Date
21 September 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 Thursday, March 6:

TOP STORIES

China sets 7.5 percent growth target for 2014

China has kept its annual economic growth target at 7.5 percent for the third time in a row, with inflation and broad money growth seen at 3.5 percent and 13 percent respectively for 2014, Premier Li Keqiang {李克強} said in his first government work report on Wednesday. The figures were largely in line with market expectation and similar to the levels last year. Li also vowed to keep monetary policy prudent and fiscal policy progressive. Economists, however, said the government may find it harder to achieve the targets this year amid increased credit risks and weaker growth in exports and fixed-asset investment.

Fast Retailing eyes 5 trillion yen sales by 2020

Interview: Fast Retailing Co Ltd. (06288.HK), the parent company of UNIQLO, is eyeing 5 trillion yen (US$48.88 billion) worth of sales by 2020, mainly through organic growth, chairman Tadashi Yanai said. The company is tapping the Greater China market, in particular Hong Kong, for business talent and sales growth, Yanai said. The Japan-based apparel retailer has estimated its sales for the current fiscal year through August to come in at about 1.32 trillion yen, compared to 1.14 trillion yen the previous fiscal year.

HSBC may need to make provisions on BoCom investment

Interview: HSBC Holdings Plc. (00005.HK) is assessing potential provisions for losses in the carrying value of shares it holds in Bank of Communications Co. Ltd. (03328.HK) due to a steady slide in the latter’s share price, said Peter Wong, HSBC managing director and chief executive of The Hongkong and Shanghai Banking Corp. Ltd. The provision, which is required by international accounting standards, will not affect the group’s cash flow and dividend distribution plan, Wong said.

POLITICS

Missing remarks on Hong Kong autonomous rule sparks speculation

In a departure from previous arrangements, Premier Li Keqiang has deleted the reference to “Hong Kong people ruling Hong Kong” and “high degree of autonomy” in the section on Hong Kong in his government work report delivered at the opening of the National People’s Congress plenum yesterday. It gave rise to speculation of a change of Beijing’s policy towards Hong Kong. Basic Law Committee vice-chairmen Elsie Leung said the two policies were already embodied in the notion of “one country, two systems” that Li reaffirmed in his speech. But the Democratic Party feared it was a sign of Beijing hardening its Hong Kong policy.

Carrie Lam says debate on opinion poll should be left to academics

Chief Secretary Carrie Lam said debate about the credibility of public opinion should be better left to academics and researchers. She was commenting on a row caused by Peter Lee Ka-kit, vice-chairman of Henderson Land Development. Lee criticized the polls run by University of Hong Kong pollster Robert Chung as being biased, saying they were always unfavorable to the government and the pro-Beijing camp. Lam said she found polls have reference value for the government. Lee refused to comment further yesterday.

EDITORIAL

Chaori Solar debt default bad omen for Chinese economy

Shanghai Chaori Solar Energy Science & Technology Co. Ltd. will not be able to repay 89.8 million yuan (US$14.61 million) in interest due on March 7 on one billion yuan of corporate bonds issued in 2012. The default, which came to light on the eve of the delivery of Premier Li Keqiang’s government work report yesterday, has highlighted credit risks in China and the urgency of structural reform in the nation. The case of Chaori Solar might only be the tip of iceberg. If banks tighten liquidity in view of the credit risks, the downward pressure on the Chinese economy will grow. And it will not be easy for the country to achieve its targeted annual growth of 7.5 percent.

COMMENTS

Respecting religious, cultural aspects long-term solution on ethnic minorities, Yuen says

Premier Li Keqiang has made swift reference to the terrorist attack in Kunming in his government work report yesterday. But it contained no new policy initiatives to help address the problem of disputes related to ethnic minorities, veteran China watcher Edgar Yuen wrote. Government crackdown will be harden if secession activities of Xinjiang pro-independence activists continue. Conflicts are therefore not likely to ease. There are reason for worry about the situation unless new measures are taken by the central authorities. The long-term solution to bring peace to the ethnic minorities region is to adopt policies to respect their religion and culture.

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