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Web-only Exclusives November 30, 2000 From Our Correspondent: Hirohito and the War A conversation with biographer Herbert Bix From Our Correspondent: A Rough Road Ahead Bad news for the Philippines - and some others From Our Correspondent: Making Enemies Indonesia needs friends. So why is it picking fights? |
Week of December 18, 1998
IT'S GOING TO BE A TOUGH CHRISTMAS season for the territory, but surely not bad enough to justify hijacking Santa Claus. Retail sales are down 21% from a year ago amid rising unemployment and financial market turmoil. Negative inflation figures have heightened fears that the territory is succumbing to deflation for the first time, even though the Hang Seng Index is climbing. But does all that justify an assault on Santa? No, but when Coca-Cola sent six of their classic holiday paintings to the territory for an exhibition, the company took no chances. Painted in the 1930s as part of Coke's advertising campaign - "thirst knows no season" - the company considers the artwork priceless and is keeping it well protected.Week of December 11, 1998
HONG KONGERS DON'T JUST TRAVEL TO MAINLAND CHINA for business or tourism. Many of them go there to indulge in an activity outlawed in Hong Kong: eating exotic or endangered species of animals. A survey conducted by Traffic, a wildlife watchdog group, has found that 36.3% of respondents had eaten snake and 21.5% civet cat. A small number had tried dogs, ant-eaters and monkeys.Week of December 4, 1998
SINGAPORE The Singapore International Monetary Exchange (SIMEX) relaunched its controversial Hong Kong stock index futures contract. The index uses 35 leading stocks to parallel Hong Kong's Hang Seng index. Stock exchange authorities in Hong Kong are concerned that speculators could use SIMEX to attack Hong Kong's financial markets from without.RETAIL SALES FELL 21% over the 12 months to September as consumers, concerned by job security and market turmoil, reined in spending.
Week of November 27, 1998
MACAU Local authorities launched a renewed crackdown on organized crime as the enclave entered its last 400 days under Portuguese rule. Around 70 people were detained by police in raids on casinos. Triad violence has escalated in the run-up to the handover as rival gangs battle to control gambling and prostitution rackets.DESPITE THE ECONOMIC DOWNTURN, Christie's Hong Kong Ltd. sold $30 million worth of jewelry and antique works of art at a recent auction. Highlights included a collection of antique and modern jewelry by Hong Kong socialite and entrepreneur Theresa Po Lau. Billed as the most important jewelry collection ever offered for auction in Asia, Lau's pieces fetched $6.6 million.
Week of November 20, 1998
FINANCIAL SECRETARY DONALD TSANG said he welcomed the competition from the Singapore International Monetary Exchange to start trading in futures based on a list of Hong Kong stocks that is almost identical to the Hang Seng Index. Tsang might be happy, but the Hong Kong exchange says it will cut off real-time price feeds to any financial reporting service that supplies its market prices to Morgan Stanley Capital International, the investment house that calculates the index for SIMEX.Week of November 13, 1998
THE EUROPEAN UNION AND THE SAR signed the territory's biggest international treaty since the 1997 handover. The pact will help tackle copyright piracy and drug trafficking. European Commission VP Leon Brittan said the signing demonstrated Hong Kong's freedom to enter into international agreements independently of Beijing.Week of November 6, 1998
THE ADMINISTRATION REVEALED IT SPENT $15.2 billion during its August stock-market buying spree. The government-run company managing the assets - The Exchange Fund Investment Ltd. - disclosed details of the intervention in the interests of market transparency. Until now, the government had refused to report how much it had spent.
