Articles

Areas Title Date Remarks
Education Lessons to be learned from a return to Language of Instruction

English
Education does not need giveaways and 25-1-2010 competition of schools in attracting
gimmicks students
Every student must be provided internet 9-2-2010 Students’ internet access
access
School places mismatch a cause of 17-2-2010 School places problem
heartbreak
The lesson that all parents need to learn 26-4-2010 Trend of Private Tutoring
Health Hospital staff must be treated with respect -
Drug safety centre needs the tools to Drug Control
protect us
Serious thinking needed in approach to 8-1-2010 Overuse of antibiotics
drugs
Kickback culture must be stamped out 21-1-2010 Doctors taking kickbacks for referrals
Fresh ideas on health insurance welcome 18-2-2010 Health insurance reform
Doctors need healthy work-life balance 24-2-2010 Long work-hour problem
Environme It's time to impose laws to help clear the air 9-2-2010 Waste Management
nt
Incineration should no longer be a dirty
word
Time for tougher action on polluting trucks 17-2-2010 air pollution control on the road
It's time to get dirty vehicles off our roads 12-3-2010 policy to get rid of dirty vehicles
World Political tigers are an endangered species
Politics
A promise impossible to deliver is no 'right'
Obama ticks the right boxes on Asia 20-1-2010 Obama took office a year
We need Obama and we need to work 29-1-2010 Why Obama should be supported
together
World Rein in the banks and end fat-cat bonuses 21-1-2010 Bankers getting bonuses
News
US bankers don't seem to have any shame 9-2-2010 Bankers getting bonuses
Recent efforts to discredit the IPCC should 10-2-2010 Environmentalists striking back
not detract from its vital work on the critics on disreputable report
science of climate change
We must not tolerate these rich tax cheats 15-3-2010 Stopping rich tax cheats
HK Politics Give new free-to-air broadcasters a chance TV Broadcasting
Bubbles burst, faith tested, answers wanting 17-2-2010 air quality control
A vote that is about far more than just a rail 8-1-2010 High-Speed Rail Line
line
Time to put an end to corporate voting 11-1-2010 Functional Constituencies
We need far more than this 'referendum' 13-1-2010 Pro-democracy lawmakers
resignation plan
Laudable attempt to reach young audience 14-1-2010 Hong Kong
Judicial independence of vital importance 15-1-2010 Judicial Independence
The causes and methods may be new but, 15-1-2010 Post-1980s activists
in essence, the 'post-1980s' activists aren't
very different from their predecessors -
young, angry and with a point to make
Listen to more voices, and act on what they 19-1-2010 Hong Kong Governance
say
Obsessed with form over substance, the 23-1-2010 Government’s unwillingness to listen
government champions public
consultations. Yet, the process is a farce
Our city needs these by-elections to 26-1-2010 By-election run by pro-democracy
proceed
Root of the problem 29-1-2010 Functional Constituency
A lack of common sense on all sides means 29-1-2010 By-election
no winners will emerge from the by-
elections fiasco
Putting a brave face on a dysfunctional 8-2-2010 Interview with Donald Tsang
system
Wen elaborates on 'deep-rooted conflicts' 15-3-2010
ad hoc HK toy sellers bemoan loss of best spots at 13-1-2010 TDC News
fair
Better system wanted over sex offenders 25-1-2010 De-registration of teachers who
committed sexual offences
Safety of our homes and offices must be 2-2-2010 Old building collapsed
assured
Caution vital when tweaking land supply 25-2-2010 Budget 2010
Narcotics We must take a new route on drug-driving 28-1-2010 Drug-driving
Leisure Eviction strengthens dog owners' hand 20-1-2010
Skater's gold tarnished by petty posturing 11-3-2010
Property Steps to protect flat buyers are welcome 16-4-2010 Measures in maintaining honest
Prices property selling
China The need to avoid being misunderstood
China must heed its neighbours' concerns

Beijing hits brakes on bank lending 13-1-2010 Central Bank to control inflation
World needs to adjust to China's new power 13-1-2010 China’s Rise
A loss for Google and the Chinese people 14-1-2010 Google attacked by Chinese hackers
Chinese peacekeepers' deaths were not in 19-1-2010
vain
Leaders must find way to listen to the 27-1-2010 Regional Governments
people
Piracy role sets Beijing on course to build 29-1-2010 China’s Anti-privacy role
trust
New Year home-going can be a stressful 8-2-2010 New Year Home-going
time
China's new status as the leader in exports 8-2-2010 The rise of China under globalisation
reflects the virtues of global trade
A bitter blow for free speech on the 10-2-2010 Sentencing commentator on Si
mainland Chuan
Mainland journalists must be unshackled 11-2-2010 Freedom of information in China
More inclusive system will help nation 18-2-2010 The rise of China while free flow of
flourish information still is restricted
Soft-power play 24-2-2010 Competition of soft power between
Beijing and Taipei
Better-paid workers key to mainland's 12-3-2010 Wages of Factory Workers
progress
Beijing should do more to right official 15-3-2010 Stopping petitioners amid Wen’s
wrongs pledge to improve social justice
China's growth depends on boosting 15-3-2010 Increasing spending key to boosting
household income and persuading people to economy
spend more
Steady as she goes 26-4-2010 Rising value of Yuan
Asia Time for Malaysia to unite, not fight 28-1-2010 Malaysian social unrest
Lessons to be learned from a return to English
Updated on Jan 06, 2010
Even with big changes under way in the structure of school education, the language of instruction
remains a primary concern for many parents. This week, they have voted with their feet after a
significant relaxation of the mother-tongue policy that has divided the community. Schools switching
from Chinese to teaching in English from September have been flooded with applications for Form
One discretionary places. That was to be expected. The switch is a response to strong and sustained
parent demand for an English-language education.
Sixteen schools now teaching in Chinese will switch to teaching entirely in English. Another 80 will
adopt a mixed approach - using Chinese for humanities subjects and English for science subjects. As
a result, 199 schools - or nearly half the city's secondary schools - will be teaching entirely or mainly in
English.
In a perfect world parents have the right to choose what kind of education their children will have. In
our public system the basic right to an education takes precedence, and choice of what kind is often
limited by intense competition for places at preferred schools, or financial means.
In Hong Kong's unique historical circumstances, this has presented parents with a dilemma, both
before and after the government ordered all but selected secondary schools to switch the medium of
instruction from English to Chinese in 1998. They have had limited or, in practice, more often no
choice in which of two official languages their children are to be educated - the mother tongue or the
de facto world language of English. For many, the educational and cultural benefits of the former
came at the price of the worldly benefits of the latter. The relaxation of the 1998 order has introduced
a measure of freedom of choice, albeit imperfect, which addresses that dilemma and is therefore to be
applauded.
It has been driven by parents. It remains to be seen how much further they drive schools back to
English. That could become a concern. A Chinese-language education retains a lot of support, and
indeed Chinese fluency should be a key goal of any policy. But critics of the change fear it is the first
nail in the coffin for the mother tongue in schools.
Officials must strive as far as possible to preserve freedom of choice. The public has always been
divided over the introduction of the mother-tongue policy. There is no question that learning in one's
own language has education benefits - for example, in efficient transmission and processing of
information, and building confidence in a classroom environment. It also came to be pushed as a
means of protecting young people who have difficulty learning in English.
But in the end the market value of English has prevailed. The public remained sceptical about officials'
claims that children could acquire good English by taking it as a subject at a Chinese-medium school.
Mastering English is seen to be all about getting ahead. Indeed, the language is often the key to a
good career and a bridge to the outside world, as evidenced in many job advertisements.
That said, if secondary schools find the parent-driven trend back to English irresistible, the
government has a duty to see that no student capable of an English or bilingual secondary education
is denied the opportunity through lack of resources. That will call for a big investment in recruitment
and training of teachers, and from primary school upwards.
Hospital staff must be treated with respect
Hong Kong has one of the world's best public hospital systems. For a minimal fee, residents get a
good standard of health care from well-trained doctors and nurses. It is not perfect - waiting lists can
be long and equipment and facilities are not always the best they could be. Nonetheless, we should
be more than grateful for what we have and, in consequence, courteous to the staff.
This is unfortunately not always the case. Health workers are primed for physical violence and abuse
from patients and their relatives. There were 2,704 attacks on Hospital Authority staff from 2005 to last
year. Injuries sustained included bruises, abrasions, sprains, strains and bites.
Hospital is an unusual and unpleasant experience for most people. While there, we naturally consider
our own ailment to be of more importance than those of other patients. We expect treatment to be
given as quickly as possible so that we can return to familiar surroundings. It is not surprising that
stress levels in accident and emergency departments, medical wards and outpatient clinics are high.
But anxiety is no excuse for poor behaviour. Doctors, nurses and attendants are doing their best to
care for us. More pressing cases get priority. Just as outside the hospital, we should be considerate
and polite.
Health care reform is long overdue. Our ageing population is putting increasing pressure on the public
hospital system. People with the means for private treatment are taking advantage of a service they
see as saving them money. Resources in some sections have long been at capacity. Other areas are
seriously understaffed. Bringing down waiting times is not a simple matter in such circumstances.
Public hospital staff have a tough job. Their work is in most cases not getting any easier. When in their
care, we have to be less selfish. We have to be thankful for their help and treat them as we would our
relatives and friends.
It's time to impose laws to help clear the air
Let's be clear: Hong Kong has the ways and means to keep air clean and safe, or at least cleaner or
safer than it is now. The Environmental Protection Department has a multi-billion-dollar budget and
more than 1,600 staff to help achieve this objective. Yet 44 days a year, the levels of pollution along
streets in Central are dangerous to health. How can this be?
For too long, the issue of air pollution has revolved around blame, not solutions. For years the
government passed off haze and smog as mostly being beyond its control, pointing to factories and
power plants in Guangdong province. The same reason and the weather have been put down to high
readings at roadside monitoring stations. But such explanations are at odds with those given by
environmentalists and independent scientists, who say the source is more often than not local.
Just look at the numbers. While readings from EPD monitors at rooftop stations show a significant
improvement in air quality, there has been a marked degradation beside roads in Central, Mong Kok
and Causeway Bay. Analysis of data by this newspaper found that in Central last year, readings were
above the "very high" 100 mark on 44 days, five days more than in 2008 and 31 more than in 2005. In
Mong Kok, there was only one such day five years ago, but 37 last year. The figure for Causeway Bay
was 25, up five-fold on the number for 2005.
The EPD put such readings down to a rise in ozone concentration in the ambient air. This, it said, was
the result of factors including high solar radiation and low rainfall. That may well be the case, but this
is of little comfort to people in Central who are faced with the prospect of breathing dangerous air on
average once every 10 days.
The weather may be making things worse, but the crux of the problem are tiny particulates in vehicle
exhaust fumes that can cause heart and lung problems in the young, elderly and those with pre-
existing conditions. Authorities are well aware of the problem. They have been working for more than
a decade to clean the air. Improved fuel standards, cross-border co-operation, studies and
recommendations have made a measurable amount of difference above roof-lines. But there has
been little or none at all when it comes to what we breathe on our busiest streets.
A key issue is the government's refusal to adopt legally binding policies. Laws stopping vehicles from
parking with engines running while drivers wait to deliver and take on goods and passengers would
make a big difference. Forcing old delivery trucks and buses unable to use cleaner fuel off the roads
would also help. So, too, would electronic road pricing. Rationalising bus routes is a sensible idea.
The government does not have a popular mandate. It is fearful about stepping on toes, especially
those of the business sector, which pay the majority of taxes. There is a reluctance to cause public
discontent by implementing policies that could cause fare rises and price increases. But voluntary
schemes and gentle nudging have only a limited effect when commercial and personal interests are
involved.
But it's not too late. The recently-ended consultation on a review of air quality objectives gives
authorities a chance to take firm action. Recommendations laid out in the consultation document were
tepid, meeting only the lower standards suggested by the World Health Organisation. For a city as
wealthy as ours, with so many resources, we should be striving to do the best, not the minimum.
Poor air quality affects our health and the image of our city. The cost of not doing enough is high in
terms of medical costs and the loss of talent and tourists. Policies have to get to the root of the
problem, not nip at the edges. Laws, not voluntary schemes, are the most effective way of making our
air clean and clear. The time for solutions - not blame - has arrived.
Drug safety centre needs the tools to protect

us
Western pharmaceutical drugs are strictly controlled in Hong Kong. "Natural remedies", health
supplements and illegal versions of approved drugs are not. After a series of safety incidents with
Western drugs that resulted in five deaths, the government is to further tighten controls on them. But
despite similar problems with slimming products and backyard impotence drugs, these products
remain uncontrolled.
If there seems to be something seriously wrong here, our report today on the medical battle to protect
Hong Kong men from adulterated impotence drugs from the mainland confirms it.
In the last three years more than 70 Hong Kong men have fallen ill from taking these drugs. Three
died; so did more overseas, and an unknown number on the mainland. One remains in a coma. But
for a general alert issued by the Department of Health two years ago, there might have been many
more cases. The Hospital Authority's Toxicology Laboratory has won international recognition for its
role in alerting the world to the danger. Disturbingly, however, cases still arise, the latest only three
weeks ago. In the absence of proper regulation, they are slipping under the authorities' guard until
they are picked up by toxicological analysis of suspicious cases.
It seems unthinkable to draw such comparisons, yet Dr Tony Mak Wing-lai, consultant chemical
pathologist for the Toxicology Reference Laboratory, says sooner or later "we will have another
thalidomide on our hands if we allow these drugs to come out". Thalidomide caused serious foetal
deformities after being given to pregnant women as a "safe" drug for nausea.
The case that raised the alarm in Hong Kong involved the mixing by a mainland backyard operator of
a blood-sugar-lowering drug with the active ingredient of a legal impotence drug to create what is
known as an analogue drug. These are like real drugs, only one component has been changed to
enable sellers to get around licensing and prescription regulations. This is likely to change their effect
and level of safety. To grasp how dangerous this can be, you need only consider that tests and trials
to establish the efficacy and safety of drugs usually take several years and cost hundreds of millions
of US dollars. As we report today, the problem with analogue drugs is not what they do but what they
are not known to do, which is only revealed when disastrous side effects appear.
Health authorities have long been concerned about similar problems with women's slimming
supplements - for example, the mixing of analogues of Western slimming drugs with herbal
ingredients, sometimes with grave health consequences.
The Department of Health tests non-pharmaceutical samples from various outlets for the presence of
Western drug ingredients. But Dr Mak and others have previously called for legislation to govern their
sale and distribution so that adulteration is detected early through random testing. The same should
go for impotence drugs and other illegally manufactured remedies. As a result of the fatal blunders in
the manufacture of legal pharmaceutical drugs, officials have promised eventually to set up a centre
for drug safety that will also cover traditional Chinese medicine. Though regulation of the latter is still
in its early stages, the government should set up the centre sooner rather than later. If its name is to
mean what it says, the government should also give it the resources to control any product claimed to
improve health, performance or body shape.
Political tigers are an endangered species

Richard Halloran
The coming lunar new year is the Year of the Tiger, a time when natural leaders with vigour, courage
and imagination are supposed to do great things.
Unhappily, not many tigers are roaming the capitals of the United States and Asia at present, at least
not with the stature and statesmanship of those leaders after the second world war who had a sense
of mission and strategic vision that went beyond everyday politics.
An exception is Lee Kuan Yew, founder of the island nation of Singapore, prime minister from 1959 to
1990, an organiser of the Association of Southeast Asian Nations, and now, aptly, minister mentor of
the city state.
Lee, who is 86, once said that Singaporeans needed "to find a niche for ourselves, little corners
where, in spite of our small size, we can perform a role which will be useful to the world. To do that,
you will need people at the top, decision makers who have got foresight, good minds, who are open to
ideas, who can seize opportunities."
Not that Lee's rule has been without controversy. His critics, at home and abroad, have pointed to his
authoritarian ways, accused him of nepotism in getting members of his family appointed to powerful
positions and lamented his repression of the opposition and the press.
Even so, when Lee received the Lifetime Achievement award by the US-Asean Business Council last
year, former US secretary of state Henry Kissinger said: "He has become a seminal figure for all of us.
I've not learned as much from anybody as I have from Mr Lee Kuan Yew. He made himself an
indispensable friend of the United States, not primarily by the power he represented but by the quality
of his thinking."
Today, US President Barack Obama is finishing his first year in office without having proved, despite
his Nobel Peace Prize, that he belongs in a class with Democratic president Harry Truman or
Republican president Dwight Eisenhower, often considered by historians as among the top 10
American presidents.
Closer to home, President Hu Jintao is seen as a competent technocrat but a lacklustre bureaucrat
not in the same league as the brutal but charismatic Mao Zedong and the brilliant statesman Zhou
Enlai . Russian President Dmitry Medvedev and Prime Minister Vladimir Putin do not measure up to
president Mikhail Gorbachev, who ended the tyranny of the Soviet Union, closed out the cold war and
won the Nobel Peace Prize.
Indian Prime Minister Dr Manmohan Singh, an economist, is given credit for prodding his nation out of
the economic doldrums but few would elevate him to the political levels of prime ministers Jawaharlal
Nehru or Indira Gandhi, who led India onto the world stage after independence in 1947.
Among US allies, Prime Minister Yukio Hatoyama of Japan is floundering, which has led to
speculation that he is on his way out. President Lee Myung-bak of South Korea has been distracted
by financial investigations. President Gloria Macapagal-Arroyo of the Philippines rules a corrupt,
nearly failed, state. Thailand's turmoil has left it almost paralysed.
Australia's Prime Minister Kevin Rudd has enjoyed approval ratings between 60 per cent and 70 per
cent for two years but has not risen to the level of Sir Robert Menzies, who set Australia on its feet in
his 16 years as prime minister until 1966.
Elsewhere, the legacies of Ho Chi Minh in Vietnam, Dr Mahathir Mohamad in Malaysia, or Sukarno or
Suharto in Indonesia, who were authoritarian but fervent nationalists, have not been replicated,
although President Dr Susilo Bambang Yudhoyono of Indonesia has received good marks for
fostering political democracy and economic progress.
Other than Singapore, Asia-Pacific capitals today sit atop a bleak landscape bereft of tigers.
Richard Halloran is a former New York Times foreign correspondent in Asia and military
correspondent in Washington
Give new free-to-air broadcasters a chance

Hong Kong officially has a free-TV duopoly enjoyed by TVB and ATV. But, judging by market share
and advertising revenue, TVB effectively dominates the airwaves. The station has long been the
predominant free-to-air broadcaster and the only one that consistently makes a profit. But a lack of
competition doesn't help quality and content. Besides news, local game shows and formulaic soap
operas have been the order of the day, or rather night. Few locally produced programmes genuinely
appeal to the heart or mind.
One solution that has often been proffered by critics is to introduce more competition. This will soon
be put to the test as two companies aim to set up their own free-to-air stations. City Telecom has
already applied to the government for a licence, and Cable TV is preparing an application. These are
moves in the right direction, but we should not entertain high hopes. Huge hurdles exist for any new
entrants to break the stranglehold TVB has on the entertainment industry and local culture at large.
The two companies may also end up producing poor imitations of TVB's popular but formulaic
programmes. For their enterprise to be worthwhile, they need at least to attempt to produce more
innovative programmes. But, given the financial constraints, it may be asking too much.
City Telecom may be the first in the race, as it has no media cross-ownership issues. Its subsidiary,
Hongkong Broadband, has an extensive fibre optic network that can quickly help City Telecom to plug
into local households. However, it does not produce a lot of its own content. And the maximum of
HK$210 million that City Telecom says it plans to invest in the new station does not sound like much
in light of the high costs of producing original programmes or even buying overseas content.
Meanwhile, Cable TV has an effective news team, but its main attraction is its international sports
programmes. Will it end up duplicating itself as a sports TV station?
Since TVB was set up in 1967, the city has always had two stations, except for a third one which
existed for a brief period before going under. The government has no quotas on free-to-air
broadcasters, so the duopolistic structure appears to be market-driven. It did not have to be this way.
The government certainly has the resources to make RTHK, its TV and radio station, a local version of
the BBC. However, it lacks the political will. As a result, RTHK has been mired in its own existential
struggle with pro-Beijing critics and other vested interests sniping at it since the time of the handover.
The local television scene has been enlivened by the increasing popularity of pay television, whether it
is through cables (i-Cable) or fibre optics (NOW). But their services can be expensive, and not every
family may choose to pay for them. There is, therefore, room for more free-to-air broadcasters.
Provided they meet basic requirements, the government should give City Telecom and Cable TV a
chance to prove their mettle. We can - and do - hope they will surprise us.
The need to avoid being misunderstood

December was a tough month for China. The nation's diplomats have been trying to project a softer
and kinder image abroad. But during the festive season, criticism and condemnation escalated as
Beijing sentenced prominent dissident Liu Xiaobo to 11 years in jail and executed Briton Akmal Shaikh
for drug smuggling despite claims that Shaikh was mentally unfit. And, earlier that month, China took a
tough stance on emissions cuts which has been blamed for causing the ineffectual agreement
reached in Copenhagen.
These instances are a stark reminder that mainland actions are often viewed with scepticism from
abroad, and especially the West. In many cases, they have also been interpreted as China thumbing
its nose at the world. Whether justified or not, that perception calls for more skilful management of
international concerns - through moderating rougher rhetoric from its recent past and deploying so-
called "soft power" more effectively.
China has moved some ways in this direction already; and this week it unveiled a major reshuffle at
the Foreign Ministry. Senior ministers in their 60s have been sent off, to be replaced by younger
ambassadors with more worldly experience rather than ideological conviction. An example is
ambassador to Britain Fu Ying . She is of Mongolian origin and only the second woman to be made a
vice-minister since 1949. She is part of a new diplomatic corps adept at using international news
media and protocols to defend the nation's interests, and eschewing ideological rhetoric.
Promoting younger talent has been the norm at practically all major ministries in recent times. Each
year, tens of thousands of officials are rotated, and preference for promotion is given to younger and
better-educated officials. Many are educated in law, economics, history and management, rather than
the long-preferred engineering fields. The Foreign Ministry is no exception. But given the nature of
their work, mainland diplomats especially benefit from such promotion preferences. As a rising power,
China needs effective and skilful advocates to represent its interests.
China must heed its neighbours' concerns

China's leaders vow that the nation will grow through peaceful development. They speak of mutual
trust as being the foundation for stable bilateral ties, respect for concerns and core interests, and the
necessity of negotiation to solve disputes. Transparency and co-operation will be priorities, they
promise. But plans to turn the contested Paracel archipelago into a tourist destination - while
economically perhaps a good idea - raise questions about Beijing's intentions among its neighbours.
Authorities revealed the plans last week as part of proposals to boost the economy of Hainan
province. Hainan, which Beijing has designated to administer the disputed Paracel, Spratly and
Zhongsha archipelagos in the South China Sea, is among the nation's poorest regions despite being a
special economic zone. Developing it as a haven for foreign tourists makes good sense given its
tropical location, sandy beaches and colourful coral reefs.
But China needs to be mindful of how this will be seen by other claimants to the islands.
The uninhabited Paracels have been contested for centuries by China and Vietnam and are also
claimed by Taiwan. All assert sovereignty over the 16 islands based on historical factors. Deposits of
oil and gas are believed to lie in the surrounding waters, which are rich fishing grounds. China seized
the islands in 1974 after a sea battle with Vietnam, and the issue - like control of the Spratlys -
remains a thorn in relations.
China has agreed with the Association of Southeast Asian Nations, of which Vietnam is a member, to
resolve sovereignty of the archipelagos in a peaceful manner through direct negotiations. In a deal
signed in 2002, the countries involved pledged to exercise self-restraint in carrying out activities that
could complicate disputes and affect peace and stability. Specifically mentioned was refraining from
inhabiting islands, reefs and other features that were unoccupied. The proposals for the Paracels,
while perhaps abiding by the letter of the agreement, run counter to its spirit.
Beijing has a military presence on the largest of the Paracels, Woody Island, where it has built a
runway. Weather stations are maintained on other islets. That its navy and that of Vietnam patrol the
waters makes the possibility of conflict ever-present. China's modernisation and the growth of its navy
as it takes its place as a global power should come as no surprise to anyone; but neither, too, should
the natural unease its rivals feel about the development. Some, Vietnam key among them, are also
strengthening their militaries. The State Council did not give details of how it intends to develop
Hainan's tourism potential. There are potential pitfalls, not only because of the sovereignty claims;
parts of the main island of Hainan are off-limits because of sensitive military operations. The People's
Liberation Army Navy's fleet of nuclear-powered submarines is based there, as will be a launch centre
for satellites and space vehicles that is under construction.
China has promised to be mindful of the concerns of its neighbours and has often pledged that its
military rise is for defence, not aggression. It has made agreements about how to handle territorial
disputes. Claims to sovereignty over the South China Sea cannot be taken lightly. The possibility of
conflict is high. Building resorts on the Paracels could lead to provocation and further raise fears about
China's expansion. Pacts should be respected and rhetoric about peace and stability backed by more
openness and transparency.
Bubbles burst, faith tested, answers wanting

