No life in the ocean grave


Gwynne Dyer
Jun 15, 2007           
     


When the annual meeting of the International Whaling Commission opened in Alaska last month, Japan declared that it planned to kill 50 humpback whales as well as the usual minke and fin whales next year in its "scientific" whale hunt. Humpbacks were heading for extinction when the commission agreed a moratorium on all commercial whaling in 1986, so the place erupted in protests.
Australian Environment Minister Malcolm Turnbull called it "a highly provocative act", but it is also a carefully calculated one.



Japan's real goal is to get commercial whaling restarted, and it offered to drop the plan to kill humpbacks if the commission approves a return to "limited commercial whaling" by four Japanese coastal villages. Just four little villages for now, and strictly limited numbers of whales - but the 1986 moratorium on commercial whaling would have been broken.

The pro-moratorium countries at the commission understand Japan's tactics and will not make that deal, reckoning the lives of 50 humpbacks are less important than the principle of no commercial whaling. The killing of 50 humpbacks is regrettable, but it will not endanger a species that has gradually recovered to perhaps 60,000 or 70,000 since the moratorium was imposed.

We care about whales now, but the fish of the oceans benefit from no such sentiment, and they are now going as fast as the whales once were. In fact, according to a report last year in Nature, the scientific journal, 90 per cent of the really big fish - tuna, marlin, swordfish and the like - are already gone, and the middle-sized fish are following.

The cod are gone on the Grand Banks of Newfoundland, once the richest fishery in the world, and show little sign of recovery despite an absolute ban on cod fishing for the past 15 years. They are declining rapidly in the North Sea, too. In the 1980s, the annual catch was about 300,000 tonnes. The European Union quota for cod was cut to 80,000 tonnes in 2005 - and EU fishermen only managed to catch two-thirds of that. Nevertheless, they will probably keep on fishing, with gradually reducing quotas, until the stock is completely eliminated.

Individual fishermen, up to their ears in debt for their hi-tech boats and equipment, cannot reverse this trend because they have to go on fishing. Governments could cut the huge subsidies they give to their fishermen, and above all to the bottom-trawlers that are systematically turning the floors of the world's oceans to mud, but they are unwilling to face the political protests of well-organised fishing lobbies.

A major human food source - the principal source of protein for one-fifth of the human race - is going to collapse in the next generation unless drastic measures are taken. The world's fishing fleet needs to be reduced by at least two-thirds, bottom- trawling must be banned outright, and widespread fishing moratoriums for endangered species need to be imposed for periods of five or even 10 years.

Unfortunately, the minimum measures needed to prevent ecocide in the oceans would cause major short-term disruption and throw millions out of work, so they probably won't be taken. It is much easier, politically, to ignore what is happening now and let the collapse happen later, on somebody else's watch.

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


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Abbas seizes moment in interests of peace


EDITORIAL/LEADER

Jun 18, 2007           
     
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The stormy division of the Palestinian factions is lamentable, but inevitable given the intransigence of Hamas on recognition of Israel. Now that the group has been isolated through its seizure of the Gaza Strip and President Mahmoud Abbas has scrapped the government of national unity and formed an emergency cabinet, the peace process can resume in earnest.
This was not possible while Hamas remained a dominant political force, despite its winning of democratic parliamentary elections last year. While the militant organisation refused to acknowledge Israel's right to exist and maintained a combative stance through attacks on the nation, any attempt to broker a two-state solution was doomed.





After weeks of fighting in which hundreds of Palestinians were killed and thousands have fled to neighbouring Arab countries, Mr Abbas seized the initiative. By naming respected economist Salam Fayyad as prime minister, outlawing the military wing of Hamas and taking emergency rule, he has ensured that foreign aid and border taxes essential for Palestinian survival will be resumed. As importantly, the peace process will be back on track.

Hamas may be isolated from the process, but this does not have to be the case. By renouncing violence and acknowledging the sovereignty of Israel, it can again be part of the political process.

Its leaders have refused this course, even though they have limited backing from Middle Eastern governments. All but Iran and Syria have realised that being within, rather than out of, the process launched as the "road map for peace" in 2002 by the quartet of the US, European Union, UN and Russia is the most viable way forward.

Those partners of Israel and the Palestinians led by Mr Abbas are now in a strong position to convince Hamas and its supporters to change their ways. Through backing the interim Palestinian government with funding, humanitarian aid and political support, a peaceful future and a way ahead can be mapped out.

Ultimately, new elections will be the test; if Hamas retains its hard line and Palestinians again choose to back the group, peace will remain elusive for the region.


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Small step forward in dealings with N Korea
EDITORIAL/LEADER

Jun 20, 2007        
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The cash dispute holding up North Korea's denuclearisation has been resolved and the process is back on track. A timetable was clearly set out in talks in Beijing four months ago and Pyongyang must now return to this in earnest, proving through goodwill that it can be relied on to be a partner in global peace and stability.

But this is not a one-way street; all parties to the deal must show resolve in ensuring that the North can shut down its reactor, scrap its weapons and end decades of isolation. Only through diplomatic and economic integration with the wider world can the nation turn from the course that led to its developing atomic weapons.

The row over cash frozen by the US in Macau's Banco Delta Asia showed just how removed North Korea had become. Despite the funds being released, no bank was willing to transfer them to Pyongyang. Finally, the US ignored its own sanctions on doing business with the North, last week allowing the money to be sent to its Federal Reserve, then on to Russia's central bank and from there, to a North Korean bank account in Vladivostok for collection. If the North is to join the global economy, there must be trust and understanding so that the most basic ingredient of doing business - the international banking system - can be utilised.

This is some way off, though; before such facets of any working relationship can be engendered, North Korea has much to do to prove it is worthy of such standing. While UN nuclear inspectors have been invited back after being expelled in December 2002 and will return next week to begin the process of shutting down the reactor at Yongbyon, this is only the first phase of the timetable.

The next stage involves the North declaring and disabling all its nuclear programmes in return for fuel oil or aid and diplomatic benefits, including ties with the US. Sanctions imposed by the US and UN Security Council after the North tested a nuclear device last October have to be lifted, the country has to be removed from Washington's list of "rogue nations" and a decades-long dispute with Tokyo over kidnapped Japanese must be resolved.

Brokering agreements on each stage will take time; almost four years of talks between the North and China, Japan, Russia, South Korea and the US passed before a final deal was struck in February. But as shown by Pyongyang's insistence that the cash in Macau be handed over before it would shut down its reactor - despite the timetable stipulating it must be done within 60 days of the agreement - unforeseen trip-ups lie ahead.