Zhu Sorts out SAR Problems
IT LOOKS AS IF CHINESE PREMIER ZHU RONGJI personally mediated a truce between Hong Kong's Chief Executive Tung Chee-hwa and the territory's property tycoons. During Zhu's high-profile visit to Guangdong province last week, he undertook a significant side-mission. According to SAR press reports, the PM held unprecedented one-on-one meetings with 10 of Hong Kong's wealthiest businessmen in the coastal city of Shantou - hometown of paramount Hong Kong magnate Li Ka-shing. Zhu reportedly listened to their views about the territory's economy and then urged them to cooperate with Tung's efforts to achieve a turnaround. Several days before, Tung met officially with Zhu in Beijing, delivering his annual report on the territory. Apparently, Zhu asked the CE to consult more closely with his business community in formulating policy.It is no secret that Hong Kong's corporate leaders greatly resent Tung's property policies, aimed at fighting sky-high prices by increasing the land and housing supply. And coupled with complaints from mainland companies and individuals who had invested heavily in SAR property and stocks, Tung has clearly lost a lot of friends. But the dissatisfaction with Tung does not appear to be deep-seated - few are pushing for his replacement. And it is almost unthinkable that Beijing, generally pleased with Tung's performance, would ever agree to the early departure of the man they hand-picked to take over their Special Administrative Region from the British. Instead, the tactic seems to be to support him publicly, while giving him direction from off-stage. As for Hong Kong property, land sales were suspended in June until April 1. One sign they'll proceed on schedule: Li Ka-shing, with his usual knack for such things, has been the first tycoon to publicly call for the resumption of sales then.
Week of October 30, 1998
POLITICAL CONFIDENCE IS AT ITS LOWEST since the 1989 Tiananmen Square incident and consumer sentiment is at rock bottom amid the economic downturn. A third of the public rated the government's performance either bad or very bad and only 11% expressed approval. The survey, conducted by the South China Morning Post, also found widespread dissatisfaction with Chief Executive Tung Chee-hwa.Week of October 23, 1998
CHIEF EXECUTIVE TUNG CHEE-HWA'S second policy speech offered few solutions for rising unemployment. But he did give positions - nonpaying, of course - to 14 wealthy foreign businessmen to act as a Council of International Advisers. They will meet annually to devise economic strategies for the SAR. Six are North American, six European and two are Japanese.MACAU China deployed another 500 troops around the Portuguese enclave, which has been rocked by triad violence prior to its return to mainland rule next year. Three new border command posts have been set up. There are now around 4,000 soldiers from various People's Liberation Army units on duty around Macau.
A SURVEY OF 150 LEADING COMPANIES by Hong Kong's South China Morning Post and Nomura International found most predict the economic slump will last at least another six months. Only 11.9% think the economy will pick up in the next half year.
Week of October 16, 1998
Propaganda Pared in the SAR
BEIJING WILL CUT FUNDING for Hong Kong's three pro-China newspapers by the end of the year. Ta Kung Pao, Wen Wei Po and the Hong Kong Commercial Daily, which collectively lose millions of dollars annually, have been instructed to merge or close by the Communist Party's propaganda department. Wen Wei Po is financially the strongest, so the other two will most likely die or fold their operations into their stronger sister. The scheme is a top priority for Wang Fengchao, who recently became deputy director of Xinhua's Hong Kong operation. Wang's wife Lei Yuping, an experienced journalist, has been offered senior positions at all three papers, although she hasn't decided if she will join her husband in his new Hong Kong post. Ta Kung Pao's editor, Tsang Tak-sing, was given an appointment to the Central Policy Unit - the Hong Kong government's think-tank - earlier this year, most likely in preparation for the consolidation.Week of October 9, 1998
BEIJING People's Liberation Army soldiers prepared for the nation's 49th anniversary of the founding of the People's Republic of China on Oct. 1. The military's reputation has been refurbished by the role troops played fighting the floods that devastated parts of the country. The army ranked only behind party cadres and the masses on the list of those praised by President Jiang Zemin at a national conference in the Great Hall of the people where he reviewed the causes and future prevention of the floods. And in Hong Kong, 12,000 passes for a PLA open house on National Day were distributed to the eager public within two hours. Last year, the army's bases were open only to specially invited groups.OUTGOING SECURITIES AND FUTURES COMMISSION chairman Anthony Neoh slammed a government proposal to give the territory's chief executive emergency powers over stock and futures exchanges. Neoh told businessmen he was "alarmed" by the proposal, which would, he said, be inconsistent with world trends.
