THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Economy + Finance
Guangdong urged to attract small businesses: Guangdong officials should try to attract more small- and medium-sized enterprises from HK under the Cepa framework to boost the province's service industry, a new report says. HK invested only US$163 million in Guangdong under the Closer Economic Partnership Arrangement (Cepa) between 2003 and March this year - just a fraction of the US$1.2 billion of HK capital that entered the province through direct investment. This was because of limitations set by local governments and "hidden regulations" in the services sector which had discouraged HK companies, the report said.
Retail sales in July jump 14.2 per cent: Retail sales in July totalled HK$21.3 billion in HK, up 14.2% from a year ago. The HK Retail Management Association said the result was in line with its own estimates. Retail sales in the first seven months of this year were up 10% in value year on year.
HK invests in its future (Wall Street Journal, 12.9.2007): By acquiring a small stake in the city's stock exchange, HK's government is trying to grapple with a big and increasingly urgent challenge: to avoid being sidelined by the astonishing transformation and growth of china's financial markets. Investors have greeted the stake purchase as a sign of hope, not defense.
HKEx chief urges single China market: HK and the mainland should develop a single China market that could challenge the trading power of exchanges in New York, Tokyo and London, the chairman of the local bourse said. Clearing chief Ronald Arculli outlined an ambitious blueprint that would include a single listing and trading platform covering HK, Shenzhen and Shanghai. Officials in HK, Asia's third-biggest market, are becoming increasingly concerned that the city's traditional role as an investment window to the mainland is being challenged as Beijing further liberalises its capital markets. Some mainland companies now prefer to list in Shanghai, where they can raise more money on better terms.
Call for single China market finds broad support: The call by HK Exchanges and Clearing chairman Ronald Arculli for the development of a single China market for shares has been welcomed by regulators, brokers and academics, who argued it was the way forward to develop a dominant force in the global equities and finance markets. The key to achieving the market was to narrow the regulatory differences between HK and the mainland and to encourage more cross-border trading and listings, they said.
HK office market faces double hit: HK's robust office rental market could take a delayed double hit from an Asian fallout from the United States subprime mortgage debacle and an abundance of new supply coming on to the market in decentralised areas, property consultants warn. "On the surface, it still appears to be a calm sea. But there could be a swirling current beneath," said a consultant. "There are already noises in the market that some investment banks will consider holding off their expansion plans in HK or Asia, even though they have not taken any action so far."
Guangdong a threat on expos, says Tang: All the talk in recent weeks about the threat to Hong Kong's convention and exhibition business has centred on Macau, but yesterday (24.9.2007) the chief secretary had a first-hand look at the threat posed by Guangdong. Facilities in the province posed a challenge to Hong Kong's quest to be the region's hub for conventions and exhibitions, Henry Tang said. He toured venues in Guangzhou, and said he was impressed by the huge potential for development of the industry in the provincial capital.
HK property market buoyed by economy: New home loan approvals in Hong Kong rose 10.9% last month to HK$19.3 billion, aided by the city's robust economy. New approvals for primary and secondary market transactions increased 8.6% and 15.3% respectively in August from July, the Hong Kong Monetary Authority said. Market watchers expect new approvals to climb further because rising inflation has resulted in negative interest rates which will prompt more people to seek alternative investments to bank deposits.
HK improves, mainland slips back in global war on corruption: Hong Kong has been ranked 14th on a global list of least corrupt places in the world, one place better than last year and its highest position since the handover. The mainland was ranked 72nd in Berlin-based Transparency International's annual Corruption Perceptions Index covering 180 countries, compared to 70th last year.