North Korea has proven over the decades, after all, to be an unreliable deal-maker. Its nuclear test amid the negotiations showed how able and willing it is to derail progress. But the US and Japan are also capable of upsetting agreements. Ultimately, all nations should be working towards reducing tensions in the region; and for this to happen, perceived military threats have to be lessened to build mutual trust.

Only the supreme optimist would have said in February that the scrapping of North Korea's nuclear programme would go without a hitch. Instantly, North Korea raised the Macau bank account funds issue, proving pessimists right.

With such a long process ahead, the potential for more missteps is great. But given the economic and political benefits for North Korea for sticking closely to the deal, and for other nations in finally resolving the region's biggest threat to stability, ensuring it reaches fruition has to be a priority.


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Business as usual
Claims that Chinese rule would damage Hong Kong's status as Asia's global city have been proved wrong, writes David Meyer

David Meyer
Jun 21, 2007           
     
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Alarmists inside and outside Hong Kong feed on any seeming threat to the city's status as Asia's leading global business centre. Now, 10 years since its return to Chinese sovereignty, it is time to dismiss these pessimists for good.
During the years leading up to the return of Hong Kong to China, an industry of naysayers emerged to proclaim that Beijing's rule would damage Hong Kong as a dynamic, freewheeling business centre. They refused to take China's leaders at their word that they supported Hong Kong as an international financial centre. Beijing institutionalised this backing in Article 109 of the Basic Law.





Since then, top Chinese officials - from the president and premier to heads of the financial regulatory agencies - have employed virtually identical language to repeatedly affirm their support. They are crystal clear: Hong Kong is China's global financial city; Shanghai is a domestic centre, with a major presence of foreign firms. Nevertheless, alarmists jump on any difficulty that comes along and proclaim it a threat to Hong Kong. They did this with the Asian financial crisis of 1997-98, severe acute respiratory syndrome, bird flu, stock listings and initial public offerings of mainland firms in Shanghai, and so on. Yet, none of these have detracted from Hong Kong as Asia's global city.

Its resilience rests on sturdy foundations. Hong Kong is the greatest agglomeration of Asia's most sophisticated decision-makers, who control the exchange of capital within Asia and between it and the rest of the world. Two great business networks, Chinese and foreign (non-Chinese), intersect in Hong Kong. Participants in these networks share specialised knowledge about investment opportunities, and economic and political intelligence.

Cross-fertilisation of ideas among these businesspeople is so valuable that most of the world's leading financial firms place their Asia-Pacific offices in Hong Kong. Firms that either fail to locate their offices in the city, or move away, place themselves at a serious competitive disadvantage. The roster of financial firms which house their Asia-Pacific offices in Hong Kong includes most of the world's top commercial banks (Citigroup, Credit Suisse, HSBC) and investment banks (Deutsche Bank, Goldman Sachs, Morgan Stanley).

Hong Kong is also the leading centre of private equity firms which invest across Asia, and the hedge fund industry is on a rapid upwards trajectory. Business services are a major export; the real value of net exports has grown at a 19 per cent compound annual rate since 1998. Between 1997 and last year, the number of regional headquarters in Hong Kong jumped from 935 to 1,228.

No Asian competitor seriously threatens Hong Kong's position. Tokyo primarily operates as a domestic financial centre, and foreign firms locate there to access the Japanese market. Tokyo is not an intersection point for Chinese and foreign business networks. Singapore is the business centre for Southeast Asia (Indonesia, Malaysia and Thailand). Shanghai is the financial centre for central and northern China, not a base for the Asia-Pacific.

Hong Kong's growth has wiped out most of the architectural history of its firms. Yet, its business legacy as Asia's global city rests securely on 150 years of dynamism. When the first leading British trading firms set up operations in the 1840s, other companies from Europe and North America soon joined them. Likewise, top Chinese traders from Asia flocked to the city. During the first decades following the founding of the Hongkong and Shanghai Banking (SEHK: 0005, announcements, news) Corporation, in 1865, Hong Kong strengthened its position as the pivotal meeting place in Asia of the Chinese and foreign business networks.

Since then, the city has never lost its position as the home of the most sophisticated decision-makers in Asia who control the exchange of capital.

China's rule has opened even wider venues for Hong Kong as Asia's global city, because it is the country's window to global capital, and Beijing's leaders will protect that.


David Meyer is professor of sociology at Brown University, Rhode Island. He is the author of Hong Kong as a Global Metropolis



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Developed world must lead on climate change


EDITORIAL/LEADER

Jun 22, 2007           
     
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Beijing's dismissal of a report from the Netherlands that the mainland has overtaken the US as the world's top producer of carbon dioxide - a year ahead of the earliest predictions - is less pertinent than a mainland official's comment that there is no need for a big fuss anyway, because the event is inevitable.
He has a point. China's displacement of the US at the head of the table of big polluters will not change anything. The mainland is still well down the table and a long way behind the US when its greenhouse gas emissions are calculated per head of population.





However, given the country's goal of sustaining strong economic growth, that will not remain so for long. A new report by the US National Bureau of Economic Research gives a different perspective. It forecasts that by 2040, the mainland's economy will be twice as big as that of the US, the core European Union countries and Japan put together. It will also be rich, say the researchers, with a per capita income of US$85,000 in year - in 2000 dollar terms. To realise that forecast, China would have to maintain an 8.3 per cent annual growth rate from 2000 to 2040.

It is expansion of such speed and scale, spearheading a shift in the world economic balance to Asia, that poses the real challenge to efforts to limit climate change. The US report's author, Robert Fogel of the Centre for Population Economics at Chicago University, even dismisses the idea that ever-worsening environmental degradation could slow the momentum of the mainland's growth.

World leaders have recognised the need for agreement on measures to combat global warming, but they have yet to come to grips with it. They are not likely to until the developed world agrees on an approach to take account of the reality that emerging nations, led by China, will not agree to mandatory caps on emissions that inhibit their rapid development and the raising of living standards for hundreds of millions of people. And so long as they do not, the US is not likely to either.

The mainland's ranking as the biggest modern polluter, though it is not to blame for accumulated pollution which started global warming, should serve as a reminder to developed nations that they have the most to lose. They will have to engage with the mainland sooner or later on global efforts to limit climate change.

Commitments to cut emissions remain the most effective means at hand for developed nations to combat global warming, but consensus is badly needed on a more flexible approach to meeting emerging nations' concerns and gaining their co-operation.

