Date
12 December 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 Monday, Mar. 24:

TOP STORIES

Qin Xiao sees breakthrough in renminbi convertibility in three years

The renminbi is likely to rise 1 percent a year and see a breakthrough in its convertibility in three years, said Qin Xiao {秦曉}, convener of the mainland opportunities committee of the Financial Services Development Council. Qin expects mainland China to open its capital account with restrictions only in certain circumstances. He said a slower appreciation or even depreciation would not affect the recognition of the yuan as a reserve currency as long as it maintains a significant growth in transaction volume, liquidity flows and value stability.

Yang Qiumei backs Hong Kong as offshore RQFII headquarters

Interview: The Hong Kong government should promote the city as headquarters for the overseas issuance of products under the renminbi-denominated qualified foreign institutional investor scheme, said Yang Qiumei {楊秋梅}, executive vice president and head of Asia Pacific at Investment Company Institute Global (ICI Global). The Chinese securities expert market said such a positioning can increase the city’s competitive edge during the course of renminbi internationalization, adding that it may take three to five years for overseas RQFII businesses to become profitable.

Bubble exists in certain internet stocks, Francis Leung says

Interview: Certain stocks in the technology and internet sector have been overvalued to such an extent that signs of bubble have emerged, said Francis Leung, managing partner and chairman for Greater China at CVC Capital Partners SICAV-FIS S.A. The former investment banker, who helped float Tom Group Ltd.’s (02383.HK) predecessor Tom.com (08001.HK), said investors should beware firms with no real operation but only promote the virtual investment theme of an asset injection. He also said game companies are facing rising competition and business risks amid fast-changing consumer taste and a shorter product lifespan.

POLITICS

Hawaii university law professor calls for compromise on reform

Interview: A University of Hawaii law professor has called on moderate democrats and the pro-establishment camp to seek a compromise on the universal suffrage system for the 2017 chief executive election. Carole Petersen, who had been a university law lecturer in Hong Kong for 11 years, said people should not be too worried about whether Beijing has set a bottom-line on reform at this stage. She said Hong Kong people have a more powerful voice in lobbying Beijing if they stood united. Any proposal that allows the nominating committee to screen out candidates is undemocratic, she said.

Carrie Lam clarifies remarks on mainland law professor’s views on political reform

Chief Secretary Carrie Lam has clarified her remarks on Sunday that implied comments by Rao Geping {饒戈平}, a Basic Law Committee member and Peking University law professor, struck a definitive note on the arrangements for the 2017 chief executive election. Lam explained the government still wanted to consult the people, adding she was only summarizing the views of some panelists including Rao at a political reform seminar on Sunday. Pan-democrats lambasted Lam for “shutting the door” for talks on reform.

EDITORIAL

Government should review punitive stamp duty as end of US quantitative easing looms

Expectations grew that there will be further adjustments in the Hong Kong property market as flat owners have shown flexibility in negotiating the prices of their properties up for sale. With the imminent end of the United States’ quantitative easing, the government should revise its punitive stamp duty. The special levy on second homes should be abolished after the Federal Reserve ends its bond-purchase program. By doing so, the property market will regain its vigor and market forces will sustain its healthy growth.

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