Managing the SAR's Billions
Hong Kong's plan to put all the stocks it bought up fighting off marauding hedge funds into a holding company is straightforward enough. Exchange Fund Investment Ltd. will be set up by the end of October to manage the substantial quantity of stocks the government now holds. But there is a part of the plan that may have gone unannounced so far: A source at the territory's Land Fund says the Exchange Fund will also inherit the $19 billion the Land Fund administers. That money comes from holding half of the revenue from land sales from 1985 to 1997 - part of the deal for Hong Kong's return to China's sovereignty. The fund became part of the SAR's foreign reserves after the July 1997 handover. The source at the Land Fund says the new body will act as any prudent fund manager would: "The idea is to run the portfolio as a closed fund. That means there won't be any more new capital, and trading will be based on the shares already held by the government. We do not rule out holding the shares for five or 10 years. We'll also swap weak shares for stronger ones, or cash in when the price is good."THE NUMBER OF SUICIDES in Hong Kong this year rose 25.8% to 1,208 compared to the corresponding period last year. The number of psychiatric admissions to public hospitals also rose by 12%.
Week of October 2, 1998
MACAU Governor Rocha Vieira says Beijing's plan to station troops in the territory once it reverts to the mainland's control will have to be negotiated - it is not part of the original turnover agreement. Vice Premier Qian Qichen said last week that Beijing had reversed its previous plans and will put troops in Macau.MARK UP A VICTORY for the workers, for now. Hongkong Telecom suspended its plans for a 10% pay cut for 13,800 staff, bowing to pressure from unionized workers and their supporters and criticism in the press. Editorials attacking the plan and articles revealing how much the company's top executives are paid most likely influenced the pullback. The decision - it's not a final one, the company insists - reversed a trend in the territory that has seen plummeting wages and prices coupled with the worst unemployment levels in decades. Watching warily were civil servants, who were heartened by Chief Executive Tung Chee-hwa's criticism of Telecom's move. He called for more concern for workers' needs
Riding the Flood's High Tide
IN CHINA'S FLOOD-STRICKEN HUBEI PROVINCE, the Hong Kong-based Ta Kung Pao daily has donated about 20,000 yuan (about $2,400) to relief efforts. The paper's Wuhan bureau - the city is Hubei's capital - is not officially accredited and has had to rely on political connections to continue to operate. At one point, the deputy propaganda minister for Hubei, Miao Helin, directed the paper's Wuhan bureau chief to make donations to build a "Hope" primary school for underprivileged children in nearby Shishou city - a feather in Miao's political cap. It would be the first foreign donation to build one of the high-profile central government-backed schools in the area, and will help finalize Miao's promotion to his current post. Ta Kung Pao's deputy editor Su Chang-hui traveled to Wuhan to present HK$20,000 (about $2,500) from the newspaper and another HK$10,000 from a Hong Kong department store on Sept. 17. Some party officials initially refused to attend the donation ceremony, saying the sums were too small, but finally showed up. The paper's deputy editor-in-chief, Yang Zu-kun, denied there was a donations-for-accreditation deal. "We didn't feel any pressure from the Hubei government," he says. A reporter in Hubei says that the allocation of much of the donated money for flood relief has been slow - provincial officials also want a piece of the action.Week of September 25, 1998
AS THE UNEMPLOYMENT RATE ROSE to a 15-year high of more than 5% in the three months to August, unions called for a halt to the import of foreign workers. In the three months to June, the jobless rate stood at 4.8%. There are about 170,000 foreigners now employed as domestic helpers and in blue-collar jobs in the SAR. An estimated 100,000 school leavers this year need jobs.
Beijing to the Ramparts
BEIJING IS PREPARED to shift $10 billion to $15 billion of its foreign exchange reserves to help defend the Hong Kong dollar. China would convert that amount of its U.S. dollar holdings into Hong Kong dollars to stiffen the currency, should another major attack on the SAR's currency materialize. Given prevailing global economic trends, Beijing's think-tanks have concluded that, with the likely fal l of U.S. markets, the greenback is sure to depreciate in the year ahead, especially with the emergence of the euro. China, which has 57% of its $140 billion in reserves in American dollar-denominated assets, is likely to cut its exposure to 40%, with another 40% in European currencies and the remainder in other denominations.High-end Hong Kong retailers are opening down-market shops. Dickson Concepts will introduce outlet shops selling Polo, Coach and other expensive labels. Joyce Ma had already launche d a warehouse store for goods from fashion seasons past. Brands include Prada, Armani and Gucci.