The mainland continues to build hundreds of coal-fired power stations to fuel its growth and admits that it will be hard to reverse the increase in total emissions of greenhouse gases. Nonetheless, it recently unveiled a plan to combat climate change by increasing power efficiency and promoting renewable energy. Apart from measures to wean local and regional authorities off the mantra of development at any cost, it promises innovation, or the introduction of energy-saving and pollution-cutting technologies.

Action to rein in the future growth of emissions will speak louder than words. The plan lacks detail, firm undertakings and transparency. But it offers the developed world the chance to open a dialogue on a framework for environmental co-operation to help the mainland achieve its objectives, including access to new technology which will, in the end, be crucial to global efforts to combat climate change without sacrificing economic growth.


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Halting the slide


Philip Bowring
Jun 25, 2007           
     

The new census data showing the continued growth of income inequality comes as no surprise. Hong Kong is heading for the Latin American level of inequality, rather than that of recently developed East Asia or old Europe - or even the US.
But the data does contain a few clues as to what might be done to reverse the trend. By that, I do not mean more hand wringing by officials, leading to committee recommendations, which are intended to be a sop to the community rather than a way of addressing the issue.

First, the facts. The numbers in the top three and bottom three income brackets have soared since 1995, with the biggest rises being in those over HK$40,000 a month and under HK$4,000. The international standard measure of income inequality, the Gini co-efficient - in which 0 is perfect equality and 1 is total inequality - has risen to 0.533, from 0.518, from 1996 to last year.

Second, let us dispense with the excuses. It is true that there has been a global trend in the developed world towards increased inequality. But to blame, as the government is attempting to, the increasing dominance of service industries over goods-producing ones makes little sense. That is especially the case if one compares Hong Kong with, for example, other service-centred economies such as Britain and the US.

Let us also recognise that the data actually understates income inequality by not taking into account the fact that the top 15 per cent of households have access to domestic helpers, who are paid a fraction of the median wage, and in many cases far less than the supposed minimum for helpers. Indeed, this access to cheap foreign labour is one reason for the increase in household inequality: many middle-class families have two full-time incomes because, with a helper, neither partner has to stay at home to cook, clean and look after young or elderly family members. Furthermore, access to this, and other non-permanent labour, pushes down the wages of unskilled locals, particularly women.

But perhaps the most interesting statistic in the report is the Gini co-efficient for Hong Kong, adjusted to take account of actual or implicit government subsidies for health, education, and the like. This also indicates that inequality has got worse (the adjusted co-efficient has risen from 0.466 to 0.475). And the gap between this adjusted figure and the unadjusted one tells us most clearly what the government is already doing to narrow the poverty divide and, hence, that it could do more.

Two principles need to be at work in assessing the role of government in income distribution. First, it must accept that it should have no control on relative wages, other than those of civil servants. The tendency of incomes of highly skilled workers to rise, relative to those of low-skilled employees, may well continue.

Second, in any well-ordered society, some minimum standards have to be attained if class tensions are not to induce dangerous resentment. It is no more acceptable to leave society entirely to the mercies of economists than it is to leave it to those of clerics or generals. All governments have a redistributive role.

The Hong Kong government has long accepted its responsibilities - through health, housing, education and water policies, for example - to a modicum of income equality, as well as to providing public services. The colonial government often acted out of fear of a backlash from the public if it ignored popular sentiment. But the trend in recent years has been in the other direction: to push for lower government spending in most of these sectors. Cutting recurrent spending, as a percentage of gross domestic product, remains a major government objective, over and above achieving further fiscal surpluses.

The hypocrisy is stunning. The bureaucrats responsible for most policies are not only highly paid by any measure, they also enjoy all kinds of perks. Yet they demand that the rest of the population fend for itself. Those non-bureaucrats with influence have inherited their billions, yet seem to think they owe their wealth to hard work rather than good luck.


In practice, there are several easy ways to adjust income equality while balancing the budget - and without increasing the size of the civil service.
Here are some ideas:


Raise direct payments to the elderly - most of whom have worked very hard yet have seen their savings eroded by the near-zero real interest rates on savings deposits;

Provide large cash allowances, rather than income tax breaks, to all families with children under 16. (This would be an investment in future manpower);

Cut all income tax allowances for the top 20 per cent of salaries tax earners;

Enforce the minimum-wage law for domestic helpers;

Ease entry of highly skilled mainlanders and tighten restrictions on unskilled ones;

Introduce a minimum wage for locals - at, say, 50 per cent of the median wage for full-time work (HK$5,000 a month);

Introduce road pricing and spend the income on non-polluting public transport;

Reduce funding for elite semi-private schools (entry to which is usually through influence, and often through bribery) and spend more on improving the quality of public primary and secondary education;

And, cut taxes on gambling and cigarettes, the most regressive of all Hong Kong taxes. (This proposal will infuriate overpaid health academics and assorted do-gooders but would be a major benefit to lower-income groups).
None of these measures takes away from the need for the "ability to pay" to play a larger role in health and housing policies. As an ageing society, more will have to be spent on health care and pensions provisions in Hong Kong, so any policy must focus on ensuring that those who can pay, do pay. It is time for the government to recognise its own role in income distribution, and take action.

Philip Bowring is a Hong Kong-based journalist and commentator



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Then and now


Michael Chugani
Jun 26, 2007           
     

What are we supposed to feel now that the 10th anniversary of the handover is upon us? Must we see it as an occasion to celebrate by saying Chinese rule has worked? Or do we quietly tell ourselves that it was better under the British? Would it be terribly unpatriotic to accept the present, yet acknowledge the past?
One thing is for sure: Hong Kong 10 years after the British, or 10 years under China - whichever way you look at it - screams out for comparisons. We've already been doing that for many weeks now on TV, radio and in newspapers where key players - past and present - give their take on then and now.

Were you afraid 10 years ago? Are you afraid now? Is Chinese rule working? How come Hong Kong didn't die, as some had feared? Are we being well-governed? Do mass protests, the rich-poor gap, the destruction of our heritage and worsening pollution mean the government has lost touch with the people? Why doesn't Beijing trust us with democracy? What must we do to make it trust us? And on it goes.

The answers have been as predictable as the questions. From the self-proclaimed patriots, we're hearing that the past 10 years have been better than at any time during colonial rule. And from the China-bashers, the worn message is that our rights are on a slippery slope.

