Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Thursday, Oct. 3:
Alibaba said to change communications strategy for Hong Kong listing plan
Alibaba Group Holding Ltd. is said to change its marketing and communications strategy in a bid to rebuild its image and gain approval for a purported Hong Kong listing, which has been strangled by the partners’ board control structure of the company that does not comply with the city’s regulation, sources told HKEJ. They said the company has not given up on its listing plan as Hong Kong has been its important market. Chairman Jack Ma is said to come to the city soon to discuss the issues. However, it is now unlikely for the company, which is purportedly due to repay a syndicated loan worth US$4 billion by March next year, to complete its listing procedure by the end of this year.
Most people want HK govt to maintain property curbs, survey shows
About 62.6 percent of respondents in a Hong Kong survey said they support the continuance of heavy government levies, namely buyer stamp duty, double stamp duty and special stamp duty, on property purchases. The survey by the Chinese University of Hong Kong found only 17 percent said such measures should be relaxed. The survey also found that over 50 percent of respondents believe the measures have effectively suppressed surges in property prices, but 89.2 percent of interviewees still think the property price levels are too high. Meanwhile, about half of the respondents oppose any exemption to Hong Kong registered companies or buyers of industrial and commercial properties. Lawmakers will discuss the measures at a committee meeting on Thursday.
ECONOMY AND BUSINESS
Henderson Land seeks to buy shares of subsidiaries from Lee’s family
Henderson Land Development Co. Ltd. (00012.HK) is planning to acquire HK$3 billion (US$386.87 million) worth of share interests in four subsidiaries from chairman Lee Shau-kee and his family, the property developer said in a stock exchange filing. The concerned subsidiaries are Hong Kong and China Gas Co. Ltd. (00003.HK), Hong Kong Ferry (Holdings) Co. Ltd. (00050.HK), Miramar Hotel and Investment Co. Ltd. (00071.HK) and Henderson Investment Ltd. (00097.HK). A spokesperson for the developer has refuted rumors of a potential legacy distribution plan that may have triggered the proposed deals, saying they are aimed to streamline the investment and holding structure of the group.
Hong Kong urged to attract more direct investment from mainland companies
Interview: The newly announced initiatives for creating a free-trade zone in Shanghai are likely to boost outbound direct investment by mainland companies situated in the area and Hong Kong should seize the opportunity to attract them to set up offshore international headquarters, said Ernst & Young chairman and managing partner for Greater China Albert Ng. Given a new instalment program for related tax on any value addition from revaluation of assets overseas, more companies may seek to raise their outbound investment, Ng noted. The combined outbound direct investment of Chinese companies amounted US$87.8 billion last year, only second to the United States and Japan.
Top CCP meeting next month may swing stock markets in mainland
Interview: The top political meeting of the Chinese Communist Party next month may cause volatility in the mainland stock markets, said JPMorgan Asset Management executive director for Asia-Pacific Lilian Leung. Investors are likely to focus on potential reforms that may be unveiled during the meeting to help achieve the government goals in urbanization, Leung said, adding that she expects such reforms will likely change the current household registration regime, also known as hukou system, and land transfer regulation. Consumption power of some two million people could then be unleashed, boosting sectors such as entertainment, telecommunications and technology.
Audrey Eu calls on HK people not to accept ‘fake’ universal suffrage
Interview: Civic Party chairman Audrey Eu has urged Hong Kong people not to accept a “fake” universal suffrage model for the 2017 chief executive election, wrongly believing in claims that the electoral methods could be amended further after another term. She insisted Hong Kong people must fight for true universal suffrage in 2017. Eu warned she would veto the government blueprint at the price of “marching on the same spot” in democratic development if the package was a fake model.
Pan-democrat legislators plan to launch inquiry into Paul Chan land row
A group of 23 pan-democratic Hong Kong legislators plan to move a motion at the legislature for it to invoke special powers to investigate into the alleged hoarding of land by development minister Paul Chan in northeastern New Territories, which falls within a redevelopment plan he was overseeing. They said they remain decided on whether to push for the setting up of an independent inquiry if the motion is vetoed at the legislature.
Abe takes big bet on consumption tax hike for recovery
Faced with doubts in the international community about Japan’s financial sustainability and debt risk, the Shinzo Abe government announced a hike in consumption tax on the eve of an APEC leadership summit to demonstrate its determination to restore financial discipline. But Japan is confronted with ageing population, slowdown in innovation improvement and other issues. The increase in consumption tax will create grave uncertainty to the nation’s economic recovery next year.
Beijing urged to follow UK and not exercise all powers over Hong Kong
It is an undeniable fact that the Chinese central government, as any other sovereign governments are entitled to, holds enormous powers over Hong Kong. The former British colonial government had been able to exercise self-restraint over Hong Kong by not using all of its powers, HKEJ founder Lam Hang-chi wrote. If Beijing fails to do the same, China’s promises of “one country, two systems” and “Hong Kong people ruling Hong Kong” will not be realized.
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