Week of September 18, 1998
THE LEGISLATIVE COUNCIL was set to discuss the proposed sacking of disgraced legislator Chim Pui-chung after he was sentenced to three years in jail for forgery. But Chim did not go to the meeting because he refused to wear handcuffs outside of the Legco building, where he was sure to be photographed by the media.MACAU Chinese officials urged authorities In the Portuguese enclave to crack down on violence after a pair of bomb blasts - one possibly detonated by remote c ontrol - injured five police officers and 10 journalists. They were the latest incidents in a wave of violence over the last 18 months, as rival triad gangs battle for control of highly lucrative gambling and prostitution rackets prior to the territory's return to Chinese sovereignty in 1999.
Beijing: Speculators Beware
AT A TOP-LEVEL MEETING IN BEIJING RECENTLY, Chinese Premier Zhu Rongji warned that international speculators would "have to reckon with China" if they intend to lay long-term siege to Hong Kong's markets. Zhu's words are understood to mean that Beijing would deny such players access to the China market in the future. And while everybody knows that the Hong Kong government pumped billions of dollars into the SAR's stock exchange to combat speculators, are there other motives for the intervention? The SAR government has now become the biggest shareholder in the Hongkong and Shanghai Banking Corp. and has bought sizable stakes in Hongkong Telecom, both British-controlled behemoths. In the early 1990s, Beijing began signaling to the businessmen it trusts in Hong Kong that it would like them to some day take control of Hongkong Telecom. So to whom will the government sell its shares? One name being mentioned in business circles is that of property tycoon Li Ka-shing, who is well respected in Beijing. His Hutchison Whampoa is already a big player in the telecom sector.A POLL CONDUCTED BY THE South China Morning Post found that more than 50% of the SAR's residents support the government's intervention in the financial and stock markets. Chief Executive Tung Chee-hwa's approval rating rose to 65%, while confidence in the economy went up from 33% to 37%.
Week of September 11, 1998
LANDLORDS IN HONG KONG ARE TURNING their offices into unauthorized flats and then renting them out to cope with the economic downturn. The flats are advertised as "tailor-made for newly-wed couples" and "sought after by smart singles." They aren't much different from flats in residential areas - except for the lack of gas connections. But many of the flats have a sea view, which is enough to entice many tenants.Week of September 4, 1998
THE LAST GOVERNOR IS LONG GONE, but Chris Patten continues to roil diplomatic waters. A week before publication, details of his memoirs, East and West, were revealed, in which he lambasts China and refers toMao as an "angel of death" on par with Pol Pot and Hitler. Patten will return to the SAR to promote his book next month - coinciding with the visit of British PM Tony Blair.
DRAMA AND POLITICS IN MACAU
MACAU 1,2,3 is an innocuous title for a play. The numerals refer to the drama's three protagonists who symbolize the major ethnic communities in Macau: Chinese, Macanese and Portuguese. The production is a colorful tapestry of Macau's 440-year history and includes a riveting performance by Veronica Needa, a Eurasian actress. It was recently shown to rave reviews in Hong Ko ng, Portugal, Britain and Kenya. So the question everyone in Macau is asking is why local authorities balked at staging the drama at a government auditorium. Just two days before the play was to open on Aug. 21, its producers, the Hong Kong-based Asian People's Theater, were ordered to take it off stage. "They told us it is too political," says Mok Chiu Yu, an organizer.The government's action was probably prompted by the play's title. For Macau's Chinese community, "1,2,3" refers to December 3 - or, str ictly speaking, "12/3." On that day in 1966, Macau police cracked down on hundreds of Chinese trying to build an unauthorized school. Coming just after the Cultural Revolution began in China, the "one-two-three incident" triggered a public revolt against Macau's rulers. With less than 16 months until the colony's handover to China, the last thing Macau's authorities want is a revival of passions centered around one of the darkest days in the enclave's history.
Week of August 28, 1998
THE SAR WAS STUNNED BY THE ASSAULT on controversial radio talk show host Albert Cheng on Aug. 19. Morning television coverage showed Cheng in a pool of blood after being assailed by meat cleaver-wielding attackers. There was plenty of speculation about who was behind the attack, but little immediate hard evidence.SOME 75 OUT OF THE 320 NATIVE ENGLISH-SPEAKING TEACHERS picked by Hong Kong educators to start teaching in local schools this September have decided to back out o f their contracts. Remuneration is a minimum monthly salary of HK$20,000 and another HK$13,000 housing allowance - $4,258 in all.
