THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Introduction
HK must prepare itself for the many challenges of a rapidly growing integration. Experts say government needs to reassess its management of resources in planning for ad coping with a surge of mainlanders coming to HK. Experts have issued strong warning concerning the possibility of a worldwide avian flu pandemics originating in China and South East Asia. On the economic level, an IMF staff Mission to HK noted that economic performance has improved markedly since mid-2003. The economy has turned the corner "We are sustaining our momentum well into the final months of this year..." said the Financial Secretary.

Domestic politics
Livelihood issues to be main focus of Tung: With political tensions easing and the economy on the path of healthy growth the Chief Executive will most probably turn to livelihood and quality of life issues in his January yearly policy address such as environmental pollution, public sector reform, medical financing and the growing gap between rich and poor.
Beijing's warning on referendum: Mainland official underlined that referendum supporters are playing with fire. A move towards a referendum on universal suffrage would obstruct constitutional development and be seen as a threat to the nation. For Beijing it is a challenge to the country's political and constitutional system.
HK authorities draw critics with a cultural masterplan: The 40 h complex known as the West Kowloon Cultural District is attracting worldwide interest. Government shortlisted three local bidders and construction is due to start in 2007 with the first facilities opening in 2010. The Guggenheim and Pompidou museums as well as famous architects such as Norman Foster and Herzog & de Meuron have made proposals. Local critics charge that it is primarily a property development and not a cultural one, a joint venture between government and big business with no real interest for the community. Chief Secretary for Administration Donald Tsang defended the project in LEGCO saying the aim of inviting private developers to build the culture zone is to make use of their capital and corporate skills and to ensure that the cultural district will receive adequate funding to sustain it. A three months public consultation on the project has started.
HK at APEC Summit: In Santiago Chief Executive Tung met President Hu who told him that development is key to HK's future. Commentators in HK media have been rather critical of APEC stressing that the organization should go back to business and not leave security issues dominate the agenda and give economic liberalisation only a pro forma nod.
Democratic Party in disarray: The party's chairman announced his resignation taking responsibility for the party poor performance and flagging fortunes.
HK' international advisers: On Nov. 4 Tung Chee Hwa and his Council of nine International Advisers ended a two-day meeting in HK and Guangzhou. The advisers could witness the complementary relationship between HK and Guangdong as well as the potential of their co-operation in developing the Greater PRD into one of the world's most vibrant economic hubs within the next two decades. The council was established in 1998 to advise the Chief Executive from an international perspective on strategies for the long-term development of Hong Kong.

International affairs
Rumours on FBI piracy team in HK unfounded: US officers recently met in HK to coordinate regional law enforcement but no FBI piracy team visited the city.
2005 WTO ministerial meeting preparations: HK police force braces for violent protests at WTO talks and plans to head off turmoil by preparing for worst case scenario.
President Bush re-election: The Chief Executive wrote to Mr George W Bush to congratulate him on his re-election as the President of the United States of America. "I am sure under your leadership, the United States' relationship with China will become closer in the years ahead. We in Hong Kong will continue our efforts to strengthen friendship between Hong Kong and the United States," Mr Tung said in the letter.

Transborder Affairs
Credibility of HK media reports about social unrest in Guangdong Province questioned by party secretary: Following articles in HK newspapers of marching and striking Guangzhou factory workers winning wages battle, the Guangzhou party secretary has criticized the city's media for reporting that there was rising social unrest in Guangdong. He added that HK people are very fond of marches but that his city did not want to be like HK. Local authorities have been accused of imposing a news blackout on protests.
Exchanges in fight against corruption: ICAC Commissioner has recently visited Guangdong Province to exchange experiences on anti-corruption work. Since 2000 the ICAC has arranged more than 1000 presentations in HK for over 320'000 mainland officials.
HK must prepare for the many challenges of integration: HK maternity wards are swamped by mainland pregnant women and jails have more mainland inmates. Experts say government needs to reassess its management of resources in planning for ad coping with a surge of mainlanders coming to HK. In the region HK was compared to Los Angeles, the Pearl river Delta to Greater LA and Guangdong to California.
Chinese airport to challenge HK: a new international airport in Guangzhou is negotiating with neighbouring hubs in Shenzhen and Zhuhai about forming equity alliances underscoring its intensifying rivalry with HK. Misdirected spending in the region has resulted in five airports within 90 km.
HK businessman unlawfully detained on mainland for 4 years: The detainee's wife has appealed to local authorities to defend her husband's rights. Commentators and NGO's have asked HK to take better care of its citizens in the mainland.
Cooperation in higher education: Sun Yat-sen University (Zhongda) looks to HK ties.