But the truth is that it is simply not possible to compare a decade of "one country, two systems" with 160 years of colonial rule. That would be like asking: who would you rather have - an authoritarian, paternalistic and untrusting boss from your own family, or an outsider who seized the house of your forefathers and forced the generations thereafter into second-class status?

Our first post-handover chief executive, Tung Chee-hwa, declared 10 years ago that we had finally become masters of our own house. Our last British governor, Chris Patten, hinted more recently of bad governance, post-1997, by noting that, under his leadership, there were no mass anti-government street protests. Both statements were self-serving, but were they accurate? That depends on how you interpret them. Are Hong Kong people masters of their own house? Yes, but only in the wider context that the motherland had regained control of a colonised Hong Kong. However, if what Mr Tung meant was that Britain's departure would finally allow Hongkongers to run their own house, he's been slapped in the face by National People's Congress chairman Wu Bangguo , who crudely reminded us recently that the real masters reside in Beijing.

Mr Patten is literally right in that there were no mass protests during his time as governor. He is partially right if, by that, he meant people were generally content under his leadership. But he is reading the people inaccurately if he is asserting that they had happily embraced colonial rule. They preferred colonialism to communism, but never forgot they were Chinese, or that the British had disowned them by refusing them citizenship. Any pollster will tell you that if you asked an average Hongkonger today whether he or she would prefer Mr Patten or Mr Tung, the answer would likely be the former. But if you asked the same person if Hong Kong should have been returned to China, the answer would almost certainly be "yes".

The mood of a community changes with the circumstances, hence the pre-handover jitters giving way to today's post-handover confidence. Few would have guessed that the mass exodus leading up to 1997 would turn into a reverse migration.

Likewise, we still have the mass protests - there'll be one this weekend - that spun directly from Mr Tung's poor handling of crises. Yet, these protests are not intended specifically to vent anger at Chief Executive Donald Tsang Yam-kuen, who is in fact very popular, as latest polls show.

Mr Patten earned his popularity from his championing of democracy at a time when Hong Kong people feared the heavy hand of the incoming communists. Mr Tung's built-in popularity as the first chief executive quickly vanished when he failed to connect with the people to achieve his lofty goals, and especially when he alienated the community with his open subservience to Beijing.

Mr Tsang's popularity wasn't so much earned as having come by default. The people were relieved to see the back of Mr Tung. But Mr Tsang has earned it now, with his administrative skills and his promise to settle the democracy issue in his new term, which gives the impression that he is less subservient to Beijing.
If the first eight years of "one country, two systems" were defined by the hopeless inadequacies of the Tung administration - which saw three ministers resign in disgrace - then Mr Tsang can write his own legacy simply by showing that not all chief executives anointed by Beijing, and unelected by the people, are poor leaders.

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

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Beijing must protect world heritage listings


EDITORIAL/LEADER

Jun 27, 2007           
     
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The annual sessions of the UN's World Heritage Committee are keenly watched by governments. If sites they have submitted for inclusion on the World Heritage List are selected, substantial rewards follow through funding, interest from experts, prestige and tourism revenue.
But as Beijing may find with this year's meeting in New Zealand, there also is a downside: that a previously acknowledged place can be moved to a second listing, "endangered". The shifting of the Three Parallel Rivers of Yunnan Protected Areas, a source of pride when it was approved by the committee in 2003, appears likely and would be a reason for shame.



That the region of deep gorges, steep mountains and glaciers that is the headwaters of three of Asia's great rivers - the Mekong, Yangtze and Salween - has been considered threatened is not surprising. Yunnan's provincial government is insisting on going ahead with a hydroelectric dam on the latter, known on the mainland as the Nu River, despite pressure from Beijing, environmentalists and the UN. Deforestation and farming also have denigrated the area.

Similar disregard for conservation has been expressed about some of the top places among the 33 on the mainland with World Heritage List status, the Great Wall and Summer Palace among them. In these cases, the pressure of tourism is threatening the sites.

World heritage listing carries benefits, but also obligations to conserve and protect. Beijing is not so desperate for electricity that it needs to dam the last of its wild rivers, nor is money so needed that the wear on historic icons by tourist traffic should go uncontrolled.

An inability to maintain the standards required is understandable for nations lacking funding or expertise. But this is not the case for the mainland.

Leaders on the mainland have expressed the will to find a balance between conservation and development. They can prove that this is not empty rhetoric by equalling their eagerness for places to get World Heritage List recognition with effort to protect those sites.

They can start by forcing Yunnan officials to scrap plans for dams in and around the Three Parallel Rivers protected areas.


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How about investing in HK soccer clubs?


EDITORIAL/LEADER

Jun 29, 2007           
     
  |   

  



The slogan "I liked the company so much that I bought it" has long been a frivolous cliché for carefully calculated investment decisions. But given the huge popularity in Hong Kong of English Premier League soccer, it is easy to imagine local tycoon Carson Yeung Ka-sing using it to explain his investment company's option to buy nearly a third of the Birmingham City club for £15 million (HK$234 million).
In fact it is surprising that Mr Yeung is the first Hong Kong investor to buy into the Premier League, and that Asian investors generally have been slow to join the foreign suitors circling clubs to tap into the revenue streams of soccer's richest league.



With phenomenal wealth having been created by globalisation and the spread of capitalism, new money knows no bounds in the search for investment opportunities. Public interest in the Premier League makes the region a goldmine of marketing potential, already exploited by powerful clubs led by Manchester United, now foreign-owned. Before a ball is even kicked in the new season, the 20 Premier League clubs are guaranteed a share of about £2.7 billion from domestic and overseas broadcasters over the next three years. Little wonder that up to 10 of them could be in foreign hands by the beginning of next season. The three top league clubs are already owned by people from outside Britain - two by Americans and the other by a Russian. And former Thai prime minister Thaksin Shinawatra has recently bought a controlling stake in Manchester City.

Supporters of Hong Kong's league, however, may not share Mr Yeung's euphoria. Once strong and competitive, capable of filling grounds, it has languished in recent years. Local supporters will be hoping that the prospect raised by the new Hong Kong Football Association chairman of a HK$200 million investment in the sport by the Jockey Club will be realised, although this remains to be seen.

Investment in the local league would cost a fraction of that required to buy into an English club. True, the return for businesses would be limited at first to little more than an image boost and marketing opportunities. But their support could help local clubs shake off a malaise and restore the local league to its former glory.