When this column urged readers last New Year's Day to make a resolution to be optimistic, it was
reflecting the sentiments of the season despite deep economic gloom. Few would have boldly
predicted then that stock markets would end the year back at levels last seen before the collapse of
Lehman Brothers. Optimism has prevailed, thanks to unprecedented intervention by governments to
halt a financial meltdown. The narrow escape from global economic depression climaxed a decade of
events and change that will shape the new decade.
With the world recovering from a financial meltdown, parallels are to be found with the beginning of
the first decade of the new millennium. Then, Asia was emerging from its own financial crisis and the
global dotcom bubble was about to burst upon financial markets. Between then and now, the world
has enjoyed a period of relative economic stability and growth.
Some may find reasons for optimism in that. But comparisons can be misleading. The financial
meltdown was a systemic failure that went global. Economic stability remains dependent on worldwide
government support for spending and investment to maintain growth in emerging economies and
prevent a slide back into recession in developed countries. Such stimulus must be maintained until
economies are once again able to stand on their own feet.
Economic malaise
The decade began with the US revelling in its economic ascendancy. The bursting of the dotcom
bubble, and the exposure of giants like Enron and WorldCom as facades of creative accounting, did
nothing to shake its faith in its financial system. Bankers and investors turned to housing and created
another bubble, using financial instruments they did not really understand. By 2007 defaults in the
subprime housing mortgage market had transmitted the first warning signs, but few anticipated the
calamity that lay ahead and led to the freezing of world credit markets.
Some big American banks have repaid billions in bailout funds to the taxpayer, but many other lenders
have closed, the government has committed trillions to supporting the US economy, property prices
remain depressed and American household debt relative to income is still historically high. As a result
of this and similar debacles in Europe and Britain, the decade has ended not only with serious debate
over the merits of unfettered, Western-style free-market capitalism - a subject close to Hong Kong's
heart - but with questions over the primacy of US power in the world, given its economic malaise and
the rise of China and India.
Were it not for the financial meltdown and its aftermath, the rise of China as a world power, climate
change and terrorism would dominate a review of the past decade and a preview of the next.
Indeed, China's growing power and influence was most in evidence at last month's world climate-
change summit as a voice for recognition of the energy needs of developing countries. True, the
summit will be remembered for failure to reach a commitment on combating global warming. But it
was marked by an eleventh-hour meeting between Premier Wen Jiabao and US President Barack
Obama that resulted in a political accord leaving the door open for future progress.
The threat of terrorism remains as real as ever, as we were reminded on Christmas Day when a
Nigerian with alleged al-Qaeda links tried to detonate explosives on an American passenger jet flying
from Amsterdam to Detroit. Sadly, it seems the ramifications of extremist terrorism for the world
economy and security will remain with us for the next decade.
Thanks to a sound and well-regulated banking system, strong financial reserves and government
support for small business and families, Hong Kong weathered the economic downturn in relative
comfort. It was the third major economic test since the handover, after the East Asian financial crisis
and the Sars outbreak. It remains to be seen whether the conventional wisdom that the city emerges
stronger and more confident from crises still holds true.
Not much to show
Hong Kong's transformation to a Chinese international centre of finance and commerce can be
measured in decades. If the seventies were the decade of getting rich, the eighties the decade of the
rise of finance as industry migrated across the border, and the nineties all about the return to Chinese
sovereignty, the last 10 years in some ways have been the lost decade. Our way of life has been
preserved and our per capita gross domestic product has risen, but there is not much to show for it.
The wealth gap has widened, with median household income having fallen between 1996 and 2006
while flats have grown more expensive; grand projects such as the West Kowloon cultural hub and the
redevelopment of the former Kai Tak airport site are taking a long time to materialise; political
development in pursuit of the ultimate goal of universal suffrage has stalled.
It says something about the last decade in Hong Kong that history will record that the most significant
political event was the 2003 pro-democracy protest march against the government, which led to the
resignation of the then chief executive, Tung Chee-hwa.
Political development is on the agenda again with a public consultation on limited changes for the
2012 elections that are supposed to pave the way for universal suffrage. Since Hong Kong does not
have much to show for executive government without a popular mandate, it is to be hoped that pro-
democracy forces can strike a deal for progress.
A promise impossible to deliver is no 'right'

Jacob Mchangama
New health legislation making its way through the US Congress will see far greater government
involvement in health care. This has been justified by US President Barack Obama who has claimed
all Americans have a "right" to health care and, by corollary, that the government has a duty to provide
it.
The idea that health care is a "human right" is controversial in the US, but is commonplace elsewhere.
It is enshrined in major international human rights treaties and is a principle of nearly every aid agency
and humanitarian NGO.
But not only is it impracticable in its definition, treating health as an enforceable human right creates
serious legal and democratic problems - and neither does it improve health care.
Traditional human rights such as free speech, property and personal liberty have helped secure
freedom for millions. These rights require governments to refrain from perpetrating abuses, and
therefore can be enjoyed by everyone, equally. These are called negative rights.
Since the second world war, however, international human rights treaties have added "positive" rights
such as health, food and housing to these traditional human rights. These rights require government
supply and are therefore dependent on money and a country's level of development.
This is legally complex as any government's resources are finite. Courts will therefore have to make
rulings about the allocation of resources. Positive rights such as health care have therefore been
drafted in international human rights treaties as political aspirations rather than enforceable
obligations. Revisionist interpretations of the UN's International Covenant on Economic Social and
Cultural Rights by unelected human rights experts have made signatory governments legally obliged
to uphold the right to health for everyone. According to these experts, states violate "the right to
health" if they fail to take "all necessary steps to ensure the realisation of the right to health" that
includes "insufficient expenditure or misallocation of public resources".
Absurdly, this means governments are theoretically liable for everything from providing water to food
and medicine. Sinisterly, this new interpretation of the right to health is being used to drive out private
health care.
Making health a human right creates headaches even for governments who aspire to provide
universal, collectively-funded health care. Brazil's constitution explicitly grants a "right to health" but
many patients who call upon the state to fulfil this obligation are met with shortages in state
pharmacies. Many patients have therefore - quite reasonably - sued the government. This has led to
an explosion of judicial challenges. In developing countries, this creates an intolerable burden on the
judicial system.
However, research shows that declaring the right to health makes no difference to a population's
health. Those who care about health should promote the traditional rights that underpin the personal
and economic freedom necessary to pay for good health care.
Jacob Mchangama is the author of "Health as a human right", published by International Policy
Network, a London-based think tank
A vote that is about far more than just a rail

line
Passions are at fever pitch over today's vote by legislators on the high-speed rail line connecting Hong
Kong to the national network at Guangzhou. The railway may well be necessary for our city's future -
an argument that has its merits - but issues of its cost and route, and a lack of transparency over the
HK$66.9 billion project, tap into growing frustration with the manner in which we are being governed.
Lawmakers should be satisfied that authorities have properly answered outstanding questions before
they vote.
Expensive infrastructure projects are bound to raise questions, as they should: after all, taxpayers'
money is being spent. At a basic level, people worry whether this project will be cost-effective and
generate the projected benefits. In pushing the rail line, the government has promoted a number of
reasons, backing each with anticipated financial payoffs. Economic modelling is an imprecise science,
but the government's track record on such promises is less than stellar. Little wonder, then, that there
has been scepticism about those projections.
There is an argument that the benefits of linking to the mainland network cannot be modelled; that
there are new, and as yet unforeseeable benefits, to building the rail line. That may be true. After all, it
can sometimes be hard to predict how a new technology or route will change behaviour. But if
authorities truly believe that, they should simply say so, and stake their reputation on it, rather than
citing figures that do not seem to stand up to scrutiny.
Protests are also being driven by insufficient transparency. Authorities have not been forthcoming with
essential details, have given misinformation and explained their actions poorly.
The government originally promoted the link as substantially cutting the travel time to Guangzhou.
This was clearly not the case: the station for high-speed trains is in the suburb of Panyu, some
distance from the city's central business and shopping district. There will only be a small difference in
the time presently taken.
A village in the New Territories will be torn down to make way for the line, prompting protests from
villagers demanding a route change or more compensation. All of this fuels anger and a perception
that the government is not serving the people's interests. The gap between the rich and poor is
widening. Poor handling of the rail project has helped drive such thinking towards a tipping point.
Discontent spilled over during a rally for universal suffrage on New Year's Day. Three people were
injured when a police cordon around the central government's liaison office was charged. Officials fear
more unrest today during demonstrations over the rail line at the Legislative Council Building, and
hundreds of police are being deployed. Beijing's top official in Hong Kong, Peng Qinghua, has called
for calm.
The issue is emotive, but violence is no way to deal with concerns; the law must be abided by and
cool heads kept. There may be frustration over how the government has dealt with the issue, but
ratcheting up confrontational tactics also fails to promote needed dialogue and reasoned debate over
an important issue.
Legislators will be voting on a railway line, but their decision is about much more - whether we can
have robust, inclusive and informed debate on critical policies. Lawmakers have previously deferred
approval; the time spent should have been used to raise and discuss the details. Any vote should be
an informed one. This is, after all, taxpayers' money and should only be spent after careful debate.
Serious thinking needed in approach to drugs

Amid the ebb and flow of human diseases - from old killers such as tuberculosis to the latest strains of
influenza - an abiding worry for health authorities is resistance to treatment with antibiotics and other
pharmaceutical drugs as a result of abuse. That is particularly so in Hong Kong. As long ago as 2001,
a Hospital Authority study showed that misuse of antibiotics here had made them less effective
against bacteria than in the US and Britain. A recent World Health Organisation poll of public health
experts paired illnesses due to antibacterial resistance with a flu pandemic at the top of the 10 most
important diseases of the next decade.
The government's move this week to plug serious loopholes in our pharmaceutical drugs regime is
therefore welcome, if overdue. Controlled drugs including antibiotics can be bought at some
pharmacies and drug stores without a prescription. Reforms include a bid to stamp out over-the-
counter sales by making written orders mandatory. This would enable the authorities to trace them,
both for law enforcement and safety recalls. Sadly, some doctors have been involved in illegal
distribution by selling on supplies obtained cheaply or free from drug firms in return for orders.
Improper use of legally supplied antibiotics is not uncommon. Examples are prescriptions for viral
conditions that do not respond to them and failure to complete courses of treatment. Illegal sales and
self-medication are an even more serious problem.
Pharmacists complain that the reforms do not go far enough. They want the law amended to require
that all new pharmacies be majority-owned by pharmacists, giving them control over the sale of drugs
instead of just being employees of pharmacy owners. Permanent Secretary for Food and Health
Sandra Lee Suk-yee says this would spell the end of small, independent pharmacies. But the
government should seriously consider whether the robust entrepreneurial spirit for which Hong Kong
is known - rather than professional qualifications and ethics - is appropriate to the supply and proper
use of controlled drugs.
Time to put an end to corporate voting

Public registers of Hong Kong voters are hardly mines of information. But patient inspection unearths
ammunition for critics of the snail's pace of reform of the city's electoral system. It reveals the full
extent to which the present arrangements deliver disproportionate representation in the legislature to a
fraction of the community.
As we report today, voting by corporates and other bodies enabled less than 1 per cent of voters to
elect a fifth of lawmakers in the Legislative Council at the 2008 election, including nearly half the
trade-based seats.
And that figure assumes all voters are independent entities. But some large companies have multiple
votes in trade-based voting sectors through subsidiaries. As a result, Li Ka-shing's Cheung Kong
group and Hutchison Whampoa have at least 20 votes across eight sectors; the Kwok family's Sun
Hung Kai Properties at least 10 votes, including a number in the tourism sector; and property tycoon
Cheng Yu-tung's New World Development five votes in the transport sector.
The 12 lawmakers solely chosen through voting by corporates or other bodies represent the
insurance, labour, financial, tourism, industrial, commercial, transport and financial services sectors.
There is nothing improper about this, however concentrated the voting power in Legco it gives to
those in control of companies and other bodies. Upholding the legality of it last month, Mr Justice
Andrew Cheung Kui-nung said corporate voting in functional constituencies had long been part of
Hong Kong's system and the drafters of the Basic Law probably intended it to remain after the
handover - at least until constitutional reforms were introduced.
The government has now launched a consultation on proposals for limited reforms for the 2012
elections to pave the way for universal suffrage at the 2017 chief executive election and the 2020
Legco election. Its consultation paper acknowledges public opinion that functional constituency
electorates should at least be broadened for 2012. Sadly, it proposes no alternative, saying the
process would be too complicated because it involves the interests of many different sectors and
individuals and consensus would not be easily reached.
That is simply evading the issue. Corporate voting is the most egregious example of the
incompatibility of functional constituencies with the goal the government says it wants to move closer
to - universal and equal suffrage. In opposing a court challenge to corporate voting, the government
rightly said functional constituencies were designed to return legislators "through voting by key players
and stakeholders" in various sectors of society. But that is why they cannot comply with universal and
equal suffrage as currently formed.
They are, in fact, a remnant of limited autonomy allowed by a former colonial power. Both the chief
executive and the chief secretary say that functional constituencies are incompatible with free and
equal universal suffrage. So this means that if they are to be retained in some form after 2020 they
must be made to comply with the principle of equality by broadening and democratising voter
participation. To achieve this, people who currently wield disproportionate voting power will have to
give up that unfair privilege. If the limited reforms proposed for 2012 are to achieve meaningful
progress towards universal and equal suffrage, they should at least put an end to corporate voting.
A welcome move to reintroduce guide dogs

The saying out of sight, out of mind is apt for guide dogs in Hong Kong. If people who can see thought
about their absence, they might find it odd that our visually impaired fellow citizens rely on white sticks
or escorts to negotiate our busy streets, given that guide dogs are common on the streets in other big
cities. After all, many Hong Kong people have embraced canine companionship, adapting breeds of
all shapes and sizes to small flats, congested busy streets and a lack of open space in which to
exercise them.
If dogs are man's best friend, guide dogs are among the most useful and socially acceptable. But an
attempt to introduce them to Hong Kong in the 1970s ended after one of two pioneers - a dog named
Winter funded from Germany and trained in Australia - was killed by a minibus.
The city was considered too crowded and dangerous. Presumably the abiding concern was for the
welfare of the blind. True, locals are accustomed to weaving through constant crowds, dodging red-
light-jumping drivers and pedestrians and avoiding frail people pushing loads of rubbish through traffic
as if protected by a lucky charm. But we thought guide dogs came in handy for helping unsighted
people avoid these kinds of hazards. And if the elderly and the lonely get comfort, companionship and,
it is claimed, even health benefits from having to care for a pet dog, we don't see why the visually
impaired should not be able to get seeing-eye dogs.
It is good, therefore, that the Hong Kong Society for the Blind and the Ebenezer School and Home for
the Visually Impaired are raising HK$1 million in an attempt to reintroduce guide dogs, starting with
four visually impaired people to be selected for training in the United States. The ultimate aim is to set
up a local guide dog training centre.
The law is on the side of the city's 122,600 visually impaired, with the Equal Opportunities
Commission saying that refusing access or service to a guide dog violates the Disability Discrimination
Ordinance. But the government should be ready to reinforce it and to educate the community in
accepting guide dogs in public places.
Beijing hits brakes on bank lending

Naomi Rovnick
The central government has moved to rein in rampaging asset prices and potential runaway inflation
by acting to drain cash out of the economy.
The People's Bank of China yesterday forced banks to keep more money on hand by raising the
reserve ratio by half a percentage point to 16per cent, effectively curtailing their ability to extend more
cash to businesses.
It is the first time since November 2008 that the central government has raised the reserve ratio, which
dictates what percentage of customers' deposits the lenders must post in the central bank's coffers.
Earlier in the day it had raised the interest rate on its one-year treasury bills and last week raised the
rate on its three-month bills, increasing borrowing costs.
Economists said the government was starting to call time on its stimulus package, something which
could augur badly for the Shanghai Stock Exchange. The benchmark Shanghai Composite Index
closed up 1.93 per cent at 3,273 points before the central bank announcement; the index has flatlined
this month in the expectation of government action.
Mainland banks approved a record 9.21 trillion yuan (HK$10.45 trillion) to stimulate the economy in
the first 11 months of last year.
Yao Zhizhong and He Fan, economists with the Chinese Academy of Social Sciences, have
calculated that two-thirds of that borrowed cash has poured into the country's stock and property
markets. "Beijing now feels it is time to start tapping on the brakes," said Brian Jackson, senior
emerging markets strategist at RBC Capital Markets.
Mainland exports rose for the first time in 14 months in December, while the economy grew 8.9 per
cent in the third quarter of last year on the same period in 2008.
Yao and He warned in their report published this week that unless Beijing reins in its stimulus
measures, the economy could overheat this year with 16 per cent growth.
Independent economist Andy Xie said the government was keen to "cool" prices in the overheating
property market after house prices surged in most major cities last year.
The amount of residential housing sold on the mainland last year grew 35 per cent from 2008,
according to JP Morgan. The average selling price of properties rose between 16 and 27 per cent in
first-tier cities.
"Authorities have made clear that they will step up scrutiny of property lending to curb overly rapid
price gains in some cities," said Jing Ulrich, the chairman of China equities and commodities at JP
Morgan.
Local governments are already acting to curb real estate speculation and fraud. The Shenzhen
government has launched a three-month campaign to curb illegal presales, false advertisements,
property hoarding and contract scams.
In a separate move yesterday, the People's Bank of China sent a signal it could soon raise interest
rates - one year borrowing costs are at a five-year low of 5.31 per cent.
The central bank raised the yield on its 20 billion yuan in one-year bills by about 8 basis points to
1.8434 per cent after holding it steady in the previous 20 weekly auctions.
Meanwhile, economists are ratcheting up 2010 inflation forecasts for the mainland. Citic Securities,
the nation's biggest listed brokerage, raised its estimate to 3.2 per cent from 2.6 per cent in a report
dated yesterday.
Bank of America Merrill Lynch last week increased its forecast to 3.1 per cent from 2.5 per cent.
Ben Simpfendorfer, a China economist at Royal Bank of Scotland, said there was "a convergence of
events that will lead to higher rates".
The mainland's banks lent about 100 billion yuan each day last week, the official China Securities
Journal reported. That compares with 294.8 billion yuan for all of November.
This clashed with warnings from central government policymakers that last year's lending splurge may
have resulted in badly run firms getting too much credit, creating the potential for a pile-up of toxic
non-performing loans.
Central bank governor Zhou Xiaochuan told mainland media last week that banks should be careful
about becoming over-extended. But Xie predicted the economy could cool again in the second quarter
of this year. At this point, he said, the government "may turn on the [lending] spigot again".
HK toy sellers bemoan loss of best spots at

fair
Denise Tsang
Angry Hong Kong exhibitors at Asia's largest toy and games fair say they have been left playing with
their dolls and train sets after prime spots at the Convention and Exhibition Centre were taken up by
mainland rivals.
Despite a 25 per cent growth in visitor numbers at the Hong Kong Toys and Games Fair, more than
30 Hong Kong toy companies claim they were relegated to a "dead hall" while mainland exhibitors
were given spots in high-traffic areas.
The Hong Kong Trade Development Council (TDC), the fair's organiser, denied it was favouring
mainland exhibitors.
A TDC spokesman said more signs had been added yesterday to draw more traffic to the Hong Kong
booths.
The incensed Hong Kong exhibitors, who have participated at the four-day show for the past decade,
said they were among 100 Hong Kong toy companies tucked away on a remote mezzanine floor
nearly 100 metres away from the heart of the show in Halls 1, 3 and 5. They complain the location is
so remote that even their regular buyers, not to mention first-time visitors, have failed to notice they
are at the fair.
The 36th annual toy fair, which has attracted 1,891 exhibitors this year, opened on Monday and ends
tomorrow.
The TDC charges up to US$8,383 for an exhibition booth, although fees are determined by the size of
booths and the nationality of exhibitors, not by their location.
A TDC spokesman conceded Hong Kong exhibitors pay less than mainland exhibitors.
Bob Cheung, the boss of Green Horse Toys, said Hong Kong exhibitors effectively made way for
mainland exhibitors in busy Halls 3 and 5.
"Why should overseas exhibitors, especially those from the mainland, be offered prime locations?"
said Cheung, as he and other local exhibitors jeered at nearby TDC officials and security guards. "We
are small and medium-sized businesses, and [Chief Executive] Donald Tsang [Yam-kuen] said he
supported SMEs. So why were we left in a so-called exhibition hall that has virtually no visitors?"
Edwin Yu, boss of Hong Kong-based Super Products, agreed that the TDC has favoured mainland
firms. "The TDC is supposed to promote Hong Kong trade, but it has become the China Trade
Development Council," said Yu, who has been a toy manufacturer for more than three decades.
Until the renovation of the exhibition centre last year, the toy exhibitors had been located in the same
booths and the same halls every year.
After the revamp, exhibitors said, they were invited either to "choose space" within the convention hall
and the theatres or accept a refund.
"We were not offered any other halls at all," Yu said. "But I had to show up here, otherwise my
customers might think we were in trouble or even went under."
The disgruntled exhibitors said regular buyers had become used to the location of their booths every
year, but the new arrangement meant buyers were attracted to their rivals in the mainland halls.
The TDC spokesman said exhibition booths had been grouped under product categories this year to
make the fair "more buyer-friendly".
But that was disputed by Hans-Peter Hohn, the head of Toys & Premiums (HK), who said he and
other exhibitors were clustered under "multiple products and general merchandise", a category of
products that is shown in all halls. He described the fair as "a disaster".
"I'm down here to do business, not to wait for visitors," said Hohn. "We are downgraded to a hall to
nowhere, and have suffered losses in terms of time, resources and chances to meet buyers."
Tony Yeung from toymaker Kai Jal Industrial said the traffic had been so slow for the past two days
that he only obtained five name cards of potential customers, compared with about 80 a year ago.
"I still have a pile of catalogues with me, which should have all gone by now," said Yeung. "I was in
Hall 5 for the past six years, and traffic was so busy last year that a lunch box took four hours to
finish."
Galey Toys, which has participated at the fair for more than 20 years, added an extra booth this year,
bringing the total number to five and the cost to HK$165,000, excluding logistics, decorations and
labour.
"It's hopeless this year," said manager Frankie Cheng, whose booth was relocated from the most
popular Hall 1. "You can see how quiet and remote this dead hall is."
Mainland exhibitors at Hall 1 told a different story.
Bob Yu, the boss of a Shantou-based maker of toy cars, was taking part for the first time at the show.
He said: "We met many potential customers from Europe and existing customers."
Yu, who had used up dozens of his name cards by noon yesterday, said the fair was a window to the
West for his company, which suffered a 40 per cent slide in business last year, following the global
financial crisis.
We need far more than this 'referendum'

Pro-democracy lawmakers frequently criticise government officials for putting on a show rather than
furthering the public interest. But now, five among their ranks are about to stage a show of their own -
at great expense to the taxpayer. The Civic Party and League of Social Democrats plan for five
legislative councillors to resign and then re-contest their seats in by-elections, in what they say will be
a de facto referendum on universal suffrage. But many people are scratching their heads as to how
that will work. The whole exercise, if a government estimate is correct, will cost HK$150 million. The
plan has been ill-conceived from the beginning and is distracting people from the real issue - how to
secure genuine democratic reforms. It has also exposed deep fissures within the pan-democratic
camp, with the Democratic Party opting out of the scheme.
The resignation plan is not a referendum. A referendum would have a clear outcome, with a majority
voting either yes or no for a proposal. Yet, it is not even clear what proposals the five legislators are
putting on the table beyond their demand for a fully elected chief executive and legislature in 2012, or
failing that, a precise government road map for universal suffrage. These are worthy aims, but they
are wholly unrealistic. This all-or-nothing approach will not help advance democratic reform.
Furthermore, in the by-elections there will be other issues and other candidates. This makes them
intrinsically different from a genuine referendum.
Indeed, the five lawmakers do not appear confident of success. They have set the bar so low it would
be easy for them to save face and claim victory. They will admit failure, they say, only if they get fewer
votes than their main rivals and that turnout exceeds 50 per cent. Historically, turnout in by-elections is
lower than in full elections. It is likely that any by-elections forced on us by the legislators will fall below
the 50 per cent threshold.
In reality, other than a landslide victory and the return of all the five candidates, any results are bound
to be ambiguous. In the absence of a clear-cut victory, all sides will be able to claim a mandate,
thereby nullifying the very purpose of a referendum. The plan may even backfire. If all or most of the
five lawmakers lose, their opponents would claim Hong Kong is not ready for full democracy.
The reality is that the people do not need a "referendum" to determine a clear majority preference for
universal suffrage. We know this already from election results over two decades and countless
surveys. Even the government has conceded this point.
Every opportunity should be seized to prepare the city to make the transition to universal suffrage for
the chief executive election in 2017 and Legco election in 2020, as permitted by Beijing.
Instead of allowing their action to distract from the more serious debate, the five legislators must
refocus attention by standing on a by-election platform which presents viable plans to improve on the
government's consultation proposals.
The pro-democracy camp should be negotiating with the government, and rallying public support for
an improvement of the modest proposals officials have put forward. There is a need for counter-
proposals that are well thought out and articulately presented. This would count for much more than
political grandstanding and sloganeering. The resignation plan is misguided. If it is to have a positive
outcome, the by-elections must be used to further a constructive public debate on a package that can
really take democratic reform forward.
World needs to adjust to China's new power

China can justly be proud of its achievements, not least its advances in military technology. The
missile interception system it tested on Monday was a further statement of strength and if claims of
success are true, more proof of advanced weapons capabilities. The development of a stronger
military as part of the nation's growth can hardly surprise anyone, and certainly Beijing has pledged its
rise will be peaceful.
Yet these increasingly frequent shows of military strength don't always sit easily with neighbours.
Historical wrongs against China rest heavily with the nation's leaders. Greatness gives the opportunity
to make amends. This worries past and present rivals and countries with territorial disputes. The
longer the economic and military shadow cast by Beijing, the more the unease and anxiety.
The transition, too, to a world with China as a superpower alongside the US, is naturally an uncertain
time for many. Countries are adjusting from an era where the US played the key role in regional
stability to one where there will be counterbalancing forces.
It's important, as China builds influence around the region, for Beijing to be sensitive to such tensions.
Power in the 21st century needs to be exercised in a globalised world where countries are
economically interconnected and rely on one another to solve problems like climate change; it is a
world where careful steps, quiet diplomacy and moderation are important. Adjusting to the new
environment requires learning, effort and time.
US Secretary of State Hillary Rodham Clinton has promised that the US will maintain a presence in
the region to provide a balance and ensure confidence. She said her country intended to "exercise
influence" for another century and in doing so, be a stabilising force against China's rising power.
Some neighbouring countries no doubt appreciate the balance of powers in the region.
If the US, through diplomacy and careful management of its military bases, can help ease tensions,
that will offer China a stable environment to grow into a global power. Having the US engaged in the
region can make this transition an easier one for everyone.
A loss for Google and the Chinese people

