Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Thursday, Jan. 16:
HONG KONG POLICY ADDRESS
Fiscal expense on supportive measures set to double this year
Hong Kong government plans to spend more than HK$20 billion (US$2.58 billion) to ease the economic pain of the underprivileged in Hong Kong, with half of it being on a recurrent basis, according to the latest policy address. The Chief Executive has refuted accusations that the increased supportive measures are aimed at boosting his sagging popularity. Lawmakers, meanwhile, raised concerns about the source of funding for the extra expenses that are deemed to focus on the poor while overlooking the needs of the middle class.
Hong Kong govt eyes supply of 470,000 new homes in 10 years
A total of 470,000 new home units are targeted for property supply in the private and public markets combined in the next 10 years, Chief Executive Leung Chun-ying told lawmakers in his policy address. The supply under the Home Ownership Scheme will rise to 8,000 a year from the existing 5,000. Meanwhile, the government is changing the plan of use for about 80 land parcels to residential purposes that can provide extra 89,000 units in the next five years, Leung said. Observers, however, said the change of use for some land sites may not gain public support easily.
Lantau set to thrive as core business district
The Hong Kong government has pledged to turn the eastern part of the Lantau Island into a core business district, just second to Central and East Kowloon, seizing opportunities that the development of the Hong Kong-Zhuhai-Macao Bridge may bring. More hotels, shopping malls, as well as recreational, food and beverage facilities will be built, according to the latest policy address of Chief Executive Leung Chun-ying. A man-made island occupying 1400 to 2400 hectares of space may be created by reclamation in between Lantau and Hong Kong Island, to inhabit new population.
ECONOMY AND BUSINESS
Tencent to buy China South City shares amid B2B plan
Tencent Holdings Ltd. (00700.HK) has agreed to buy a total of 13 percent stake in China South City Holdings Ltd. (01668.HK) in phases over two years for HK$2.35 billion, eyeing cooperation in commercial freight businesses and national wholesale networks. The deal, which will make Tencent China South City’s fourth largest shareholder, is seen setting a stage for Tencent to directly compete with market leader Alibaba Group unit Alibaba.com in the business-to-business e-commerce sector. China South City currently holds seven logistics trade centers in cities such as Shenzhen and Zhengzhou in the mainland.
China new loan growth slows for fourth year
Total new loans in the mainland last year reached a record 8.8 trillion yuan (US$1.46 trillion), growing at a slower pace for four years in a row, as they rose 14.1 percent from a year ago, the People’s Bank of China said. Meanwhile, the portion of renminbi lending in aggregate social financing, which rose 1.53 trillion yuan to top 17.29 trillion yuan, has shrunk to 51 percent, reflecting a rise in shadow banking activities. The broad money supply M2 grew 13.6 percent, surpassing the 13 percent government goal.
Leing’s policy address not balanced, comprehensive
Hong Kong’s Chief Executive Leung Chun-ying has doubled the effort to alleviate poverty and ease housing demand in his second policy address yesterday. The imperatives of addressing the two pressing issues have overridden some important issues including short- and medium-term economic development, government-legislature relations and political reform in the policy blueprint. The lack of a balanced, comprehensive policy approach has laid bare the constraints faced by the government. Despite the well-intended efforts to address some issues, the policy speech may not win applause.
New fishing rules in South China Sea set to fuel territorial disputes
Following the setting up of an air defense identification zone in East China Sea area, China has stepped up its sovereignty claim in the South China Sea. As expected, Hainan provincial authorities have announced new fishing regulations in the waters of the area, which took effect on January 1. Under the rules, all fishing vessels that enter the area are required to notify the provincial authorities. As the new rules cover areas whose sovereignty rights are being claimed by the Philippines, it is set to heighten the territorial dispute between China and the Philippines.
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