Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Wednesday, Dec. 11:
Shanghai overtakes Hong Kong in competitiveness ranking
Shanghai has beaten Hong Kong for the first time to take the top spot in a competitiveness ranking of Chinese cities, according to a survey by the China Institute of City Competitiveness. The institute attributed Shanghai’s catching up to better growth in gross domestic product and fiscal revenue, compared to that of Hong Kong. However, the survey was criticized by Hong Kong academics of being “highly unprofessional” as it did not consider population and debt levels when comparing GDP and fiscal strength of the cities.
Top Spring said to have secured funds from a leading developer
Top Spring International Holdings Ltd. (03688.HK) is said to have attracted a leading Hong Kong property developer into investing in the company, in a move similar to Henderson Land Development Ltd. (00012.HK) subsidiary Henderson China’s initiative in CIFI Holdings (Group) Co. Ltd. (00884.HK) earlier, sources said. Top Spring shares jumped over 20 percent on Monday amid the purported investment. Meanwhile, Franshion Properties China Ltd. (00817.HK) recently obtained HK$1 billion from The Blackstone Group L.P. for a 49 percent stake in one of its projects.
ECONOMY AND BUSINESS
CLP to raise tariff by 3.9 percent next year
CLP Power Hong Kong Ltd., a subsidiary of CLP Holdings Ltd. (00002.HK), has gained approval from the government to raise its tariff by an average 3.9 percent next year amid higher operating costs. The increase compares to a 5.9 percent hike this year. The Hongkong Electric Co. Ltd., a unit of Power Assets Holdings Ltd. (00006.HK), will keep its tariff at current levels.
Anbang buys 13.7 billion yuan worth CM Bank shares
Anbang Property & Casualty Insurance Co. Ltd. bought on Monday 13.7 billion yuan (US$2.56 billion) worth of A-shares of China Merchants Bank Co. Ltd. (03968.HK, 600036.CN). The shares were bought at a 10 percent premium compared to Friday closing price of 10.98 yuan in Shanghai, the lender announced a day after the deal. The transaction value marks a record high for a single purchase in the A-share market. The insurer holds 5 percent, or 1.26 billion A shares, in the Chinese bank.
Prudential seeks expansion in Asia
Prudential Plc. (02378.HK) has set a new goal for minimum 15 percent annual compound growth in pre-tax operating profit in its Asia life insurance and asset management businesses from now through 2017. The insurer also aims to achieve in 2017 an underlying free surplus of at least 1.1 billion British pounds (US$1.81 billion) by expanding presence in Hong Kong, Singapore, Malaysia, Thailand, the Philippines, Indonesia and Vietnam.
Fight for civil nomination central theme of New Year’s Day march
A pro-democracy alliance has set the fight for civil nomination and against political vetting for the 2017 chief executive universal suffrage election as the major theme of the upcoming annual January 1 march. Twenty-six pan-democratic legislators and the Alliance for True Democracy will also co-organize the march. They expect 50,000 people to take part in the rally. Separately, a territory-wide commerce and industry association will hold a three-day shopping festival that straddles the New Year’s Day to encourage consumption.
Universal suffrage may not happen before 2047 if ongoing reform fails, Chen says
A university law professor Albert Chen, who sits on the Beijing-appointed Basic Law Committee, has warned that universal suffrage might not happen in Hong Kong before 2047 if the ongoing political reform for 2017 election falters. He said he does not believe an electoral blueprint for 2017 that was vetoed will have a chance of passage in 2022. Chen urged pan-democrats to keep their options open for compromise on the second-best electoral blueprint.
Regulatory system of electricity firms should benefit consumers, not shareholders
Although the increase in tariffs by Hong Kong electricity companies has been moderate, the public is still unhappy about the hike. It has laid bare the contradictions between the operation of monopoly industries and government regulation. It is unclear whether the opening up of the market for more competition will keep electricity prices at a low level while maintaining stable electricity supply. The only way to ease public discontent over electricity tariff hikes, however, is to improve the market structure and review and change the regulatory system towards a system that benefits consumers, not shareholders of the companies.
Universal suffrage plan for 2017 CE election can be win-win solution, Wong says
The Chinese central government has the final say on Hong Kong affairs under the “one country, two systems” policy. That fact that final power of interpretation of the Basic Law is vested with the National People’s Congress standing committee is evidence of that, former civil service minister Joseph Wong wrote. Beijing can choose to interpret provisions in the Basic Law to resolve all disputes over universal suffrage. But just like the imaginative “one country, two systems” policy, the universal suffrage system for the 2017 chief executive election can also be a win-win plan. The crux of the matter is whether the powerful Beijing leadership has the wisdom and accommodating mind of late leader Deng Xiaoping.
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