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Vatican's peace overture breaks new ground


EDITORIAL / LEADER

Jul 02, 2007           
     

Soon after his election, Pope Benedict declared restoration of the Vatican's ties with Beijing one of his priorities, along with reunification of the church on the mainland and the estimated 10 million Catholics there. His open letter to China's Catholics at the weekend is the Vatican's most serious overture to Beijing yet. It has gone to a lot of trouble to ensure the letter is widely circulated and understood, translating it into five languages including traditional and simplified Putonghua, and providing unusual notes explaining the main points.
The letter does nothing to bridge the gulf over the Vatican's insistence on the Pope's prerogative to appoint bishops. But its conciliatory tone and gestures symbolic of wiping the slate clean break new ground. Hopefully it will help answer the Pope's prayers for more productive dialogue. The foreign ministry has reacted by reiterating Beijing's well-established position on Sino-Vatican relations. A leader of the official church on the mainland has said the Pope's letter is well intentioned. It will now be interesting to see whether Beijing responds with any action.



The Vatican's scrapping of a regulation that discouraged members of the underground church loyal to the Pope from contact with clergy of the officially approved church is unprecedented. But it recognises the reality that the two have been moving closer together. The Pope's call for those who have suffered for refusing to join the official church to forgive and reconcile for the sake of unity should add momentum. Forgiveness and reconciliation, however, will test the charity of those who suffered the most from past repression.

It is to be hoped that Hong Kong's Cardinal Joseph Zen Ze-kiun is right when he says the letter is a common starting point for dialogue. The sticking point remains the Vatican's insistence that the Pope's right to appoint bishops is fundamental to religious freedom and Beijing's view that this is tantamount to meddling in domestic affairs. In expressing trust that an agreement can be reached, the Vatican has in mind the arrangement in communist Vietnam, where it proposes a few names and the government chooses.

Resolution of the dispute would be a victory for religious freedom on the mainland. It would do China's image no harm either.

The full text of Pope Benedict XVI’s letter to Chinese Catholics in English and Chinese


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Discovery Bay needs wider transport options


EDITORIAL/LEADER

Jul 03, 2007           
     

There is often a price to pay for being different. The angst of Discovery Bay residents over the possible demise of a hire-car service that has breached the terms of its permit may raise a few wry smiles.
To many people, this waterside development on Lantau may still seem like an uninspiring expatriate enclave that has no right to expect exceptions to government rules. There may have been some truth in that once, as it was conceived as a resort and developed instead into a prosperous small town with an un-crowded, car-free, leafy environment. But these days it is a very cosmopolitan microcosm of Hong Kong, thanks in no small part to locals who now account for a large part of its population.



The hire-car service run by developer HKR International (SEHK: 0480) is the only alternative to the shuttle buses to the ferry pier and shopping centre - in effect the taxi service. It breaks the rules by making unscheduled pick-ups and allowing ride-sharing, instead of catering only for passengers who make single bookings in advance. The flexibility suits most residents, but not parents and wheelchair-bound people who often find themselves unable to obtain hire-car transport when they need it. After receiving a complaint, the Transport Department has reminded HKR to comply with its permit. HKR says this would make the service untenable.

Without the minibuses and taxis to be found in the rest of Hong Kong, the transport arrangements for Discovery Bay have become outdated. A viable taxi service of some kind is needed. It is now an established part of the city with its own identity and community spirit. Considerable effort has gone into maintaining a lifestyle of choice, although one that usually comes at a price. Development aimed at attracting more people to live there or to visit continues, including improved dining choices, an ESF school and more shops.

For Discovery Bay residents, scrapping the hire-car service would be a bit like saying there will be no more taxis on Hong Kong Island. The Transport Department has proposed alternatives to a simple waiver of the restrictions. Flexibility on both sides is needed to ensure that a community of 17,000 has adequate means of transport.


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Mainland owes it to world to ensure product quality


EDITORIAL/LEADER

Jul 04, 2007           
     
  |   

  



Damaging perceptions of the quality and safety of Chinese products - even if not entirely fair or warranted - cannot be easily undone. With the mainland running a massive trade surplus with its major trading partners, it is all the more important for Beijing to take the issue seriously. Otherwise it will provide protectionists with one more excuse - on top of the alleged attempt to manipulate the value of the renminbi - to advance their unsavoury agenda of stifling free trade.
As a consumer of mainland fresh produce, Hong Kong is well aware that product safety can be an explosive issue. Through our special relationship, it has been relatively easy to deal with scares over contaminated and tainted food and restore confidence. But in China's relations with other countries, product safety issues can easily lead to political disputes.



Maintaining consistent product standards can be a headache for any rapidly emerging economy. Japan's battle to establish credibility in world markets a generation ago, marked by zealous dedication to quality control, attests to that. However, the proliferation of product safety cases on the mainland shows China has not addressed the same issue as effectively.

Chinese officials put the blame on Panamanian businessmen after cough medicine found to contain antifreeze solvent disguised as glycerin killed 51 people in the Central American country last year. But it is worrying that the same solvent exported from China was blamed for 88 deaths in Haiti a decade ago, and that traces of the same poison have been found in Chinese-made toothpaste recently banned in many countries as well as Hong Kong.

There is an emerging perception abroad that food safety is a chronic problem, highlighted by the deaths of dogs and cats in North America blamed on Chinese wheat gluten tainted with the chemical melamine. Recent recalls and controls imposed on mainland goods by American regulators involved fish contaminated with drugs or unsafe additives, or tainted with salmonella, unhygienic frozen crab meat and toy trains coloured with lead paint.

It is not as if China's product inspectors have been idle, as evidenced by yesterday's announcement of the discovery of excessive additives and preservatives in nearly 40 of 100 children's snacks sold at big stores and wholesale markets. This followed recalls of fake polio vaccines, vitamins and baby formula. But the mainland continues to reap the harvest sown by rampant crime and corruption at nearly every level, highlighted by the recent death sentence on its top drug regulator for taking bribes from pharmaceutical firms to approve substandard medicines.

It is naïve not to think there is sometimes a hidden agenda behind hurdles erected against mainland exports on technical health and safety grounds. But it is wrong for Beijing to blame the foreign media for hyping things and triggering consumer panic.

Beijing insisted yesterday that its export inspection regime is adequate and attributed problems to differences between China's system and those of other countries. But there is little point in claiming to be unfairly targeted when the way forward is to strive for compliance with uniform acceptable standards and ensure that all products made in China are seen to be safe, for export or not.

