THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Economy + Finance
Group fears triple whammy may shut 10,000 HK-owned factories: A drastic drop in US orders, yuan appreciation, and an anticipated slowdown in souvenir demand following the Beijing Olympics may result in the closure of about 10,000 HK-owned factories in the Pearl River Delta, the Federation of HK Industries warns. "Around 15% of the 70,000 HK-owned factories in Guangdong may be forced to close, and up to one million mainland workers may be affected", federation chairman Clement Chen said. "The federation has been keeping in touch with the mainland authority and the HK government to keep our members updated on the situation," he said, adding the government has been helping industrialists find a way out.
HK to remain top QDII destination: HK will continue to be the most sought-after equity market for mainland institutional investors even though their opportunities have been broadened to include more foreign countries, said Ma Zhigang, managing director of the China Securities Index. In an effort to provide more investment channels, the China Securities Regulatory Commission already allows fund management companies to invest client money in 35 destinations under the so-called qualified domestic institutional investor programme. These include HK, Britain, India, the United States and Korea. The extension of the programme has fuelled market concerns that the HK stock market will lose its appeal to mainland investors, who are eager to place their money offshore amid surging inflation at home.
HKEx gives grim outlook as net earnings drop 24pc: HK Exchanges and Clearing, operator of Asia's largest listed bourse, reported a HK$1.65 billion net profit for the first quarter, down 24% from the previous quarter due to reduced trading during the market slump. HKEx chairman Ronald Arculli said the worse was not over and the outlook was full of uncertainty. The exchange makes money collecting trading fees from investors, listing fees from member companies and earning income from trading its reserve.
Economy better than expected in first quarter: HK's economy performed better than expected in the first three months of the year, with gross domestic product growing 7.1% year on year, the government announced. Despite inflation hitting 4.9% in the first quarter, after discounting the effects of this year's rates concession and last year's public housing rental waiver, the government has not changed its forecasts for GDP growth (4 to 5%) and inflation (4.5%) this year. A year-on-year 17.4% rise in the cost of food due to surging global prices was a key factor in the rise in the composite consumer price index.
Warning even as jobless plummets to 10-year low: HK's unemployment rate fell to 3.3% in April, the lowest level in ten years, the Census and Statistics Department said. Increased hiring in the amusement and recreational services, restaurants and hotels, and sanitary services, has expanded the workforce to 3.54 million people. Despite the brightening figures, Matthew Cheung, Secretary for Labor and Welfare, warned that "uncertainties in HK's external economic environment" remain. "The near-term employment outlook will hinge on how the moderation in global economic growth affects the local economy and in particular the pace of job creation in the private sector".
Inflation hits 5.4pc, highest in a decade: HK's inflation rose to 5.4% last month, the highest in more than a decade. The year-on-year increase was 0.1 of a percentage point higher than the underlying inflation rate in March. "The pick-up in inflationary pressure in recent months was largely due to the upsurge in food prices ... the sustained strong economic growth also added pressure on prices and costs," a government spokesman said.
Winemakers plot a French revolution: French winemakers are tapping into the booming local market and hope to flood it with 100 million euros worth of their product this year. "HK is a springboard to the Chinese market, it's a priority for French business to develop in Asia," said Anne-Marie Idrac, France's secretary for foreign trade. Chief Secretary for Administration Henry Tang - a wine enthusiast himself - said HK's imports had doubled by value in the two months since the government slashed the wine tax to zero.
Buoyant economy sees job openings multiply: The number of job vacancies in HK hit a record high in the first quarter of 2008 - a result of the territory's continuing economic growth. The active labor market, which has also seen an increase in the job turnover rate, is likely to push up wages, HK Institute of Human Resource Management president Lai Kam-tong said.
Our destiny lies in delta region, says airport chief: Outgoing Airport Authority chairman Victor Fung says he is confident the airport can nearly triple the volume of cargo and double the number of passengers it handles each year within two decades. "This airport, I believe, is definitely heading for 10 million tonnes of cargo and 100 million passengers" within the next 20 years, he said. "I would be fairly disappointed if we didn't." New records were set last year, when the airport handled more than 3.74 million tonnes of cargo, up 4.5% from 2006, and more than 47.78 million passengers, up 7.5%. It was originally designed to have enough capacity for 9 million tonnes of cargo and 87 million passengers a year.