Week of August 21, 1998
BEIJING Reviewing the first year of Hong Kong under China's control, Jiang Zemin - at a top-level meeting- applauded the way the local People's Liberation Army contingent and Foreign Affairs Office conducted themselves. He also praised the SAR's freewheeling media, which he said not only kept the territory's government honest, but also helped Beijing keep an eye on the local administration.CATHAY PACIFIC AIRWAYS announced that it had posted a net loss of $22.6 million in the six months to June. That result compares starkly with the profit of $138 million reported for the same period last year. Revenue fell 16% to $1.66 billion.
DESPERATE TO ATTRACT VISITORS, the Hong Kong Tourist Association has plans for a film studio theme park and a World Expo. But a survey conducted by the Citizens' Party found street markets, historical buildings and natural surroundings to be top attractions for potential tourists.
Week of August 14, 1998
ACTIVISTS ARE CONSIDERING a campaign to force Chief Executive Tung Chee-hwa to step down. Tsang Kin-shing, a former member of the Legislative Council and a member of the Democratic Party, says the campaign would start if the unemployment rate - now about 4.5% - jumped to 5% and the Hang Seng index - currently around 7,500 - fell below 7,000.HONG KONG'S STAR TELECOM cut 370 jobs and will move its paging center to Macau. The territory - which is experiencing its highest unem ployment rate in 15 years - has also seen recent layoffs by Asia Television, Hong Kong Telecom, Cathay Pacific and many retailers.
Week of August 7, 1998
A 1994 RULING to curb property speculation when the territory's real estate market was nearing its over-heated peak was rescinded. In an attempt to revive the current moribund trading scene, the Monetary Authority withdrew a guideline restricting banks' exposure to property loans to 40% of their total lending. Few analysts approve of the change, seeing it as desperate, risky and futile.HONGKONG TELECOM laid off 270 management staff as part of a "reshaping exercise." Union l eaders claim it is the start of a major downsizing which will affect up to 1,000 employees. The company neither confirms nor denies the charge.
Week of July 31, 1998
Judge Wook Kwok-hing will head a commission probing the chaotic opening of the new $20-billion airport. Legislators warned they may set up their own inquiry if they are not satisfied with the government's. The SAR's ombudsman is investigating the problem, too.Week of July 24, 1998
Two more children contracted the "baby killer virus" - enterovirus 71 (EV-71) - which took the lives of more than 50 children in Taiwan. Another nine cases were listed as suspected, pending laboratory tests.Week of July 17, 1998
WASHINGTON The Institute of International Finance - a U.S.-based group of 285 private financial firms - is launching an investigation to determine how private lending bodies contributed to the Asian crisis and to propose guidelines for avoiding such mistakes in the future.
JIANG'S HONG KONG PLEDGES
He might not fully grasp market forces, but President Jiang Zemin knows what he likes - and what he likes is Hong Kong. When he came through the SAR to mark the first anniversary of its return to China, Jiang told locally based corporate chiefs of mainland companies that he would be asking Zeng Peiyan, the head of the State Planning Commission, to press ahead on plans to have 50 - yes, 50 - of C hina's biggest corporations establish headquarters - yes, headquarters - in Hong Kong next year. Jiang reckons that not only will the move help the territory's flagging economy, it will also force the companies to shape up and learn to play capitalist hardball the Hong Kong way. Critics of Jiang's initiative warn that the state's attempts to control corporate decisions seldom pay off.The president also noted that while the Hong Kong-dollar peg to the greenback will be around for awhile, there is no good reason for the value of the Hong Kong dollar to be linked to the yuan. He admitted that part of the psychological tie between the Hong Kong and Chinese currencies is due to Beijing's repeated assertions that it won't devalue the yuan because doing so might damage the Hong Kong dollar. Jiang told his audience of red-chip chiefs that it was their job to help maintain financial stability in the SAR. Beijing, he pointed out, is not asking them to transfer their Hong Kong-based cash or assets to the mainland.
HONG KONG PROPERTY TRANSACTIONS fell 47.8 % year-on-year in June, the Land Registry reported. June's deals were worth $3.57 billion, down 9.8% from May and 66.1% from the previous year.
