised everyone last week with proposals for a framework on greenhouse gases when the Kyoto Protocol expires in 2012. But the US wants the work to be that of the 15 biggest emitters, not the UN, and said nothing about the extent of cuts, the mechanisms for achieving them or whether the targets would be binding. The more or less united Europeans, especially G8 host Germany, are furious.

All the signs are that these will be wasted days. British Prime Minister Tony Blair, backed by his successor Gordon Brown, will be trying hard to get the G8 to make good on promises of a massive increase in aid to Africa. Billions of dollars were pledged, but have yet to be paid.

Oxfam has just produced a report card on the members of the G8, which makes for depressing reading. It states: "Canada: ... has cut aid; could do better ... France: aid down for the second year running; the French government needs to start keeping its word ... Germany: needs to step up to the mark ... Italy: year's worst offender ... Japan: aid [in 2006] fell by 10 per cent, and has not delivered a penny of the US$10 billion promised in 2005; could do better ... Russia: 2006 summit was a disappointment for anti-poverty campaigners everywhere and no progress at all was made; could do better ... UK: much to do to turn the G8's promises into real change for poor people; could do better ... US: smallest percentage in aid of all G8 countries; must try harder."


This says it all: lots of pomp and circumstance, hot air, many bold promises and nothing really achieved except dashed hopes and broken heads.
This year, even the empty promises may not be made. Russian President Vladimir Putin is in a feisty mood, with oil and gas fuelling his superpower muscles. Europe and the US are on different tracks on many issues. Bureaucrats are hard pressed to get an agreed text, even one devoid of great promises.

That is why it is better to scrap the G8, rather than try to reform it. For years, the grouping has been talking of adding China and, perhaps, India. Yes, President Hu Jintao will be hastening to Germany, along with other leaders of emerging nations, to join some of the discussions. This just suggests that the G8 members are totally naive - since there is a price for expecting China and India to pay their respects, and since guests are harder to convince than members to make concessions on sensitive subjects.

Back in 1991, India's Prime Minister Manmohan Singh, who was then the finance minister, told me: "The G7 (Russia had not been admitted to the imperial club) must not become the directorate of the world." He was right. Why should a G8, or a G12 or a G20, purport to control the world? If members led by example, it would be easier to justify their existence.

There is another world body: the United Nations. It is time for the large and rapidly growing nations of the world to take an initiative to safeguard this planet. Brazil has shown imagination, and its foreign minister, Celso Amorin, has been an important player in trying to revive the Doha Round of trade talks. Let Dr Singh live up to his 1991 warning and join in proposing an alterative annual economic summit - whether inside or outside the UN - and bring in Nigeria and South Africa, along with Brazil.

Tell Japan that the colonial era has ended and that it should best use its influence and economic clout to help create a new economic order. Advise China that it is now mature enough to stop being either a follower, paying empty court to the G8, or a spoiler, by blocking Japan and India from permanent seats in the UN Security Council, and must now become a leader of the world.

But these hopes may be as empty as a G8 communiqué, because this fragile planet lacks leaders with vision and humanity.

Kevin Rafferty is a political commentator


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New way needed for dealing with discontent


EDITORIAL/LEADER

Jun 08, 2007           
     
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The tens of thousands of protests across the mainland each year indicate not only a great deal of perceived injustice but, more tellingly, the lack of a worthy official mechanism to deal with grievances. With prosperity creating a society that demands more effective and responsible leadership, authorities must move towards a system where citizens can have a say in matters that affect their lives.
The natural conclusion of such a process, fully fledged democracy, is not a realistic way of giving citizens greater voice in the present political environment. Nonetheless, as the example of recent protests over a proposed petrochemical plant in Xiamen show, democratic principles are necessary to maintain communities that are content. Whereas most previous demonstrations have involved the less-advantaged members of society fighting for basic rights, those in the prosperous coastal eastern city last Friday and Saturday comprised middle-class people. Their concern was not the usual unfair land grabs by officials, but the planned construction in their midst of a factory that would produce a hazardous chemical.



Protests involving the poor have often turned violent and been broken up forcefully by police. Those in Xiamen comprised well-educated, affluent people able to more forcefully argue their case. Authorities have listened to them, putting the project on hold. Given that central government officials have taken notice and commented in favour of the demonstrators, the project may even be scrapped.