Imagine a world without Google. The company, after all, is synonymous with the internet and the
revolution in the way information and ideas flow freely through much of the planet.
But not in China. When Google compromised its principles by accepting censorship in return for
access to the mainland's vast market in 2006, wide dismay was understandable. Politicians from left
and right and human rights and free-speech activists condemned it as a sell-out. The company argued
then that the benefits of increased access to information and a more open internet justified the
decision.
Now Google has changed its tune, citing attempts over the past year to limit freedom of speech and a
recent wave of "highly sophisticated" attacks allegedly originating in China on the company and many
other firms, in a bid to hack into the e-mail accounts of activists around the world. As a result, Google
has declared that it is unwilling to accept censorship any longer and is ready to shut down Google.cn if
it cannot reach agreement with Beijing on operating an unfiltered search engine. The company has
been losing market share to Chinese search-engine Baidu. But it would be quitting a market that major
multinationals consider crucial to growth.
Constraints on Google's operations over the past three years have turned out to be much more
intrusive than agreed bans on sensitive topics like Tibet and Tiananmen Square. More recently, for
example, China has briefly blocked access to its main search engine and other services such as
Gmail, blocked the video-sharing service YouTube and forced the disablement of a function that lets
the search engine suggest terms. The latter move was officially aimed at blocking pornographic
material, but effectively limited wider access. Then there was the uproar over the attempt to compel
the installation of personal computer software that would have blocked material unsuitable for viewing
by children, because of fears it could also be used for political purposes.
The catalyst for the company's about-face was Google's discovery of the attacks on itself and a wide
range of companies, said to be aimed at accessing the Gmail accounts of human rights activists in
China, and evidence that the accounts of dozens of US and Europe-based rights activists have been
routinely hacked by third parties.
The about-face adds to what promises to be a year of tension between the US and an increasingly
assertive China over trade, climate change, military developments and human rights. US Secretary of
State Hillary Rodham Clinton has already raised the issue to official level by demanding an
"explanation" from Beijing of Google's claims.
The central government is accustomed to major foreign companies adapting to Chinese practices. But
when the practices include broad censorship, its citizens are ill-served. Certainly, Google's China
service fell well short of its global standards. China has rightly won acclaim for economic
achievements that have lifted hundreds of millions out of poverty. It no longer has any compelling
reason to fear the right to expression guaranteed in its own constitution.
Google's stand may redeem it somewhat in the eyes of critics of its willingness to abet increasing
restrictions of what Chinese citizens can read online. But for all of Google's economic might - and
even with Washington's backing - it seems unlikely that this will result in any change in censorship
standards on the mainland. That will be Google's loss, certainly. But it will also be the Chinese
people's loss.
Laudable attempt to reach young audience

Governments are generally not renowned for being innovative. They like to play it safe. Financial
Secretary John Tsang Chun-wah's office has broken the mould with a comic book to encourage young
people to express views about the upcoming budget. Whether this is the best way of achieving the
objective is questionable, but authorities nonetheless have to be applauded for trying to think of new
ways to generate interest in public affairs.
Tsang is a self-confessed fan of comics. They are the most popular form of media in the world. In
Japan, they account for almost one quarter of publications - although it has to be pointed out that
many are pornographic. There is also no finer form of spreading propaganda: they are printed by the
millions on the mainland to promote patriotism and fight the spread of Western influences.
The government has the best of intentions with its bid to attract interest in the budget. To maximise
appeal, an award-winning cartoonist has illustrated the book in the Japanese manga style. The main
character, Yat, travels back in time to the romantic Three Kingdoms period for his adventures. It is a
pity, though, that the storyline is less than riveting.
A great deal of effort has gone into the comic. Its message that prudence is the best course for growth
is laudable. But whether it is the right vehicle to hook the target audience of 15- to 25-year-olds into
making suggestions for the budget, to be delivered on February 24, is quite another matter.
Communication comes in many cheaper and more accessible forms in our technologically-savvy era.
Among them are Facebook, Friendster, Twitter, mobile phone texting, YouTube and any number of
other variations. Each is as innovative and with hand-held devices so popular among the young, make
for a highly effective means of getting messages to a wide audience. They don't allow Tsang to have
his cartooned image on a bookmark, as happens with the hard copy version of the comic. What they
do offer, though, is the chance for the government to use simple language to show that it is
approachable and willing to listen.
Judicial independence of vital importance

Hong Kong people enjoy basic freedoms that set our city apart from the mainland, thanks to the
preservation of the rule of law. Chief Justice Andrew Li Kwok-nang, in the job since the handover, has
deservedly received many plaudits for maintaining confidence in our legal system. As a result, his
annual speech at the opening of the legal year is keenly anticipated. He is not known for engaging
directly in controversy, but he does not shy away from it. This year was no exception. It was his last
speech at the ceremony before his retirement in August. The top judge's emphasis on the importance
of the independence of the judiciary and the separation of powers is important. It is a reminder that
these principles lie at the heart of Hong Kong's separate system. Vigilance is needed to ensure they
are not eroded.
He made no reference in his speech to last month's remarks by a senior official from the State
Council's Hong Kong and Macau Affairs Office, praising the Macau judiciary for co-operating with that
city's government; nor to Vice-President Xi Jinping's comment during a visit to Hong Kong in 2008 that
the three branches of government - the executive, legislative and judicial branches - should give each
other mutual support and understanding. Li later denied he was responding to anyone. But he
pointedly added that he felt the role of Hong Kong's independent judiciary needed to be clearly
explained for everyone's understanding.
The rule of law is rightly regarded as one of the pillars of Hong Kong's success. It protects our
freedoms, provides a level playing field for doing business and guards against abuse of power. Under
the system of checks and balances between the three branches, an independent judiciary has a vital
role in ensuring that the executive and the legislature comply with the Basic Law, and that our
fundamental rights and freedoms are safeguarded. The ability of businesses to have disputes settled
fairly by independent judges in is also vital to Hong Kong's competitiveness.
The vice-president, by contrast, comes from a hierarchical political culture that does not expect the
different branches to work as checks and balances on one another, but rather, within a single
harmonious framework. The mainland judiciary lacks independence from government and, indeed,
from the party itself. It does not function as a check on the abuse of power or people's rights.
One legal development in recent years is the growing use of the judicial review process to challenge
administrative and legal decisions, often resulting in them being struck down in the courts. Li
dismissed speculation that the process was being abused and urged reflection on why so many were
resorting to judicial review.
So long as Hong Kong does not have an elected government or a fully democratic legislature, judicial
reviews are likely to remain a popular avenue of redress. Their growing popularity, however, is part of
an international trend. Meanwhile, it is crucial that people continue to believe they can go to court and
receive a fair hearing, even in sensitive cases involving the government. The independence of the
judiciary is therefore of paramount importance, as is the choice of Li's successor.
Rocking the boat

The causes and methods may be new but, in essence, the 'post-1980s' activists aren't very
different from their predecessors - young, angry and with a point to make
Stephen Vines and Rosanna Wong
Stephen Vines
"The trouble with young people today ..." How often have you read these words, or something similar?
For many years, young people in Hong Kong were criticised for being apathetic about social and
political affairs; now they are castigated for irresponsible involvement in social and political
movements. And when the criticism falters, there is a barrage of patronising talk, mainly from
government officials, about how, if only they understood, they wouldn't criticise.
It is hard to know how to respond to all this, especially when much of what is being said is presented
as new and original thinking, whereas it is nothing of the kind. The agonising over the development of
the so-called post-1980s generation in Hong Kong mirrors concerns, and, yes, excitement, over the
development of protest movements in other generations. Sure, there are differences in emphasis and
differences in the way people mobilise but, in essence, things have not changed - youth gravitates
towards change.
Let us first consider the situation in the late 1960s, a time of unrest around the world but mostly
expressed in Hong Kong by leftists emulating the activities of the Red Guards during the Cultural
Revolution. The history of this movement, like all history, is written by the victors, in this case the Hong
Kong establishment, which has succeeded in depicting this period as an episode of mindless violence
carried out by brainwashed youths who were misled.
This is not entirely untrue but it remains a facile interpretation of events. Hong Kong at the time was a
relatively poor place rapidly emerging from poverty, yet the benefits of this transition were very
unequally distributed. The lingering arrogance of the colonial authorities was out of synch with the
changing world and the government had little vision for changing the status quo. In other words, there
were perfectly sound reasons for protest and little excuse for the initial attempts to suppress it by force
without considering whether there were other ways of addressing people's concerns.
Ironically, the person who is probably best placed to understand all this is Tsang Tak-sing, the home
affairs minister, who was then a schoolboy protest leader and was thrown in jail on the basis of rather
dubious evidence. Now a pillar of the new order, Tsang can shake his head in disapproval at the
youthful protesters who are expressing themselves in ways far less violent than his contemporaries,
yet are still castigated for irresponsibility.
Fast forward from the late 1960s to the 1970s, when students launched a campaign to protest against
the Japanese occupation of the Diaoyu Islands. Again, this movement was violently suppressed by
the government. Yet these protests continue, albeit nowadays with tacit government backing. And it
was around this time that another group of young people formed the Hong Kong Observers, a
landmark middle-class movement interested in social change; they certainly had no violent intent but
were closely monitored and harassed by the Police Special Branch.
Some of the Observers' leading members became founders of the political parties and movements
that flourished a decade later, only to find that their attempts to channel their activities in ways
instantly recognisable in the rest of the world were criticised as being quite inappropriate for Hong
Kong, posing a danger to stability.
Here we are again with the same old lie being trotted out about dangers to stability. There are even
half-hearted attempts to suggest that the very people whose political involvement was nurtured in
criticism of the old colonial regime are somehow trying to bring back the old order.
It is quite possible that many of today's young activists are not aware of those who blazed the trail of
protest. They may think that mobilising protests by way of Facebook and using the internet means
they are doing something very new, but the reality is that this merely implies a change in the means of
communication.
Yet there is also something different about youth involvement in current protests because of the
extraordinary scope of their interests. Youthful protesters have been at the frontline of heritage
preservation demonstrations, have been very active in environmental movements and have linked up
in an impressive way with villagers concerned about the disruption to their lives by the new express
railway. And, of course, young people are also gravitating towards what might be described as hard-
core political and economic issues. Some get involved in established political parties; others simply do
their own thing alongside the veterans.
Meanwhile, it should not be overlooked that Hong Kong's best organised political party, the
Democratic Alliance for the Betterment and Progress of Hong Kong, is also working from the pro-
government side of the fence to mobilise young supporters, with some success, not least because
involvement in the DAB offers jobs and other material benefits, something denied to the anti-
government camp.
Of course, those who are active in these movements remain strictly in the minority, albeit a growing
one. But political activism has always been the preserve of the few rather than the many. It is
somewhat childish to revel in the lack of wider mass participation and perverse in the extreme to
criticise fine upstanding citizens who devote their time and energies, without material reward, to
causes they believe will create a better Hong Kong.
Yet we are told that we need to worry about what's happening to Hong Kong youth. Go figure.
Stephen Vines is a Hong Kong-based journalist and entrepreneur
Rosanna Wong
Ever since the New Year's Day protests, the media has been full of analysis and reports on the so-
called "post-1980s" generation. Commentators, the community at large and even government officials
have attempted to postulate theories on why this particular group of young people, ranging in age from
20 to 29, has assumed such a public and visible form of expression. While some of these explanations
have focused on disillusionment and frustration, others have highlighted a positive emergence of
youthful social and civic awareness.
Similarly, while some have characterised the entire generation as "lost", "angry" and "radical", others
are wary that the young people who charged the central government's liaison office and who staged
the impassioned demonstration against the express rail link are just a minority who are not
representative of the entire generation of 20-somethings.
I believe the truth lies somewhere in between.
This is a generation that has grown up in the midst of Hong Kong's economic boom and affluence.
They are highly educated and are far more knowledgeable and informed thanks to the internet and
access to satellite and cable media. They are creative, entrepreneurial and highly motivated to
succeed.
They are young people with an international perspective who are increasingly in tune with global
concerns such as the environment, human rights, and social and political reforms.
They are also a generation, "post-material" as it were, who have been brought up to think not only
about their community but, more importantly, about their own role and civic responsibility within the
community.
As such, they are much more willing to volunteer than even the generation before them. And they
have no hesitation in getting involved with causes ranging from heritage conservation to climate
change and the widening rich-poor divide, as well as fair-trade issues. They are a generation who
wish to see justice and rights manifested and are, in some instances, prepared to raise their voices.
The young people who have taken to the streets over the past few weeks are treading a well-worn
path, using public protest to articulate their frustration, discontent, disillusionment and dissatisfaction,
and as a means of attracting attention to themselves and their concerns.
While they may not represent their entire age group, they, like youth before in Hong Kong and abroad,
just want to be heard. We in the community must pay attention to this. We must do so without getting
distracted by the minutiae of the whys and wherefores of their general sentiment.
The fact is that this post-1980s generation in Hong Kong lacks a platform to be taken seriously. They
do not have many avenues for participation in community affairs. Young people, it can be argued, feel
excluded - or at least actively discouraged - from assuming their civic right to fully engage in policy
debate, public and development issues, and reforms. No doubt this feeling of exclusion, of not being
taken seriously, has only encouraged some to take to demonstrating and protesting.
I am sure that I am not the only voice calling for the widening of avenues for young people to publicly
participate in a meaningful way. I know that legislators, academics and other agency heads have all
called on the government to listen more openly to young people.
I applaud this and agree that the different debates and issues facing Hong Kong today need to include
young people's perspective. After all, it is their future we are talking about.
However, I also feel that just listening to young people is not enough. Simply having a youth
representative on the Commission on Youth is not enough. These are just the first steps.
I believe that the government should harness the willingness of young people to get involved by
including them in the wider scheme of consultative and advisory bodies. This would then allow them to
express their opinions, while also participating in public debates and implementing decisions.
By providing young people with a chance to be part of a process - whether in terms of policy
formulation or discussions on issues of public concern such as the high-speed rail link or urban
renewal schemes - we will create a generation with a sense of ownership and pride in Hong Kong's
future development.
Young people are bound to have a point of view that may not always be in line with those in authority.
But this should not be seen as a challenge. Instead, it should be welcomed as an opportunity to widen
perspectives to ensure greater community participation and support.
To involve young people in the public process, by giving them a chance, the government must also
strengthen its own belief that this younger generation can make a worthwhile and genuine
contribution. Only then, I believe, will value be added to how we as a community move forward.
At the moment, the entire issue of protests and young people is extremely emotive. But I think we
should use this opportunity to grasp the energy, creativity and talent of this "post-1980s" generation -
along with other young people - to increase public involvement.
This really is an opening that has the potential for long-term leadership building, which in turn will help
create a mature populace and a sustainable future.
We can all be armchair analysts of youth discontent. Or, we can be the catalysts for change by giving
them a chance for actual engagement and participation. The choice is ours.
Dr Rosanna Wong is executive director of the Hong Kong Federation of Youth Groups
Listen to more voices, and act on what they

say
Hong Kong's blend of an unrepresentative political system with a society that cherishes its right to free
speech inevitably means a culture of protest. The government's efforts to address societal concerns
have been so ineffective that they are fanning, rather than dampening, the flames of discontent.
Authorities are seen to be more responsive to big business and less for ordinary citizens; they do a
poor job of proving otherwise. It seems the only solution, in the absence of much broader suffrage, is
to give as many people as is feasibly possible more voice - and then listen to, and act on, what is
being said.
Such a way forward seems obvious, but the government is in a difficult position. The protests leading
up to the vote in the Legislative Council on Saturday on the fast rail link to Guangzhou clearly show
why. Our city needs linkages with the mainland to develop and prosper, yet authorities' lack of
transparency, and their inability to communicate properly why, instead led to demonstrations. Approval
was inevitable given support for the government in the legislature, but tongues remained tied even as
lawmakers were blocked from leaving the chamber by young protesters - apparently on the
recommendation of police.
Secretary for Transport and Housing Eva Cheng has decided to address concerns through the
internet. She should have done so face to face on Saturday night, just as her colleague Carrie Lam
Cheng Yuet-ngor did two years ago during demonstrations over the demolition of Queen's Pier.
Regardless of her message, the anti-government movement spearheaded by people in their teens
and 20s belonging to the so-called post-1980s generation has been given a new head of steam. They
have pledged to take on other planning and development issues to ensure that people who are
affected have more say in their future.
There are a dozen or more small protests every day in Hong Kong. People from all walks of life gather
or take up placards to make their objections to government policies known. We are fortunate that such
issues are generally raised and discussed rationally and in a restrained manner. Saturday's protest
was considerably larger - the issue warranted it - but passions on all sides thankfully remained mostly
under control.
The government has been saying since 2003, when half a million people took to the streets against
anti-subversion legislation, that it will listen to the people. Greater effort is being made to inform and
consult, but clearly many people do not feel this is enough. Being even more inclusive will help meet
that need.
A good starting point is with young people. They lack representation in government panels,
committees and advisory bodies. It is as if their views do not matter. Little wonder they resort to
demonstrations to be heard.
Hong Kong does not have a harmonious government. Few would describe the political structure we
have as effective, ideal, or truly representative. True, there will always be protests, even in systems
with universal suffrage. But we must do a better job of giving voice to the people who are concerned
about Hong Kong and its future.
Chinese peacekeepers' deaths were not in vain

The eight Chinese peacekeepers killed in last Tuesday's earthquake in Haiti were well aware that
peacekeeping is a dangerous job. They had been trained to deal with civil unrest, tropical diseases
and natural disasters. As they were meeting officials at the headquarters of the UN Stabilisation
Mission in Port-au-Prince, the tremor struck, taking their lives and those of dozens, perhaps hundreds,
of UN staff. Their loss is a tragedy for their families and China, and highlights the everyday realities of
the blue-helmeted men and women who strive to bring peace and stability to our troubled world.
Taking on such a role is no insignificant task. It requires dedication and determination. Being posted to
a peacekeeping mission inevitably means going to a far-flung and troubled part of the world. There is
always the possibility that life will be sacrificed.
Ministry of Public Security officials Zhu Xiaoping, Guo Baoshan, Wang Shulin and Li Xiaoming and
peacekeepers Zhao Huayu, Li Qin, Zhong Jianqin and He Zhihong made that ultimate sacrifice. They
were imbued with the spirit of humanitarianism and had a faith in peace. Those same basic principles
drive their 134 Chinese colleagues in Haiti, the 9,100 other international peacekeepers and the teams
of rescuers and aid workers helping the millions of victims of the quake. Their efforts will always be
remembered.
China's eight batches of peacekeepers sent to Haiti since 2004 have earned high praise. The head of
the UN's mission in Haiti, Hedi Annabi - who also died in the quake - had spoken of their
professionalism and devotion to peace. Similar sentiments have been expressed by UN Secretary-
General Ban Ki-moon about the 12,753 troops and 1,571 police the nation has so far sent to 18 UN
peace missions. China now ranks among the top 10 contributors of funds and peacekeeping forces.
Through these commitments, the nation is working towards the ideal of lasting world peace. To bring
this closer to reality, China and other nations must continue contributions to UN peacekeeping
missions and co-operate in global security. The deaths of the eight peacekeepers is a reminder that
the price of participation can be high. Nonetheless, tackling global instability is also crucial. There is
no other way to give practical meaning to the words of the UN charter: "To save succeeding
generations from the scourge of war."
Eviction strengthens dog owners' hand
Whether you love dogs or hate them, there is no disputing that these faithful friends are popular in
Hong Kong and enhance the lives of their owners.
The need to take them for a walk provides a reason to get some exercise and the chance to socialise
with other dog lovers. Evidence of that was in abundance on the Wan Chai Waterfront Promenade on
Sunday when about 3,500 owners with 1,500 pets attended a carnival at the popular dog exercise
spot.
Contrary to what people may have expected, the park was kept clean. Indeed, this was cited by
special guest Carrie Lam Cheng Yuet-ngor, secretary for development, as testament to the way dog
owners valued the designated space.
Alas, in a city where living space is not at all dog-friendly, the promenade is to be closed next week to
make way for the Central-Wan Chai bypass. Dog owners are powerless in the face of this kind of
development when well-organised lobby groups opposed to the bypass have failed to stop it. And they
knew all along that the park was only a temporary measure.
But their eviction strengthens their hand in the campaign for more open spaces in which to exercise
dogs. Happily, the promenade's success has persuaded the government to plan other dog-friendly
parks, with two having opened already at Sheung Wan and Yau Ma Tei, and more to follow at Tai Po,
Sham Shui Po and Tseung Kwan O.
The SPCA plans a campaign to make them known to owners, especially the one at Sheung Wan.
However, with dogs forbidden on trains and buses, an exercise area so handy to Wan Chai and
Causeway Bay will still be missed. We wish the society well in its push for more dog-friendly parks,
including reopening part of Victoria Park in Causeway Bay to dogs. It needs to convince opponents
who regard them as a nuisance that a well-exercised dog makes less noise and is better behaved.
Obama ticks the right boxes on Asia

US President Barack Obama can look back at his administration's first year of engagement with Asia
with satisfaction. There were no serious missteps or opportunities lost. A sturdy platform has been
created on which can be built solid relationships. The future will remain bright as long as policies
continue to be carefully thought out and pragmatically implemented.
Obama faces many challenges, but Asia can't be counted among the most pressing for him. At home,
approval ratings are plummeting due to high unemployment, concern about the economy and handling
of divisive issues like health care reform and a troop surge in Afghanistan. But support beyond
American shores remains high. There is much appreciation of the administration's multilateral
approach towards foreign policy.
The right first steps were taken when US Secretary of State Hillary Rodham Clinton broke with
tradition by making her first overseas trip to Asia rather than Europe. There could have been no better
symbol of commitment. Clearly, the US was going to take the region seriously. Such has since been
the case. The administration in July signed the Treaty of Amity and Co-operation in Southeast Asia
peace pact, and in November Obama became the first American leader to attend a meeting of the
Association of Southeast Asian Nations.
Obama took office promising change. A year is a short time in diplomacy, so key issues on which
pledges were made - climate change, nuclear proliferation and the Middle East - remain elusive. One
has been kept and delivered, though: a lifting in many regions of the cloud of anti-Americanism that
his predecessor, George W. Bush, seeded and spread. The shift has moved some Asian nations, who
have concerns about China's rise, closer to the US.
Relations between China and the US remain difficult, just as for every previous American
administration. The nations have as many common interests as differences. Challenging times lie
ahead. Nonetheless, under Obama, relations are off to a sound start.
The president's first trip to China in November did not go as smoothly as hoped. No significant deals
were made and coverage of his visit was muted in the Chinese media. These are not worrying
developments. The process of building ties must not be rushed.
No Asian nation has stronger ties with the US than Japan. The election win of the Democratic Party of
Japan has strained the relationship. Uncertainty about US naval bases is rife and Japanese forces
have been pulled out of a refuelling mission in the Indian Ocean helping the US-led war in
Afghanistan. But relations are such that it is likely the disputes will be amicably resolved.
A trade pact under discussion with South Korea is nearer. The nuclear agreement struck with India
has brought the nations ever-closer. A recent announcement that Washington will join the Trans-
Pacific Partnership - a small group of countries including Singapore, Chile and New Zealand - opens
the possibility of a platform of economic integration in the Asia-Pacific region.
North Korea and Afghanistan remain problematic. US involvement is crucial to ensure scrapping of the
North's nuclear weapons programme. The region has an interest in the US-led coalition succeeding in
Afghanistan. Obama's sending of another 30,000 troops to the conflict is a welcome sign of
commitment.
Asia and the US need one another. Obama has shown he understands the importance of the region to
his country and the world. But rivalries and sensitivities mean diplomacy has to take place in
measured steps. The US leader has thankfully adopted the right approach and pace.
Rein in the banks and end fat-cat bonuses

