Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Monday, Feb. 17:
John Tsang urges consensus on land reclamation, labor importation policies
Hong Kong’s Financial Secretary John Tsang has urged lawmakers to forge a consensus on land reclamation and labor importation policies for better economic growth. The two issues are crucial to the momentum of the economy amid a lack of supply of land and workers in the city, Tsang wrote on his blog over the weekend, noting Singapore as an example that has outpaced Hong Kong, Taiwan and South Korea. Construction, nursing, retail, catering and ground services are among the sectors facing labor shortage, Tsang added.
Abenomics helps buffer impact of Fed tapering
Interview: The quantitative easing measures of Japan, or the so-called Abenomics, have acted as a buffer to liquidity outflows in the region amid the Federal Reserve tapering in the United States, said Jerry Schiff, deputy director at the Asia-Pacific department of the International Monetary Fund and mission chief for Japan. Meanwhile, Japanese financial institutions are changing their portfolios to investing more in Asian bonds as existing government bond holdings mature, Schiff noted, adding that more of their funds will be parked in Asia-Pacific, Europe and US markets.
Physical A-share ETFs seen se on better accounting treatment
Physical A-share exchange-traded funds (ETFs) have seen their unit prices pick up momentum after CAM CSI300 (03188.HK), managed by China Asset Management Co. Ltd., said it will no longer make provision for withholding tax on capital gains as authorities have clarified the rules. All of the 11 such ETFs under the renminbi-denominated qualified foreign institutional investor scheme posted significant gains after the asset management firm’s move, which can significantly improve the net asset value of an ETF. Other firms are expected to follow suit soon.
Elsie Leung not optimistic about political reform deal
Deputy Chairman of the Basic Law Committee Elsie Leung said she is not optimistic about a consensus on political reform in Hong Kong, saying differences between various groups were still wide. She has called on the pan-democrats to take a longer view on political reform, urging them to soften their stance on matters such as venue if they are keen to forge dialogue with mainland officials.
Fred Ma calls for broadening Hong Kong tax base
Interview: The government should broaden the tax base to allow flexibility in public finances although the overall financial situation of Hong Kong remains solid for now, said former secretary for financial services and the treasury, Frederick Ma. He said he hopes the next chief executive with mandate from voters through universal suffrage will introduce goods and services tax, as the city relies too much on revenue from income and profit tax.
Consultation on rent control a waste of time
History of the introduction of rent control in Hong Kong shows the measure brings no benefits to both tenants and landlords. It will not only fail to solve housing problem, but worsen the problem of shortage. The government may just want to show its willingness to listen by agreeing to consult the public again. It will again prove to be a waste of time. The only effective way to solve the housing problem and keep rents stable is to provide sufficient supply.
Social media offers ample room for free speech, Lian says
Statistics show readership of social media is growing while those of traditional media are falling. The circulation of traditional media will drop if political pressure on their editorial stance continues, former HKEJ chief editor Joseph Lian wrote. Traditional media will become more inclined to support the government. Journalists in traditional media must stand firm to resist pressure on their editorial independence. But even if traditional media collapses, there is still ample room for free speech in social media. There is no need for pessimism.
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