Domestic politics - “Green Paper” (consultation on constitutional reform), Universal Suffrage
Government credibility over 2012 'undermined': The HK government's credibility is being "seriously undermined" by suggestions that Beijing is unlikely to sanction universal suffrage in 2012, the chief executive was warned yesterday. In separate meetings with Chief Executive Donald Tsang, a representative of both the Democratic Party and the Civic Party urged Mr Tsang to clarify the government's position on the possibility of universal suffrage in 2012 during his policy address next month. They urged him to explain why political figures close to the government and Beijing have dismissed its possibility before the consultation period on political reform had elapsed. Recently, executive councillors Cheng Yiu-tong and Tsang Yok-sing said universal suffrage in 2012 was either "impossible" or had a "very slim chance". Also, the deputy director of the central government's liaison office, Li Guikang, praised the acceptance of universal suffrage at a date later than 2012 as "rational".
HK prepared for suffrage: The chief executive pledged to deliver universal suffrage, saying "one thing was missing" from HK - people's right to choose and remove their leaders. Appearing at an exchange session before more than 600 students at the University of HK, Donald Tsang asserted his belief in universal suffrage and said the city was now prepared for it. "It is true, we do not need a universal suffrage system to underpin the cherished values that HK has - the values of fair play, rule of law, human rights ... because those are enshrined in the constitution, the Basic Law... "But there is one further thing missing - that is the participation of everybody in a sense. People must be given a choice. The choice to choose their leaders, I think that is universal ... the choice to remove their leaders as well."
2012 suffrage backed by 60pc in poll: The introduction of universal suffrage for electing the chief executive and Legislative Council in 2012 has received 60% support from top business and opinion leaders in HK, a study has found. However, views remain divided over the electoral model to be adopted. Half the respondents said they were not confident that a concrete timetable would be introduced by Chief Executive Donald Tsang during his current term. Mr Tsang has given an assurance that he will resolve the deadlock over universal suffrage during his term.
Growth before political reform, Hu tells Tsang: President Hu Jintao called on the HK government to focus on developing the economy while political reform should take place gradually. But the leader's remarks did not mean that the chances of introducing universal suffrage in 2012 were slim, said Chief Executive Donald Tsang. The green paper on political reform came up in a one-hour meeting with the president, Mr Tsang said.
Beijing loyalists say no change before 2017: A group representing leading mainland businesses in HK has thrown its weight behind a conservative constitutional reform proposal backing universal suffrage no sooner than 2017 for the chief executive and 2020 for Legco. The HK Chinese Enterprises Association also wants Legco's functional constituencies to be retained, saying that business interests must be balanced to ensure economic development and social stability.
HK 'not ready for full vote': Casino tycoon Stanley Ho said Beijing would grant the city full democracy once it considered Hongkongers were "patriotic and love Hong Kong". "The state has not yet prepared for universal suffrage in Hong Kong; any efforts to set the date at 2012 are useless," he said. "Beijing will give a date at a suitable time ... when most of you are patriotic and love Hong Kong." The tycoon also preferred a slower pace of democratic reform, citing examples in Asia. "Is democracy good to Taiwan, Malaysia or Indonesia? Universal suffrage may not be a good idea and we should not rush towards that," he said.
Unfair poll stoking anger, says Leong: Hong Kong's unfair chief executive election process is stoking growing antagonism between the middle class and the government, according to Civic Party lawmaker Alan Leong. Leong said that allowing all citizens to vote for the chief executive would strengthen Hong Kong society and give the leader a mandate to rule, "so that he would not only listen to the tycoons." Chief Executive Donald Tsang won a landslide second term against Leong in March. It was the first contested leadership race since the handover 10 years ago.