Domestic politics
Pan-democrats urged to work with rivals to safeguard suffrage timetable: HK democrats should work on negotiations with the Beijing-friendly camp to press for genuine democracy, an American academic said, otherwise the timetable for universal suffrage could possibly go beyond 2020. Despite saying that the pan-democratic camp was in a "structurally weak bargaining position", Stanford University political scientist Larry Diamond said it should negotiate with the rival camp. "Unless HK pro-democracy forces figure out a way to change the current polarised power game, the transition to genuine democracy will continue to be deferred or diluted," said Professor Diamond, a former university mentor of ex-security chief Regina Ip.
Tsang names eight deputy ministers: Chief Executive Donald Tsang named eight new deputy ministers as part of his drive to improve governance through the expansion of political appointments. But despite Mr Tsang's confidence that the new team - drawn from political, academic, business and media circles - would improve governance, critics said some appointees lacked the experience and expertise for such senior posts. The appointments were part of Mr Tsang's plan to add two additional layers of appointees under the existing three policy secretaries and 12 ministers.
Anson Chan attacks new appointments: Legislator Anson Chan has warned that the morale of civil servants could be hurt by the appointment of undersecretaries because their roles and duties, as well as apparent mismatches between their experiences and portfolios, could create conflicts with bureaucrats. The former chief secretary urged Chief Executive Donald Tsang to explain to the public how he chose the eight political appointees to clear up doubts about any bias in favour of certain political parties or groups. "It gives an impression that only pro-government people are appointed," she said. "The public may doubt whether the government is offering advantages to certain political parties, doing under-the-table exchanges or offering political rewards."
Question of functional constituencies on hold: Secretary for Constitutional and Mainland Affairs Stephen Lam has avoided further discussion on the fate of functional constituencies, saying the administration "had not taken a view". Chief Executive Donald Tsang was accused of revealing his true intent during a question-and-answer session with lawmakers when he suggested the preservation of the trade-based seats could still comply with the principles of universal and equal suffrage. When asked how it would be possible to ensure equal electoral rights while preserving trade-based seats for people of certain professions, Mr Lam said: "At this stage, the administration has not taken a view on the future of functional constituencies, nor have we taken a view on how we should implement universal suffrage for forming the legislature in 2020. Our focus now is on dealing with the electoral methods for forming the legislature in 2012, and for returning the chief executive in that year."

China Visa
Ministry defends stricter visa process: China's visa application process is "more convenient" than that of many other countries, the Foreign Ministry's office in HK said amid criticism of the stricter travel rules put in place ahead of the Olympic Games. The Foreign Ministry Commissioner's Office wrote that the latest visa rules were in line with those of previous hosts of the Olympics and with Chinese law. "Compared to most other countries, it is more convenient to get a Chinese visa," spokesman Song Ronghua wrote. In the letter, the Foreign Ministry spokesman wrote that multiple-entry visas were available for those who were "in need and qualified". He said applications would be considered on a case-by-case basis.
Businessmen step up complaints over visas: The European Chamber of Commerce has issued another letter - the first sent a month ago is still unanswered - to the Chinese authorities underlining the impact of visa restrictions on the foreign business community. The restrictions have been interpreted as tightened security to stop protesters from disturbing the 2008 Beijing Olympics this August. Chief Executive Donald Tsang told legislative councillors yesterday the government will try its best to help HK-based foreigners to obtain mainland multiple-entry visas. He said as far as he knew the mainland authorities were not banning foreigners from visiting the country but that the restrictions were connected with undertakings given to the International Olympic Committee with regard to security. Tsang urged legislators to bring relevant cases to his attention.
Confusion still reigns over visas at border: Renewed uncertainty has broken out over Beijing's visa policy, with travellers saying Shenzhen visas are still being issued at the border. Under visa restrictions announced last month, visitors to Shenzhen are supposed to obtain one beforehand. But expatriates in HK say they have recently been given five-day Shenzhen visas at the crossing, despite an announcement they would not be available.