This is a healthy sign of the mainland's development. While there have been some reports of arrests of protesters, the event passed peacefully and with officials reacting positively. That bodes well for the adoption of a system better able to resolve conflicts in society.

Central to such progress is stamping out corruption, increased government transparency and movement towards a strong rule of law so that disputes can be evenly settled. Moves have been made in this direction through allowing elections in some villages and within the Communist Party, but the level of discontent shown through demonstrations reveals the process has barely begun.

Hong Kong would be a worthy model for mainland authorities to work towards. While we do not have full democracy, many of its aspects exist and thrive here. The process of government consultation of citizens on planned projects is one such mechanism that would benefit mainland communities torn between development and preserving the environment, lifestyle and health.

This does not mean that there is no place for protests, though. Even in democracies, demonstrations are necessary to keep governments in check, push for progress or voice disapproval of unpopular policies. Often, it is the most effective way for minority groups to be heard by leaders.

Hong Kong people well know this. While staging public rallies has been largely the domain of the rural and urban poor on the mainland, the rapidly growing middle class there now seems to have caught on to the idea. Their power and influence requires that authorities change the way they have been dealing with dissent.

Direct democracy cannot be ignored on the mainland and should be gradually implemented in a timely manner. Until then, though, authorities must strive to listen to the people they govern and do their utmost to act on their wishes. With will, a system can be developed whereby people feel that they have a say in the way the community is run, their voices are heard, grievances are tended to and disputes are settled fairly.


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Film makers fail to focus as spotlight falls on culture


BEHIND THE NEWS
Clarence Tsui
Jun 11, 2007           
     
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As if to prove that there's a flip-side to everything, Hong Kong's increasing awareness about its cultural past seems to have left the film industry in the cold.
While the city's vernacular architecture is receiving full attention by academics and activists alike, and compilations of 1980s pop songs are becoming nearly de rigeur in most local households, Hong Kong's filmmakers are finding it hard to whip up interest - and box-office revenue - on cinematic fare that once enthralled the local masses and beyond.



Directors such as Derek Yee Tung-shing and Johnnie To Kei-fung, for example, have bemoaned in recent years of the challenges of conjuring productions which do not have to pay heed to the whims and fancy of the mainland audiences - a much larger market which provides more attractive returns.

With co-productions with mainland investors becoming nearly the norm these days - thanks to the Closer Economic Partnership Arrangement (Cepa), which allowed these jointly funded films to enter the mainland market without restrictions - Hong Kong's celluloid output is inundated these days with films that fit well with the preferences of the ticket-bearers across the border.

It probably speaks volumes about the fortunes of local cinema when Hong Kong's entry to the Academy Awards Best Foreign-language Film fell to The Banquet - a production of which the cast and crew are largely drawn from the mainland. (What made the film eligible for taking the slot was the fact that one of its investors, Bill Kong Chi-keung's Edko Films, is a Hong Kong-based company.)

And then there are the censors, whose taboo subjects are the ones which gave Hong Kong cinema its rough, idiosyncratic edge.

Unsurprisingly, politics remains the most sensitive issue for authorities, but it hardly mattered for Hong Kong's largely apolitical filmmakers; but the fact that ghosts, for example, remain an absolute no-no has certainly given directors and screenwriters a big headache. Meanwhile, villains - if they are allowed to appear at all, as triad kingpins aren't - who do not get their comeuppance in the end are still viewed with utter suspicion.

The consequence of this is the way some films, such as the undercover-cop thriller Infernal Affairs and gang-warfare drama Election, are required to have their ending drastically altered, much to the chagrin of their creators and audiences.

While Cepa is sweet music to film moguls and established commercial filmmakers, it sounded the death knell for aspiring filmmakers whose vision veers away from those of the mass-entertainment blockbusters.

While directors in the mould of Herman Yau Lai-to - infamous for turning out sexploitative schlock like The Untold Story and Ebola Syndrome, - could still manoeuvre their way to small-budget, wayward projects (such as his recent two films, the skin-trade eulogy Whispers and Moans and the gory paranormal shocker Gong Tau), many younger upstarts have fallen by the wayside.


It's a fact that many directors and the industry's technical staff have relocated to the mainland. For example, the ever-canny Wong Jing, the producer-director notorious for his relentlessly misogynist films during Hong Kong cinema's golden age, now spends more time doing mainland TV series.