Bankers and financiers in the West have long been accustomed to being treated like masters of the
universe. It must, therefore, be disconcerting to be cast in the role of public villains in the two years
since the onset of the financial crisis. The Financial Crisis Inquiry Commission in the US lined up Wall
Street's top bankers for public testimony last week. It was probably the closest thing for the bankers to
being put in the dock.
It does not help matters that it is reporting season again and the public has just learned that the top
five US banks will be paying record bonuses and compensation to the tune of US$50 billion. US
President Barack Obama has rightly described the new round of bonuses as obscene and introduced
plans to claw back bailout money over 10 years from financial institutions that have received federal
support during the crisis. It is clear the return of many Western banks to profitability was not the result
of bankers' skills but the unprecedented support and debt guarantees offered by their governments.
Taxpayers are, therefore, subsidising their bonuses.
The furore in the US follows something similar in Britain. Banks in the City of London have collectively
thumbed their noses at the authorities; most said they would cover the new punitive 50 per cent tax on
bonuses for their staff. In other words, shareholders will be made to pay the tax while bankers go on
their merry way after being bailed out by British taxpayers. To rub salt into fresh wounds, British
bankers and their lobbyists warn financial institutions will simply move elsewhere given the new
punishing tax and regulatory environment. Regulatory arbitrage - by which you exploit differences in
supervisory regimes and operate in countries or jurisdictions with lax monitoring - has long been only
hinted at; now it is an open threat. That is why governments must work together to align effective tax
and regulatory regimes in major financial centres around the world.
There needs to be an end to the Anglo-American bumper bonus culture. It is not only distasteful and
morally reprehensible; it is socially corrosive, because it undermines the social contract under
capitalism. A fundamental capitalist principle is that while you get to enjoy the fruits of your labour,
enterprise and ingenuity, you must suffer for the mistakes you make. But the bonus culture has turned
that upside down. Its tie to performance has always been tenuous, if not a charade. The bonuses
stayed high on Wall Street and in London even when Western financial systems were on the brink of
collapse. It is questionable whether, even during the preceding bullish decade, the phenomenal rise in
the return on equity of big banks was due to skill or performance. A recent Bank of England study
finds a complete - complete! - correlation between British banks' higher leverage and rising return on
equity in the past decade. Any profits most of these banks made have since proved illusory.
So, high leverage before the crisis, government support after it - bankers in New York and London
make it look like they are just there to game the system. They can afford to do so because banks and
other financial institutions are at the heart of the Western capitalist system, which in turn underpins the
global economy. They have bet, correctly, that they can make fatal mistakes and taxpayers will still
have to bail them out collectively as an industry - and in many cases, individually. That is why they
need to be reined in and controlled in a worldwide effort co-ordinated by governments and regulators.
We need to save capitalism from itself.
Kickback culture must be stamped out
Kickbacks may be an acceptable way for casinos to reward operators who bring in customers, but
they have no place in referrals of patients to specialists by family doctors. Yet this unethical practice,
exposed more than five years ago, continues to thrive in Hong Kong to such an extent that one doctor
quoted in our report today says it is deeply rooted. Private doctors involved pocket up to one-third or
even more of specialists' fees for sending patients their way. That is not just an abuse of the trust on
which the doctor-patient relationship is founded but has implications for patient safety. Referrals
should be made objectively and solely in the best interests of the patient. A referral influenced by
financial gain can put the patient at risk.
Both morally and in the eyes of the law it is corrupt. A few years ago the Independent Commission
Against Corruption launched an investigation into two family doctors and a surgeon, but the
Department of Justice declined to prosecute, citing a lack of evidence. The ICAC felt confident enough
to appeal against the decision through an internal review committee, without success.
It is a worrying situation which undermines the integrity of our health system. A source quoted in our
report tells of having been offered kickbacks for referrals by doctors who have trained in diagnostic
procedures that enable them to specialise in investigations or tests for profit. This leads to over-
servicing - or unnecessary procedures and operations - one of the main obstacles to containing
health-care costs.
The Medical Council seems powerless to deal with what its chairwoman calls this "invisible crime" and
says it is reliant on the ICAC. A court in 2006 ordered it to investigate a complaint by a doctor, but no
disciplinary hearing has been held. True, the council has been pressing the government for reforms to
make self-regulation more effective. If the profession cannot be empowered to sort this out the
government should consider tougher regulations. And if it is serious about health care being based on
a public-private partnership, the kickback culture must be stamped out.
Education does not need giveaways and

gimmicks
Few know the consequences of Hong Kong's rapidly ageing population as well as public
schoolteachers. They are in the front line, wondering how to keep the schools they work for open -
and their jobs - as student numbers dwindle. Innovation comes to the fore in such situations and
competition to maintain enrolments to stave off closure with gifts and gimmicks is keen. But as much
as enterprise is to be lauded, efforts should not be about enticing children with giveaways, but better
educating them. Education is not the natural first thought for teachers whose jobs are on the line. They
know that when student numbers in a form drop below 61, the Education Bureau starts taking action.
In the past five years, five public secondary schools and 72 primary ones have been forced to close. A
total of 31 secondary classes have been cut this academic year.
Government-subsidised secondary schools have taken a lead in trying to reverse the trend. They
cannot conjure more students from the shrinking pool but can lure them away from one another and
look to new arrivals. Tactics vary from handing out free notebook computers to recruiting through
booths at railway stations to hiring public relations consultants so that images can be overhauled.
Competition is healthy. It is good among schools. But it should not be about which can offer the best
bribes or install the flashiest electronic advertising displays. Rather, competing has to be for
academics, the sports field and the arts.
Principals fearful of enrolments slipping into danger zones do not always think of competition in such a
way. Their instinct is to fight for survival. Attracting students becomes a priority. Teachers can easily
be swayed to adopt strategies that are inappropriate.
Not all schools have turned to gifts and stunts. Some, like Fung Kai No 1 Secondary School in Sheung
Shui, are trying to improve the behaviour of their students. Teachers patrol the neighbourhood during
lunch hours to ensure pupils are on their best behaviour. Principal Wong Tsang-cheung says the
school has earned a reputation for high standards of discipline and is drawing students.
Schools elsewhere are making learning more interesting, providing better teacher support and
improving extra-curricular activities. This is the right approach to the problem. Only the fittest will
survive in an era of shrinking classroom sizes. Reputation is of utmost importance. Regardless of how
good schools and staff are, they have to face reality. Only in recent years has Hong Kong's birth rate
been growing. It will be some time before this feeds the student population. Even then the effect will
be minor; unless there is a dramatic increase in the number of young families moving here, schools
will continue to decline in size and close.
Our public school system has numerous challenges. New reforms are still being grappled with. Debate
rages about whether the medium of teaching should be in Cantonese or English while questions
continue about whether there should be a greater emphasis on Putonghua. Drugs and other social
maladies are of increasing concern. In light of the problems, consolidation of schools may not be a
bad idea. They would presumably be staffed by the best teachers. Resources could be optimised.
Standards should rise.
Hong Kong has to develop people who are well versed in a wide variety of areas. This is our key to
success in a world of low birth rates and ageing populations. Real effort has to be put into attaining
this goal. Attracting students with giveaways and gimmicks is not where our education system should
be headed.
Better system wanted over sex offenders
Sex offenders who prey on children strike fear into the hearts of parents. That does not make it any
easier to find a balance between protecting the community against these heinous crimes and
upholding the rights of offenders who have paid their debt to society. One of these rights is privacy,
which is key to a fair chance of rehabilitation. Reconciling this conflict is one reason Hong Kong has
yet to follow other jurisdictions in maintaining a confidential sex offenders' register that can be
accessed by employers of people who work with children.
Meanwhile, the Education Bureau's power to deregister teachers provides a degree of protection
because no one can teach in our schools without a valid registration certificate or permit. Parents are
entitled to assurance that this screens out applicants who pose a known risk. It is disappointing
therefore that the bureau has declined an opportunity to give it, without infringing privacy. It has
refused our request to simply say how many of at least 31 teachers and classroom assistants known
to have committed sexual offences in the past 10 years are still registered and how many are working
in schools. As a result, lawmakers, parent and child protection groups have rightly raised concerns
about the vetting procedures.
There do seem to be some holes in the present system. The bureau keeps an internal list of teachers
with convictions but it is not the result of a formal, accountable arrangement with the police or court
registries. Compiling it from media reports and other sources seems a touch hit and miss. The bureau
says it normally deregisters teachers convicted of an offence involving abuse of their role or resulting
in a prison sentence. But it will not disclose registration details to schools without a teacher's consent
and, in any case, does not regard a criminal record as an absolute bar to employment.
The bureau is to be applauded for respecting rights and not necessarily condemning someone for one
mistake. But pending a better vetting system that balances rights and safeguards, it is hard to have
confidence in the present one unless the bureau becomes more sensitive to public concerns and the
need for reassurance.
Turning a deaf ear

Obsessed with form over substance, the government champions public consultations. Yet, the
process is a farce
Stephen Vines
Public consultation exercises launched by the government are commonplace in Hong Kong but they
are also a farce. If anything, the pace of consultations is being stepped up; five have already been
launched this year. But the record shows that, almost without exception, all these exercises are either
ignored or manipulated by the authorities. Yet Chief Executive Donald Tsang Yam-kuen would have
us believe that one of the better ways of responding to the debacle over the high-speed rail link is to
find new ways of carrying out so-called consultations.
It might be better if Tsang could furnish some assurance that his administration will actually pay
attention to feedback from the public. On the contrary, he gives every indication of only listening to
those who support government plans and has the temerity to make highly selective use of opinion
polls as vindication for policy. He has, for example, repeatedly stated that the rail project enjoys
overwhelming public support but bases this claim on highly suspect evidence.
This is a government obsessed with form over content. It launches public consultations at the drop of
a hat. Information supplied to the Legislative Council reveals that no less than 66 public consultations
were launched from July 2002 to June 2007. That amounts to a rough average of one per month. Last
year, the pace of public consultation launches doubled.
Yet, on every really significant issue, the government either ignored public views or skewed the form
of consultation in a manner to ensure that it produced the desired result. Much forgotten but perhaps
the most notorious of these exercises was the three-month so-called consultation on the anti-
subversion laws that preceded the bill brought to the legislature. The government claimed that its
consultation exercise proved there was public support for the bill; the hundreds of thousands of people
who poured onto the streets told another story.
Fast forward to today and the government is already claiming to have secured majority support for its
constitutional reform proposals, supposedly a matter for consultation. We do not need to wait for the
outcome of this consultation process because, as sure as night follows day, the result will be a few
tweaks to the government's announced policy followed by a triumphant claim that the new plans have
secured public approval.
There are countless other examples of this kind of behaviour, ranging from the significant to the
relatively minor but of considerable relevance to people affected.
Take one very minor example. In Central, the government has erected a number of steel barriers
behind a cramped motorcycle parking bay, allegedly to allow owners to secure their bikes with
chained padlocks. If anyone had bothered to ask the motorcyclists, they would have discovered that
no one secures their bikes in this manner, and so it has turned out.
The net achievement has been to erect entirely superfluous railings that make it really difficult to get in
to the bay. When the new rails were installed, a notice was posted saying that this was an
experimental measure and a phone number was given for feedback. It proved impossible to call this
number and the experimental obstruction has now become permanent.
Nearby is the abandoned site of the Central Police Station, the subject of another so-called
consultation exercise. The overwhelming evidence suggested that the public was looking for a plan to
preserve the historic nature of the site and create a space with mixed commercial and public
development. Instead, the government opted to erect yet another skyscraper and transform this area
into a place that would make bureaucrats happy.
If the government seriously believes that public confidence in its consultations can be enhanced by
some clever internet-based method, or another wheeze, it is seriously mistaken. What people want is
meaningful consultation where public views will be genuinely considered and meaningful changes can
be made to existing plans. The alternative is taking consultation to the streets, something Tsang
describes as "irresponsible behaviour".
Although there has been some rather excitable reporting of what have been essentially peaceful
protests, the fact remains that the overwhelming majority of Hong Kong protesters have demonstrated
an ability to behave in a restrained manner.
They do not take to the streets just for the sake of it but because they are faced with a government
that simply refuses to listen. This produces greater polarisation in a society where there are
increasingly fewer ways of influencing policy in a peaceful manner.
All this, of course, raises the essential question of where public consultation begins. My apologies for
repeating the obvious, but consultation begins with an elected government that is genuinely
accountable to the people who have the power to kick it out of office. This is what makes consultation
and accountability really meaningful.
Our city needs these by-elections to proceed

The resignation plan by five democrat lawmakers was, with good reason, widely regarded as an ill-
conceived political stunt when it was first proposed. That has all changed as a result of Beijing's
warning that the scheme breaches the Basic Law. The ensuing row has the potential to turn into a
constitutional crisis - and so it is time for all concerned to calm down and for the law to be allowed to
prevail.
A statement issued by the Hong Kong and Macau Affairs Office raised the stakes earlier this month. It
described the planned resignation by legislators to trigger by-elections in a "referendum" on universal
suffrage as a blatant challenge to the Basic Law and the authority of the National People's Congress
Standing Committee.
Since then, Beijing loyalists have - all too predictably - competed to find the best way in which to show
their support for the central government's position.
There have been suggestions that the Hong Kong government should change election laws to prevent
the polls from taking place. A court challenge to the democrats' plan has also been proposed. There
have been calls for the president of the Legislative Council to refuse permission for the five lawmakers
to resign. And, most worryingly of all, suggestions that Beijing might intervene if the by-elections are
not stopped.
All of these actions would undermine the "one country, two systems" concept and damage confidence
in Hong Kong's rule of law.
The resignation plan, however it is described, is not a referendum and does not breach Legco's
procedures, election laws or the Basic Law. Legislators are entitled to resign, whatever their
motivation.
And when they do, by-elections must be held. Attempts to prevent those legislators from standing in
the by-elections would seem to be a breach of their rights under the Basic Law. The elections,
therefore, should be allowed to proceed.
It will then be up to the Beijing-loyalist camp to decide whether or not it wishes to field candidates. The
Liberal Party has said it will not participate. Others are likely to follow suit. If, in the end, the only
candidates opposing the five democrat lawmakers are independents, it is unlikely to be seen as any
kind of referendum. Indeed, if the only candidates participating are the five, we would not even have a
vote.
Whatever the outcome, though, this would still not amount to a real referendum, as the government is
not bound to follow the outcome.
The only sensible course of action is for the by-elections to go ahead in accordance with Hong Kong's
laws. The democrats involved have irresponsibly described their plan as an uprising, knowing very
well that this would further provoke the central government's supporters.
But if this is an uprising, it is a remarkably moderate one - a call for people to rise up and vote; a
revolution that could result in the democrats losing a seat or two in Legco.
None of this poses a threat to law and order. Nor is it likely to have much of an impact on the
constitutional reforms to be put in place for 2012. But if attempts are made to block the plan, the
damage done to the rule of law could be long-lasting.
The democrats have, through their resignation plan, succeeded in attracting a great deal of attention.
But the scheme is likely to achieve little else.
Let the by-elections proceed and then, perhaps, we can finally get on with a serious debate about how
to push forward democratic reform.
Leaders must find way to listen to the people

The army of petitioners who descend on Beijing to have their voices heard is not confined to farmers
and factory workers: it also applies to regional governments. About 10,000 liaison offices representing
lower-level agencies are located in the capital to lobby and communicate with the leadership.
That's a lot of offices - let alone officials - in the capital, and a clear sign of how top-heavy the nation's
politics has become. It also indicates how the civil service, which has a tradition of being well
organised, is no longer serving China's 1.3 billion people effectively.
Now there is nothing wrong with regional governments having an office in the capital. Ready access to
decision makers is essential for effective communication and good governance. One might suspect
from the huge number of representatives, though, that not all of them are involved in simple lobbying
work; and that those that are, do not have easier ways of being heard. In theory, at least, there would
not be so many if a clearer, more transparent way of communication existed.
In any case, leaders do not like having so many out-of-towners on their doorsteps. They have long
been embarrassed about people with complaints descending on Beijing and last year issued
regulations to curb the practice. Action has now been taken against the regional government
representatives. Under a directive, thousands of liaison offices set up by county-level government
agencies, lower-level governments and state-run companies have six months to quit the capital. The
ones allowed to remain will be closely monitored. Authorities say the move is to tackle corruption;
there have been several high-profile cases involving officials from the offices. Doubtless, getting a
posting to Beijing can be a lucrative career move for some bureaucrats.
But ridding Beijing of tens of thousands of provincial civil servants will really only be effective if there
are better channels of communication between the centre and the provinces. Government decision-
making has become so centralised at the uppermost levels that regional governments have found the
best way to have a say in their affairs is to lobby in Beijing. Finding better ways to not just talk, but
also listen, to the provinces, is an important step forward for the country.
We must take a new route on drug-driving
Tough penalties and random tests have sent motorists a loud-and-clear message that drink-driving will
not be tolerated. Horrendous accidents forced the change. Similar rethinking of the rules and laws are
needed following a spate of arrests of drivers suspected of being under the influence of drugs. The
government should respond as a matter of urgency; we must not wait for a tragedy to happen before
acting.
Transport officials have already formed a working group. The transport minister, Eva Cheng,
answered questions raised by legislators in May. She said then, and her bureau this week repeated it,
that the issue is complex. This is true. But no matter how complicated it may be, ways have to be
quickly found to keep drugged drivers off our roads. It is, therefore, good to hear that tougher
legislation is being considered.
Statistics here and studies elsewhere show why. Government figures indicate one in seven people
killed in road accidents over the past five years had traces of drugs in their bodies. There is no
certainty that the crashes were caused by drugs, but the suspicion is enough to cause concern.
Extensive surveys in Australia, Europe and North America reveal even more worrying figures and
trends. They point towards an alarming prevalence of drug-driving, particularly among the under 30s.
We know that there is a thriving drug culture among our city's young people; we would be foolish to
believe that Hong Kong drug-takers do not sometimes get behind the wheel while high.
The effect of alcohol on drivers is well known. Drugs in this regard are less studied, but we know that
they equally impair the ability of users to think and respond normally. Depending on the type and
quantity taken, they can cause drowsiness, loss of co-ordination, increased reaction time, vision
problems, an inability to manage the unexpected, and aggressiveness.
A quarter of deaths on Hong Kong roads involve alcohol. Drugs have not been as prominent, but
police tell us there is a rising trend of use in our community. Authorities were sufficiently worried to
start a random testing programme in Tai Po secondary schools. Random testing of drivers for alcohol
began last year; serious consideration should be given to extending the practice to drugs.
This is where the complications begin. Drug testing is not as easy as for alcohol. Limits cannot be set
on acceptable levels of drug intake. In the Australian states of New South Wales and Victoria, portable
saliva kits are used by police, but several days are needed before results can be confirmed. Blood
tests are the most accurate, but permission has to be given under our laws before samples can be
taken.
Complexities are no reason for delay. Other governments have adopted a wide range of responses.
Most have been tackling the problem for several years - in some instances, a decade or more. A great
deal of leg work has been done.
Sometimes, the government spends a long time looking into a problem without acting. Road rules are
usually revised only after lives are lost in tragic circumstances. But we know that drug-driving is a
problem. Work on redrafting the laws has to begin now.
Time for Malaysia to unite, not fight
Church burnings, religious slurs and demonstrations over who has the right to the word Allah are tell-
tale signs of Muslim extremism. They are not what we expect of Malaysia, a nation with a tradition of
Islamic moderation, and ethnic and religious tolerance. Yet such incidents are increasingly frequent,
spurred by leaders using Islamist nationalism to woo voters. If decades of stability and growth are to
continue, the authorities need to curb these excesses and ensure a return to unity.
Prime Minister Najib Razak is trying to stimulate the economy by luring foreign investors, and the
slogan "One Malaysia" is being used to attract tourists. Neither campaign is working as it should; the
violence has sparked worries at home and abroad. Investment and tourism require a stable political
and social environment. The pigs' heads placed outside mosques in Kuala Lumpur yesterday and the
attacks on churches, a Catholic school, a Sikh temple and Muslim places of prayer point to spreading
unrest.
The attacks began after a court on December 31 overturned a government ban on the use of the word
Allah by Christians. Like Arab Christians and Jews, Malaysia's Malay-speaking indigenous Christian
communities use the term when referring to God. But only in Malaysia has the matter become one of
religious ownership. The National Front coalition government, headed by a Malay nationalist party, is
using it to bolster declining Malay Muslim support.
Such policies have worked in the past, but in an era of Muslim radicalism they can be dangerous.
Landslide election losses in 2008 in favour of opposition parties headed by former deputy prime
minister Anwar Ibrahim were telling; his campaigning was based on uniting the majority Malay and
Chinese, Indian and ethnic communities. Malaysians are, after all, interested less in Muslim
nationalism than an end to the recession, improving their lot financially and ridding the nation of
corruption. Using the religion card will stir discontent and open divisions rather than win widespread
support.
Malaysia's secular character has to be maintained. Otherwise, radical Islam could harm the nation and
its relations with neighbouring countries. Government challenges to the court's ruling have to be
dropped. Now, Najib and other top-level officials must direct their efforts to unifying the country and
not allowing it to be torn apart.
Piracy role sets Beijing on course to build

trust
Sometimes the best way of getting to know any nation - and building trust with it - is to work closely
with its people. That is one reason militaries hold joint exercises with allies and even adversaries.
Even better when they are deployed on actual missions together.
So China's taking of a central role in anti-piracy efforts off Somalia can therefore be seen only in the
most positive of lights. Beijing has agreed to take turns chairing meetings of the international naval
task force set up to protect shipping from the pirates. The deal means the nation will now help patrol
the busy corridor through the Gulf of Aden.
As China rises, it needs to take a bigger role in ensuring global peace and stability; participation in
such important efforts is an excellent step towards that goal.
Beijing had for months been lobbying to chair the Bahrain-based co-ordinating group Shade. With so
much China-bound Middle East oil and import and export traffic passing through the gulf, having a say
in co-ordination is sensible. But protection of interests is just one facet of taking on the responsibility.
As importantly, the nation gets to show its worth as a global player, and interaction means greater
knowledge and understanding on all sides.
About 40 navies are involved in the operation. Shade brings together those of China, the European
Union, Nato and a US-led grouping known as the Combined Maritime Forces. Three Chinese naval
vessels were sent to the region last year, but their patrol and escort duties have been confined to
waters around and leading to the main shipping route through the gulf. Under the chairmanship deal,
more warships will be needed so that a sector of the most vulnerable part of the corridor can be
protected.
The expansion and modernisation of China's military, while a completely reasonable exercise, raises
concerns among neighbours and rivals.
China, as any other nation, has the right to protect its interests on land and sea, yet the deployment of
naval ships to the Indian Ocean to escort Chinese-flagged vessels was viewed with alarm by some
governments; they are worried about the nation's growth as a maritime power.
Widening and expanding the battle against piracy will help ease those concerns. Trust will be built as
escorts are given for vessels other than those that are Chinese. Joint naval exercises will develop co-
operation. Administering operations will improve communication.
There is every reason why China should send more warships. Nations are struggling to curb the
attacks. A stepped-up naval presence in the gulf has made the pirates only more brazen and
ambitious. They are now targeting ships as far as 1,000 nautical miles from their bases; the vastness
of the Indian Ocean means a dramatically bigger presence is needed.
The problem will not go away any time soon. Somalia is a lawless and largely ungoverned country.
Piracy has become the biggest source of income for its people. Until the government is able to do its
job - a years-off prospect in the present circumstances - the seas off its coastline will remain unsafe.
So, for many reasons, China increasing its profile in the fight has to be welcomed. Other nations have
realised the importance of its contribution, and this exercise can serve as a model for Beijing's
participation in other international operations.
We need Obama and we need to work

together
In these tough economic times, few leaders can claim to have an easy job. US President Barack
Obama undoubtedly has one of the hardest of all: as head of the richest and most powerful nation, the
world expects him to help solve all its problems. His first state-of-the-union address plainly showed the
challenges and what he is up against. As he rightly pointed out, though, it is in nobody's interests that
he fails.
Obama took office just over a year ago with optimism high that the catchword of change with which he
won election could be translated into action. His to-do list was daunting and his reform agenda
ambitious. But despite his Democratic Party having a strong majority in both houses of Congress, his
efforts have been littered with defeats. He still has an in-tray from hell: a crippling budget deficit, 10
per cent unemployment, a constituency deeply divided on bailing out the corporate titans, wars in
Afghanistan and Iraq and controversial economic stimulus and health care packages.
Whatever the expectations, no leader could emerge a year later with his popularity intact. Obama's
has been hit hard, most spectacularly by the opposition Republican Party in this month's election for
what had been the safest of Senate seats in the state of Massachusetts. The president took to the
stage with this firmly in mind, telling heckling Republican lawmakers that the only way the nation could
pull out of the mess was by all sides working together. He urged them to be loyal to the American
spirit of not giving up and told them "not [to] allow fear or division to break our spirit".
We have grown used to Obama's oratorical skills. His address was engaging and free-flowing,
focused on difficult domestic matters but with a smattering of foreign-policy wishes and promises
towards the end. He sparred good-naturedly with his political rivals, but the overall tone was serious -
as it should be.
The US faces grave problems and in consequence, so does the global economy. It is essential that
political divisions are overcome. No matter what we may think of Obama, his call for setting aside
differences makes perfect sense. This is the way to recovery.
Root of the problem

Community discontent is unlikely to ease until the cause is addressed. But the perceived root of social
injustice in Hong Kong - the functional constituency election system - is now so deeply entrenched
that it has become an immovable object. Do functional constituencies really lie at the heart of the
problem? Yes, because they are the face of special-interest pleading in this community. Half the
legislature is comprised of functional constituency representatives. Their utterances and voting
records are there to remind the people of this city what they stand for.
Moreover, many functional seats are returned by corporate voting, which means the people who
control companies in certain business sectors - such as property development and construction
companies, banks, insurance companies and stockbroking firms - enjoy the constitutionally backed
privilege of having their own representatives speaking for their interests in the legislature. Essentially,
the same system is used to elect members of the Election Committee that selects the chief executive.
In the case of the recent express-rail funding vote, the public saw functional constituency legislators
as providing the backbone of the voting bloc that got it passed. Functional constituency
representatives are often labelled "pro-government" - except when they vote against policies they see
as threatening their own sector's interests. Thus, functional constituencies are seen as putting
corporate interests first, then voting with the government if there is no direct conflict. They are often
described as "conservative" because they back the status quo.
The Basic Law was designed to preserve the status quo of the 1980s, where the major economic
interests of the day were given functional representation in the legislature and in selecting the chief
executive. So the same interests continue to dominate the political landscape today. Indeed, the main
obstacle in political reform is deciding what to do with functional constituencies as Hong Kong inches
slowly towards greater direct representation.
Beijing is reluctant to get rid of functional voting because it knows very well that it is far easier to
control commercially oriented interest groups than influence millions of voters. There is also a belief
that the economic elites who control major companies and conglomerates are the major force in the
economy and need to be kept engaged in politics to ensure stability. In the current round of
consultation on the government's proposed reform package, it may prove impossible to eliminate
corporate voting, let alone to agree on a timetable to phase it out.
In the eyes of not only the 1980s generation, but the public at large, the functional constituencies and
what they represent lie at the centre of social injustice because they are seen to be staunch
supporters of the status quo. In turn, many functional representatives and economic elites see those
who want reform as radicals who would wreak havoc on the economy and ruin relations with Beijing if
they came to power.
One school of thought is not to focus on the undesirability of the functional constituencies but to do
whatever it takes to get the chief executive directly elected in 2017, even if it means preserving the
functional seats intact, and even if there is a nomination system that ensures no candidate would get
through whom Beijing didn't want. Having a public vote would mean candidates could not put vested
interests ahead of the public interest.
Knowing that Beijing is the ultimate decision maker in electoral reform, it is not inconceivable that
there would still be much bargaining behind closed doors during the nomination period and perhaps
even among candidates. Some may be offered consolations to lose gracefully.
This is all conjecture, of course. But, if such a course was chosen, it would be mightily difficult to
soothe public outrage. How would the government and its supporters justify keeping functional
constituencies essentially unchanged for another decade or more? Improved "consultation" would not
help much.
Christine Loh Kung-wai is chief executive of the think-tank Civic Exchange. cloh@civic-
exchange.org
Losers all round