Beijing must understand that it needs to assure foreign consumers that its products are safe. That remains to be demonstrated by effective action. Otherwise people will hesitate to buy "made in China", no matter how cheap.


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Vision impossible


Alan Leong
Jul 05, 2007           
     


The third term of the Hong Kong Special Administrative Region's government was inaugurated on Sunday. What are the hopes and expectations of the people for this new administration? How can we, as members of the political force outside of government, offer a constructive contribution towards creating a better Hong Kong?
These are the questions which must be asked in this new political landscape.



During the chief executive election in March, Hongkongers demonstrated their clear aspiration to participate in public affairs; 86 per cent saw both election debates on television even though they had no right to vote. This was an astonishingly high number even when compared to western countries.

At the end of the election on March 25, I promised the Hong Kong people that I would continue the good work which we had started during the campaign, helping to offer a new direction and a new momentum for Hong Kong, and to monitor the performance of the government in the next five years.

Throughout the election I travelled all over our city, listening to ordinary people telling me about their hopes, their struggles, and their concerns. It was clear there was a strong feeling in the community that the present government has failed to meet the expectations of those in need, that there is complacency at the highest levels of government, and it is refusing to respond to the people.

In his Letter to Hong Kong, broadcast on RTHK on March 31, Chief Executive Donald Tsang Yam-kuen openly admitted such complacency existed and vouched to change this by truly listening to the people of Hong Kong.

I congratulate him for his honesty, even though I have profound differences with him over what needs to be done in relation to two of our most pressing problems - the failures in our education system, and air pollution.

The latest round of A-Level exam results reveal the serious shortcomings and inadequacies of our present education system. The standard of English continues to fall and is at a record low. More than 50 per cent of our students failed to attain the minimum requirement for a university education.

For our modern economy, which thrives on the quality of our workforce and in which employers are demanding ever higher standards from their employees, our education system is simply failing to meet even the most basic expectations. It is obvious we have a crisis in this area, yet what is the government doing?

I remember during our first televised election debate that Mr Tsang proudly repeated the fact the government is spending more than HK$47 billion annually on our education system and that it constitutes the largest expenditure item in the budget.


One has to question what this money has achieved? It is obvious that good education isn't just about money.
The mindset of bureaucratic superiority and arrogance is most apparent in education reform. With bureaucrats dictating to teachers, headmasters and academics on how to teach, what they should or should not do, and never-ending administrative forms for teachers to complete that add no value to teaching.

What is worse is that the present policies are eating away at the morale of our teachers and academics.

Education is the most precious gift a society can bestow on its children. The key to education today is to personalise learning and to recognise different children have different abilities.

However, personalising learning is not just about a distinctive approach to every child, it is also about a distinctive approach to every school and university. It is about schools and universities feeling they are in charge of their own future. It is about the power and responsibility that come from being free to chart their own course, to experiment, and innovate.

We need to give autonomy and flexibility back to education's institutions. The government needs to listen seriously to the needs of parents, teachers and students. Now for another main area of concern for Hong Kong - air pollution. The government's failure to admit that air pollution levels are a serious public health crisis - and rapidly turning into an economic one - is another sign of bureaucratic arrogance at its worst.

Again, what we desperately need is a government which is open and honest with the Hong Kong people about air pollution problems - and that has the courage and vision to tackle them.

We should begin by adopting the international standards accepted by the World Health Organisation and not hide behind outdated methods of measuring the extent of our pollution. The government has refused to do this.

In the next five years, we must force the government to face up to the problems caused by air pollution and tackle them with the strong political will which is required, but is presently lacking in our administration.

A government which is not elected by the people is ultimately unaccountable to the people. Therefore, their voices, their needs, and their hopes will always come second to power itself.

My work in the next five years, together with other concerned groups in our society, is to ensure as much as possible that under this imperfect system Hong Kong people's voices are heard, their views expressed, their opinions valued, and their needs addressed. And I openly invite the people of Hong Kong to measure the failures and successes of our efforts on these issues in the next five years.

As for me, the election campaign has come to an end but the work goes on, and the hope for universal suffrage by 2012 still lives.

Alan Leong Kah-kit is a legislator and was a chief executive election candidate

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World needs convincing PLA is not a threat


EDITORIAL/LEADER

Jul 06, 2007           
     
  |   

  



Australia has joined the US-led chorus of concern over mainland China's military buildup. Canberra's latest defence policy paper warns that the pace and scope of the mainland military's modernisation risks creating "misunderstandings and instability" in the region. This is a marked stiffening of the Australian position and further deepens the US-Japan-Australia military relationship.
The Australian paper was accompanied by fresh expressions of Washington's concern at a lack of transparency in Beijing's intentions, this time from the commander of the battle group of the aircraft carrier USS Kitty Hawk.



These concerns are not easily dealt with and will not go away. In fact, military suspicions and tensions could all too easily worsen before the situation improves. While the likes of Australia and the US may speak openly, other regional powers are showing their mistrust by building up their own military forces. Analysts say the mainland's rise is one of the factors driving arms purchases across Asia, from Japan to India.

Any power has a right to modernise its military after years of neglect, and particularly as its economy improves - a fact acknowledged even by hawks such as former US defence secretary Donald Rumsfeld. And China, with its borders with 15 nations, sits at the heart of a historically dangerous and complex region.

Beijing has repeatedly stressed its peaceful traditions and insists its military credo is entirely defensive, not expansionist in any way. Recently, a senior PLA officer reiterated this stance at length to a receptive audience of defence ministers in Singapore. That is exactly the kind of dialogue Beijing needs to foster in the months and years ahead.

Showing more openness and explaining its military budget, as Washington demands, are not the only things Beijing needs to do. Its military diplomacy should become more proactive in order to ease fears and promote peace and co-operation. Beijing has won praise for its increasingly broad and flexible diplomacy, a trend that must spread deeper into the military realm.


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Some criminals more equal than others


Eugene Robinson
Jul 09, 2007           
     
  |   

  


Let's put this in perspective. Martha Stewart is convicted of conspiracy, making false statements and obstruction of justice, and soon she's decorating a prison cell. Lil' Kim is convicted of perjury before a grand jury, and conspiracy, and off to the big house she goes. Paris Hilton commits a crime that could be described as "driving while blonde, vapid and obnoxious", and next thing you know she's freaking out in solitary confinement.
But when Lewis "Scooter" Libby is found guilty of perjury before a grand jury, lying to FBI investigators and obstruction of justice, US President George W. Bush intervenes to save him from the indignity of spending a single night behind bars. No home confinement, no ankle bracelet, nothing. Now that he has paid his US$250,000 fine, Libby is free to scoot on with his life.