Legal Affairs and human rights
Coexistence of two legal systems possible: Two legal systems, one country is no problem and can easily coexist for Justice Secretary.
Falun Gong followers escape convictions: Court of Appeal has upheld fundamental freedoms of assembly, demonstration and expression for religious activists. The coinvictions of the Falun Gong members including four Swiss nationals for obstruction of a public space were quashed in an unanimous decision by the court. The ruling will help enhance HK's reputation as a tolerant, diverse society that is committed to the rule of law
HK only a waiting room for 1,000 claiming political asylum: As the UN Refugee Convention has been signed by China but not extended to HK, the government accepts no responsibility for processing their claims and leaves them to the cash strapped UNHCR.

Economy
An IMF Mission was in HK from Oct. 26 to Nov. 2 for the annual Article 4 consultation.
Some highlights: Developments & outlook: Economic performance in HK has improved markedly since mid-2003. Real GDP grew by 9 ½ percent (year on year) in the first half of 2004. IMF expects the HK economy to grow by 7.5% amid strong domestic demand and exports. Growth will moderate to 4% in 2005. CEPA is expected to foster deeper trade end investment linkages between HK and Mainland economies.
Macroeconomic policies: While the deficit target for 2004/05 (before bond issuance) was set at 4.9 percent of GDP, indications are that a significant over performance is again likely. The mission again recommended to broaden the tax base through the adoption of a goods and services tax.
Structural policies: The mission noted HK progress in the enhancement of regulatory and supervisory arrangements and welcomed the introduction of a deposit protection scheme in 2006. The property market has rebounded, reflecting the economic recovery; the government's continuing efforts to reduce its direct involvement in this market are welcome.
Third quarter results: Exports of goods surged 15.3 % over the same period a year ago, while exports of services rose 10.3 %. Consumer spending grew 5.1 % year on year, after rising 11.2 % in the 2nd quarter. Investment in machinery, equipment and computer software rose 12.2 %. However, investment in construction fell 8.4 % compared with the corresponding period last year, following a 10.1 % drop in the 2nd quarter. The consumer price index rose by an average of 0.8 % over a year earlier, reversing the 0.9 % decline in the 2nd quarter. The property market regained momentum towards the end of the 3rd quarter. By September, flat prices had risen by about 6 % over June, resulting in a cumulative rebound of around 36 % from the middle of last year. HK is expected to face greater inflationary pressure as a result of the plunging value of the US dollar. But the weaker greenback would also enhance the competitiveness of Hong Kong's exports and help attract international investment.
Outlook: The economy is likely to expand by 4 to 5 % in the 4th quarter over a year earlier following strong growth of 7.2 % in the 3rd quarter. The government is sticking to its 7.5 % target for full-year growth, the same as the revised forecast released in August.
Goods and Services Tax: According to Financial Secretary H. Tang a GST should not be brought in until at least 2009. The government will offer tax concessions to alleviate the burden on low- and middle-income earners when it introduces the GST. Tang conceded that proposals such as a global tax on worldwide earnings, capital gains tax were unlikely to proceed. But a "green" tax on plastic bags and vehicle tyres has public support.
Investment migration scheme: more than 500 applications were made under the scheme (under which people can apply to move to HK with their families by investing 6.5 million) in its first year, of which 310 have been approved with 1.54 billion invested.