A lack of common sense on all sides means no winners will emerge from the by-elections
fiasco
Stephen Vines
It is almost unknown for a political crisis to leave all those involved worse off than before it began.
Generally what happens is that someone emerges as a winner, while others are relegated to loser
status. But this is most unlikely to happen in Hong Kong as a result of the resignation of five
legislators, the impasse over constitutional reform and growing civil discontent.
The League of Social Democrats and the Civic Party were motivated to launch the referendum
strategy out of sheer exasperation with the snail's pace of constitutional reform. Their logic was to
force a referendum by holding by-elections in all the geographical constituencies to give the public an
opportunity to express their views on democracy. Because they acted in a state of exasperation, they
failed to appreciate the insurmountable difficulties of creating a referendum in conditions where they
had no control over the rules of the game and no hope that their opponents would passively go along
with the plan.
This strategy has split the democratic camp and produced acute tensions within the Democratic Party,
which decided not to support the referendum plan. It is therefore highly likely that the result will prove
to be a setback for the democratic movement.
But, on the other side of the fence, the anti-democrats have acted with equal haste and stupidity.
Instead of cleverly using the by-elections to increase their presence in the legislature, they have
allowed the mask to drop from the pretence of favouring democratic reform, albeit at a pace dictated
by Beijing.
They really want no reform and no opportunity for open debate, to the extent of walking out of the
Legislative Council to prevent those resigning from making a statement. Some are trying to block
funding for the elections while others have gone so far as to initiate legislation that would ban resigned
legislators from ever re-entering the chamber; a ban that does not even extend to convicted criminals
who have been readmitted on release from prison.
Moreover, the anti-democrats have laid bare to whom they are accountable. A couple of brisk phone
calls from Chinese officials was all it took for the Liberal Party to abandon its categorical pledge to
contest these by-elections. The infinitely smarter and better organised Democratic Alliance for the
Betterment and Progress of Hong Kong is likely to follow suit, under pressure from Beijing, even
though the party stood every chance of doing very well in the by-elections.
Instead, it is likely to demonstrate that, when it comes to a choice between putting its case to the
people or taking orders from the mainland, it will tremble and obey.
It might be imagined that, in these circumstances, the Hong Kong government would be sitting back
reaping the reward from the malaise among the political parties. Any bureaucrat who thinks this way is
seriously deluded because what this whole farrago demonstrates is their growing irrelevance in the
political process. Even their so-called allies go directly to Beijing without even pausing for a pit stop at
the Central Government Offices.
The democrats, meanwhile, did not even bother to go there on January 1 for the pro-democracy
mobilisation but went straight to the central government's liaison office.
While seemingly unaware of their impotence, officials have employed a worrying level of hysterical
rhetoric in this matter, throwing around charges of revolution and threats to civil order, and thus
placing a question mark over their judgment.
The net result of all this is to steer Hong Kong into uncharted waters, where both the government and
the established political parties are weakened as a vacuum emerges.
It may be argued that this vacuum will simply be filled by the government in Beijing. If this is so, we
can say goodbye to the concept of "one country, two systems".
Another possibility is that new political forces will emerge to fill the void; however, it is hardly axiomatic
that something new will be something better.
Shrewd political operators know never to get into a situation where the way out is not evident.
The fact that this piece of common sense has been ignored in Hong Kong may have something to do
with the immaturity of the political system.
Safety of our homes and offices must be

assured
Updated on Feb 02, 2010
When a building collapses in as spectacular and tragic a fashion as did the five-storey block of flats in
To Kwa Wan, outrage is to be expected. Our city is wealthy and not short of the resources to ensure
that high safety standards are maintained. Yet for thousands of buildings across Hong Kong,
inspections have been considered too difficult to carry out and repair orders allowed to be ignored.
There is no more damning proof of the consequences than the pile of rubble and broken lives. Our
government was well aware of the problem. For years it had been talking about legislation that would
force owners to take care of their flats and buildings. Complaints about the cost and inconvenience
made the process drag on. It is ironic that just days before lawmakers were to take up the matter,
Block J of 45 Ma Tau Wai Road crashed down, killing four people and making dozens homeless.
We can only be perplexed as to why authorities deemed inspections too hard. As happens so often
when tragedy strikes in our city, they have sprung into action with orders and promises. A total of 40
teams of surveyors and inspectors are now urgently checking the 4,000 or so buildings 50 years and
older that may also be a risk to life and limb. Why such work is possible now, but was not last week
prompts not applause, but questions.
The pattern is familiar for anyone with even a passing interest in government affairs. Pressure from
influential interest groups too often ensures laws that would keep us safe are ignored, delayed or left
to languish. Only when tragedy or a disaster strikes do officials respond with conviction. A string of
fatal fires and accidents involving minibuses and drink-drivers come readily to mind.
Then there are the cases where people have been killed or injured by a lack of enforcement of the
rules. A handful and more of government sections are responsible for maintaining trees, yet a young
woman still died in 2008 when a branch of one inspected just days before fell on her. The limb had
rotted and was an accident waiting to happen. Authorities over-reacted by putting responsibility in the
hands of a co-ordinating committee under the Chief Secretary's Office. Action where there was none
or little before is human nature after a tragedy. Regardless, though, the government's coffers are flush
with ready funding. We have a civil service that is well staffed and well paid. If inspections of buildings
were deemed too difficult to carry out before, one has to wonder what the government sees as its role
in serving and helping its citizens.
In the face of tragedy, the law legislators are looking at will go a long way to correcting what has been
ignored. Owners of buildings 30 or more years old will be required to carry out inspections and if
necessary, repairs, once every 10 years. The enforcement regime will be toughened, as will penalties
for infringements. Putting the law in place could take 18 months; in light of the collapse in To Kwa
Wan, this has to be speeded up.
We do not know why the block of flats collapsed. It is obvious that it was not structurally sound.
Whatever the eventual findings, though, it is quite shocking that a building can fall down in such a way
in a developed city such as ours. As belated as it may be, it is time for the government to make
amends to ensure that all our homes and offices are safe to live and work in.
Yin-yang contracts must be stamped out

The disclosure of fraudulent conduct often foreshadows the bursting of an asset bubble. If so, the
revelation of widespread dodgy property transactions on the mainland designed to cheat the taxman
may be a signal of worse news to come. So-called "yin-yang" contracts are a common but illegal
practice to avoid paying taxes. Officials have long known about it, apparently, but have done little for
fear of upsetting shaky market sentiment during the financial crisis. They may soon have to pay a
much higher price for not cracking down on the practice.
In such a scam, a flat buyer and a seller agree to sign an under-the-table contract, which states the
true value of their transaction. But they also produce another contract that understates the value for
official registration. In doing so, the seller avoids paying the full capital gains levy, which is counted as
part of personal income tax. The buyer has an incentive to go along because, on the mainland, most
or all the costs of a property transaction are offloaded onto buyers, including the seller's tax from any
capital gain.
How widespread is the illegal practice? The scale of the problem may be gleaned from the wide
discrepancies between official and unofficial estimates of price rises in major cities. Last month, a
report released by Beijing estimated home prices in 70 cities rose just 7.8 per cent year on year in
December. However, large property agencies with nationwide coverage believe price rises were
closer to 60 or even 70 per cent last year, the result of tight supply and massive liquidity from Beijing's
stimulus programmes. Even people who take only a cursory interest in the mainland property market
would know the agents' estimates were much closer to the mark. Indeed, officials must know it, too.
What else would account for the recent introduction of anti-bubble measures to rein in property
speculation and cool an overheating market if prices rise less than a paltry 8 per cent?
The prevalence of "yin-yang" property transactions has created many problems, such as frequent
disputes between sellers and buyers. More seriously, it distorts property prices and creates a potential
black market.
Transaction prices become fictitious, and buyers cannot consult reliable official records to determine
the fair value of a property. When "real" prices become what sellers and agents pull out of a hat, the
conditions are ripe for a speculative market in which people no longer care about fair value, but only
for offloading property onto "greater fools".
To be sure, tougher monitoring guidelines have been introduced in many major cities. For example,
officials are supposed to investigate when a recorded transaction price is more than 15 per cent below
market rates. But enforcement has been uneven and sometimes lax. Many local governments have an
incentive to keep up market sentiment to fetch higher prices in official land auctions. By cracking
down, they may collect more taxes individually but less in total if transaction volumes fall.
The problem for Beijing is that a property market collapse would pose a serious threat to the nascent
economic recovery, yet allowing a bigger bubble to brew will create an even greater danger. However,
tolerating price distortions and illegal practices not only makes a mockery of the law; enforcement
becomes even more difficult down the road.
Officials must act to stamp out already rampant yin-yang contracts before they go truly out of control.
Constructive approach required on Sino-US

ties
Relations between China and the United States seem to perpetually see-saw - one moment looking
up, the next deteriorating. So far, under Barack Obama's presidency, they have been on a downward
spiral, and warnings from Beijing now threaten to push them to worrying lows. It is not in either
nation's interests that bilateral ties are unstable; their economies are interconnected to the point that
they need one another.
As importantly, resolution of some of the world's most vexing challenges depends on understanding
and co-operation between the two sides.
These realities have been lost in the heat of power play. China's rise has meant a corresponding
increase in suspicion and rivalry. Obama's election pledge of change offered hope, but since
September, when he imposed a tariff on Chinese-made tyres, this has evaporated. Trade and claims
of currency manipulation have long dogged ties, but they have now been joined by a welter of fresh
complications.
Relations went from cool to frosty this week with the release of a US defence white paper perceiving
China to be a potential threat. Beijing warned of unspecified consequences if an anticipated meeting
between the American president and Tibet's spiritual leader, the Dalai Lama, went ahead as
promised, most probably in coming weeks. The developments came a week after Washington
announced sales of missiles and helicopters to Taiwan - not a surprise, but guaranteed to earn
Beijing's ire.
The response was prompt and resolute: military co-operation at all levels has been put on hold.
American firms connected to the weapons deal could lose contracts. But the implications go well
beyond the bilateral relationship. Animosity extends to allies and impinges on issues of common
interest.
Obama - and the world - need China's pressure to end nuclear proliferation by North Korea and Iran.
Both nations are allies of Beijing; its economic influence is an invaluable weapon. China has the
power of veto at the UN Security Council, giving it the means of blocking sanctions. US-led efforts to
rid the North of atomic weapons and prevent Iran from making them could well rest in the hands of the
Chinese leadership.
A meaningful pact on climate change also depends on China's co-operation. The world is divided on
what tack to take, with Beijing and Washington leading the two camps. Yet another issue is testing
ties. The US internet company Google's threat to quit China after claimed cyber attacks has prompted
a fresh volley of criticism about spying and a lack of free speech. US Secretary of State Hillary
Rodham Clinton's call for Beijing's thorough investigation and an end to internet censorship has
inevitably led to claims of interference in domestic matters.
Diplomatic spats are nothing new for the sides. Trade rows are a feature of the relationship. The
mainland's human rights record has always been troubling for the US. What has changed, though, is
the growing importance of China to resolving regional and global problems.
Obama's state-of-the-union speech last week centred on reaching out to opposition politicians to
ensure that his domestic agenda could be met. The same approach should be adopted towards
China. Constructive engagement is the only way forward - for both sides.
Right balance vital to safeguard our children

Striking a balance between protection of children and the rights of sex offenders who have paid their
debt to society can be a difficult task. Yet Hong Kong's current system provides hardly any safeguards
to shield children from sexual predators in child-related occupations. The Law Reform Commission
makes the point that societies which have introduced comprehensive defensive mechanisms would
find this unthinkable. It is hard to argue with the commission's view that Hong Kong children - and their
parents - are entitled to at least a minimum level of protection.
This is what the commission has set out to achieve in proposals for interim safeguards that can be
introduced quickly. They follow concerns raised in the courts and the wider community about cases
involving sex offences against children by people appointed to positions of trust who had previous
convictions for similar crimes. The government and the chief justice asked the commission to consider
the need for a sex offenders' register to help screen applicants for jobs that involve working with
children.
The commission's response, which follows a public consultation, may seem tame compared with the
approach adopted in some overseas jurisdictions. However, it does address a huge gap in safeguards
for our children. At present, the law allows criminal record checks - and refusal of employment or
registration in the event of a previous conviction - only for registered school managers and teachers,
social workers and childcare workers.
That leaves a wide range of people who have close contact with children in their work who cannot be
checked, and whose word that they have no criminal record must be taken on trust. They include, for
example, laboratory and computer technicians, school support staff, tutors, music teachers, sports
coaches, staff in children's wards, and volunteer workers at youth centres and religious and other
organisations. Recent disturbing cases of sexual abuse by people in positions of trust include a private
music teacher, a tutorial school teacher and a school technician, all with previous offences.
The commission proposes that employers should be able to have checks made on these people for
convictions for a specified list of sexual offences. But, to safeguard the human rights and privacy of
applicants and their families, they must be initiated by the prospective employee, who must consent to
results being disclosed. This measure could be introduced quickly without the need for legislation. It
represents a measure of protection for the community where there is presently none. The government
should consider adopting it swiftly, while a commission sub-committee considers the need for a law to
force disclosure of sexual offences records.
Some respondents to the consultation argued that only mandatory checks could ensure the safety of
children, otherwise employers would be tempted by convenience to dispense with checks. Their
concerns should not be dismissed. A mandatory scheme would require legislation. But lawmakers
would be more likely to give it calm and rational consideration with experience of the voluntary
approach. The commission is right to reject a public register of sex offenders along the lines of those
found in some American states. Experience elsewhere has shown that public disclosure could
jeopardise their rights. Striking the right balance between rehabilitation and preventing reoffending is a
delicate issue with paedophiles. The proposals make a start on finding it, and equally importantly, give
our children more protection.
Right balance vital to safeguard our children

Striking a balance between protection of children and the rights of sex offenders who have paid their
debt to society can be a difficult task. Yet Hong Kong's current system provides hardly any safeguards
to shield children from sexual predators in child-related occupations. The Law Reform Commission
makes the point that societies which have introduced comprehensive defensive mechanisms would
find this unthinkable. It is hard to argue with the commission's view that Hong Kong children - and their
parents - are entitled to at least a minimum level of protection.
This is what the commission has set out to achieve in proposals for interim safeguards that can be
introduced quickly. They follow concerns raised in the courts and the wider community about cases
involving sex offences against children by people appointed to positions of trust who had previous
convictions for similar crimes. The government and the chief justice asked the commission to consider
the need for a sex offenders' register to help screen applicants for jobs that involve working with
children.
The commission's response, which follows a public consultation, may seem tame compared with the
approach adopted in some overseas jurisdictions. However, it does address a huge gap in safeguards
for our children. At present, the law allows criminal record checks - and refusal of employment or
registration in the event of a previous conviction - only for registered school managers and teachers,
social workers and childcare workers.
That leaves a wide range of people who have close contact with children in their work who cannot be
checked, and whose word that they have no criminal record must be taken on trust. They include, for
example, laboratory and computer technicians, school support staff, tutors, music teachers, sports
coaches, staff in children's wards, and volunteer workers at youth centres and religious and other
organisations. Recent disturbing cases of sexual abuse by people in positions of trust include a private
music teacher, a tutorial school teacher and a school technician, all with previous offences.
The commission proposes that employers should be able to have checks made on these people for
convictions for a specified list of sexual offences. But, to safeguard the human rights and privacy of
applicants and their families, they must be initiated by the prospective employee, who must consent to
results being disclosed. This measure could be introduced quickly without the need for legislation. It
represents a measure of protection for the community where there is presently none. The government
should consider adopting it swiftly, while a commission sub-committee considers the need for a law to
force disclosure of sexual offences records.
Some respondents to the consultation argued that only mandatory checks could ensure the safety of
children, otherwise employers would be tempted by convenience to dispense with checks. Their
concerns should not be dismissed. A mandatory scheme would require legislation. But lawmakers
would be more likely to give it calm and rational consideration with experience of the voluntary
approach. The commission is right to reject a public register of sex offenders along the lines of those
found in some American states. Experience elsewhere has shown that public disclosure could
jeopardise their rights. Striking the right balance between rehabilitation and preventing reoffending is a
delicate issue with paedophiles. The proposals make a start on finding it, and equally importantly, give
our children more protection.
Putting a brave face on a dysfunctional system

It was famously said long ago, and repeated often since, that democracy is the worst form of
government - except for all the others that have been tried. Hong Kong's experience of government by
consensus rather than by the democratically expressed will of the majority through universal suffrage
raises no argument with that. Indeed, in an exclusive interview with the South China Morning Post
reported today, Chief Executive Donald Tsang Yam-kuen defends his government against criticism of
inaction by referring time and again to the need for consensus.
From the drawn-out introduction of the plastic bag levy, to the stalled ban on idling engines, to the lack
of proper safety inspections of decrepit buildings, to the pressing need for reform of health care
financing, Tsang cites consensus as a precondition for effective governance. Speed in getting things
done should not be confused with quality of governance, he insists. Rather, the process of good
government is necessarily slow.
That is putting a brave face on the political dysfunction that arises from the lack of a popular mandate
to govern, and a political system that allows interest groups to stall legislation. Ironically, in that
respect, Tsang does have a point about reconciling divergent views. That is the need to reach
consensus on political reform for the 2012 elections. They are, after all, supposed to pave the way for
universal suffrage for the chief executive election in 2017 and the Legislative Council elections in
2020, as permitted by the central government.
It will not be easy. The government's modest proposals for changes for 2012 have led to demands
from the pro-democracy camp for a road map to universal suffrage that addresses the future of
functional constituencies and corporate voting.
In the interview, Tsang declined to express his personal views on functional constituencies, although
the government has already conceded that, in their present form, they are not compatible with
universal and equal suffrage. He observed, rightly enough, that if he says functional constituencies
might be retained, the pan-Democrats will be up in arms, and if he says they must be scrapped the
other side will be fuming. While we would prefer the government to be bolder in setting out a vision for
2012, we can sympathise with his position. For him to express a personal opinion might not help reach
a consensus on reform - just when that is needed if we are to achieve universal suffrage according to
the timetable laid out.
But Tsang also declined to take a position on whether he would vote in by-elections prompted by the
resignation of five pan-democrat lawmakers, because they had been "engineered" as a so-called
referendum on democracy. We do not yet know if anyone will stand against them. In any case, the
vote is secret. We think the chief executive should set an example and fulfil his civic duty to vote.
The resignation plan is a needless distraction from the important business of striking a deal on
democratic reform for 2012 that improves on the government's proposals. We do not need a vote to
confirm that Hong Kong people want democracy.
If the by-elections go ahead they should be treated as such and no more. They do not amount to a
referendum. They will return five lawmakers to Legco. Legislators have great responsibilities that go
beyond the issue of democratic reform. Voting in elections is a rare and precious right. When
opportunities do arise to use our vote, we should do so - no matter whom we decide to vote for. If the
by-elections go ahead, everyone should turn out to register their preference, and Tsang should show
the way by casting the first vote.
New Year home-going can be a stressful time

Progress, for all its implied virtue, can come at a price - loss of heritage, traditions and old values
among them. This strengthens people's attachment to those core traditions that do withstand change,
such as home-going and family reunions during the Lunar New Year. But even that is now being
tested by progress; in this case, by China's remarkable growth and movement of people to the cities.
"Home is where the heart is" remains a truism the world over. Those who leave home tend to return or
visit sooner or later. What sets China apart from most countries is that families reunite at the same
time every year; more than 200 million people will travel the mainland by train during the holiday
period.
This is a religiously observed tradition not to be taken lightly - as evidenced by the reaction of China's
top leaders two years ago, when the worst snowstorms for half a century paralysed the national rail
network as the holiday began. Premier Wen Jiabao will be remembered for his personal appearances
to lift the spirits of huge crowds of stranded home-goers. Yet, for an increasing number of migrant
workers in Guangdong and other coastal provinces, the question this Lunar New Year is whether to go
home or stay put.
Mainlanders have even coined a name for it - kongguizhu, or "home-going phobia". It is attributed to
rising costs, economic difficulties, the ordeal of the long return journey on a stressed rail system - and
the prospect of family pressures to marry and settle down when they finally do arrive home. Long
absences only serve to sharpen pent-up parental expectations.
While family reunions remain a core value of Chinese society, the reality is that most workers in the
coastal area are from a new generation that is less bound by traditional culture. That is partly the price
of urbanisation - or progress. Fortunately, however, the more things change the more they can stay
the same. As the new generation puts down family roots in the cities, it may recommit itself to
traditional values, to bring cultural nourishment to city life. Then their offspring may not have so far to
go for reunions.
World of opportunity
China's new status as the leader in exports reflects the virtues of global trade
Daniel Ikenson and Alec van Gelder
To protectionists and Sinophobes, China overtaking Germany last year to become the world's largest
exporter heralds a new, unwelcome global order. But, more than a reflection of China's growing
economic might, it is testament to the erosion of economic, political, physical and technological
barriers to production.
China's success is because of multilateral trade with the rest of the world, despite what the anti-China
lobbies in Brussels, New Delhi and Washington argue. So, when US President Barack Obama and
lawmakers complain about China, they forget that Chinese exports include American exports.
Beginning with widespread liberalisation of trade and investment rules after the second world war,
barriers have been falling and incomes rising around the world.
China's opening to the West in 1978; the fall of the Berlin Wall in 1989 and of the Soviet Union two
years later; the collapse of communism as a model for developing countries; the advent and
proliferation of containerised shipping; GPS technology; just-in-time supply; and other marvels of the
information, transport and communications revolutions have spawned a global division of labour and
production that defies traditional analysis. This makes trade-flow accounting highly misleading.
Global economics is no longer a competition between "us and them", between "our" producers and
"their" producers. Instead, because of cross-border investment and transnational production and
supply chains, the factory has broken down its walls and now spans borders and oceans. Competition
is often between international brands or production and supply chains that defy national identity.
So, what does all of this have to do with China's status as the world's biggest exporter? Like Hong
Kong, which blazed the way for living off international trade, the vast majority of mainland Chinese
exports are hugely dependent on imports from the rest of the world: iron ore from Australia; microchips
from Taiwan, South Korea or Singapore; software from teams in Redmond (Washington State) and
Bangalore; new designs from Cambridge (Massachusetts or England) and Toulouse; investments
raised from consortiums based in New York City, Sao Paulo or Johannesburg.
China has become the world's largest exporter primarily because of the global division of labour that
has helped reduce poverty and create wealth: China provides lower-value-added production. The
components of Apple's iPods and iPhones are put together in China, but their designers in California
are worth more to the company's bottom line. Denmark's Ecco has shoe factories across Asia, but
their most valuable footwear is still designed and manufactured in Europe, where the quality is
guaranteed and the workforce is highly trained - and higher paid.
China has not become a key figure in global trade by accident. It has capitalised on the new reality of
global production and supply chains: since 1983, it has unilaterally removed barriers to trade, realising
they were primarily harming China. True, China's trade policies remain far from perfect. But they have
liberalised quickly and considerably, which helps explain China's prominent role in global production
and supply.
Calculating who earns the biggest amount from exports remains a problem. Intermediate goods are
shipped to mainland China from places such as Japan, Taiwan, Singapore, Australia and the US,
snapped together (or perhaps a slightly higher value-added operation), then exported.
As those goods leave the ports of Shanghai, Tianjin or Guangdong for export, simple trade-accounting
rules attribute the total value of those exports to China, even when the Chinese value embedded in
those goods accounts for a small fraction.
That accounting method helps explain why China's exports have surged over the decades, as the
division of labour evolved and manufacturing chains proliferated.
A recent study by economists at the University of California concludes that the Chinese value-added
embedded in a 30 gigabyte Apple iPod accounts for only US$4 of the total US$150 cost, yet the entire
US$150 is chalked up as a Chinese export.
Other studies estimate overall Chinese value-added in all products exported from China to average
somewhere between 35 and 50 per cent, a big proportion but a lot less than gross export figures
imply.
Indeed, "if China grows, this pushes the world's economy - and that's good for export-oriented
Germany as well", Volker Treier, a German Chamber of Industry and Commerce economist, said
recently.
As we consider China's new status as global export leader, it is important to understand what it
means. This data speaks much more convincingly of the virtues of economic interdependence than of
China's standalone export prowess: it presents opportunities for everyone to join the global economy.
Daniel Ikenson is associate director of the Cato Institute's Centre for Trade Policy Studies and
author of No Longer Us vs. Them. Alec van Gelder is a project director at International Policy
Network
Every student must be provided internet

access
Every child should have an equal opportunity in life. In an internet-driven age, an important part of this
means having sufficient computer and broadband access. Poverty means that this is not the case for
thousands of Hong Kong students. The government should make amends in the upcoming budget.
Teachers increasingly rely on the internet for homework, providing information and communication.
Students without access from home are at a disadvantage. Their only way to meet their obligations is
through the help of friends or by using the limited-time resources at school, in public libraries or
provided free in places such as shopping malls. Since screen-based work often takes several hours a
day, assignments are invariably rushed, inadequately researched and, in some instances, incomplete
or not handed in.
Second-hand computers are readily available for minimal or no cost through community projects. But
broadband does not come so easily; private telecommunications companies provide home
connections and service, and they are not charities. Their fees are negligible to most of us but out of
reach for about 12,560 primary and secondary school students whose parents cannot afford them.
The inequality of internet access means a considerable number of children are unnecessarily falling
behind their peers at school. That they are from the poorest part of society is lamentable. All students
should have a chance to excel no matter what their background. They must have equal access to the
tools to thrive and grow academically. Most jobs are advertised on the internet and many applications
have to be made online using an e-mail address.
Ensuring home broadband access would not be financially debilitating for the government. Whichever
way it is attained - a voucher system, subsidy or as part of welfare - there must be enough financial
support for upkeep and long-term running costs. Education is essential to our city's future and to
nurturing our best resource: people. Internet access is part of education today, and it, like schooling,
should be available to all students.
US bankers don't seem to have any shame

The credit meltdown in America has often been compared to the earlier savings and loan scandal. The
comparison is inexact, but the contrast may be more revealing. Take, for example, the number of
bankers jailed in the previous saga and the dearth of any in the latest crisis. More than 1,000 savings
and loans officials were put behind bars between 1990 and 1995 for offences stemming directly from
the debacle; hundreds more were jailed for related crimes.
Contrast that with the financial crisis, now more than 2-1/2 years old, and the wheels of US justice
seem to be grinding excruciatingly slowly. The latest civil fraud charges, brought against Bank of
America's former chief executive Ken Lewis and ex-chief finance officer Joe Price, will not result in jail
sentences even if proved. They are noteworthy not only because of the men's seniority but because
there have been so few of them. The two bankers are accused of misleading shareholders in 2008
about Merrill Lynch's losses and duping the federal government to secure US$20 billion in public
funds, in order to cement the takeover.
We make no presumptions about their guilt or innocence. Both men, through their lawyers, have
dismissed as baseless the allegations made by the New York attorney general. But looking at the
larger financial landscape it is hard not to expect, in a crisis of such magnitude, that more top bankers
will end their careers in legal trouble. Yet that does not seem to be the case at the moment.
To be sure, it may still be early in the day and more charges may result from dozens of official
investigations that have been launched targeting Lehman Brothers, American Insurance Group,
Freddie Mac, Fannie Mae, Washington Mutual and the like, not to mention lawsuits launched by
individual investors.
In the recent downturn, Wall Street's recklessness and irresponsibility seems even greater than during
the S&L crisis; and the scale of wealth destruction and loss of public trust is incomparably greater this
time. What is different is the level of financial sophistication. The finances involved in the S&L saga
were plain vanilla compared to the fiendish complexity of the derivative instruments devised during the
recent credit bubble years.
Virtually all the key players in the industry were involved in this kind of "financial innovation", which
has proved toxic. However, few prosecutors and regulators have the expertise to untangle these
instruments, many of which were built to bypass legal restrictions without actually breaching the law.
When the dust has settled it is likely that the most these clever bankers will be found guilty of is a lack
of moral responsibility. Some may be fined but few are likely to go to jail.
In retrospect the S&L mess was easier to clean up, and the credibility of the financial system was
restored relatively quickly. This was partly because public anger was appeased after so many finance
officials were found guilty and seriously punished. Not so this time. Instead of bankers being put in the
dock we see so many of them have already gone back to their old ways, being paid million-dollar
bonuses as if nothing had happened. Many are fighting government attempts at financial reform. No
wonder so many American voters are irate and taking their anger out on their government for bailing
out the banks. A cleansing ritual, such as seeing those with a direct hand in causing the crisis
punished, is unlikely to happen this time. As a result, bankers may long be despised and their
profession mired in ill repute.
Incineration should no longer be a dirty word