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US should try the carrot on Iran before the stick


EDITORIAL/LEADER

Jun 12, 2007           
      

European diplomacy, Russian deal-making, UN sanctions and sabre-rattling from the US have not dissuaded Iran from its nuclear ambitions. With Tehran using the time bought to move well down the path to being able to make the fuel for weapons, a more urgent approach is necessary - and Washington holds the key.
That is not to say it is time for a military solution; the disaster of the Iraq invasion serves as a poignant lesson. Rather, US President George W. Bush has to offer Iran the biggest prize it could ask for: the possibility of a restoration of full diplomatic ties.





Americans will find rewarding Iran hard to swallow. The nation has been Washington's nemesis since the Islamic revolution 28 years ago, when the US embassy in Tehran was seized and diplomats held hostage for 444 days. Iran's hardline leaders have since threatened the US' foremost ally in the Middle East, Israel, backed Lebanese militants and supported Shiite extremists in Iraq.

While restoring diplomatic relations may seem a reward, it should be offered only as part of a comprehensive deal centred on a nuclear agreement, joint security guarantees, resumption of trade and recognition of Israel. Negotiating such an agreement will take resolve, but is the most viable way of preventing Iran going the way of North Korea and developing a nuclear bomb.

The world's nuclear watchdog, the International Atomic Energy Agency, has been unable to divert Iran from its single-minded march towards proliferation. Inspectors of the UN agency have been barred from facilities and had their orders ignored despite Iran having signed and ratified the world's safeguard against the spread of atomic technology, the Non-Proliferation Treaty.

Iran was told by the IAEA 10 months ago to stop enriching uranium, and its refusal prompted Security Council sanctions. More sanctions have since followed, and in light of inspectors' belief that Tehran is close to being able to produce weapons-grade material, demands that the restrictions be further toughened seem likely at the group's latest board of governors' meeting under way in Geneva.

UN sanctions failed against North Korea, which has been able to sustain itself through more than half a century of international isolation. If targeted at Iran's oil industry, the pillar of the nation's economy, they are likely to be considerably more effective.

But this is a card that international negotiators should play only as one of the last resorts. Tough sanctions on Iraq during dictator Saddam Hussein's rule barely affected the leadership, while miring ordinary Iraqis in poverty. The same would be the case in Iran.

With Iran having the world's second-largest oil reserves, such a move is not likely to be readily adopted by importer and Security Council permanent member China; nor would developed nations take kindly to the significant rise in world oil prices that an interruption to Tehran's oil trade would cause.

Better, then, for the US to come to terms with its bitterest enemy in the Middle East, Iran, by proposing face-to-face talks - with diplomatic relations as the incentive. The benefits of such a deal for the US and the region would far outweigh any perception the US had lost an ideological struggle with an adversary.


A first step was made last month in Baghdad when the US and Iranian ambassadors to Iraq broke three decades of diplomatic freeze to discuss bringing peace to the insurgency-racked nation. Ramping up the discussions to focus on matters closer to home would be straightforward in such circumstances.
If Iran declines the offer, or accepts it but continues on its dangerous path, the effort would at least have been made, and other options can then be turned to.


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Guns, grenades and GPS: hi-tech pirates wage terror on the high seas


BEHIND THE NEWS
Audrey Gillan
Jun 13, 2007           
      

The two small vessels were travelling across the Indian Ocean at high speed, their occupants wielding rocket-propelled grenades, AK47s and machine guns, bearing down on the bulky container ship. As he stood on the bridge of the MV Rozen, Captain Priayantha Perera sounded the alarm. He knew what was coming: pirates.
The Somali pirates who threw a pipe ladder on to his deck and boarded his ship went on to hold him and his 11 crew hostage at gunpoint for 41 days. The captives were released last month after a ransom, believed to be about US$100,000, was paid.





Piracy off the coast of Somalia is on the rise again. Last month, pirates seized two South Korean fishing vessels and are still holding their crew hostage. Another gang attacked a cargo ship, the Ibn Younis, but the captain managed to outrun them. In another attack, pirates killed one of the guards sent to intercept an attempted hijack of a UN food aid ship.

The increase in attacks, particularly on vessels carrying aid for the World Food Programme (WFP), led the UN last week to call for international action. The agency's executive director, Josette Sheeran, said: "We urge key nations to do their utmost to address the plague of piracy, which is now threatening our ability to feed 1 million Somalis. Unless action is taken now, not only will our supply lines be cut, but also those of other aid agencies in parts of Somalia."