Legal affairs and human rights
Workers rally in thousands to demand pay rise: Thousands of workers from various unions marched to government headquarters yesterday (1.5.) demanding higher wages to offset inflation and for minimum wage legislation. The government's Wage Protection Movement - widely described as a failure and which only protects cleaners and security guards - is due for review in October.
Police accused of curbing the right to demonstrate: Police have been accused of suppressing the freedom to demonstrate after officers carted away several activists who clashed with cheering crowds waving Chinese flags during the Olympic torch relay. Some complained police had threatened to arrest them for "creating disturbances". Police forcibly removed a university student who brandished a Tibetan flag before the cheering crowd - many of them speaking Putonghua - in Tsim Sha Tsui.
HK hints at tougher entry for Olympics: The government said it would not welcome anyone who "seeks to damage the solemnity" of the Olympic Games in HK, following its banning of several foreign human rights campaigners ahead of the torch relay last week. This latest stance was severely criticised by pan-democrat lawmakers, who accused the government of setting a precedent that would damage HK's freedom of expression and its international image. It also coincided with Beijing's admission for the first time that visa controls for foreigners entering the mainland had been tightened, a move described by Foreign Ministry spokesman Qin Gang as ensuring "a safe environment" ahead of the Beijing Olympics. In a paper for the Legislative Council security panel, the government said HK, as a co-host city of the Olympics, had an obligation to ensure that related activities would proceed in a "safe, peaceful and smooth manner".
Lawmakers angry over ambiguity in race bill: The government has conceded it will need to rethink a section of the race discrimination bill after it was pointed out that chambers of commerce serving specific groups might be ruled unlawful under the proposed law. Lawmakers at the meeting of the bills committee that is scrutinising the race discrimination bill were exasperated when administration officials were unable to give definitive answers as to whether certain chambers would fall foul of the new law. Committee chairwoman Margaret Ng said it was unacceptable that while lawmakers were working so hard, the administration could not answer for its own policy.
Police 'removed all protesters': Police have been accused of removing all protesters from the Olympic torch relay in HK, casting doubt on whether it remains the only Chinese city on the torch's route to enjoy freedom of demonstration. Protesters denounced the move as politically motivated, saying the police were no longer politically impartial but acted according to Beijing's wishes - ignoring freedom of speech and freedom of protest.
Cool response to racial equality proposal: The government remains non-committal about a proposal to add a clause to the Race Discrimination Bill that would create a statutory duty to promote racial equality. The administration's seeming hesitation led lawmakers to question its dedication to eliminating racial discrimination. The Constitutional and Mainland Affairs Bureau had been asked to consider an Equal Opportunities Commission proposal to include in the bill a general duty to promote racial equality and assess the impact of policies on ethnic minorities.
Maximum working hours urged over minimum wage plan: The government has been urged to set maximum hours when preparing for the introduction of a minimum wage to better protect security guards and cleaners. The move came as lawmakers gave their views on the government's decision to adopt an hourly rate for the proposed statutory minimum wage. The minimum wage will be introduced if the voluntary "wage protection movement" proves to be a failure when the final review is made in October.

Health
Higher taxes unlikely for health care reform: Raising taxes is the option least likely to be chosen to finance the overburdened public health system, the chief secretary said. Henry Tang, speaking on the government's proposals for health care reform, said that although the community had agreed to address the question of reform, people had a range of views about what to do. "Many support increasing government funding for health care. But raising taxes or using tax-like schemes to fund the system is so far the least favoured of the options put forward," Mr Tang said, citing the findings of opinion polls conducted by political parties and other organisations.
Tamiflu losing its sting because of overuse: Medical experts are calling for stringent controls on the use of the antiviral drug Tamiflu after HK research found that many elderly people suffering from flu-like illnesses actually do not have flu. The warning comes as the World Health Organisation's latest surveillance shows resistance to Tamiflu - seen as one of the key defences against a deadly bird flu epidemic - is increasing globally.

