Date
17 August 2017

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 Friday, Jan. 24:

TOP STORIES

Analysts see potential polarization in Hong Kong home prices

The government efforts to increase supply of residential land may lead to polarization of home prices between those in northern New Territories and the Hong Kong Island, analysts say. The concerns come as the government is listing out 152 land parcels for property developers to apply for a change in the purpose of those sites to offer a combined 215,300 residential units to the market. However, as much as 75 percent, or 162,800 target units, will be located in the New Territories, with 42,000 units in Yuen Long but only 16,400 units in the island.

Hong Kong Exchange Fund yield lagged inflation last year

The Hong Kong Exchange Fund has posted a 32 percent slide in investment income to HK$75.9 billion (US$9.78 billion) last year as compared to 2012, with a yield of 2.7 percent, lagging behind the 4.3 percent inflation rate. Norman Chan, chief executive of the Hong Kong Monetary Authority, which operates the fund, attributed the fall to a spike in bond yields that were triggered by the tapering plan of the United States in its bond purchase program. Chan warned of the possibility of capital outflow from emerging markets later this year.

IOSCO head calls for WTO-like watchdog in financial market

Interview: David Wright, secretary general of the International Organization of Securities Commissions (IOSCO), has called for the establishment of an international watchdog in the financial market that holds authority and sanctions capacity similar to what the World Trade Organization does in the commercial world. Such institution has to be endorsed by the Group of 20 and the Financial Stability Board, and likely to take a long time for negotiations to make it a reality, Wright said.

POLITICS

Nominating body to name ‘best choices’ of chief executive for vote, Leung says

Vice chairman of the Beijing-appointed Basic Law Committee, Elsie Leung, has rejected criticism that the nominating committee for the 2017 chief executive election would be a tool to screen out candidates Beijing does not like. She said the nominating body instead would help prepare the “best choices” for voters to choose through universal suffrage. Leung has argued that international covenant on human rights also allowed restrictions on right to participate in elections. Pan-democrats blasted Leung’s remarks as misleading.

Privacy chief calls on new law on protection of data transfer overseas

Privacy commissioner Alan Chiang has called on the government to set a timetable for the introduction of a new law to protect the transfer of personal data outside Hong Kong. The existing protection is weak and would not be conducive for the city to become a hub for international finance and transfer of data, he said. A constitutional affairs bureau spokesman said such a law might cause adverse impact on the transfer of data by commercial firms overseas. He said the issue should be examined carefully.

EDITORIAL

China faces challenges as manufacturing weakens

Despite a slowdown of the nation’s manufacturing activities, China is likely to continue the drive to restructure the economy and stimulate the private sector as long as the economic growth rate stays between 7.0 and 7.2 percent. But the pressure on unemployment will grow if the weakening of manufacturing activities continues. The central bank may have to consider relaxing its monetary policy later this year if the economic slowdown pace gathers speed.

COMMENTS

Broadly-represented nominating body can prevent missteps in CE election, Niu says

A nominating committee comprised of four sectors for the chief executive election will help avoid populism and welfarism in “one person, one vote” election, Niu Gan {牛耕} wrote. Although universal suffrage in Western countries has helped strengthen their capitalist system, academics have pointed out the downside risk of excessive welfare and money politics. A nominating committee comprised of different sectors could ensure the candidates represent the overall interests of different sectors, and not one particular sector, Niu wrote.

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