THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Introduction
WTO - It's a deal: Round-the-clock negotiations by trade ministers on the final day of the World Trade Organization ministerial conference in HK yielded a last-minute deal as countries agreed to preferential treatment for goods produced by the world's poorest countries, and cuts in financial assistance for farmers and cotton growers in richer countries.
Farewell to a dirty year in politics: Last week's constitutional reform fiasco marked a breathless end to a year of roller-coaster politics featuring the downfall of Tung Chee-hwa, the rise of Donald Tsang and a new wave of democracy demands. As Mr Tsang reflects on the political scene after concluding a duty visit to Beijing - his first since taking up the post of chief executive - he is likely to be baffled, if not awed, by the volatility of HK politics.

Domestic politics
Article 45 group set to become new party: Founded in 2003 as a loose grouping of mostly barristers fighting for democracy, the Article 45 Concern Group has decided to register as an apolitical party underlining that a lot of HK people who support democracy are looking for a political party that is more moderate than the Democratic Party.
Lam hits hopes for universal suffrage timetable: A top official poured cold water on any hopes the pro-democracy camp harboured of bargaining with the government for a timetable for universal suffrage. In describing the December 4 mass protest for full democracy as "mission impossible," Secretary for Constitutional Affairs Stephen Lam made it clear that, when dealing with the timetable issue, the government cannot only listen to opposition legislators without regard for other parties' views. "We have been very careful in striking a balance between different parties because the reform package's proponents won't support us unconditionally," he said.
Pro-Beijing camp fights back in reform row: The pro-Beijing camp was going on the counter-attack against the democrats by forming a coalition to gather signatures in support of government proposals for the 2007-08 elections.
Reform row hits Tsang's popularity: People's confidence in Donald Tsang as the chief executive has plunged as the constitutional reform row has deepened, a university survey has shown. Mr Tsang's popularity fell seven percentage points from early November to 68 per cent in the survey straddling the December 4 march for universal suffrage, according to the University of HK's Public Opinion Programme.
"We want democracy" - HK people repeated their message: Between 100’000 and 250’000 people marched peacefully for democracy. Police figures were much smaller. Unlike previous marches, no one could say people came out because they were unhappy about the economy, suffered negative equity or didn't like former chief executive CH Tung. They clearly flooded out because they wanted to tell the authorities here and in Beijing they wanted universal suffrage soon. What really unnerved the Chief Executive was not the ten of thousands of marchers chanting for democracy, but the presence in the streets of Anson Chan, the popular former government No 2. One observer said she has shown her appetite to become chief executive in 2007. CE Donald Tsang responded to the march that he has heard their voices and felt their feelings.
Democrats chief blasted for lack of alternative plans: With 25 pro-democracy lawmakers seemingly set to vote down the government's political reform package on December 21, a political academic blasted local Democratic Party chief Lee Wing-tat for failing to offer an alternative strategy for achieving universal suffrage.
Tsang in “animals” outburst at critics: In a stinging attack on opponents of the government's political reform plans, Chief Executive Donald Tsang has branded pro-democracy politicians as a group of "horrifying animals." He also acknowledged for the first time that he had underestimated HK's political climate in trying to press ahead with his controversial political reform package, which was on the brink of defeat when it was presented to the Legislative Council.
HK lawmakers veto limited democracy plan: HK lawmakers rejected government proposals to introduce limited democratic reforms for election of the Chief Executive and Legislative Council, which pro-democracy legislators say do not go far enough. Some 34 legislators voted for it, 24 were opposed and one abstained (constitutional changes need the support of two-thirds of the 60-seat chamber). “I think we need a country that respects the aspirations of the people. I’m proud of being a Chinese if China is strong, not only in terms of its military strength and its economy but rather a respect for human rights and the wishes of the people,” Democratic Party chairman Li Wing-tat said in the chamber after the vote. Tsang said the government will not put forward any new proposals for 2007-2008. "We have lost an opportunity to take a significant step towards full democracy," he said.
Pressure mounts on Tsang for talks: Victorious pro-democracy politicians put pressure on Chief Executive Donald Tsang to begin discussions on a timetable for universal suffrage after his political reform package suffered an embarrassing setback. But Rafael Hui, chief secretary for administration, did not seem to be in any mood for reconciliation as he launched a blistering attack on veteran democrat Martin Lee and Bishop Joseph Zen, outspoken head of the Catholic Church, for the reforms' collapse.
Beijing's trust will be hurt, warns Tsang: Mutual trust between Beijing and HK lawmakers will suffer following the defeat of the electoral reform proposal, Donald Tsang warned. Time would be needed to mend the damage done by veto, the chief executive said. Mr Tsang said he would gauge Beijing's reaction when he paid his duty visit next week, but warned: "I think it will be out of the ordinary.”
Democracy put on hold for seven years: The central government quickly came out in support of embattled Chief Executive Donald Tsang following his failure to push through the contentious constitutional reform package and warned that this has put the journey toward democracy on hold for at least seven years. The State Council's HK and Macau Affairs Office branded the rejection of the proposal by 24 pro-democrat legislators as out of line with mainstream public opinion.
Tsang escapes blame: Donald Tsang came away from what could have been a bad day with Beijing leaders saying Beijing's support for his government is undiminished in the wake of last week's defeat of the government's political reform proposal. After the meeting with President Hu, the SAR chief executive said central leaders remain "accommodating" and "selfless" in their approach to HK and that their policy is "fundamentally unchanged by the defeat" of the political reform proposals. Tsang said he will continue to play his role as a "middle man enhancing communications" with Beijing despite the setback over reform. He insisted that communications between HK and the mainland must involve "all parties" but that it requires "reciprocity, understanding and sincerity" from everyone involved.