Somalia has had no officially recognised government since 1991 and it's believed that the pirates are run by local warlords, the funds raised used to arm their militias. Lloyd's List has blacklisted the Somali coast for insurance purposes.

Last month's attacks, at least 330km from shore, mark a new strategy and confirm fears that the pirates are becoming better funded and equipped - they now use satellite phones and GPS to track their prey. That same technology allows large container ships to operate with smaller crews, making them easier to overpower.

"When the pirates got close I could see that we were surrounded. I had no choice but to stop the ship - we couldn't outrun them and I couldn't allow them to start firing at my crew, many of them have young children," said Captain Perera, 53, in Mombasa, Kenya, while waiting for his ship to be repaired.

The crew's ordeal began on March 25, just after they had discharged their cargo of WFP food aid in Merca, a port south of the Somali capital, Mogadishu.

When the pirates boarded the ship, they stuck an AK47 in the captain's belly and took him to his cabin to steal the money in his safe. But Captain Perera knew the gunmen's real aim would be to negotiate a ransom for the crew's release. "They told me they wanted US$1 million and I told them, `go to hell, forget about it, the ship's owners don't have that kind of money, you can go on and kill us one by one'," he said.

Three days after the ship was taken, it was tracked by coastguards from the semi-autonomous Somali state of Puntland. "The Puntland coastguard started firing at us," Captain Perera said. "The pirates fired warning shots, but the coastguard wouldn't stop shooting. [The pirates] were all high on khat [a plant chewed for its amphetamine-like properties] and that makes things even more dangerous. I thought `we're finished now'. I got on the radio and begged the coastguard, `Please, please, stop firing' ... They kept on firing and hitting all over the bridge, it was filled with smoke and there were pieces of glass flying everywhere."


Athule Mahanama, the chief engineer, said: "It was terrifying. A bullet came through the bridge and just missed my stomach." The pirates forced the captain to take the ship further north, out of the Puntland jurisdiction and into lawless waters near the coastal town of Eyl.
When Karim Kudrati, the manager of the Rozen, got the call saying his crew were being held hostage, he knew what to expect; three other vessels owned by his company, Motaku Shipping Agencies, and all carrying aid, had been attacked by pirates. The crew of one vessel had been held for 100 days. "The ransom negotiations are done in secrecy; no names or receipts are given. Everything is done in Somalia, with the help of the Somali contractors we work with and local elders," he said.

But it isn't just ships carrying aid that have fallen foul of the pirates. Crucial shipping lanes pass through Somali waters, allowing ships carrying oil, gas and even tourists from the Indian Ocean into the Red Sea. In 2005 there were 47 incidences of piracy, including one on the cruise ship the Seabourn Spirit, with 22 British tourists on board, which was foiled with the aid of a sonic boom gun.

In the unlikely setting of Barking, east London, Captain Pottengal Mukundan heads the International Maritime Bureau's piracy reporting centre, where incidents are recorded and warnings issued. He advises all ships to sail at least 370km from the Somali shore. There have been six attacks there since April, each one more daring.

Last June, the Union of Islamic Courts took control of southern Somalia, but they were routed in December by Ethiopian-backed forces. "The UIC made an announcement that anyone caught committing piracy would be dealt with under sharia law," Captain Mukundan said. "The attacks died down." In one instance last October, he said, the UIC gave chase after pirates took a cargo vessel. They captured the pirates and returned the ship to its owners. "We have not seen action of this kind in Somalia for decades," he said.

From his own experience, Captain Perera predicts worse is to come. "The lion's share of the ransom money goes to these militias. Unless they clear the area between Puntland and Mogadishu of militias, they will not be able to stop these pirates ... The pirates who took us told me they were no longer interested in small ships - their main aim is to get tankers and big container ships. They're aiming for British, American, Japanese and Korean vessels. They know that's where the money is."