Timothy Peirson-Smith
Hong Kong, like many cities worldwide, has a troubled historic relationship with incineration as a
waste management option. A 1989 white paper published by the government identified the
incineration of solid waste as a key contributor to air pollution and decided to cease the practice for
good, leading to the closure of the four local incineration plants between 1991 and 1997.
With this legacy and baggage, coupled with viable concerns over air pollution in a high-rise city, the
community understandably is hostile to the incineration concept. It was not until 2008 that incineration
re-emerged as the preferred approach but, after so many years of stigma, the government faces an
uphill struggle to get it accepted.
The situation today is different elsewhere. During an environmental tour to Japan last October,
arranged by several industry groups including the Hong Kong Waste Management Association, I was
astounded by the quality and extensive use of incineration technology for waste management.
Technology has advanced such that modern incineration constitutes a state-of-the-art, hi-tech, clean
and sustainable waste management solution, much different from the dirty, smelly, smoke-belching
incinerators of the 1990s.
Japanese companies are designing and building plants that incinerate waste at a much higher
temperature, with negligible levels of emitted pollutants, including dioxins.
Bearing in mind these dramatic advances, negative perceptions regarding incineration are no longer
as pertinent as they once were. In this context, the government is right to recognise incineration as a
key strategy in the fight to stave off an impending waste management crisis - as it has with recent
proposals for integrated waste management facilities. In terms of environmental sustainability, the
concept represents a welcome step away from the expansion of landfills as Hong Kong's sole waste
management strategy - one that has begun to display dangerous tendencies. The recently approved
expansion of the Southeast New Territories landfill into a section of Clear Water Bay Country Park, for
example, is a travesty.
When deciding the details of the integrated facilities, environmental and social sustainability must be
key. To be sustainable, incineration should satisfy three conditions. First, any plant built in Hong Kong
must be a "waste-to-energy" facility, whereby heat and/or electricity are supplied back to the
surrounding community either at a discount or free. Second, the facilities must be a community asset
with a recognised civic role. Third, the facilities need not be an industrial eyesore. In Japan,
incinerators are often architecturally outstanding contributions to the skyline.
All of Tokyo's non-recyclable waste has been incinerated since 1996. With limited space and a need
to protect our country parks, Hong Kong has a lot to learn. We must now further educate the public
and nurture their acceptance of incineration as a safe, sustainable and effective solution for non-
recyclable waste.
Habits must also be transformed to counteract the very "wet" nature of our waste, which makes the
process less efficient. Importantly, the public must be encouraged to recognise that incineration of
non-recyclable or residual waste - the fourth "R" - is only part of the solution, and embrace the "three
Rs" of "reduce", "reuse" and "recycle".
Some have argued for another "R" to be added: "responsibility". We are part of the problem, and we
are part of the solution. Through education, increased awareness and a willingness to follow the high
standards of nations such as Japan, the integrated waste management facilities could be just one
element of a truly sustainable waste management revolution.
Timothy J. Peirson-Smith is managing director of Executive Counsel Limited, a sustainability-
focused public affairs and strategic communication consultancy based in Hong Kong. He is
also chairman of the Business Policy Unit, British Chamber of Commerce, Hong Kong
A bitter blow for free speech on the mainland

A court in Chengdu has jailed mainland activist Tan Zuoren for five years for subversion of the state.
The elephant in the courtroom was the memory of more than 5,000 schoolchildren who died in the
Sichuan earthquake disaster.
Tan was not charged over the issue that aroused official hostility in Sichuan - his refusal to abandon
an investigation of the role of official corruption and incompetence in the collapse of shoddily built
schools. Ironically, he was charged in connection with another national tragedy - e-mailed comments
about the 20th anniversary of the June 4 crackdown in Tiananmen Square. Reference to this incident
is usually taboo. In this case it has served to maintain a local taboo on any discussion of why schools
collapsed as other buildings remained standing.
Tan's arrest derailed his plans to issue an independent report on the disproportionate damage to
schools. There is little doubt, as his lawyer, his wife, supporters and human rights campaigners are
convinced, that concern about what it might contain was the catalyst for his detention. Although his
investigation was not mentioned in court, the indictment before his trial in August last year said he had
seriously damaged the image of the Communist Party and the government in statements after the
quake. But so did the National Audit Office. Reporting last year that more than 50 ministries and
agencies were linked to the misappropriation of 30 billion yuan (HK$34 billion) in 2007, it said
embezzlement by rural officials of funds for school construction was rife, forcing schools to run on 55
per cent of their budgets.
The sensitivity of Sichuan officials to the prospect of having Tan identify their administration with such
greed in the aftermath of the quake is understandable. After all, top state leaders have often
acknowledged that official corruption is rampant, and nominated the eradication of it as a prerequisite
for maintaining the political legitimacy of Communist Party rule.
But just as China cannot truly move on from the shadow cast by June 4 until it confronts the issue, it
cannot bring closure to thousands of parents, many of whom lost an only child, until it gets to the
bottom of the "tofu" schools scandal and holds the responsible officials accountable for any
malpractice.
Instead, parents were offered compensation in return for keeping quiet, and campaigners, among
them Beijing artist and activist Ai Weiwei, pressured to drop the collection of data about children killed.
Tan's trial in August and the sentencing made a mockery of the accusation that he had damaged the
image of the party and the government with statements about the quake. The authorities and police
hurt it themselves by refusing to allow the defence to call witnesses or show supporting video
evidence, beating up Ai before he was due to appear as a witness, and barring the parents of quake
victims from court. At both the trial and sentencing, Hong Kong media representatives were physically
intimidated.
Tan's case is not to be compared with that of Liu Xiaobo, the dissident jailed for 11 years recently over
online essays calling for civil rights and multiparty elections, either in terms of the challenge to
authority or the international attention it will attract. But Ai is right to describe it as an even more
egregious example of the intolerance of free speech. It is a shabby postscript to the acclaim China
earned for the speed and scale of earthquake rescue and relief and the freedom it allowed the world
media to cover the disaster.
Striking back
Recent efforts to discredit the IPCC should not detract from its vital work on the science of
climate change
Achim Steiner
The science of climate change has been on the defensive in recent weeks, owing to an error that
dramatically overstated the rate at which the Himalayan glaciers could disappear. Some in the media,
and those who are sceptical about climate change, are having a field day, parsing every comma and
cough in the Intergovernmental Panel on Climate Change's (IPCC) 2007 assessment.
Some strident voices are even dismissing climate change as a hoax on a par with the Y2K computer
bug. As a result, the public has become increasingly bewildered as the unremitting questioning of the
IPCC and its chairman assumes almost witch-hunting proportions in some quarters.
The time has really come for a reality check. It is quite right to pinpoint errors, make corrections, and
check and recheck sources for accuracy and credibility. It is also right that the IPCC has
acknowledged the need for ever more stringent and transparent quality-control procedures to
minimise any such risks in future reports. But let us also put aside the myth that the science of climate
change is holed below the water line and is sinking fast on a sea of falsehoods.
Over the course of 22 years, the IPCC has drawn upon the expertise of thousands of the best
scientific minds, nominated by their own governments, to make sense of the complexity of unfolding
environmental events and their potential impacts on economies and societies. The panel has striven
to deliver the "perfect" product in terms of its mandate, scientific rigour, peer review and openness,
and has brought forward the knowledge - but also the knowledge gaps - in terms of our understanding
of global warming.
Its 2007 report represents the best possible risk assessment available, notwithstanding an error - or,
more precisely, a typographical error - in its statement of Himalayan glacial melt rates.
One notion promulgated in recent weeks is that the IPCC is sensationalist: this is perhaps the most
astonishing, if not risible, claim of all. Indeed, the panel has more often been criticised for being far too
conservative in its projections of, for example, the likely sea-level rise in the 21st century. Indeed,
caution rather than sensation has been the panel's watchword throughout its existence.
In its first assessment, in 1990, the IPCC commented that observed temperature increases were "
broadly consistent with predictions of climate models, but it is also of the same magnitude as natural
climate variability". The second assessment, in 1995, said: "Results indicate that the observed trend in
global mean temperature over the past 100 years is unlikely to be entirely natural in origin."
In 2001, its third assessment reported: "There is new and stronger evidence that most of the warming
observed over the last 50 years is attributable to human activities."
By 2007, the consensus had reached "very high confidence" - at least a 90 per cent chance of being
correct - in scientists' understanding of how human activities are causing the world to become warmer.
This does not sound like a partial or proselytising body, but one that has striven to assemble, order
and make sense of a rapidly evolving scientific puzzle for which new pieces emerge almost daily while
others remain to be found.
So perhaps the real issue that is being overlooked is this: confronted by the growing realisation that
humanity has become a significant driver of environmental changes to our planet, the IPCC, since its
inception, has been in a race against time.
The overwhelming evidence now indicates that greenhouse-gas emissions need to peak within the
next decade if we are to have any reasonable chance of keeping the global rise in temperature down
to manageable levels. Any delay may generate environmental and economic risks of a magnitude that
proves impossible to handle.
The fact is that the world would have to make a transition to a low-carbon, resource-efficient future
even if there were no climate change. With the world's human population set to rise from 6 billion to 9
billion in the next half a century, we need to improve management of our atmosphere, air, lands, soils
and oceans anyway.
Rather than undermine the IPCC's work, we should renew and redouble our efforts to support its
mammoth task in assembling the science and knowledge for its fifth assessment in 2014. What is
needed is an urgent international response to the multiple challenges of energy security, air pollution,
natural-resource management and climate change.
The IPCC is as fallible as the human beings that comprise it. But it remains without doubt the best and
most solid foundation we have for a community of more than 190 nations to make these most critical
current and future global choices.
Achim Steiner is executive director of the United Nations Environment Programme, which co-
hosts the IPCC
Mainland journalists must be unshackled

Journalists the world over are watching the expansion of mainland media with envy. While falling
advertising revenues elsewhere mean that resources for news coverage are shrinking and jobs are on
the line, the central government is pouring billions of dollars into new international outlets and
university training programmes.
As journalists ourselves, we're not inclined to decry more money being poured into the industry. But
as readers who care about access to fair and honest reporting on China, we are less sanguine about
the impact of those billions of yuan. The goal here is not furthering freedom of information, but
extending the reach of Beijing's point of view. To be sure, there are legitimate reasons for wanting
Asian and Chinese perspectives represented more in the marketplace of ideas. But that requires
much more openness and freedom to report on issues on the mainland.
Between 35 billion and 45 billion yuan (HK$40 billion and HK$51 billion) is going into new
newspapers, television and radio channels and programmes. Top-flight students are learning how to
be editors and reporters. Such an investment in the media would be welcomed with enthusiasm in
many other countries - expectations would be high that there would be more in-depth coverage of
news, including detailed investigations into issues of public concern. There seems little chance of this
happening with the billions being invested.
There are many excellent - and courageous - journalists on the mainland. Those of Caijing magazine
and Guangzhou's Southern Metropolis Daily newspaper are renowned for their investigative work. But
they are as often as not exceptions to the rule, and are at the boundaries of what is officially
permissible. Those determined to have gone too far - whatever that may be - will find themselves out
of work or, in extreme circumstances, in jail.
The vast majority of the time, mainland journalists quickly learn - or are explicitly told - that there are
subjects and issues they cannot speak or write about. As a result, an important public service role of
the media elsewhere - to help people to be more informed and to give them the information and tools
to hold governments accountable - is lost.
We are not expecting this new investment will go into making the government more transparent or
officials less corrupt. The aim of the publications and channels is to give Beijing's view of events.
China wants a voice on the international stage and to improve its image, which it perceives is being
tainted by Western media painting it in a bad light. Beijing contends its views go largely unheard
outside the nation. The government believes its publications and channels will correct this. Certainly,
they will provide hours of air time and column-centimetres of copy. But news investment is of minimal
value without credibility. The mainland's media is regarded with great scepticism internationally, and
with some reason; the banning of journalists from trouble spots, imprisoning them for doing their jobs,
and censoring the internet do not point to any government desire for - or tolerance of - independent
reporting.
So Beijing's foray into the international media arena may enrich some journalists and some media
companies - not that we are against that - but is likely to have much less effect in changing people's
minds around the world. Highly educated and well-trained journalists are of little use unless they can
do their jobs without official interference. If authorities want to improve their country's image, they
should let good journalists do their job unhindered.
More inclusive system will help nation

flourish
The view that the mainland's economic reforms will, naturally, be followed by rapid political change is
one that is becoming increasingly difficult to sustain. There is no sign that Beijing is willing to embrace
democracy. Indeed, a hard line continues to be taken against people perceived as political threats and
a tight grip maintained on the flow on information. But it could be argued that these authoritarian ways
harm the nation's development. As economic growth continues, a shift in thinking is needed to ensure
that all citizens enjoy the benefits of a fair and just society.
Many foreign and domestic critics of the mainland system have long predicted that democracy will
inevitably follow economic reforms. The assumption was that a more open economy would breed
more open politics. Some even argued that assisting the mainland's economic development would
accelerate this type of change. So far, reality has been somewhat different. At the helm of an
increasingly powerful and secure nation, the government has become even more jealous of its political
monopoly. Instead of better protecting rights and freedoms, it has seemingly drawn satisfaction from
resisting liberalisation. Evidence lies in the punishment being meted out to those who question the
government's authority. Official figures show a sharp rise in the number of people being jailed for
endangering state security - a non-specific charge that allows lengthy terms without the need for
explanation. There were more than 1,700 such imprisonments in 2008, up from 742 the previous year
and 295 in 2005. It was the reason Liu Xiaobo, who had been pushing for rights and freedoms
enshrined in the constitution to be observed, was jailed for 11 years in December; Huang Qi, who
helped the victims of the Sichuan earthquake, was put behind bars for three years the previous month;
and Tan Zuoren, who said the deaths of thousands of children in the quake was largely down to
shoddy school construction, was last week given a five-year term.
Liu, Huang, Tan and their counterparts were not trying to impress critics of the government - their
efforts were to improve the nation's well-being. The drive to push economic growth at all costs has
created a slew of problems. Corruption is rampant, the gap between rich and poor is ever-widening,
arbitrary land acquisitions remain rife, working conditions are for many poor and unsafe, the rule of
law remains weak and free speech is suppressed.
Authorities wrongly assume that wealth is the only solution. If people have a good job or business, a
healthy income, a home, car and consumerism, this can help maintain stability and harmony. This
approach has generally paid off with the burgeoning middle class, many of whom take the view that
improving living conditions are a reason not to rock the boat. For all the success, though, there are
significant flaws: the fruits of the economic miracle are far from evenly divided. It is hardly surprising,
therefore, that dissatisfaction boils over. The estimated 100,000 protests and riots each year point to
mismanagement, not good governance.
It is widely accepted that modern market economies need a free flow of information to function
properly. Citizens, business people and investors need ready access to accurate news and data.
Checks and balances are essential to prevent abuse of power by interest groups and officials and
ensure transparency and openness. If China is to thrive and flourish, a more democratic system is the
best way forward. An open and inclusive political system has to be at the core.
Fresh ideas on health insurance welcome

Yet another public consultation later this year makes reform of health-care financing look like a
process of consensus by exhaustion. That said, the government's latest proposals for voluntary
medical insurance could show the way forward. It does not rule out setting up its own health insurance
company to compete with private insurers. That is not the way business is usually done in this town
and such a step should not be taken lightly. But there is a case for it in the short term, at least to play
a part in keeping private insurers "honest", to quote an official.
Health insurance is not to be compared with general insurance like fire, motor vehicle or liability. It is a
social safety net that cannot be dependent on cross-subsidy from other insurance classes or exposed
to losses in them. A public option run on commercial principles would give the government exposure
to local claims experience and an independent window on prudent premium pricing, reserves and
investment policies. Insurance sector legislator Chan Kin-por argues that a transparent mechanism for
setting premiums would make this unnecessary. In time that may turn out to be so. But it is good that
the industry does not rule out such competition, so long as it is on a level playing field. Consumer
demand should determine whether it becomes a permanent fixture.
A government official has rightly ruled out a call for some of the HK$50 billion start-up fund for health
financing reform to be used to subsidise higher premiums for people with pre-existing conditions. The
industry has hardly established a case for it yet. The issue poses some serious problems. But there
does not seem to have been much discussion of options like qualifying periods and discrimination
between different conditions. For example, coverage for a hip replacement in a private hospital after
payment of premiums for a year or two does not pose the same risk as open-ended, continuing
benefits for a chronic pre-existing condition. If private medical insurance is to be viable and affordable,
it may be necessary to accept annual limits on benefits beyond which a public subsidy kicks in, or the
public system takes over.
Time for tougher action on polluting trucks

Authorities should be tackling roadside air pollution as a matter of urgency. They claim that this is the
case: the Environmental Bureau and Environmental Protection Department said in their last annual
progress report that high public expectations meant this was a top priority. An ineffective scheme to
get old, polluting vehicles off the streets tells a different story. If there was any interest in making the
air we breathe less dangerous, adopted measures would be forceful, not feeble.
The two-year-old scheme ends in April, having made only a small dent in the number of diesel trucks,
vans and buses made before 1995, to pre-Euro and Euro I emissions standards. Such vehicles are
the main reason for the poor air quality along our streets. They burn fuel far less efficiently than newer
models. The subsidy aimed at phasing them out was supposed to have retired most, but there are still
39,500 on the roads - about four-fifths of the original total. Such a low take-up rate shouldn't be a
surprise. The grant averages HK$43,000, a fraction of the cost of a new truck. Owners are only taking
up the offer when their vehicles are no longer roadworthy. The government has sensibly decided to
end the scheme.
The tiny particulates in diesel fumes are the reason air quality monitoring stations along our busiest
streets record excessively high readings. Young and old people and those with heart and lung
problems are especially vulnerable. They will continue to be at risk while vehicles with engines that
can't use low-polluting diesel are on roads. Measures to improve circumstances have to be assertive.
Our government has a poor track record in this regard when it comes to the environment. Pressure
from business groups mean its schemes are invariably voluntary or, in cases like idling vehicle
engines, left in the too hard basket. Jobs and profits are important, but Hong Kong also needs to
address the serious threat to public health from roadside emissions. Without stronger measures we
will pay a heavy price in lives lost and debilitating illness.
City officials in other developed parts of the world have the right attitude. Older vehicles are banned
from financial and shopping districts and owners are given hefty fines if rules are ignored. In addition
to subsidies, attractive interest rates are offered on new cars and trucks. Vehicles over a certain age
require higher licence and registration fees - a move lawmakers here, after hearing the pleas of
lobbyists, rejected last year.
The government is capable of concerted action. This was amply proven with the successful first phase
of the plastic bag levy and will surely also be the case when it is widened. It has introduced the
highest European standard for diesel, Euro V, and the second-best for vehicle emissions, Euro IV.
Financial incentives are offered for environmentally friendly cars. Action has been less forthcoming
towards commercial transport. While almost all taxis have switched to liquid petroleum gas, only 60
per cent of minibuses use the low-polluting fuel. About 35 per cent of the commercial fleet is still using
diesel of the lowest, most polluting, standards. Authorities claim to want them off the road as soon as
possible, yet efforts are clearly not aimed at this target.
Years may yet pass before all old diesel vehicles are out of service. Greater incentives, higher fees,
no-go zones and fines have to be implemented to get them off our streets. Idling engines have to be
banned. Efforts must be legally binding, not voluntary.
School places mismatch a cause of heartbreak

Poor communities often lack the resources to provide adequate education for their people. But even a
rich city like Hong Kong can fall short of providing good quality schooling for all. Despite our riches,
many parents who try to find a suitable school for their children face a frustrating or even
heartbreaking experience.
We have schools that fail to enrol enough students and so are counting their days before being shut
down. Then, there are the elite and international schools with hopelessly long waiting lists. The
English Schools Foundation, for example, has seen its waiting list for Year One places at its nine
primary schools jump in three years from 382 to 819. Disappointment, therefore, awaits many families.
This is especially so for parents who mistakenly believe they have taken a shortcut to a guaranteed
Year One place when they enrol their children in kindergartens run by the commercial arm of the
foundation. No such "through-train" is ever guaranteed by ESF Educational Services. But some
parents have argued that statements made on its website have created an impression that most
children do move on to an ESF primary school.
Their situation is particularly bleak because many ESF kindergarten graduates lack the requisite
language skills to enter local Chinese schools. Meanwhile, most international schools have long
waiting lists, too. An ESF kindergarten will double in size next year, thereby exacerbating already keen
competition. The problem was highlighted more than a week ago when a mother hurled her four-year-
old daughter from a shopping mall balcony before leaping to her death. The girl, who survived,
attended an ESF kindergarten, but was refused a Year One place.
There has been clearly a mismatch in expectation and a failure in communication between many
parents and the foundation. In a fair and equitable way, every effort should be made to accept
qualified ESF kindergarten graduates currently on the waiting list. And to avoid any more
heartbreaking confusion, the foundation must make it abundantly clear to the parents that the
kindergartens are operated by its commercial arm with no "through-train" admission policy to ESF
primary schools.
Doctors need healthy work-life balance

Three years ago nearly a fifth of our public hospital doctors worked more than 65 hours a week.
Excluding senior doctors, the figure for medical officers was closer to a quarter. It was common for
some of them to be treating patients after being on duty continuously for 30 hours.
For young interns, who are a minority, working extraordinarily long hours is a time-honoured way
around the world in which they quickly gain knowledge and experience on the job in different fields of
medicine. But in general it cannot be good for either doctor or patient. There are obvious risks that can
have serious consequences. No patient should have to be treated by a doctor who is physically and
mentally exhausted. Medical blunders are more likely, not to mention the detrimental effect that such
punishing schedules can have on the health of a doctor.
It is good that some progress has been made in reducing hospital doctors' hours, mainly by hiring
more staff and reassigning some simple duties to technical staff. A committee set up to devise
measures to reduce their shifts has reported that by last December, the number of medical officers
who work more than 65 hours a week had fallen from 24 per cent to 7 per cent, and the number of
senior doctors who do so from 3.6 per cent to 0.6 per cent. The Hospital Authority says only 1 per cent
of doctors are now working more than 70 hours a week, compared with 10 per cent three years ago.
But those benchmarks are very high, and the figures do not tell us how many doctors are still working
long hours. It is a worry that they still complain of having to work more than 30 hours continuously,
that some departments still require them to work 16-hour shifts with only a few hours in between, and
that the figures based on rosters fail to take into account the hours actually worked.
However, the committee has at least made a start on badly needed reform, which involves changing
long-established work patterns as well as hours. That said, our public doctors have a legitimate
expectation of work arrangements that enable a healthy work-life balance. This would be in the best
interests of patients.
Soft-power play
Despite a loudly trumpeted "diplomatic truce" under which neither Taiwan nor the mainland will try to
raid each other's diplomatic allies, especially through the use of chequebook diplomacy, neither side
has given up the contest for influence among ordinary people around the world - something that is
often called soft power.
Taiwan's president, Ma Ying-jeou, made this clear when he recently disclosed that Taipei will establish
a string of academies around the world to promote Chinese language and culture.
In this, mainland China has a big head start. Ever since the first Confucius Institute was opened in
Seoul in 2004, Beijing has used them to spread Chinese language and culture and, today, more than
280 have been established in 88 countries and regions.
In fact, since the Chinese government provides funding and resources, they are much sought after by
overseas universities.
The idea of setting up "Taiwan Academies" - exactly what they will be called is not yet clear - around
the world was floated by Ma when he was a presidential candidate. At the time, he also proposed
setting up a US$150 million fund to finance an award that will be comparable to a Nobel Prize in
literature for Chinese people. This, too, is worth pursuing. It is good that Taiwan is planning to
strengthen its position and vie for influence in the dissemination of Chinese language and culture.
After all, in earlier years, especially during the Cultural Revolution - when the mainland was
denouncing Confucius and Red Guards were destroying precious relics - Taiwan positioned itself as
the guardian of Chinese culture.
But, in recent years, Beijing has been depicting itself as the custodian of Chinese culture and has
used such Confucian ideas as "harmony" to bolster support for the Communist Party.
However, the recent box-office failure of the movie Confucius, offered by the mainland to offset the
Hollywood blockbuster Avatar, shows that the Chinese public at large is not necessarily attracted to
propaganda dressed up as history and culture.
While Taipei continued to operate cultural centres and Chinese-language schools in various countries,
it has lacked the momentum of Beijing's Confucius Institutes. The setting up of Taiwan Academies,
beginning this year in Los Angeles and Houston, is definitely a step in the right direction.
Taipei's idea is to have the cabinet-level Council for Cultural Affairs spearhead this project, in
conjunction with the Overseas Compatriots Affairs Commission. The inclusion of the latter body shows
that the effort is at least in part directed at ethnic Chinese around the world.
The Taiwanese government's ties with overseas Chinese communities go back more than a century,
having been forged by Dr Sun Yat-sen when he was a revolutionary. He solicited funds and recruited
supporters from Chinese in the United States, Japan, Hong Kong and elsewhere.
In recent years, however, Taiwan's Chen Shui-bian government, in attempting to distance itself from
Beijing, deliberately cut itself off from overseas Chinese communities. In fact, the commission itself
was renamed by replacing the word "Chinese" with the word "compatriots".
Taiwan's return to the contest for cultural influence is likely to be welcomed. For one thing, overseas
institutions will have another potential source of funding to turn to. Students unable to study at a
Confucius Institute may have a second chance by applying for a scholarship at a Taiwan Academy.
Moreover, Taiwan will have a chance to offer the world a window into Chinese culture. Taiwan should
also promote its own contemporary culture, which has its own intrinsic value.
But, most importantly, Taiwan will be in a position to promote traditional Chinese culture, and to do so
without viewing it through the eyes of the Chinese Communist Party. Of course, the Kuomintang, too,
should not politicise Chinese culture to serve its own ends. Chinese culture is part of the world's
heritage and should not be monopolised by any political party as its own asset.
Frank Ching is a Hong Kong-based writer and commentator. frank.ching@scmp.com
Caution vital when tweaking land supply