Week of July 10, 1998
A JUDGE SENTENCED Wong Yeung-ng, the former editor of the Chinese-language Oriental Daily News, to four months in jail for contempt of court. The court said Wong had ordered paparazzi-style coverage of senior judge Gerald Godfrey to harass him, and was responsible for the paper's remarks about "swinish" judges and the "scumbag" government it made in December.PRESIDENT JIANG ZEMIN returned to the territory on June 30 to celebrate the first anniversary of China's Special Admin istrative Region. Chief Executive Tung Chee-hwa flew with him from Beijing into Kai Tak airport. Jiang will depart through the new Chek Lap Kok facility, which opens to commercial flights on July 6.
Week of July 3, 1998
Hong Kong activists trying to get onto the disputed Diaoyutai islands in the East China Sea abandoned their protest ship after it was rammed by Japanese ships. The survivors were picked up by one of the Taiwanese boat in the six-vessel fleet. The islands - claimed by Japan, China and Taiwan - are known as the Senkakus in Japanese.CHRISTIE'S HELD ITS FIRST wine auction in Asia, hoping that the region's economic woes would not dampen sales. Most of the vintages on the block sol d at far below the lowest estimated prices. The highlight of the Hong Kong sale, a jeraboam of 1982 Le Pin Pomerol - expected to go for between $31,000 and $38,750 - fetched only $21,960.
Week of June 26, 1998
WAGERING AT THE Jockey Club,the SAR's biggest tax contributor, fell for the first time in more than 20 years. Betting receipts dropped 0.87% to $11.82 billion over last year's racing season.Week of June 19, 1998
AIR SAFETY Some 150 of the world's best known airports have been put on a pilots' blacklist, London's Sunday Times reported. The survey awards black stars to 15 facilities it considers "critically deficient." They include Hong Kong, San Francisco, Wellington and, of course, Kabul. San Francisco is listed because planes land in pairs on parallel runways with pilots often relying largely on visual contact. Hong Kong is highlighted because of the proximity of the runway and paral lel taxi-way - which can be dangerous in crosswinds.A COALITION OF POLITICAL PARTIES pressured the government into meeting with them to discuss plans to boost the ailing economy. They want policies enacted to create more jobs, cut income taxes and property rates, and freeze official fees. They also want to start planning for a deficit budget in 2000 - the first since 1985.
"THERE ARE ONLY BROKEN THINGS being discarded and they are not even resalable," Choi Kim says. Her income has dropped sharply: she earns much-needed cash by sorting through trash near Hong Kong's luxury high-rises and salvaging used consumer items.
Week of June 12, 1998
"Re-evaluate the 1989 Democratic Movement," the signs say. A surprisingly large number of demonstrators - about 2,700 - turned out on SAR streets on the weekend before the ninth anniversary of the bloody June 4 crackdown on student demonstrators in Beijing.Week of June 5, 1998
THE MANAGING DIRECTOR of the Ming Fung Group brokerage, Chan Kwong Hung, was arrested on May 23 in connection with the theft of clients' funds. Provisional liquidators KPMGPeat Marwick are seeking a buyer to meet 2,000 clients' request for compensation totaling about $64 million.Week of May 29, 1998
Unemployment hit a 14-year peak - 3.9% - and looks set to go higher. Consumer and tourist-related sectors had jobless rates well over 4%, but construction workers bore the brunt of the slowdown, with an out-of-work rate of 5.6%. The Confederation of Trade Unions fears wage hikes will be less than inflation.Week of May 22, 1998
SINO AFFAIRS Taiwan's top mainland policy-maker quietly arrived in Hong Kong on May 10 for a four-day visit and was given "official treatment." Chang King-yuh, chairman of the Mainland Affairs Council, is the highest official to visit the territory since it returned to Beijing last year.Sales of mutual funds rose 46% from February to March, to $394 million, outpacing redemptions by $93.8 million, according to the Hong Kong Investment Funds Assn. Some fund managers read it as a sign of new investor confidence, but others predict bad numbers for April as regional stock markets falter again.