Health
Mystery infection in Caritas hospital: 31 children have been affected by infection which causes fever and respiratory problems. Caritas isolation ward not ready for this mystery infection.
Japanese encephalitis threat: HK reacts quickly to virus threat and takes cue from SARS in warning of risks posed by Japanese encephalitis.
Threat of pandemic should not be ignored: After WHO health ministers meeting in Bangkok experts have hardened their pandemics warning stressing that the figure of 7 million potential victims of flu pandemics was may be too conservative and that the purpose of the exercise is give an indication of the magnitude of the problem and not to give exact figures. The fact is that the virus is more deadly for chicken and has infected other animals such as tigers, cats, ducks and pigs.
Tests for Bird flu in HK : About 100,000 wild birds and chickens in markets and on farms were tested for bird flu in the first 10 months of this year in an effort to monitor the disease. Only two dead birds tested positive for the H5N1 virus - a grey heron found this month and a peregrine falcon found in January. Bio-security measures, including inspections of chicken farms and covering them with nets to keep wild birds away, will be stepped up. Farm chickens will continue to be vaccinated.

Macau
Security Bill: The Macau government started drafting a national security bill to satisfy Article 23 of its Basic Law. The bill is expected to be completed next year after a public consultation.
Fastest growing market in the world for gambling: Unable to repel a wave of foreign investors into once tightly controlled Macau gambling market, Stanley Ho has joined forces with Kerry Packer, Australia's richest man, who described the city as the fastest growing market in the world for gambling.
Macau broadens its appeal to tourists: Competition in casino and airline industries heats up and will draw more visitors. This trend may help the territory to emerge one and for all from the shadow of its larger and more economically vibrant neighbour HK.

Varia
Surveys: Competitiveness HK has been ranked 2nd in a World Economic Forum (WEF)survey on urban competitiveness (the survey rated 53 cities using an index on competitiveness focussing on quality of public institutions, technological and innovation environment and economic situations). Distrust: according to another WEF survey, 63% of HK people thought their business leaders were dishonest; 61% thought their political leaders were dishonest and 66% said that the city's political leaders had too much power end responsibility; 37%thought the next generation would be less prosperous. Pessimism: 25% of HK workers believe it is very or somewhat possible they will be laid off in the next year(down from 29.5% from the May survey).
New Index: From February the Creativity Index will assess HK competitiveness in creative industries, with the idea that creative industries, fine arts and cultural heritage could be the drivers of future economic growth.
Final edition for a respected Asian newsweekly: The Far Eastern Economic Review published in HK for more than half a century will stop being published because of lack of advertisers and become a monthly opinion magazine.
Poor air quality in HK: according to the Sunday Times travel section air quality in HK is so poor that it poses a health risk.
Good quality of life in HK: HK enjoys a slice of the good life according to Economist Intelligence Unit annual survey which has ranked the city No 18 worldwide.

Press articles related to Switzerland
South China Morning Post, 9.11.04: Perfect ten tourist attractions in Zürich
Weekend Standard, 13-14.11.04: Wolfgang Schmidt-Soelch, an executive board member of giant insurer Winterthur tells of his company's plans for Geater China.
South China Morning Post, 20.11.04: Swiss based fashion firm 's chairman, Marco Franchini, said in a interview that Bally "is firmly entrenched in China and in the mind of the Chinese people as one of the world's top luxury items..."
South China Morning Post, 25.11.04: Swiss envoy plans to paint town red. In planning the promotion campaign "Switzerland greets Hong Kong" he was most concerned with how best elevate the excellent links between Hong Kong and Switzerland to an even higher level. The answer was to stress more co-operation in cultural, academic and scientific fields, resulting in a spectacular array of events that includes film, music and arts festivals, business seminars and healthcare exchanges.
 

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