In times of economic stress, people clamour for the government to provide relief, and the budget is
eagerly awaited. So the lack of excitement generated by Financial Secretary John Tsang Chun-wah's
speech yesterday might be seen as a sign that better times are on the way. Its modest aims befit a
government that wants to maintain a steady course and avoid doing anything which might rock the
boat. The initiatives announced are in line with what we have come to expect from Tsang and the
government: some feel-good one-off giveaways designed to benefit the poor and middle class, with
the caveat that this is the last round; and warnings about a potential property bubble, along with some
counter-measures to moderate excesses in the luxury market.
Longer term, the most significant measure is that of a willingness to increase land supply by tweaking
the application list system. In this, the government must tread carefully. It cannot afford to be seen to
be interfering in the market and increasing its volatility at a time when economic recovery is still at an
early stage.
Since Tsang took up his current post in 2007 when the global financial crisis first started, there have
been several rounds of fiscal stimuli and giveaways, that is, temporary relief measures catering to
practically all sectors of society. Tsang claimed credit for the fiscal measures that helped the
economic recovery. However, the giveaways have been prompted more by politics than economics.
Indeed, their economic benefits are questionable. They are becoming more difficult to justify in light of
the city's recovery on the back of the mainland's economic juggernaut.
Even so, Tsang needed to make amends after predicting a deficit when, in fact, the government is
likely to have a HK$13.8 billion surplus this financial year. The unexpected riches came mostly from
stamp duty collected from a recovering stock market since last March, and also from better-than-
expected land sales.
The government has been heavily criticised for doing little to tackle the widening wealth gap, so it is
understandably under pressure to give away some of the current surplus. As a result, many eye-
catching measures are aimed at poor and lower-income groups. The poor will get two months' free
rent for public housing and an extra month's welfare payment. A 75 per cent cut in salaries tax,
subject to a ceiling of HK$6,000, will help low-income earners. Waiving rates for the 2010-2011
financial year, subject to a ceiling of HK$1,500 per quarter, caters to the needs of property owners.
Perhaps the most difficult balancing act the government faces today is how to deal with the property
market. There is, undoubtedly, some froth in the market, but this need not equate to a bubble. As
Tsang said, it's easy for the government to crash the market but difficult to prop it up. It must,
therefore, be very careful in tinkering with the application list system. With details still to be disclosed
in coming days, it appears the government is ready to release select sites for auction or tender even if
they have not been triggered by a developer. But the conditions for the selection and release of such
sites need to be clearly drawn, lest we repeat the mistake of former chief executive Tung Chee-hwa
and his fiasco over the plan to supply 85,000 new flats a year. The lesson that should be learned is
that too much government interference introduces uncertainty and confuses the market. Officials must
explain how the revamped application list system will work.
As Tsang said, market leads and government facilitates. Let us hope the government knows its limits
and keeps to them.
Skater's gold tarnished by petty posturing

Updated on Mar 11, 2010
State support is instrumental in the success of many elite international athletes. Without it they would
find it difficult to undertake the full-time training and get the overseas experience they need. But it is
not entirely altruistic. There is a political dividend too. Governments can take credit for the national
pride evoked by Olympic gold medals - and generally avoid blame for failure.
State sponsorship has levelled the playing field for developing nations, China included. The trend was
begun by the state medal mills of the old eastern bloc nations, led by East Germany. Their dominance
during the 1970s and 1980s led to the emergence of sports ministries and the spread of state support.
Along with professionalism, this has changed the face of sport. Happily, however, the innocence of
youth and the Olympic ideals of fair play and honour have mostly survived the big-brother overtones of
bureaucratic interference and petty officialdom.
We were reminded of that after Chinese skater Zhou Yang's Olympic gold-medal wins, when she
thanked her parents, who nurtured her and made sacrifices for her career. But Zhou was rebuked by
deputy director of the General Administration of Sport Yu Zaiqing for not thanking her country first - in
other words, for not putting the motherland before mum.
True, Zhou owes a lot to her country and could have remembered to acknowledge it. But she is, after
all, only 18 and can be excused the oversight in the excitement of the moment. Such a public rebuke
smacks of petty state interference in the lives of its citizens. We cannot resist observing that Yu in turn
owes a lot to the skater for her contribution to China's best-ever Winter Olympics performance, since a
poor medal haul would have done nothing for the career prospects of top sports officials. An online
poll of 300,000 people has found 88 per cent support for gold medallists thanking mums before the
motherland. Sensibly, however, Zhou's mother promised to remind her daughter to thank the
motherland first. Mainland officials do not have a reputation for heeding public opinion.
Better-paid workers key to mainland's
progress
There are few constants in business, but the law of supply and demand is one of them. With business
picking up and labour short, migrant workers in Guangdong province are increasingly choosy about
what jobs they take - and not surprisingly so. Nobody wants to work in sweatshops for long hours for
minimal pay. Factory owners are faced with a number of choices: Move operations to where labour is
cheaper, pay higher wages, improve working conditions and accept lower margins, or manufacture
higher-priced, better goods with a better-paid, skilled workforce. With domestic consumption so
essential to the mainland's development, the latter two options seem to be the best.
Many of the province's factory owners are locked in a model of production that is under threat from
progress. It is the same one that served Hong Kong well when it was an industrial centre in the 1960s,
but does not apply when education levels improve and financial and livelihood expectations rise. While
many parts of China remain underdeveloped, economic and social circumstances in high-growth
areas have evolved to the point that not all workers are willing to work for meagre salaries. Factories
have to be flexible with working hours, improve conditions and provide recreational facilities.
The circumstances are vexing for owners. There is a marked shortfall in the number of workers
despite high unemployment and underemployment. The government's economic stimulus package
included incentives for rural areas, prompting people who would have moved to cities in search of
work to stay on the land. Buyers in the west apply crippling pressure to keep prices down. Meeting
workers' demands cuts into profits.
A natural choice for owners has been to move operations to poorer provinces and other countries
where labour is cheaper. This is good for the firm's viability and profits and provides opportunities for
people who would be otherwise unemployed, and could well spur development further inland. But that
does not help the coastal regions, and cannot be a strategy that can be employed for the long run. For
the sake of the country, economy and citizens, China needs a workforce that is increasingly skilled
and better paid - workers that are in a better position to afford to buy the products they make.
There has been an increase in wages at some factories in Guangdong, but it is unclear how lasting
the trend is. Import and export figures are substantially up on this time last year, though, and orders
are flooding in. Workforce shortfalls do not necessarily mean higher minimum wages. More cash is
being handed out for longer shifts and people who would previously not have been considered for
jobs, such as the elderly, are being taken on. Job fairs held recently in Shenzhen give an indication of
what workers want. One for factories drew scant attention, while another for white collar jobs was
packed. A more sophisticated population has meant a supply crunch in low- and unskilled labour. The
trend is spreading across the nation as a result of urbanisation, improved living standards, affluence
and the better-educated children of migrant workers wanting a better lot than that of their parents.
Factory workers have more negotiating power, at least for now. Higher wages and better conditions
benefit workers - and also the country. Greater spending power in more hands will spur the domestic
economy and make the nation less dependent on exports. Factory owners obviously are not so
enthusiastic about the changes. Nonetheless, without greater consumer demand, the domestic
economy cannot grow, and that hurts everyone in the long run.
It's time to get dirty vehicles off our roads

Few things are more important than the community's health. Yet the government seems to be more
concerned with business reaction than with our well-being when it comes to roadside air pollution. It's
a problem that should be easy to tackle: it simply has to get off the streets the old commercial diesel
buses and trucks that are mostly the reason for the poor readings. With yet another voluntary scheme
having failed, it is time to get priorities right and get tough.
Environmental officials have resurrected a proposal rejected by lawmakers in 2008, increasing licence
fees for diesel trucks and vans that are 15 years or older. Their decision follows the failure of a soon-
to-end subsidy scheme aimed at retiring the worst-polluting vehicles. Owners of just 13,000 targeted
vehicles took up the grant; another 38,500 remain on our roads. But as worthwhile as the revived
approach may seem, it will also be of little value unless it puts citizens first. Vehicles that are 15 years
or older emit as much as 20 times more pollutants than new ones. These emissions can cause a
myriad of health problems, particularly for the young and elderly. But even people who consider
themselves healthy can develop allergies, asthma, bronchitis and, over time, lung damage.
Putting people first is simple: the licence fees have to be set at a level that discourages owners from
keeping old vehicles. Legislators previously declined to even consider such a move, determining that
economic circumstances were not right. By listening to lobby groups instead of people suffering from
the effects of pollution, they were doing our city a disservice. There are costs to this, of course, and
owners quite rightly worry about the impact on them.
But if there is an investment that seems well worthwhile, it should be in the health and well-being of
our citizens - one of Hong Kong's key assets. While there is no doubt that old vehicles are the main
cause of roadside pollution, owners should be helped to get replacements. Subsidies and assistance
with getting bank loans will be necessary. But there can't be any half-measures this time - dirty buses,
trucks and vans must be eliminated.
Beijing should do more to right official

wrongs
Petitioning rulers to resolve grievances and disputes is an ancient remedy of last resort for the
powerless. The abolition of kings and emperors democratised it. Parliaments are now magnets for so
many petitions on all manner of social, political and personal causes that they have formal procedures
and rules for receiving them. Even if petitions fail to change anything, this acts as a safety valve for
diversity of opinion, discontent and dissent.
With a cultural tradition of petitioning going back centuries, China ought to serve as a good example.
Alas, things have not changed much for the better. Ordinary citizens travel to the capital in the slim
hope of seeing officials so they can pursue complaints about wrongs done to them or vindication,
much like citizens used to make personal pleas to the emperor or a high official. Often they are to be
found protesting peacefully in the streets because they feel they have been denied a fair or
meaningful hearing
It is not surprising, therefore, that petitioners see the annual gatherings of members of the parliament
as offering a better chance of getting official attention. However, as they and their supporters prepared
to converge on Beijing this month, police and national security agents stepped up surveillance of
those considered unwelcome in the capital to make sure they stayed home. Often they are detained
and mistreated by security officials.
Premier Wen Jiabao has said repeatedly in his annual work reports to the National People's Congress
that the authorities should attach importance to the handling of petitions. This year he promised to
improve the situation. But it seems it will take more than these reminders to overcome the reluctance
of officials to allow petitioners to draw attention to grievances against authority. Wen's plea did not
stop an NPC deputy in charge of legal affairs in the Guangxi regional legislature from calling for 20
ways of petitioning - such as chanting slogans, distributing written material and staging sit-ins - to be
criminalised, with sentences of up to 15 years for serious or persistent offenders who "seriously
disrupt the normal life and work order of local government leaders". Leaving aside what this means to
the constitutional right to protest, such actions by petitioners often arise from frustration with what they
see as official indifference to sincerely held grievances.
People have to be desperate to leave their homes and jobs and travel long distances in the hope of
getting official attention. That this kind of petitioning still goes on tarnishes China's emergence as a
modern world power. To be sure, petitioning of one kind or another happens in all countries. But it
should not happen on the scale it does in a country whose premier has set a national goal of
achieving social equity.
So long as there are serious shortcomings in the system of law and order and access to independent
dispute resolution, petitioning will remain part of life on the mainland, fuelled by complaints arising
from administrative actions, official corruption, land disputes, unemployment and the wealth gap. But if
the process is to have any value, complainants must feel that they have at least had a hearing.
Hopefully, provincial and municipal officials will respond more positively to Wen's latest plea. But
Beijing should tackle other solutions, such as a fairer and more independent legal system, more
freedom of information and freer access to public debate. Much petitioning would be unnecessary if
people had greater confidence in the system to right official wrongs.
We must not tolerate these rich tax cheats

Renewed diplomatic spats over Switzerland's banking secrecy are a clear sign that the days of the
alpine nation's highly lucrative, if shadowy, practice are numbered. Swiss officials and bankers should
accept reality and overhaul the system.
The latest dispute involves revelations that a client data theft in 2006 and 2007 at HSBC's Swiss
private bank involved 24,000 accounts, far more than was initially acknowledged. The suspect, a
former information technology worker named Herve Falciani, ended up in the custody of the French
authorities, who made copies of the stolen information before returning it to their irate Swiss
counterparts. The French say they reserve the right to use the data to track down French tax dodgers.
Cash-strapped governments across Europe and in the US are ready to use all methods fair or dubious
to gain banking information to go after tax evaders among their own citizens. The French case echoes
recent controversial incidents with the US and German governments, which have shown willingness to
pay for stolen information of secret Swiss accounts. These fights, which often see potential criminals
being rewarded for their crimes, are becoming increasingly frequent and acrimonious. But it would be
absurd to consider Switzerland the victim of bullying by other governments.
To be sure, there has always been an element of hypocrisy in the way governments of rich nations
have tolerated the existence of tax havens like Switzerland for decades. Rich and powerful people
have made use of such services and their friends in governments do not want to stand in their way.
Meanwhile, dictators and corrupt officials of poor and developing nations have long been among
Switzerland's most loyal customers. The Swiss therefore indirectly aid and abet the impoverishment of
many poor countries.
Last year, the G20 group of leading economies forced the Swiss to water down secrecy laws and
regulations but it did not go far enough. The bottom line is that the world should not tolerate special
treatment for rich tax cheats.
Consuming passion
China's growth depends on boosting household income and persuading people to spend more
Anoop Singh
China has weathered the Great Recession well. The world now waits to see if last year's impressive
growth in domestic demand can be sustained, and if China can, in the words of Premier Wen Jiabao,
"give full play to the leading role of ... consumer demand in driving economic growth".
The mainland consumer has been held back for too long, and now must be put front and centre in
China's growth model. Beijing is already moving ahead on multiple fronts to attain this goal, as was
clear from announcements at last week's National People's Congress.
Of the many factors that have decreased the share of consumption in China's economy, declining
household disposable income has been central. That, in turn, has reflected the fall in labour income as
a share of the economy, owing in part to structural changes that have moved workers out of
agriculture - where the labour share of income is high - and into manufacturing, where capital
commands a larger share of income.
While labour income drops, government-imposed ceilings on bank deposits - the primary savings
vehicle for most households - have held down household capital income. That has been magnified by
rising household savings rates, driven by insufficient insurance for health care and old age, the high
cost of education, growing income inequality and demographic trends.
So what is the right course of action? I recently attended a workshop organised by the International
Monetary Fund in Beijing that brought together Chinese officials, academics, international analysts
and IMF staff to discuss how best to catalyse household consumption in mainland China. Participants
urged changes in multiple areas, including improving the system of taxation and social insurance,
further developing housing and the service economy, and eliminating a range of relative price
distortions.
One key idea was to lighten the tax burden on labour. Taking into account the personal income tax
and various social contributions, the taxation of labour income is too high in mainland China. To be
sure, taxes are needed to finance social spending, but revenue sources other than taxes on labour
income could do the job. China could usefully explore shifting part of the burden from labour towards
property, capital gains and inheritance taxes. Larger dividends paid to the budget from the highly
profitable state enterprise sector could also provide an alternative source of funds.
Another route to improve consumption could be to offer households greater support . The global crisis
has prompted Beijing to push ahead with its social reform programme. Important improvements have
been made over the past year to expand the pension system's coverage, move towards universal
health care and provide public funding for basic education. But more can be done to speed up the
existing reform package, find ways to develop full coverage for catastrophic health events and develop
government-backed financing of tertiary education.
Fixing the housing market could also help spur consumption. Distortions in the property market are a
powerful motivation for saving, particularly among young people who struggle to meet the high down
payment needed to buy a first home. Part of the high cost of housing arises from an underdeveloped
financial system, which makes housing one of the few alternatives to bank deposits as a store of
value.
Taxes on property or capital gains could help curb the demand for housing as an investment vehicle.
In addition, a comprehensive nationwide housing policy is urgently needed to ensure that housing
remains affordable, particularly for those on limited incomes.
Related to this is the need for improvements in the overall financial system. By developing markets for
private pensions, commercial health insurance and annuities, China could complement expanded
government provision of social insurance and weaken the incentives that underlie high, precautionary
saving.
Similarly, broadening the range of available savings instruments could raise household disposable
income and increase consumption. A more developed financial system would provide alternatives to
property as a store of value, thereby making home ownership more accessible. These issues will be
examined carefully during the course of this year as Beijing and the IMF collaborate on a financial
sector assessment programme for China.
Fostering a dynamic service economy, too, will certainly boost consumption. In the coming years, a
more fully fledged service economy will be an essential ingredient to increase employment and lessen
China's reliance on manufacturing.
But spurring faster growth in services is a complex undertaking. Entry barriers, particularly in service
industries dominated by state-owned oligopolies, need to be lowered. Distortions in key prices that
favour capital-intensive manufacturing need to be removed by raising the cost of land, energy, water
and capital. Changing the tax structure will also help. Industry is now the primary source of tax
revenue for the government, particularly at the local level, giving the state too little incentive to foster a
service economy.
Finally, a stronger yuan ought to be an integral part of the package of reforms to boost consumption. A
stronger currency would increase household income. It would also create a powerful incentive for
companies to expand into the service economy, providing more jobs and more choices for mainland
consumers.
If consumption can be successfully and sustainably boosted, I believe that China's development will
enter a new era, one in which economic growth continues at a rapid pace, generates higher
employment, increases social welfare, places less demand on natural resources and, ultimately, is of
a much higher quality - thereby underpinning more balanced global growth.
Anoop Singh is director of the IMF's Asia and Pacific Department. Copyright: Project Syndicate
Premier spells out concerns for HK

Wen elaborates on 'deep-rooted conflicts'
Fanny W. Y. Fung in Beijing and Albert Wong
Premier Wen Jiabao yesterday elaborated for the first time on the "deep-rooted conflicts" in Hong
Kong, acknowledging that the city's constitutional reform process, along with economic challenges,
were issues of concern.
Despite having used the phrase on various occasions previously, this was the first time he had
explained what he meant. In 2005 and last year, both years of significance for constitutional reform,
Wen called on Donald Tsang Yam-kuen to resolve the conflicts when the chief executive paid his
annual duty visit to Beijing.
However, Tsang said in December that Wen was talking about the conflicts "in a context of economic
development" and denied the remark referred to democratic reform or social issues. But yesterday,
while laying down five points of conflict he observed in Hong Kong, Wen said: "Hong Kong people
need to be inclusive, to gauge consensus and to stick together in order to maintain Hong Kong's
prosperity and stability.
"In the future, not only will Hong Kong have great economic developments, but it will also develop
democracy in a gradual and orderly manner according to the Basic Law."
This echoed his appeal in the central government' annual work report. In the paragraph on Hong Kong
and Macau affairs, the report urged people to "work together" and "accommodate and help each
other".
Veteran China observer Johnny Lau Yui-siu said Wen's words were highly significant. "This is the first
time he has explained it in his own words ... and it shows that he feels something is wrong," Lau said.
He said Wen seemed to express a belief Hong Kong had missed opportunities regarding economic
development and integration with the mainland economy, but there was also no doubt that now he
was referring to the ongoing debate over democratic reform.
"There are two issues of conflict at the moment; the by-elections and the democratic reform package.
These two must be handled with care, and resolved, otherwise these conflicts will continue and the
potential for confrontation will become greater. This would not conform with their principle of 'gradual
and orderly progress'... the implication is that if you don't resolve these conflicts, universal suffrage in
2017 is by no means certain," Lau said.
The other conflicts Wen pointed out were:
• The city's economic edges should be further developed to maintain its status as an
international financial, shipping and trade hub;
• It should boost industries with local advantages, particularly the service sector;
• It should use its geographical advantages, enhance co-operation with the Pearl River Delta
and make use of the large market and rapid economic growth on the mainland; and
• It should improve people's livelihoods and enhance education.
Wen also pledged that the central government would widely consult people from various sectors of
Hong Kong when it drafted the 12th five-year national development plan for 2011 to 2015. The
blueprint would take into consideration Hong Kong's close economic ties with the mainland, especially
with the Pearl River Delta region, he said.
Tsang Yok-sing, president of the Legislative Council, said the remarks reflected that the central
leaders were very concerned about Hong Kong's constitutional development, but thought it good that
Beijing would express its worries to help Hong Kong understand the issues.
Wen's words come a day after local deputies to the National People's Congress revealed that the
prospect of Beijing meeting the moderate pan-democrats for talks and agreeing to make certain
pledges was slim.
In an RTHK broadcast, lawmaker Ronny Tong Ka-wah, a member of the Alliance for Universal
Suffrage which seeks dialogue with Beijing in order to obtain certain pledges regarding democratic
reform, warned that this was the "last attempt" at dialogue, and should Beijing decide to shun this
opportunity, "deep-rooted conflicts" would only worsen.
A government spokesman said that despite the ending of the consultation period on political reform,
the administration would continue to listen to the views of different parties.
Mainland muzzles are not the answer

Updated on Apr 12, 2010
A nation's strength lies in the character, creativity and determination of its people. These are the
qualities that have underpinned the rise of many great powers and enriched the world. They are in
abundance in China, but the Communist Party's refusal to allow their full expression means
development is constrained and opportunities lost. In place of dedicated and concerned citizens like
now-silenced rights lawyer Gao Zhisheng , corrupt and immoral cadres and their venal business
friends flourish.
There can be few more discouraging moments than Gao's announcement this week that he had given
up his cause in favour of "peace and calm" . Unwilling to speak openly after having resurfaced from a
year of what had clearly been forced political re-education, he spoke of his past life as having been
abnormal. He hinted at a compromise deal with authorities in which he had given up his fight for
democracy in return for a reunion with his exiled wife and two children. The party has scored another
victory, but the nation is the loser. Gao's yielding to years of intimidation, being disbarred from
practice, detention and torture is totally understandable. He has been kept from his family and friends
under circumstances that we can only imagine. No person who loves their country and wants the best
for it should be treated in such a way. He is not a criminal; he has only highlighted the wrongs in
society, and sought their correction.
The lawyer is the latest in a long line of like-minded citizens to be silenced. Pro-democracy advocate
Liu Xiaobo was, in December, jailed for 11 years on the ill-defined charge of subversion.
Environmentalist Tan Zuoren was given a five-year sentence in February on the same charge; his
crime was to call for the creation of a database listing the children lost in the 2008 Sichuan
earthquake. HIV/Aids advocacy landed Hu Jia with a 3-1/2 -year jail term in 2008. Countless others
have been handed the same fate.
Authorities say these civic-minded people of conscience are dissidents. Human rights groups refer to
them as activists. They are actually reformers - men and women who know that the system is flawed
and want to fix it. Unfortunately for China, the party sees them as a threat to the power, privilege and
riches that come with office. Authorities could not be more misguided. The real threat to the nation are
the corrupt officials among its 75 million members. A series of sex scandals in recent months has
further dented the image of a body that is riddled with graft. President Hu Jintao is well aware of the
problem; he warned officials this week to be aware of the temptations of beautiful women, money and
power.
Hu is stating what the people already know. He would have less reason to even raise the matter were
Gao, Liu and others like them allowed to speak their minds. One of the fundamental advantages of an
open society is that behaviour of officials can be scrutinised by parliaments, a free media and an
independent judiciary. Silencing those voices in an autocratic system like the mainland's can only
contribute to corruption and ineptitude and waste.
True greatness will elude the country until diverse views can be freely expressed. The authorities must
be open to criticism and ideas and willing to listen to political opponents. The media has to be allowed
to operate freely and independently. Silencing critics does more harm than good. The future will be
bleak unless those of conscience who want to contribute to the country's development can play their
role.
Steps to protect flat buyers are welcome

Finally, some action. After a public outcry about perceived unfairness and suspected market
manipulation over questionable sales tactics by developers, the government is now taking steps. The
measures proposed this week by housing minister Eva Cheng do not go far enough to satisfy all
consumers. But they are welcome, because they show that officials are prepared to step in, albeit
reluctantly, if market discipline fails to adequately protect buyers.
The new rules will give buyers a better idea of what they are getting for their money. They require
developers to make show flats more accurate representations of uncompleted properties, ruling out
practices like the omission of walls and doors and the substitution of glass walls to give an illusory
impression of space in ever smaller flats. The address and actual location of properties would have to
appear in advertising materials, and not just an idealised image of the development, its setting and
urban environment.
Developers would also have to disclose details of sales of flats to their own senior executives and
those of associated companies, following recent examples of connected sales that could have misled
genuine buyers, and gave rise to suspicion of market manipulation.
These moves follow a recent requirement for developers to disclose the saleable floor area and its
price per square foot when uncompleted flats go on sale, instead of the gross area including common
areas.
The new measures are reasonable and timely. But the immediate reaction of developers and critics
reveals a lot about the market power of the industry. Some developers support them, but their industry
organisation, the Real Estate Developers Association, says it will be difficult to comply and has not yet
agreed to them. Critics, on the other hand, say the new rules would fail to solve key problems and are
far from sufficient to achieve a more level playing field for buyers.
Loopholes remaining in the rules for selling uncompleted flats include the lack of vital information on
prices and transaction records, which leaves buyers prone to make wrong decisions, along with tactics
such as midnight sales and selling flats batch by batch.
Complaints about sales practices and lack of transparency have grown amid a surge in luxury
property prices. Property plays a dominant role in our economy and household prosperity and is
extremely sensitive on both the supply and demand sides. The government is, therefore, right to be
cautious about doing anything which increases supply or reins in prices, risking harm to the market.
An example is to be found in the modest steps to boost the supply of flats by increasing the number of
units in MTR Corp and Urban Renewal Authority projects, tweaking the land sale system and
enhancing the secondary market for Home Ownership Scheme flats.
Neither developers nor existing homeowners benefiting from rising prices will lose too much sleep
over that. But if the government is to refrain from interfering with market forces, it need make no
apology about trying to help the market work more efficiently: by ensuring transparency and fairness in
sales practices, and hence a level playing field for all participants. All markets require rules and
practices for them to function effectively. These proposals would help serve that goal, and with some
developers already on side it is difficult to see how their association can raise any serious objection to
the proposed new rules.
Watchdog must hold doctors to their ethics