Domestic politics (other matters)
Critics call for cultural outline: Critics are asking the government to outline its strategy for cultural development in the nine years before the West Kowloon Cultural District becomes operational in 2016.
The issue is being raised as the administration begins to consult public views on the arts hub. Critics said the government should, during the public consultation, introduce a plan to fill the nine-year interim period, and should also demonstrate that the arts hub would become a driving force for cultural development in remote districts.
A chance I can't pass up, Anson Chan says: Anson Chan Fang threw her hat into the ring for December's Legislative Council by-election, and said the popular mandate she stands to win would give her a better platform to push for universal suffrage. She admitted she did not think Beijing wanted her to run. Announcing her maiden Legco campaign, Mrs Chan, 67, admitted that her core group of advisers, set up a year ago to speed up democratisation, had not had the desired results.
Chan praised over decision to face Ip: Political parties believe the decision of former chief secretary Anson Chan to run against former security secretary Regina Ip Lau in the December 2 Legco by-election will result not only in fierce competition but will also promote democracy. Chan's move came as loyalists in the pro-Beijing camp consolidated their support for Ip. Liberal Party chairman James Tien said the contest by two heavyweights with a similar senior-minister background would be fierce and could result in a large voter turnout.

Legal affairs and human rights
UN agency depriving asylum seekers of their rights: Asylum seekers applying for refuge in HK have been deprived of their right to have their status certified because of misadministration at the local United Nations office in charge of refugees, a human rights group claimed. The Society for Community Organisation (Soco) also claimed the HK office of the United Nations High Commissioner for Refugees (UNHCR) was breaching its own guidelines in handling asylum cases.
Shock as number of working poor soars despite growth: Despite the strong economic rebound, the number of people earning less than HK$5,000 a month has shot up drastically by 87% the past 10 years to almost 419,000 according to an Oxfam study. During the same period, the number of workers in the "extra poor" category - those earning less than HK$3,000 a month - saw an even bigger increase of 103%. The study, conducted by Oxfam Hong Kong using the latest Census and Statistics Department figures, has put renewed pressure on the campaign for legislation on minimum wage.

Health
City-wide drill to test readiness for a flu pandemic: A city-wide pandemic preparedness drill will be held to test the emergency response to a community-acquired flu involving boys "falling sick" in Fanling. Field investigations, management of patients and admission and treatment procedures at the newly commissioned Infectious Disease Centre and the Major Incident Control Centre in Princess Margaret Hospital will be tested.

Environment
US executives being driven out by pollution: Nearly 60% of American Chamber of Commerce members say their companies are likely to invest in places other than HK because of the city's pollution, a survey has found. In the second annual environmental survey conducted by the Nielsen Company for AmCham, 83% of those polled said they knew of professionals who were thinking of leaving the city or had already left because of the environment. The figure for last year was 78%.

Culture
New vision unveiled for cultural hub: The government unveiled its fresh start for the West Kowloon Cultural District, scrapping the widely condemned single-developer approach, handing control to a new authority and abandoning the award-winning design proposed by architect Norman Foster. The authority will be established in about the middle of next year, with construction of the first phase to start in 2010 and the first venues operating in 2014 at the earliest. Under a new financing model, the cultural authority will be sustained by income from the retail, restaurants and entertainment venues.
Critics call for cultural policy blueprint and action on funding: Lawmakers and cultural critics have urged the government to present a blueprint on cultural policy in next month's policy address. They want to ensure arts professionals remain in or are attracted to the city ahead of the opening of the first phase of the West Kowloon Cultural District in 2014. The cultural critics have also urged the Legislative Council to set up a committee to monitor cultural policy and relevant projects, so that funding injected into cultural development is used properly and wisely.

Macau
Macau wins on emotion: Macau poses a threat to HK's convention and exhibition business not just because of the size of its venues - though they are, or will be, huge - but because of its emotional pull, says one of the region's leading trade fair organisers. "Macau is an emotional venue. The exhibition centre is an add-on to what it is all about in the first place - gambling, shopping, leisure. In a certain way, you have a different clientele."
Macau urged to plug terror and crime loopholes: A major international study into the possibility of money laundering and terrorist financing in Macau is urging action to plug potential legal loopholes in the city's booming casino sector, warning of "substantial risks". A 300-page report prepared by the intergovernmental Asia/Pacific Group on Money Laundering calls for Macau police and gambling authorities to conduct a sweeping risk assessment to bring the former Portuguese enclave up to international standards. No such assessment has been carried out in the casino sector to guard against the risks of either laundering or terrorist activity, it notes. "The legal framework for the reporting of suspicious transactions remains fragmented, incomplete and potentially contradictory ... for casinos/gaming concessionaries," the report states.
HK warned on conventions threat: Macau is expected to capture up to half of the market for corporate meetings and conventions from HK in the next few years, warns the HK Association of Travel Agents. Macau presented a major threat as a rival destination for hosting corporate events, the association's Paul Leung said. However, the main losers in HK will be the dining, retail, hotel, entertainment and conference venues that rely heavily on this market.