The Guardian


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The third coming
Japan has a chance to reinvent itself, by again using the forces of globalisation to become a world power, writes Joseph Nye

Joseph Nye
Jun 14, 2007           
     

Most people looking at the rise of Asian power focus on China and India. They often forget that Japan's US$5 trillion economy is the second largest in the world - more than China and India combined - with a per capita income that is 10 times that of China. In addition, Japan spends US$40 billion annually on defence, and has one of the top five military forces in the world. China's economy is growing more rapidly, and its total size will probably overtake Japan's in a decade or two, but any serious analysis of power in East Asia must include Japan as a major factor.
Japan has played a unique role in world history. It was the first Asian country to encounter the forces of globalisation, master them, and then make them serve its own interests.

Moreover, Japan has reinvented itself twice. During the 19th century Meiji Restoration, it scoured the world for ideas and technologies that allowed it to defeat a European great power in the Russo-Japanese war of 1904-1905. Unfortunately, Japan moved onto militaristic imperialism in the 1930s, which eventually led to its surrender and occupation in 1945.

But in the post-second-world-war period, Japan again used the forces of globalisation to reinvent itself as an economic superpower that became the envy of the world. As academic Kenneth Pyle argues in his new book, Japan Rising, these reinventions were responses to external shifts in world politics. Now, with the growth of Chinese power, one of the great questions for this century will be how Japan responds.

The Japanese are currently debating their role in global politics. Prime Minister Shinzo Abe has taken a more nationalistic stance than most of his predecessors, and his Liberal Democratic Party is committed to revising Article 9 of the constitution, which limits Japan's forces to self-defence. Public opinion is divided on the issue. Nonetheless, many astute analysts believe that the constitution will be amended within the coming decade.

While Mr Abe wisely visited China and smoothed over relations ruffled by his predecessor, Junichiro Koizumi, who repeatedly visited the Yasukuni Shrine (where 14 class-A war criminals are interred), many people are uncertain about his long-term vision. As one well-known Japanese intellectual told me during a recent visit to Tokyo: "I can accept constitutional revision in the long run, but not while Abe is prime minister."

In May, the Asahi newspaper, known for its left/liberal inclination, proposed an alternative vision for 21st-century Japan in a series of 21 editorials. It rejected the idea of revising Article 9, and proposed, instead, that the Japanese Diet legalise the role of the Self-Defence Forces. The editorials accepted the treaty with the United States that serves as a basis for Japanese security, but rejected the idea that Japan has a right to collective self-defence.

Interestingly, one of the reasons given for retaining Article 9 was that it would better enable Japan to resist American pressure to engage in military "coalitions of the willing" far from Japan's shores. The newspaper worried about the precedent set when Mr Koizumi sent Japan's Self-Defence Forces to Iraq, albeit in a non-combatant role, to please US President George W. Bush. Conservative voices argue just the opposite - that abolishing Article 9 is important for exactly such reasons.

The alternative vision that the newspaper offered was for Japan to become a world power as a provider and co-ordinator of global public goods from which everyone can benefit and none can be excluded, such as freedom of the seas or a stable international monetary system. This would be a way for Japan to escape its reputation for insularity, avoid the mistakes of its military history, improve relations with Asian neighbours who still remember the 1930s, and increase its "soft" or attractive power. More specifically, the newspaper urged Japan to take the lead on managing global climate change by building on its record of successful innovation in energy conservation following the oil shocks of the 1970s.

In an interesting conjunction of events, shortly after the editorial was published, Mr Abe committed Japan to halving greenhouse gas emissions by 2050 and to helping developing countries join in a new post-Kyoto-Protocol climate regime.


The liberal vision also includes a major Japanese role in stabilising globalisation by supporting international trade and monetary institutions; alleviating global poverty by increasing overseas development assistance, particularly to Africa; helping to develop instruments for conflict prevention and management such as the United Nations Peacebuilding Commission; and participating in UN peacekeeping operations. As for the rise of Japan's giant neighbour, the liberal vision urges patience and tenacity in encouraging China to move towards greater transparency, the rule of law, and democratisation, as well as adhering to international rules governing world order.
While maintaining its alliance with America, "Japan must always bear in mind the strategic importance of stabilising its relationship with China", it says. By helping China in the areas of energy and the environment, perhaps "the scars left from the war with Japan may begin to heal".

Japan has become more willing to use its power, and more aware of changes in the external balance of power. It is rising, but how? As one Japanese liberal said: "This is our third response to globalisation. What can we contribute this time?"

Joseph Nye is a professor at Harvard and author of Soft Power: The Means to Success in World Politics. Copyright: Project Syndicate


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