Week of May 15, 1998
The number of sale and purchase agreements for real estate in April dropped 56.4% from the same month last year. In total, 11,162 deeds were registered, showing a drop of 15% on the previous month. The territory's property market prices have fallen up to 30% since July 1997.Week of May 8, 1998
So far, seven candidates vying for the Legislative Council have withdrawn from the race because they do not meet residency requirements. The Democratic Alliance for the Betterment of Hong Kong uncovered two Democratic Party contenders in violation. Five more contestants voluntarily pulled out for the same reason.Week of May 1, 1998
The jobless rate hit a three-year peak of 3.5% - the highest since the third quarter of 1995. Financial Secretary Donald Tsang, heading an ad hoc task force to look into the problem, said : "It [the unemployment rate] will take a period of time to resolve, but I think the situation is not as bad as what some people say."Week of April 10, 1998
HONG KONG-TAIWAN There is plenty of speculation about who will buy Lim Por-yen's shares in Asia Television. The 83-year-old Hong Kong businessman is still in jail in Taipei, facing bribery charges. Rumored suitors include Beijing-backed tycoon Tsui Tsin-tong and Rupert Murdoch's STAR TV.EIGHT YEARS AHEAD OF SCHEDULE, Hongkong Telecommunications is surrendering its exclusive international license. The government will pay the company $865 million in compensation for giving u p the rights before the previously agreed date of October 2006. Two years ago the carrier gave up its exclusive local call rights.
Week of March 27, 1998
Boom Securities (H.K.) Ltd. received its license from the Securities & Futures Commission to become the first Internet-based stockbroker in the SAR. Its online trading scheme - the company will pass trading orders over to a network of brokers for execution - will start up on a limited basis at the end of March.Week of March 20, 1998
Construction contractors promise that a 40-meter-long hairline crack in the runway of the territory's new airport will not delay the projected July 6 opening date. They admit the landfill on which the airport is built is sinking at about 2 millimeters per year, but say the settlement is natural for reclaimed land.Week of March 13, 1998
When this Cathay Pacific cargo freighter touched down in Hong Kong from Anchorage on March 1, it completed the first flight by a non-communist airline through North Korean air space since before the 1950-53 Korean War. The route saves time and millions of dollars annually in fuel costs for trans-Pacific flightsThe retail-sales slump in Hong Kong brought on by the region-wide economic slowdown ñ exacerbated by a fall in tourist arrivals ñ caused yet another department store to close. Japanese owned-Matsuzakaya announced it will close in August, after 23 years in the SAR. Japanese retailer Yaohan pulled out in November
Week of March 6, 1998
CHINA PLANS TO ALLOW more of its citizens to vacation in the SAR to help boost slumping tourism numbers there after the July 1 handover. Beijing had restricted the number of mainland visitors to the former British colony, in a bid to avoid a mass influx during the change of sovereignty.Week of February 27, 1998
"The price of chicken is about 50% higher than before the chicken flu came on," said one chicken seller, "but the number of customers has dropped about 30%." The good news is that there have been no new cases of avian influenza since before Hong Kong slaughtered all 1.5 million of its poultry in December.Week of February 20, 1998
Anson Chan Out After May?
While Hong Kong's Chief Executive Tung Chee-hwa remains popular, his "hands-on" management style is working against him. A close personal friend and adviser to Tung says the fault lies with the CE's indecisiveness. Under former British Governor Chris Patten, the civil service was essentially given free rein. This made Chief Secretary Anson Chan Fang On-sang, 58, a powerful fi gure. "Patten let her run things," he says. "Tung wants to make the decisions. He has to start making tougher choices. He's waiting until after the Legislative Council elections [in May]. After that, he'll know what kind of legislature he has and can then make adjustments [to his team]." Tung and Chan, the source says, are not getting along. "If the relationship doesn't improve, after the elections, Anson's out."But while there are people in the CE's camp who wish her gone, the Chief Secretary has shown no signs of packing it in. On a recent U.S. trip, she made it clear she would not retire early. Tung chimed in later, saying that Chan could stay even after she turns 60. With Hong Kong facing tough times, Tung still needs the experienced administrator by his side, whether he likes it or not.
RETAILER DICKSON CONCEPTS is the lone bidder for failing American luxury retailer Barney's, after the French DFS Group dropped out. In August, Dickson offered $205 million for a 51% stake in Barney's, allowing credit ors to retain 49% of the shares. The offer must still be approved by a New York bankruptcy court.