Environment
Mainland bag levy leaves HK lagging: The mainland has put a price on plastic bags nation-wide, prompting green groups to complain that HK is lagging behind the rest of the world. Mainland shoppers will from Sunday be charged from 0.2 yuan to 2 yuan for plastic bags, in line with the central government's pledge to boost its green credentials ahead of the August Olympics. HK trails by comparison. The SAR government's proposal for a 50-cent green levy on plastic bags is dragging along in the Bills Committee at the Legislative Council.

Macau
800 stage smallest Labour Day rally in Macau in three years: About 800 Macau residents marched from North District to government headquarters by Nam Van Lake in a peaceful protest against corruption, imported labour and the wealth gap. It was the smallest Labour Day rally in at least three years and a far cry from the violent clashes that left 21 police officers and dozens of demonstrators injured a year ago. Unionists said the small turnout was due to positive changes in government polices.
Macau focuses on foreign labor: About 1,000 protesters used the Labor Day holiday in Macau to protest against the influx of cheap foreign labor and to call for more public housing. The marchers handed in a petition at government headquarters. The participants shouted slogans urging the Macau government to tackle the labor problem as well as a serious social imbalance. When it comes to patriotism, HK is not in the same league as Macau, the experience of the torch relay in the two cities shows.
Macau's loyalty evident without a hint of dissent: HK police had to "protect" demonstrators by removing them, after activists clashed with cheering crowds. But not a sound of protest could be heard in the former Portuguese enclave when the flame passed heritage sites and glittering casinos on the 19km relay route. It was a festival of pride without a single disruption. The "journey of harmony" seems to have truly started in Macau, where most people feel close to the mainland and patriotic education has taken a firm hold.

Varia
Fire of patriotism fanned with flags, cheers and some jeers: HK people were once said to lack patriotism, prompting calls for the government to step up civic education. But when tens of thousands of red-clad relay supporters - and rival human rights demonstrators dressed in orange - turned out on the streets, few could dispute that everyone present cared for the nation finally fulfilling its long-held desire to host the Olympics. Their only difference - except for the colours they wore - was how they expressed their feelings.
Trade unions call for more paid holidays: The HK Confederation of Trade Unions is calling for five unpaid bank holidays to be made statutory holidays for blue-collar workers. "It is unfair for some to go on bank holidays while others get only statutory holidays," union secretary-general Lee Cheuk-yan said. Lee said HK has 17 holidays for workers in banking or related sectors while those working in manufacturing, retail, catering, hospitality, transport and other service sectors get only 12 days of paid holidays.
Study on third HK runway moves into the second phase: The Airport Authority has begun the second phase of a study on a third runway, as the existing two are likely to reach maximum capacity by 2015. "We are very serious about the third runway and realise that it is very important to HK," Stanley Hui, the authority's chief executive officer, said.
Financial hub vulnerable as lax security raises risks: Recent security breaches pose a serious threat to HK's position as a financial hub. Government departments are not equipped with the latest dataprotection technology such as ISO27001 and thus at risk, Tech Matrix Research Center chairman Samson Tam Wai-ho said. Only the Science Park and banks have adopted such a system, said Tam.

Press articles related to Switzerland and Swiss matters
UBS staff in Asia escape worst of heavy job cuts (SCMP, 6.5.2008): UBS, the largest bank in Switzerland, will largely spare staff in Asia from its global lay-off, planning to cut only about five people from its mainland investment banking joint venture as part of its group-level reductions that will see up to 8,000 employees let go. Sources said the bank had more than 400 employees at its Beijing-based joint venture and the cuts were part of 10 jobs to be eliminated in the Asia-Pacific.
Credit Suisse moving top banker to HK (SCMP, 21.5.2008): Credit Suisse Group, the second-largest investment bank in Switzerland, is moving the head of its financial institutions business to HK in the latest move of a senior banker to the region as the industry looks increasingly to Asia as a bulwark against its current woes. Vikram Gandhi would move from New York this summer, an internal memorandum said. He will continue to run the global financial institutions group business. The mainland has become high up in the regional plans of both Wall Street and Zurich as they restructure a business model in the United States and Europe shattered by the subprime mortgage meltdown that began last year.

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