Varia
Macau complex may hurt convention trade, admits Ma: Recent developments in Macau could threaten HK's existing convention and exhibition services, Secretary for Commerce and Economic Development Frederick Ma admitted. Ma also did a U-turn with regard to a recent announcement on HK Disneyland, saying the government would not rule out further investment though it did not want to interfere in the management of the theme park. In addition, he ruled out a casino for HK, one of the Liberal Party's requests for the future.
Strategic planners worry over challenges: Alleviating social grievances arising from the widening income gap and poverty, relaxing curbs on the importation of overseas talent and enhancing HK's competitiveness topped the agenda the meeting of the Commission on Strategic Development. The head of the Central Policy Unit, Chinese University of HK sociology professor Lau Siu-kai said most members stressed the challenges instead of the opportunities HK faces, and expressed their deep concerns over the territory's long-term competitiveness, livelihood grievances and potential social conflicts. Lau said the commission was also entrusted with a more proactive mission to map out future strategic proposals to be submitted to the 12th Five-Year Plan being drafted by the National Development and Reform Commission. "We will certainly foster closer ties and conduct more frequent dialogues with the national think-tank that is formulating the future roadmap for the entire nation," Lau said.
Extension for shows center: The HK government has given the green light to the HK Convention and Exhibition Centre Phase III extension, a move analysts said would help the city better compete with the emerging threat from Macau.
HK hotels sector has plenty of room for growth: Last month's opening of the Venetian casino in Macau, which added 3,000 suites to the gambling mecca and the upcoming Beijing Olympics, many think, will put a dent in the HK hotels sector. But tourism arrivals to the city tell a different story. Total arrivals to HK surged by 6.8% in the first half of the year to 13 million visitors from the same period last year. Arrivals from long-haul markets of North America, Europe, Australia and New Zealand all recorded robust growth. Mainlanders provided the bulk - 54% - of the new arrivals.
HK safest of 663 Chinese cities but is warned of competitive threat: HK is the safest city in China and the second most beautiful, but its status as an international metropolis is facing stiff competition from mainland cities such as Shanghai, Beijing and Shenzhen, according to a study by the China Institute of City Competitiveness. The HK-based institute has, for the first time, ranked 663 Chinese cities for their beauty and safety as part of a wider study of competitiveness. Shanghai was the second-safest city and Nanjing the third-safest. Beijing was the most beautiful.
City could lose its shopping crown to Macau, study finds: Hong Kong could lose its status as a shoppers' paradise to neighbouring cities like Macau, as shoppers' satisfaction had dropped dramatically in the past six months, a Polytechnic University survey found. The twice-yearly survey, which interviewed 3,554 shoppers, found that ratings of the retail sector in five categories in the past year had fallen significantly.

Press articles related to Switzerland and Swiss matters
Credit Suisse, other banks mull move to ICC (SCMP 12.9.2007): Credit Suisse is taking the heat from senior staff in HK over plans to move its headquarters across the harbour to Kowloon - away from entertainment hot spots and their upmarket homes. The bank is believed to be in talks with Sun Hung Kai Properties about leasing space in the 118-storey International Commerce Centre (ICC) at Kowloon Station.
Extremism goes mainstream (SCMP, 23.9.2007): The South China Morning Post has published an extensive and very controversial report on the heated election campaign in Switzerland. A soft copy (pdf) of this article can be obtained from the Consulate on demand.

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