Week of February 13, 1998
THE MINIMUM WAGE for domestic workers was frozen at the 1997 level of $500 per month for 1998. The vast majority of the women are Filipinas. Many decried the move as unfair. "Demand from the Philippines is increasing because the price hikes there are just terrible," one woman worker complained.Week of January 30, 1998
Emerging Piracy Base
Hong Kong was relieved that it was not placed on the U.S. Trade Representative's "priority" list of intellectual property rights violators recently. Such a listing can lead to economic sanctions. A review in April will determine if the SAR stays on the warning level "watch" list it was demoted to in 1997.The Americans are more concerned with nearby Macau, where the production of counterfeit CDs and videodiscs is boom ing. Industry sources say the enclave has about 80, largely triad-owned, production lines turning out more than 300,000 pirated products a day. And Beijing - it is expected to be commended by Washington for its efforts to curb bootleggers - is worried that not only will the hot discs flood China, but that some of its own copyrighted material is already being ripped off in the Portuguese-controlled territory.
LIM POR YEN, detained in connection with a Taipei land scandal, was released on $297,000bail. The chairman of Hong Kong's Lai Sun Group and Asia Television was seized at Taipei's Chiang Kai-shek airport on Dec. 16 as he was leaving Taiwan after being accused of bribing a county official.
"THE FIRST SIX MONTHS after the handover make us optimistic that 'one country, two systems' has been transformed from an imaginative concept to a concrete reality," British Foreign Secretary Robin Cook said while visiting the SAR. He did voice concerns about the fairness of upcoming elections, though.
Week of January 23, 1998
Keeping an Eye on the Peg
Wondering if Hong Kong's U.S. dollar peg will drop? Have a personal stake in the fate of the currency, but are not a market player? Some signs to watch for:
1) Several days - probably a week or more - of sharp stock market plunges. Disregard one- or two-day technical corrections.
2) Large swings in interbank and overnight interest rates. These protect the peg. Big swings indicate increasing or decreasing pressure. If the peg goes, the government will probably try to protect itself at the last minute by pulling out its own money. That will make rates swing up hugely too.
3) If China begins to proclaim that it will never, ever devalue the renminbi, start to
worry. Remember Thailand and Indonesia? The Hong Kong peg is likely to follow the yuan, even if it does not devalue unilaterally.
THE TERRITORY'S new airport will open on July 6 instead of in April. The rail system linking Chek Lap Kok on outlying Lantau Island to Hong Kong will not be completed by the earlier deadline. Authorities reversed a plan to start operations without the high-speed system in place.
A DELEGATION FROM HANOI will visit the SAR in February to discuss moves to speed up the repatriation of Vietnamese boat people. The announcement came after the territory said it would scrap its "port of first asylum" policy that once made it a haven for tens of thousands of Vietnamese boat people.
Week of January 16, 1998
Asia's Turbulence Rocks Cathay
The company declines to comment on upcoming layoffs, but insiders at Cathay Pacific Airways say the next cost-cutting round at Hong Kong's carrier will hurt. Non-operational staff - some at the executive level - are likely to be laid off. There are few other options. Cathay put off buying new Boeings. They offered two-for-one fares, trying to get passengers onboard. They are even flying in the racy Takaruzaka Revue all-female variety troupe to lure recalcitrant Japanese tourists. Nothing has worked to reverse the trend.Most people at the company know some sort of retrenchment is coming. Morale is lower than Kai Tak Airport's runway at zero-visibility. Among the potential victims: probably a couple or more of the formerly untouchable "Swire princes," the young British fast-trackers recruited out of Oxbridge by Cathay's owner the Swire Group and sent out to the former col onies to be trained up for bigger and better things back home. The Cathay source says about 10% of the non-operational staff will go, most likely sometime before Lunar New Year. Timing depends on how far along Cathay's planners are in restructuring the company to deal with Asia's current economic realities.
Cathay shares have fallen 62% since Hong Kong's July 1997 turnover to China. Hong Kong tourism is down 35% for the same period compared to 1996. Business travel, already sluggish, could decline further . Bad for Cathay, bad for Swire and bad for Hong Kong. But the larger fear is that the company's upper-echelon cutbacks could set the trend for the downward glide facing many blue chip companies across Asia in 1998.
Week of January 9, 1998
The Securities and Futures Commission reports it is investigating about twice the number of fraud cases it has in recent years. The Commission is working on 300 suspected claims of insider trading and manipulation, and has handed out 50 suspensions since May.News from Hong Kong in 1997
News from Hong Kong in 1996
News from Hong Kong in 1995