Health care - and paying for it - is a topic guaranteed to raise everyone's blood pressure. Medical
insurance premiums are rising at annual rates considerably above inflation. Insurers say the increases
are necessary because some private doctors are abusing the system. It certainly is not hard to find
accounts of unnecessary procedures and hospital stays; but while it is good that the companies are
calling possible abusers to task, such a role should rest not on the firms' shoulders but with the
profession's watchdog, the Medical Council.
To be sure, insurance companies don't contend that the problem is widespread. The vast majority of
doctors follow rules and guidelines; but as in any sector of society, there are greedy physicians.
Loopholes exist and can easily be capitalised on.
In the case of wayward doctors, this involves overprescribing procedures such as colonoscopies and
biopsies. These are investigative measures to detect abnormalities like cancer; a stay in hospital and
use of specialist doctors may be called for as well. Such tests can be costly - but are obviously
necessary if a serious problem or risk is suspected. But it is also easy to see how a patient could be
pushed into needlessly parting with cash for unneeded tests.
It is not that insurance companies are entirely altruistic. They are to be commended for raising the
matter and, in some cases, compiling lists of errant doctors. It must be remembered, though, that they
also exist to make a profit. Increasingly, they nit-pick and lengthen fine-print exemptions, making the
claims process ever-more frustrating.
The sector's ways are apparent as it goes into talks today with health officials on designing a voluntary
medical insurance scheme: it complains that the government's insistence that people with existing
conditions be covered will be too costly.
Insurers policing doctors is an obvious conflict of interest. They can question claims, but it is not their
job to investigate and blacklist members of the medical profession. Physicians' reputations can be
wrongly damaged, while there is no avoiding the fact that such accusations can be seen as an excuse
not to make payments. The doctor may, after all, be entirely innocent; with patients increasingly suing
for perceived negligence, some physicians are taking every possible precaution. It is difficult to know
whether a doctor is cheating or simply being overly diligent. Some patients can also be demanding
and insist on unnecessary procedures. Others may pester for treatment of the most minor of ailments.
A watchdog exists to keep the profession in check: the Medical Council. Its role is to ensure that
doctors uphold the highest professional and ethical standards. Investigating malpractice and taking
action against those determined to have done wrong is part of its mission. But the council lacks the
independence, resources and structure for credible self-regulation. It has failed to adequately deal
with a slew of serious medical malpractice cases over the years. Its regular calls for the government to
enable change have all but fallen on deaf ears. Fresh proposals are being put forward and authorities
should urgently push them through.
The lack of approval for reform does not absolve the council. It should be maintaining a publicly
available list of doctors proven to be carrying out unnecessary medical procedures. However limited
its resources, it must make every effort to hold doctors to their ethics. With reform, it will be able to do
the job properly. Because the ultimate beneficiaries should not be doctors or insurers, but patients.
The lesson that all parents need to learn

Children need to know there is life outside the classroom. Playing, exploring, making friends and
developing new hobbies should be as important as schoolwork. But in our scholastic-obsessed
culture, school study takes up a disproportionate share of a young person's life. We all know the long
arms of schoolwork extend well beyond the school - reaching out into many aspects of a youngster's
daily life. A new University of Hong Kong survey helps quantify the costs. Fifty-eight per cent of
parents of primary and secondary schoolchildren pay for private tutorial classes; and 90 per cent dig
deep into their pockets to cover extracurricular activities. The charges amount to averages of
HK$9,842 and HK$8,952 a year respectively. Many families pay much more.
For lower-income families, such costs represent a heavy financial burden. For many children, they
impose a heavy psychological toll. A byproduct has been a shadow, parasitic tutorial industry that
exploits the insecurity of parents and students. The quality of private tutors and tutorial schools varies
greatly. But unlike normal schools, they are lightly regulated. They advertise so-called tutorial kings
and queens who cultivate an aura of stardom. These hipsters boast about their millionaire status, and
perpetuate a corrupt youth culture that prides high exam scores over genuine knowledge.
Unfortunately, many youngsters look up to them as role models, or at least admire their earning
power. What should clearly be unacceptable has become an accepted or even necessary part of
schooling in Hong Kong. Some teachers in mainstream schools even tell parents to send their children
to private tutorials to avoid lagging behind classmates. If schools are doing their job, such outside
tutoring should not be necessary in the first place. It is not unusual for a young child to spend half a
day at school, take extracurricular courses or private tutorials until late afternoon, only to go home
having to do homework and prepare for next day's classes. There is no joie de vivre in such daily
routines jam-packed with school-related activities. No wonder so many of our youngsters are sickly,
sedentary and not confident. To be sure, some extracurricular activities such as sport and music
lessons can be refreshing to the body and mind. But even piano lessons can be highly competitive, as
when students have to practise daily to pass tests and move up to higher grades.
It appears intense competition inside the classroom is driving many parents to pay for tutorials outside
school. Most are afraid that their children will fall behind if they don't take extra classes; some want to
give them an edge over others. So, although education is either free or heavily subsidised in most
Hong Kong schools, the true cost of a child's education is much higher than official figures stated in
government expenditure. Just as high rents are an indirect tax in our supposedly low-tax system, the
rising costs of schooling outside the classroom show that our education system is, in fact, anything but
free.
Schoolwork is important. But a child's whole life should not revolve around it, letting it affect even
family relationships. It is not worth the sacrifice of a happy childhood. Parents need to know they can
take control of their children's education rather than let the system take control of them. Make friends
with like-minded parents. Seek out teachers who are responsible and receptive - and schools that are
innovative and open-minded. Above all, let your children know that play is as important as study.
Steady as she goes

The yuan now looks certain to appreciate, and China is going about it the right way - slowly
Barry Eichengreen
After a period of high tension between the US and China, it is now evident that a change in Chinese
exchange-rate policy is coming. Beijing is finally prepared to let the yuan resume its slow but steady
upwards march. We can now expect it to begin appreciating again, very gradually, against the US
dollar, as it did between 2005 and 2007.
Some observers, including those most fearful of a trade war, will be relieved. Others, who see a
substantially undervalued yuan as a significant factor in US unemployment, will be disappointed by
gradual adjustment. They would have preferred a sharp revaluation of perhaps 20 per cent to make a
noticeable dent in the US unemployment rate.
Still others dismiss the change in Chinese exchange-rate policy as beside the point. For them, the
Chinese current-account surplus and its mirror image, the US current-account deficit, are the central
problem. They argue that current-account balances reflect national savings and investment rates.
China is running external surpluses because its saving exceeds its investment. The US is running
external deficits because of a national savings shortfall, which once reflected spendthrift households
but now is the fault of a feckless government.
There is no reason, they conclude, why a change in the yuan-dollar exchange rate should have a first-
order impact on savings or investment in China, much less in the US. There is no reason, therefore,
why it should have a first-order impact on the bilateral current-account balance or, for that matter, on
unemployment, which depends on the same saving and investment behaviour.
In fact, both sets of critics have it wrong. China was right to wait in adjusting its exchange rate, and it
is now right to move gradually rather than discontinuously. The Chinese economy is growing at
potential: forecasts put the prospective rate for this year at 10 per cent; the first-quarter flash numbers,
at 11.9 per cent, show it expanding as fast as any economy can safely grow. China successfully
navigated the crisis, avoiding a significant slowdown, by ramping up public spending. But, as a result,
it now has no further scope for increasing public consumption or investment.
To be sure, building a social safety net, developing financial markets, and strengthening corporate
governance to encourage state enterprises to pay out more of what they earn, would encourage
Chinese households to consume. But such reforms take years to complete. In the meantime, the rate
of spending growth in China will not change dramatically. As a result, Chinese policymakers have
been waiting to see whether the recovery in the US is real. If it is, China's exports will grow more
rapidly. And if its exports grow more rapidly, they can allow the yuan to rise. Without that exchange-
rate adjustment, faster export growth would expose China's economy to the risk of overheating. But,
with the adjustment, Chinese consumers will spend more on imports and less on domestic goods.
Overheating having been avoided, the Chinese economy can keep motoring ahead at its customary
10 per cent annual pace.
Evidence that the US recovery will be sustained is mounting. There is no guarantee, but the latest
data on sales of light vehicles, plus the Institute of Supply Management's manufacturing index and the
labour bureau's employment report, all point in this direction.
Because the increase in US spending on Chinese exports will be gradual, it is also appropriate for the
adjustment in the yuan-dollar exchange rate to be gradual. If China recklessly revalued its exchange
rate by 20 per cent, as certain foreigners recommend, the result could be a sharp fall in spending on
its goods, which would undermine growth. Moreover, gradual adjustment in the bilateral exchange rate
is needed to prevent global imbalances from blowing out. US growth will be driven by the recovery of
investment, which fell precipitously during the crisis. But, as investment now rises relative to saving,
there is a danger that the US current-account deficit, which fell from 6 per cent of gross domestic
product in 2006 to barely 2.5 per cent of GDP last year, will widen again.
Yuan appreciation that switches Chinese spending towards foreign goods, including US exports, will
work against this tendency. By giving US firms more earnings, it will raise corporate savings, and
reconcile recovery in the US with the need to prevent global imbalances from again threatening
financial stability.
Chinese officials have been on the receiving end of a lot of gratuitous advice. They have been wise to
disregard it. In managing their exchange rate, they have got it exactly right.
Barry Eichengreen is professor of economics and political science at the University of

California, Berkeley. Copyright: Project Syndicate
Fate of the nation: will election day save

Britain?
General election day is a celebration of democracy. And on one of those rare election days — there have
been only two in the past thirty years — when a change of government seems possible, it can feel like a
day of liberation. Today, however, feels very different. The mood is sombre. And we will all exercise our
democratic right with an unusual weight of responsibility.
Britain is in trouble. This election comes at a time when the quiet assumptions of our nation and its politics
are in question. It is no longer clear that Britain will be able to remain a great power, or a harmonious
society, or one prosperous enough to be able to guarantee its citizens liberty and justice.
In 2005 Tony Blair sought re-election under the slogan “Forward, not back”. It appeared a bland campaign
motto, but was rather clever. It was an attempt to appropriate to Labour the inevitable proceeds of growth
and the credit for progress that the country always sees. So it is striking that it would be a risky
proposition to run on such a slogan now. We can no longer take it for granted that Britain will go forward,
not back.
This country could well become less than it was — less prosperous, less cohesive, less significant in the
world: a country where employment among 16 to 17-year-olds is at a record low is one in which business
is no longer providing enough jobs for young people. We have increased state spending by 54 per cent in
the past 13 years but cannot boast world-class public services. The State has become more intrusive as it
has become larger, threatening civil liberties. We are not going forward. We may go back.
Election day 2010 is the moment when this country will have to stop running away from its debts. For the
past two years, as we tried to fend off recession, we have been shoving the bills into a drawer without
opening the envelopes. This has to end today. The price of our borrowing will have to be paid.
Across Europe you can see the social breakdown that is the inevitable consequence of government and
people living beyond their means. Murder, arson and riots may be a Greek tragedy today. But this tragedy
awaits any European nation that does not begin to reduce its public borrowing. Britain is fortunate that it
did not heed the advice of those who wanted us to enter the euro. But if we do not reduce our borrowing
in line with our earnings, then a Greek tragedy awaits us too.
In 1997, as a nation, we decided that we needed to find more and more money for public services. But the
policy we then embarked upon was not sustainable. We overspent badly. Increasing public spending
faster than the rate of economic growth was bound, at some point, to collide with reality. And now it has.
The alternative now is to reshape the State so that it does not require an ever increasing proportion of
national income to fund it properly. This will require some bold decisions and some very hard ones.
During the campaign it proved possible to avoid some of them. No longer.
This election is unlike other watershed moments. In 1979, the case for sorting out the economy scarcely
needed to be articulated. When rubbish lies uncollected in the streets and the electricity does not work,
you know it is time for a change. Today’s economic crisis, in contrast, is more remote. But it is no less real
or significant.
The Times has already cast its vote. It is not, of course, for us to tell you how to vote, only how we think.
We believe that the Conservative Party is best placed to tackle the vast economic challenges ahead. It is
now the turn of the electorate to decide. How the next government handles the economy will prove
decisive for the future of this country. At every election, party leaders solicitous of your vote, and media
commentators hopeful of your attention, will tell you that the stakes are high, that this time it matters. So
often the significance is inflated. Not this time. This election will define Britain for the next generation.
Cameron fights yellow peril to keep

campaign on track
James Harding and Roland Watson
David Cameron starts off by crowing about how he has decapitated a big yellow animal that has
been bugging him all week. Not the new Lib Dem leviathan, but a tabloid journalist in a giant
chicken outfit who has been stalking his campaign. On Tuesday, the Conservative Party leader
stopped avoiding the chicken, hugged him close and then pulled off his mask. Exposing the
head of Mr Cameron’s other yellow peril is not proving so easy. A week into the Nick Clegg
phenomenon, Mr Cameron’s campaign pitch for the final fortnight is refracted through the rise
and rise of the man who was never supposed to be blocking his path to power.
According to the original Tory script, their leader would by now be hammering the final nails into
Gordon Brown’s coffin. Instead he goes into today’s leaders’ debate looking to invigorate a
campaign that is coming under mounting criticism for failing much earlier to seal the deal with
voters. “I’m aiming for outright victory,” Mr Cameron told The Times as he headed to Devon on
an early-morning train. The Clegg surge had made the election “more challenging, a little bit
more tense, a lot more exciting”, he said. “But it’s absolutely there to be won.”
At the end of an interview conducted between Paddington and Chippenham, we ask for three
words to describe Gordon Brown. He does not pause: “Out of time.” And Nick Clegg? “Not the
answer.” And David Cameron? “Vote for change.” It is quickfire, off the cuff; it encapsulates his
message and yet also reveals the pitfalls of the altered landscape.
After 13 years of Labour rule, time for change was his exclusive preserve — until Mr Clegg
looked into the camera during the first leaders’ debate and turned his relative obscurity into a
claim to be new, different, the change. Mr Clegg’s is a different brand of “change”, a post-
expenses, no-more-business-as-usual kind of change, that threatens to supersede the
freshness of Mr Cameron. And it has changed the terms of debate for the run-in to polling day.
“We need to win a whole series of arguments about the problems of a hung Parliament,” Mr
Cameron conceded.
Sitting in the first-class carriage of a Great Western train carrying him into the South West — Lib
Dem country — Mr Cameron looks much more relaxed and is more genial than he appeared
before an audience of ten million people last Thursday. The men in his entourage are all in suits
and ties, but he is wearing a black V-neck jumper over his open-necked white shirt. He is
nursing a cup of black coffee, as he sets out to persuade voters that the change he is offering is
more authentic than Mr Clegg’s.
“I quite understand why some people think a hung Parliament would be change,” he said, before
making four key arguments against; one economic, one political, one historic and one about
personnel.
“A hung Parliament is instability, uncertainty, potentially higher interest rates, potentially Britain
losing its credit rating. People understand those arguments.”
Would it increase the chances of a sterling crisis? “If you have a situation where you have a
hung Parliament and you have a lack of decisive action I think it raises those risks.”
Rather than a new era of co-operation at Westminster, a hung Parliament would mean the
opposite, he said. Some might think that hung Parliaments were “great for people and miserable
for the politicians because they have to work together”, he said.
Cameron's battle to convince his
doubting party
David Cameron has revived the Conservatives from near-collapse.
But not all the party's members are won over
Peter Snowdon
In 1993 David Cameron was an aide to Norman Lamont. Yesterday he was on the brink of
power
David Cameron has led his party to the brink of power, but has been deprived of the mandate
many believed was well within in his grasp. Had 20 more seats fallen to the Tory advance, he
would have escaped the unenviable task of trying to negotiate his way into No 10. What went
wrong and what effect might it have on his authority?
The irony is that the Conservative party made up more ground on Thursday than it has at any
election since 1931. It achieved the same swing from Labour, 5%, that brought Margaret
Thatcher to power with a majority of 43 seats in 1979.
The Tories have travelled a long way in a short space of time. Only 6½ years ago they were
trapped in a perpetual crisis of leadership and identity.
One of Cameron’s senior lieutenants, Oliver Letwin, recalls the dread he felt as he and other
senior figures listened to Iain Duncan Smith resign as party leader in October 2003 after just two
years in the post.
“Standing there, I really did think that we were seeing the annihilation of a party that was
capable of functioning in the future,” he said.
After a prolonged period of acrimony, division and despair, the party had almost given up the
will to live. Only by avoiding another debilitating leadership battle and picking Michael Howard
did it step back from the political abyss.
Howard drew a line under the organisational disarray and breakdown in discipline that had
plagued the party in Westminster for many years and paved the way for a new generation to
challenge for the leadership.
From the moment David Cameron succeeded in his audacious attempt to lead the party in
December 2005, the Conservatives began to rediscover an appetite for power.
In coming to terms with why the party had become so unpopular, he carved out an agenda to
broaden its appeal. Yet when his honeymoon faded in early 2007, there were clear signs that
enthusiasm among sections of the parliamentary party and the grassroots for “modernising” the
party was only skin deep.
Cameron’s hold over it was severely questioned that summer after Gordon Brown became
prime minister. Brown’s subsequent decision not to go to the polls presented Cameron with a
precious opportunity to reassert his authority, which he duly clasped. Internal voices of dissent
suddenly fell silent.
Yet just as the Conservatives began to regain their confidence and open up a significant lead in
the polls the following year, a new set of circumstances forced the leadership to revise its early
strategy.
The emphasis on the environment and “sharing the proceeds of growth” suddenly became
eclipsed by the need to forge a clear response to the worst financial crisis since the 1930s.
Cameron and George Osborne, his shadow chancellor, struggled to articulate a distinctive
position until it became evident that the deficit in the public finances would define the
battleground ahead of the election. Fiscal conservatism provided a focal point around which
most of the party, on the centre and on the right, could coalesce.
Yet the most serious challenge to Cameron’s authority from within the party arose from a crisis
in which he was deemed to have captured the public mood: the scandal over MPs’ expenses.
By clamping down on those MPs who had brought the party into disrepute and by making an
explicit apology to the country ahead of the prime minister, Cameron rose above the fray, but
suffered collateral damage from within.
As one frontbencher observed at the time, the scandal was “a very serious lesson for him not to
dump on his party and not to take them for granted ... there’s no Praetorian Guard; people could
have turned on him in an instant and they very nearly did”.
The challenge for Cameron as the election approached was to bring the strands of fiscal
austerity and political and social reform together to present a clear and unambiguous message
to the electorate.
A tough stance on the deficit became blurred at the beginning of the year as the leadership
worried whether the promised “age of austerity” might be too negative a position to hold as the
country edged out of recession in an election year.
Cameron and his team realised that they had to offer a more positive prospectus for
government. The Tory manifesto’s guiding theme of the “big society” was intended to project a
sense of optimism and bold thinking. But Tory candidates and foot soldiers struggled to convey
this to voters.
“It was too opaque a concept to sell on the doorsteps,” said a figure close to the campaign.
“What was worse was that it had not even been tested in focus groups before the manifesto
launch.” Another campaign insider said: “The hope was that the fog would clear, but it just didn’t
lift.”
The big society as a campaigning theme had been aired properly only once, during Cameron’s
Hugo Young memorial lecture last autumn. The fact that it recast his long-held emphasis on
“social responsibility” was lost amid the fanfare of the manifesto launch and the televised
debates.
“It was a great framework, but we knew we had to be tighter and sharper in communicating what
it all meant,” one frontbencher concedes.
Although slick and disciplined, the Conservative campaign failed to ignite. Clarity was found in
the party’s pledge to oppose a rise in national insurance, which gathered support from business
leaders, and the “contract with the voters”, which specified what the party wanted to achieve in
office — but too late in the day.
The surge of support for Nick Clegg’s Liberal Democrats also muddied the waters for the
Conservatives. It did not lead, however, to the serious wobbles that previous Tory election
campaigns had succumbed to.
“We did not completely tear up our strategy,” says one senior frontbencher. “There could well
have been total panic but central command held it together. The Lib Dem surge forced us to
redouble our efforts to make the case for change.”
The verdict on Thursday showed that not enough people were convinced that Cameron’s
Conservatives had made that case or earned the right to pursue their ambitions for the country
unchecked.
If Cameron enters No 10 this week, he will be aware that those in his party who have harboured
doubts about his strategy may be even more worried about his prospects of leading a minority
government. Unlike his predecessors since 1997, he will at least have the levers of power with
which to prove them wrong.
Peter Snowdon is the author of Back from the Brink: The Inside Story of the Tory Resurrection,
published by HarperPress
Analysis: A minority Tory government is still

the most likely outcome
The key to any agreement on a new government will be timing: how long it lasts. This is the
essence of references to stability that the three main party leaders and their negotiators have
been making since Friday morning.
The post-election balance of parties in the House of Commons is inherently unstable, making
another general election probable within a few months. The only way out is if two of the three
main parties can agree on a programme lasting a year or more, like the Lib-Lab pact of 1977-
78.
Consequently, any statement that does not mention timing is likely to be very short-lived,
possibly just tiding any government over the summer until the autumn.
Just consider the position of the three main parties. The Conservatives are ready to take over
the reins of office and many of their MPs favour a minority government rather than any formal
deal with another party, particularly if that compromises their long-term attachment to the first-
past-the-post system.
Many senior Tories believe that they will be able to call the bluff of the opposition parties on key
issues, as the SNP minority administration has done in Edinburgh since 2007. But some form of
deal with the Lib Dems on “confidence and supply” (that is on the Budget and deficit-reduction
measures) would provide reassurance, to the public and the financial markets, that the new
administration would be stable and last for a year or more.
This is double-edged both for the Tories and the Lib Dems. The Tories want freedom of
manoeuvre over the timing of the next election: calling it when they are clearly ahead in the
polls, say in October or November when they think they win an overall majority. By contrast, the
Lib Dems are determined to avoid an early election and hence want a firm timetable for any
agreement with the Tories, in effect, ruling out the right to call a fresh election during the period
of the agreement.
Nick Clegg is in a much weaker position than he appears. He is not the “kingmaker” that he was
widely portrayed as on Friday. Rather, he is in danger of being damned whatever he does. If he
agrees a deal with the Tories, many Lib Dems will object and there is a real risk of a split. But if
Mr Clegg forms part of a rainbow coalition with Labour, he risks being accused of propping up a
Prime Minister who has lost the election. Hence, the pressure on Gordon Brown to announce
that he will step down during the summer. That would also allow time for legislation to be
passed to organise a referendum on electoral reform.
The fear of many Lib Dems is what will happen to them at the next election. The danger for Mr
Clegg is being blamed by voters if he is too close either to the Tories with their Budget cuts or to
a discredited Labour Government. So the Lib Dem priority is any deal that delays an election for
as long as possible. Mr Clegg will have to manoeuvre deftly over the next day or two if he is to
keep his party united.
Labour is also on the defensive and needs time — to rebuild around a new leader and to
introduce electoral reform. Senior ministers are also split on the feasibility of a Lab-Lib deal.
The Tories have the most freedom of manoeuvre in relation to other parties. But David Cameron
cannot neglect his own MPs — whom he will meet tomorrow. They are generally reluctant to
make too many concessions to the Lib Dems
The most likely result is still a minority Conservative Government and another election later this
year. But watch what anyone says on dates and times.
Civil justice reforms fail to meet expectations

Albert Wong
Updated on May 10, 2010
On the last day of 2009, the vice-president of the Court of Appeal, Mr Justice Anthony Rogers, handed
down a judgment exemplifying an efficient, robust court - a sign of the decreasing tolerance for
unreasonable litigation since the implementation of civil justice reforms.
In three short paragraphs, Rogers dismissed an application for appeal, noting that these were the type
of cases the reforms were aimed at.
The original dispute, a claim for professional fees, had taken almost eight years to resolve, required a
trial lasting five days, and yet only HK$71,449.95 was being claimed.
"This is clearly the sort of litigation which the civil justice reform was designed to prevent," Rogers
said. "The fact that leading and junior counsel on both sides could engage a judge for five days on a
claim like this is something to be deprecated. For this reason, also, I would be very reluctant to make
any order which would enable this waste of the parties' and public resources to be prolonged. I would
therefore refuse leave to appeal."
But despite his attention-grabbing judgment, commercial litigation lawyers are still unsure whether the
reforms - one year on - have made any significant impact.
After almost a decade of work, comprehensive reforms of the civil justice system took effect in April
last year, hoping to remedy flaws in litigation that drive up legal costs and deny many people,
especially the middle class, access to justice.
One of the overarching ambitions of the reforms was to change the "adversarial culture" of litigation in
Hong Kong, in which the financially stronger parties played "tactical games" with procedural
arguments to exhaust the funds of the financially weaker side.
The reforms introduced a greater responsibility, as well as more powers, to judges to manage cases
and throw out unnecessary arguments on procedural matters. The new rules now require early
preparation of arguments according to a strict timetable in the hope that the two sides would be able
to assess the merits of the case and either settle before proceeding any further in the courts, or seek
mediation.
If one party unreasonably insists on continuing with litigation despite being offered alternatives to
resolve the matter, the judges may punish that party with a higher proportion of the costs of the
litigation.
In one District Court case, decided in February, the plaintiffs, claiming for the loss from an incomplete
delivery of goods, offered to settle before proceeding to litigation at a rate of 20 per cent less than the
sum being claimed. But the defendants decided to fight the case, lost, were ordered to pay the full
amount of the claim, and because they had rejected the opportunity to settle earlier, was ordered to
pay costs on an indemnity basis.
In the opening speech of a civil justice reform conference this month, Chief Justice Andrew Li Kwok-
nang noted that "progress has been made in achieving the necessary change in culture but we have
some distance to go".
Despite increased awareness of alternative dispute resolutions such as mediation, lawyers say clients
are hesitant.
Gareth Thomas, head of commercial litigation at Herbert Smith Hong Kong, said clients still feared
mediation. Rules on more co-operation between litigants are compiled only to provide "window
dressing". "It is as adversarial as ever," he said.
Jon Witts, a litigation specialist at Allen and Overy, said "regretfully, it hasn't really worked the way we
hoped". He said there was still widespread ignorance of the new rules by lawyers, and many judges
were still "reluctant to really slap anyone".
Martin Rogers, head of litigation at Clifford Chance in Hong Kong, openly urged judges to be "more
robust" during the conference and said "the judiciary should not shy away from expressing robust
views", especially in the face of non-compliance of new rules.
In response, a judge in the Court of First Instance, Mr Justice Anselmo Reyes, was surprise that
lawyers felt judges had been too lenient. "As far as I am concerned, there has been no such thing as a
`honeymoon period' ... The judges have been well prepared, it's those who appear before them who
are not."
With little change to the "adversarial culture", the intended effect of changing it - a reduction of
litigation costs - has yet to bear fruit.
Thomas said he had seen a reduction of interlocutory applications because of the risk of having to pay
the costs of those hearings upfront, which the new rules stipulate.
"But any cost benefit that has arisen is eaten up by the requirement that the sides need to know their
case earlier", which then causes what is known as "front loading" where the legal costs were incurred
in the preparatory work that must be completed under a strict deadline before the case even begins.

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Barry Eichengreen is professor of economics and political science at the University of