What led us to this point - when a lifestyle maven, a bling-bedecked rapper and a table-dancing celebrity are held more accountable than a powerful member of the White House inner circle who functioned as vice-president Dick Cheney's right-hand man - was an abuse, or at least a misuse, of presidential power.

It's true the Libby affair pales beside other recent abuses of power - the war in Iraq, intrusive domestic surveillance, secret CIA prisons, Guantanamo, torture "lite" and whatever else Mr Bush and Mr Cheney have done to the constitution that we don't know about yet. But we can't accept presidential rule-by-fiat as the norm. Mr Bush and his erstwhile ally, Tony Blair, often defended their war in Iraq by saying they were fighting terrorists who hated our "way of life" and wanted to destroy it. Leave aside the question of whether this is really the terrorists' motivation, is not the rule of law an aspect of our way of life that's worth defending?

A duly constituted jury of his peers found Libby guilty of serious charges. His 30-month prison sentence was pronounced by a judge appointed to the federal bench by none other than Mr Bush. This was no partisan exercise in scapegoating - and no miscarriage of justice.

It's true that judge Reggie Walton threw the book at Libby. But the judge acted within sentencing guidelines, perhaps thinking that for a high-ranking government official to lie under oath was a particularly vile betrayal.

Why did Mr Bush commute Libby's sentence, knowing of all the criticism that would follow?

The reason Mr Bush gives - that he accepts the verdict against Libby but thinks the sentence was excessive - makes no sense either. The remedy in that case would be to wait until Libby had served a non-excessive amount of time in prison and only then commute the sentence.

What does make sense is that the president would feel responsible for Libby's plight. Libby's criminal lies were about his part in discrediting claims that the administration's rationale for invading Iraq was bogus.

Mr Bush might have decided that since this is his war, he, not Libby, should be the one held to account.


Eugene Robinson is a Washington Post columnist


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An innovative plan to widen access to justice


EDITORIAL/LEADER

Jul 10, 2007           
     


Access to justice is a fundamental right. Those unable to pursue a legal remedy because they are neither wealthy enough to afford the cost, nor poor enough to qualify for legal aid, face being deprived of equal access to justice. Many people in Hong Kong have found themselves in that situation. This is not good for them or healthy for our system of justice. There is a need to tackle the inequity. But it is not easy to reach a consensus on the best way forward.
The Law Reform Commission has made two worthwhile suggestions. The government should take them seriously, instead of letting the report gather dust along with other law-reform reports.

   

Clearly, there is a need for better provision of affordable legal services. It is estimated that 30 per cent of households are not eligible for either the basic or supplementary legal aid schemes. As a result, there has been a dramatic rise in recent years in the number of people representing themselves in court. The evidence is that most do so only because they cannot afford a lawyer. It gives them access to justice of a kind, but it is not equal.

Other jurisdictions troubled by the same problem, notably Britain, have adopted conditional legal fees as a solution. If a litigant has such an arrangement with his lawyer and loses the case, he pays nothing. If he wins, the lawyer is entitled to a higher fee than usual.

The problem with conditional fees, however, is that the loser still has to pay the other side's costs, which can be prohibitively expensive. The system therefore depends on litigants being able to take out insurance against such an outcome. In Britain, the provision of affordable insurance has not been without problems. The commission suggests it would be even more problematical in Hong Kong, partly because of the negative response of the local insurance industry to such a scheme. Without affordable insurance the conditional-fee system is not practical. Nonetheless, it is disappointing that the commission has shelved the idea, given its potential to greatly increase access to justice.

There is, however, wide support for one of its alternative suggestions: widening access to the self-financing supplementary legal aid scheme by raising the financial eligibility threshold and increasing the types of cases covered. That would be a sensible step that should not be difficult to implement swiftly.

The commission's other suggestion, setting up a conditional legal aid fund, is less straightforward. It is an innovative attempt to secure some of the advantages of conditional fees while overcoming the problems with insurance. The fund would take cases on merit, brief private lawyers on a conditional-fee basis and pay the opponent's legal costs should the litigation prove unsuccessful. There would be many problems to be ironed out. But the idea is worth serious consideration and the government should take up the commission's recommendation that a feasibility study be conducted. Such a fund should be independent from the legal aid department, as suggested. Any financial eligibility limit for applicants should be set quite high, to ensure that not too many in need of legal representation are excluded. Public money would be required to get the fund going, but the cost should not be an obstacle as the idea is that it would be financed by a proportion of the fees won by successful litigants.

Conditional-fee systems have proved elsewhere to be an effective way of widening access to justice without much cost to taxpayers. The government has nothing to lose and everything to gain by seriously considering the commission's proposals.


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The missing link


Anson Chan
Jul 11, 2007           
     
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It seems that one of the final duties of the outgoing chief secretary for administration was to respond to criticism by the Legislative Council House Committee of "declining" rates of attendance by government principal officials at Legco panel meetings.
The gist of Rafael Hui Si-yan's response, contained in a letter to the house committee chairman, is that principal officials try their best to attend panel meetings but, given the many competing demands on their time, they need to retain the flexibility to delegate this responsibility.

   

He concludes by urging Legco members to back the government's plans to introduce more tiers of political appointees to share the workload.

The proposal to create posts of deputy and assistant ministers in the various policy bureaus was initially put forward in a consultation document on further development of the political appointment system, published by the government a year ago. In commenting on these proposals last November, I argued strongly that, before any further development of the political appointment system takes place, there should be a thorough and open assessment of the effectiveness of the accountability system since its establishment in 2002.

I expressed particular concern at the implications of the proposals in the consultation document for the neutrality of the civil service, given that they would entrench still further the ability of the chief executive to hand-pick like-minded civil servants for elevation to the top political posts in his administration.

The appointment of the chief executive's new team of principal officials underscores my concerns, because almost all of the political appointees are either former or serving civil servants. I am not questioning either the competence or the dedication of the individuals concerned. But the public is entitled to ask: If Hong Kong is going to continue - for the foreseeable future - to be governed predominantly by former civil servants, what is the justification for creating more and more layers of highly paid officials fulfilling virtually the same role as senior civil servants, especially if these political appointees can opt freely to limit their "accountability" by refraining from regular appearances before Legco panels and committees?