International affairs
Beijing angered by US call for timetable: State Department spokesman said that the people of HK are ready for democracy and that the sooner a time table for achieving it is established the better. Response of Beijing: foreign countries should note intervene in Chinese domestic affairs.
European Parliament backs timetable on democracy: The EU Parliament passed a non binding resolution inviting the HK government to set a timetable for universal suffrage and to abolish the appointment system in the district councils. The answer from HK is that the administration is fully committed to achieving the ultimate aim of universal suffrage.
Revision of GDP makes China the 6th-biggest economy: China overtook Italy to become the world's sixth-largest economy after the central government announced economic output last year was 16.8 per cent higher than previously reported. And it may not stop there. Announcing the revision, Li Deshui, director of the National Bureau of Statistics, hinted China would overtake France and Britain to become the fourth-largest economy once this year's output figures are published.
Economic rise no threat to anyone, Beijing insists: China tried to allay fears it was a threat to its neighbours or the US by repeating in a State Council white paper it would remain peaceful. The paper was released by the State Council Information Office against a backdrop of mounting pressure from the US and Japan over the mainland's enormous economy and rising military power, and two days after the mainland revised last year's GDP figures upwards by 16.8 per cent. The document, "White Paper of China's Peaceful Development Road", did not mention military development but went to lengths to argue that China's rapid economic rise benefited the world, especially its neighbours.

WTO
MC6 Summary: Some 3,000 journalists and 2,000 members of activist and business organizations flocked to the convention and exhibition center as 6,000 delegates from 149 countries and territories - with the late addition of Saudi Arabia - tried to agree on 53 points. There were cries from the outside by another 8,000 foreign and local activists for them to pack up and leave, but this crowd in turn was balanced by 9,000 police charged with watching the gate. The WTO's sixth ministerial conference began with delegates drastically reducing their hopes of achieving anything. The EU warned that its best offer was already on the table and there would be no further concessions forthcoming. WTO director-general Pascal Lamy reckoned it would take nothing short of a professional magic trick to conjure up a deal. China, which has taken a low-profile approach to the conference, raised its head to counter attacks from the US that the mainland was not living up to its WTO commitments. Commerce Minister Bo Xilai said China was the biggest victim of unfair anti-dumping practices. Trade ministers finally agreed to eliminate farm export subsidies by 2013, a date backed by the EU, although Brazil and the US lobbied hard for 2010. Least developing nations got support in the form of duty-free and quota-free access to wealthier markets by 2008, but many countries will continue to protect "sensitive" industries. The US, in a minor concession to C4 African nations, committed to ending export subsidies for crops by 2006. But it can continue subsidising production of cotton.
The siege of Wan Chai: Wan Chai (the district where the venue of the MC6 is located) was under siege after more than 1,000 anti-WTO protesters clashed with police in the worst violence HK has seen in decades. The rioting injured 137 people, including 67 police officers. 14 protesters were arrested and appeared in court on charges of unlawful assembly. This followed the release of 944 people who had been held.
Koreans regret riot but say mission accomplished: A group of South Korean farmers apologised to HK people for riot - even as they insisted it was relatively mild compared with protests at home. South Korean Deputy Foreign Minister Lee Kyu-hyung apologised to HK for the violent clashes largely orchestrated by militant farmers and unionists from his country. Mr Lee was involved in negotiations with the government to secure the return of the detainees.

Macao
Unemployment drives job-hunters across the delta: A sluggish construction industry at home is leading more HK workers to look for jobs in Macao, with casino-led development offering new work opportunities, a union official said yesterday. "Some perceive Macao as a place full of opportunities but many fail to realise that its support facilities lag those in HK," he said.

