Date
16 October 2018

HKEJ Today: Highlights

Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Thursday, Oct. 17:

TOP STORIES

HKTV considers judicial review of free-TV license rejection

Hong Kong Television Network Ltd. (01137.HK) is considering whether to seek a judicial review of the government’s rejection of HKTV’s application for a free-to-air license, chairman Ricky Wong said. The company laid off 320 staff after the bid was rejected. Wong said the company is seeking legal advice on a potential legal challenge against the decision, which he said was unfair, unreasonable and “made in a black box”. Wong backed the company to invest more than HK$900 million (US$116.06 million) in the venture, which he claims was at the authorities’ invitation. Secretary for Commerce and Economic Development, Greg So, refused again on Wednesday to explain why the government rejected to license application.

Mainland sees chances for HK in Shanghai free trade zone

The mainland authorities expect Hong Kong, the largest offshore renminbi center, will benefit from opportunities arising from the increased fund flows that the newly established Shanghai free trade zone will bring, Hong Kong Monetary Authority chief executive Norman Chan said as he led a delegation of bankers for an official visit to Shanghai. Chan quoted Shanghai vice mayor Tu Guangshao {屠光紹} as saying that financial development in the zone will be aimed at supporting trade, investment and the real economy. The authorities are drafting a detailed plan to test market liberalization of the capital account and renminbi interest rates in the zone while at the same time reining in risks in the process, Chan said.

ECONOMY AND BUSINESS

Manufacturing guru Wong calls for end to US dollar peg

Interview: The Hong Kong dollar peg should be abolished because the appreciation of the renminbi has weighed on production costs and the central government can back the city’s currency to stand alone, said Wong’s Kong King International Holdings Ltd. (00532.HK) chairman Senta Wong. In contrast to mainstream opinion supporting a peg to a basket of currencies including the renminbi, the manufacturing guru said the Hong Kong dollar should be freely convertible and not linked to currencies that will jeopardize the city’s economic and political environment.

Unpegging HK dollar from greenback a path to instability, Antony Leung says

Interview: The time is not right to link the Hong Kong dollar to the renminbi as this will only turn the city’s currency into a proxy for speculation on the Chinese currency, which is still not fully convertible, causing financial instability, said Greater China chairman of The Blackstone Group L.P. and former financial secretary of Hong Kong, Antony Leung. Unpegging the city’s currency from the US dollar will lead to a short-term appreciation of the Hong Kong dollar, resulting in a fall in property prices that may affect most people, who own real estate in Hong Kong, Leung added.

China to roll out new consumption moves, says Aberdeen Asset Management

Beijing is likely to unveil supportive measures to boost domestic consumption while initiating reforms in state-owned companies during a top political party meeting due to be held next month, said Nicholas Yeo, head of China/Hong Kong equities at Aberdeen Asset Management Plc. The country, which has pledged to expand domestic consumption’s contribution to the economy, generates over half of total consumption overseas, Yeo noted. He said his top picks include stocks of consumer staples and property developers with a larger portfolio of shopping malls and offices.

POLITICS

Carrie Lam counters Leung’s no-confidence critics

A motion of no-confidence moved by Hong Kong pan-democratic lawmakers against Chief Executive Leung Chun-ying, the second of its kind since he took office last year, was vetoed yesterday. Pan-democrats attacked Leung’s poor performance in governance, including his recent handling of the Manila bus hostage tragedy, and demanded his immediate resignation. Chief Secretary Carrie Lam dismissed the criticism as unfounded. She said Leung has worked hard to fight for justice for the families of the victims of the Manila killings in the last three years.

Free-TV license, Manila bus hostage crisis to dominate CE question time

The row over a government decision to reject Hong Kong Television Network’s bid for a free-to-air license and the Manila bus hostage crisis are expected to dominate Chief Executive Leung Chun-ying’s question time in the Legislative Council on Thursday. Civic Party legislator Claudia Mo claimed the decision was made without transparency. She added she would also grill the government on their handling of the demands of the families of the victims of the Lamma ferry collision on the national day last year.

EDITORIAL

HK government owes explanation on TV licenses

Given that the decision to issue free-to-air TV licenses hinged on public interest, the Hong Kong government cannot shirk its responsibility to allay public doubts about its approval criteria for new applications. An explanation could prevent the row from being further politicized. There will be no real and effective competition if the government fails to make the approval process more transparent as the present open competition policy for the free-to-air market is riddled with restrictions. The government’s promise to help provide more quality TV programs and promote the creative industry will become just empty talk.

COMMENTS

Leung risks losing public trust in reversing Tsang’s TV license decision

It is clear that the previous administration under Donald Tsang was keen to issue new free-to-air TV licenses and that Ricky Wong’s Hong Kong Television Network had not been ruled out. It is rare for a new government to overrule the decision of a previous administration, HKEJ founder Lam Hang-chi wrote. To do so undermines the authority of the government in honoring its promises and the continuity of policies. The people will start to question whether Leung’s policies will also be reversed by his successor. Leung will face more difficulty in governance if he fails to win the trust of the people.

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