Let's not forget that members of our Legco are not full-time politicians. Most have to balance professional careers and diverse community service commitments with the demands of their Legco role. Most take their responsibilities very seriously and willingly accept the long hours involved. Small wonder then if they feel slighted when highly paid government ministers do not always seem to accord commensurate priority to attendance at Legco panel and committee meetings but, instead, rely on their senior civil servants to speak on their behalf.

The problem is that the present accountability system is fundamentally flawed and the creation of more tiers of political appointees will only compound, rather than resolve, its present inadequacies.

The first thing the government must do is come to grips with the challenge of defining clearly the difference in role between a "neutral" civil service and its political masters. In my view our civil servants should, as in other jurisdictions, progressively withdraw from public view. They should work quietly behind the scenes to support their minister, answer questions of fact in open committee, but not be called upon to publicly defend the government's politically based policies or positions. Only in this way will they be able to sustain publicly a perception of genuine neutrality.

We need a first-class civil service whose members can carry out their work without fear or favour in the knowledge that, subject to satisfactory service, they can look forward to a permanent career within the civil service.

We must avoid the potential conflicts of interest which are bound to arise if civil servants perceive, at some point, that they have to make a choice between continuing in the "neutral" civil service and climbing on someone's political bandwagon.

True political accountability cannot be bestowed from above by fiat. Rather, it must be nurtured from below and underpinned by a credible mandate to govern. So, instead of trying to turn civil servants into politicians, we should focus our energies on building a political structure which nurtures political leaders who are truly representative of the community and whose mandate to govern is rooted firmly in democratic elections based on universal suffrage.

The government will very shortly be issuing a much anticipated green paper on constitutional reform. We have been given to understand this document will solicit public views on a range of options for progressing to a system of full universal suffrage, with a clear road map and timetable. Resolution of these issues is an essential prerequisite for addressing, and hopefully solving, the fundamental challenge of how to build a political structure which delivers good governance and genuine accountability.

The current system is manifestly unsustainable. The longer we delay putting in place the necessary constitutional reforms - as promised to Hong Kong people in the Basic Law - the harder it will be to establish a coherent and effective working relationship between the executive and legislative arms of our government.

In the meantime, the community has every right to expect that the incoming team of principal officials acknowledge the crucial importance of their role as a bridge between the executive and the legislature by seizing every opportunity to engage with those who have been elected - directly or indirectly - to represent the interests of the Hong Kong community.

Anson Chan Fang On-sang is the former chief secretary for administration www.ansonchan.hk

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Sense and sensitivity


CHRISTINE LOH

Jul 12, 2007           
     

Hong Kong's Wetland Park at Tin Shui Wai, which opened in May last year, is a real gem. It is a great example of doing something right and doing the right thing. The 61-hectare park was created to make up for the loss of wetlands - in the ecological migratory path for birds - as a result of urban development.
In 1998, the Agriculture, Fisheries and Conservation Department and the tourism board carried out a feasibility study to assess how to carry out the project, provide sensitive conservation to the area, as well as enable visitors to learn about ecological issues.

   

Our public officials with conservation expertise know Hong Kong has many lovely marshes and fish ponds which they want people to take note of. Walking through the park, you can feel the love and attention the designers had for nature.

They wanted to share with the rest of us their knowledge that along the city's extensive coastline are charming meandering shores, dense mangrove beds and extensive mudflats. These are modest but beautiful landscapes unique to this area of the world. Our wetlands can boast of great biodiversity, with a number of rare and unique species.

The project's success has much to do with setting the right objectives. The aim was not so much to flood the place with paying tourists, as to show the diversity of Hong Kong's wetland ecosystem and emphasise the need to conserve them.

The park also complements and supplements facilities offered by the nearby Mai Po marshes nature reserve, which is world famous.

The Wetland Park is a place of serenity. The Architectural Services Department has done a great job to ensure the design of the buildings and the facilities blend in well with the park areas.

The materials and colours used for the facilities are modest and fitting of such a place. Nothing jarred; everything is in harmony with nature. The beauty of the place comes from the wetlands. There is no evidence of over-design or waste of resources. Even the souvenir shop is suitably modest with a sensible choice of T-shirts for visitors, who were not suitably dressed, and hats and sun block lotion for those who forgot to bring them. There is a good range of guidebooks about Hong Kong's ecology.

Perhaps the only thing that could have been done on the day I went to give a talk was for the air conditioning in the lecture theatre to be less cold. That was an issue of day-to-day management that can be improved easily and immediately.

As the park is there to promote conservation, it has to prevent over-use by visitors. Thus, it restricts the numbers. The park has proven to be popular and there are many occasions when tickets for the day are sold out in advance.

The Wetland Park is the best example of how government ecologists and architects can produce world-class outcomes. The elegant main building - the visitor centre - won an architectural prize. The brick walls were made with old bricks from demolished buildings in China.

The creation of the whole park cost about HK$500 million, which is almost nothing when compared with the tens of billions Hong Kong taxpayers had to spend on the Disney theme park.

What does this tell us? Given the right motivation, Hong Kong can come up with great ideas and superb executive at reasonable cost. Big ticket items are not always the best.

There is no substitute for taking the time to plan a project. The Wetland Park was not built at break-neck speed, and even with modest resources, the result is as good as anywhere else in the world. Indeed, the Wetland Park is an outstanding example of sensitive ecotourism in Asia.

Can we think about developments at the Central waterfront, West Kowloon and Southeast Kowloon not more modestly, but more sensitively?

Christine Loh Kung-wai is chief executive of the think-tank Civic Exchange



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Patriot games


REGINA IP

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

  

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

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

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

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

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

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

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

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

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

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

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


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MPF reform needed to protect nest eggs


EDITORIAL/LEADER

Jul 17, 2007           
     
  |   

  



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

  

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

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

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

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

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


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Logging success at home is not enough


EDITORIAL/LEADER

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

  

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

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

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

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

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

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


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A battle for the hearts and minds of Afghans


Raymond Kendall and Norine MacDonald
Jul 19, 2007           
     

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

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

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

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

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

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

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

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

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

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

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

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

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

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



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Biofuel mania ends the days of cheap food


Gwynne Dyer
Jul 20, 2007           
     

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

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

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

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

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

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

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

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

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

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

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


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

Andy Xie
Jul 23, 2007           
     

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

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

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

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

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

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

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

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

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

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

Andy Xie is an independent economist



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If other governments invest, why not Beijing?


EDITORIAL/LEADER

Jul 24, 2007           
     

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

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

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

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

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

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

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

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

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

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

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

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

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


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