Economy
Local pay rises second lowest in the region: According to a study of a human resources firm, HK employees averaged a 2.9% pay increase this year, the second worst in the region behind Japan's 2.4%, while the mainland's runaway economic growth helped boost wages there by 8.1% in 2005. HK's average pay rise is forecast to be 3-3.5% in 2006, according to two known consultant firms.
Upbeat for now, but costs hurt outlook: Companies in HK are more optimistic about their business prospects for 2006. But concern about rising overheads is dampening their outlook for 2007 and long term, according to a survey of the HK General Chamber of Commerce. Rising interest rates and sharp increases in commercial rents are among the key concerns. Business confidence among companies in HK is high, with almost two-thirds expressing optimism for prospects next year and about half looking to expand over the next three years, the American Chamber of Commerce said.
HK luxury goods sales take a hit: The Census and Statistics Department said October's retail sales reached $16.6 billion. Sales of cars and other luxury big-ticket items fell while total retail sales managed a reasonable 4.8% increase. HK Retail Management Association stressed that the cycle of rising interest rates was depressing consumption in the shorter term, especially for the luxury sector.
Staff turnover rate highest in two years: Companies, especially in the retail and financial services sectors, have suffered some of the highest staff turnover rates since 2003 as workers take advantage of the economic rebound and switch jobs, a quarterly survey has found. In the third quarter of this year, the overall turnover rate rose to 3.7% whereas the retail sector's turnover rate reached 9.6% and that of banking and financial services also reached 8.6%.
Anything but a free economy: The HK's long tradition of monopolistic and oligarchic practices lead to the steep cost of land, utilities and food, argued a lawyer who inaugurated the Asian Competition Law Conference. He added most developed countries have fair competition laws that are considered integral to their diverse, flourishing and open economies.
Joint study to help planning in delta: The HK and Guangdong governments launched a study, commissioned by Peking University, aiming to formulate HK and regional development strategy and analyse the development direction of the delta under the `one country, two systems' framework. It will cover background and overall development strategy, cross-border co-ordinated development, environmental impact assessment, resources protection and use and an "institutional mechanism for co-ordinated development and co-ordinated issues for early action".
HK throughput declines by 7.9%: HK ports posted their largest monthly decrease in cargo throughput last month, moving 7.9% fewer containers. The monthly fall means HK now lags further behind Singapore, which earlier this year edged out HK as the world's busiest port. Major ports in the mainland grew by 23.7%.
Jobless rate unchanged but labour market 'buoyant': Stagnant employment prospects in the construction and restaurant sectors kept HK’s overall jobless rate unchanged at 5.3 % last month. Nevertheless, the working population continued to expand to a record high of 3.4 million people, the government said. A government spokesman described the overall labour market sentiment as "generally buoyant".
New exhibition venue launched: AsiaWorld-Expo, HK's largest and newest exhibition and event complex, was formally launched. More than 30 events are scheduled for next year and are expected to bring $4 billion to HK.
Easing inflation: Inflation eased slightly in November to 1.7% (1.8% in October) year on year after six straight months of steady growth in the pace of consumer price rises. The government pointed to a slower pick-up in prices for some basic foodstuffs, jewellery and package holidays.
HKEx sees record year with market cap of $8 trillion: HK Exchanges and Clearing had another record year, thanks to a large number of new listings of mainland enterprises and volume of derivative warrants. It ranks 4th in worldwide fund-raising. The stock market's total market capitalisation was an all-time-high $8.26 trillion, up 22% from a year ago, ranking 9th in the world. It is higher than Switzerland's US$896.14 million.
City back on track as good times roll again: In a year that was marked by major government reshuffles, health scares and public unrest, HK has, quite convincingly, lived up to expectations that 2005 would be a banner year for the city's economic growth. In just 12 months, the unemployment rate managed to shed more than a full percentage point to 5.3% and those with jobs are now shopping around for better ones. Consumer prices have also risen to their highest levels in more than seven years, underscoring the overall rebound in the key property, tourism and retail sectors, while it has been a record year for exports.

Health
Roche grants mainland production licence for Tamiflu: Swiss pharmaceutical giant Roche has granted a sub-licence to the Shanghai Pharmaceutical Group to manufacture Tamiflu on the mainland. The company announced yesterday that the move was part of its effort to expand its global supply. It said the agreement signed covered the overall production of oseltamivir - which is branded as Tamiflu - for pandemic use on the mainland. The statement did not give details about production capacity or cost. The Shanghai Pharmaceutical Group said it would not sell under the Tamiflu brand name.
Questions raised on bird flu strategies: Health officials have been urged to change their strategy of stockpiling Tamiflu after more evidence that the bird flu virus has mutated quickly enough to cause resistance to the frontline drug. The warning came after four of eight patients treated in Vietnam for bird flu infections died despite the use of Tamiflu.
94pc of Guangdong’s chickens vaccinated Guangdong has vaccinated 94 per cent of its chicken population but a vaccine shortage means some flocks which only received single doses may still be vulnerable to H5N1 infection.

Environment
Minister defends air-quality index: The environment minister defended the regional air-quality index, which has been criticised for offering limited information, saying the public would not understand the details even if they were disclosed. (….) An amendment by Democratic legislator Sin Chung-kai calling for a fund to help factories across the border install anti-pollution equipment was rejected.

Varia
Happy Hong Kongers?: They may be on the streets calling for reform, but a recent survey has found that Hong Kongers are the happiest they have been for three years. The “Happiness Index” survey of 624 people, conducted by City University, rated the city’s overall feelings at 7.32 out of 10, up from 7.24 last year and 7.11 in 2003.

Press articles related to Switzerland
Swiss international pilots face job losses (South China Morning Post 27.12.2005): Swiss International Air Lines, which is being bought by Deutsche Lufthansa, plans to dismiss 314 pilots from its European fleet if they do not accept new job contracts by the end of the year. The airline is reportedly asking the pilots to accept pay cuts of as much as 40 per cent.

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