THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Economy + Finance
Rising inflation biggest challenge for HK: HK's economy recovered well from the global economic meltdown, but still faced serious challenges – particularly rising inflation, Financial Secretary John Tsang warned. “The economy in 2010 staged a full recovery [from the 2008 global economic meltdown] at a faster pace than expected. “Thanks to the strong growth in the mainland and Asia, the economy has surpassed the pre-tsunami level,” said the financial secretary, who was delivering his fourth budget to the Legislative Council. “For 2010 as a whole, gross domestic product (GDP) grew by 6.8 per cent in real terms,” he said. But Tsang cautioned that rising inflation was now a serious concern for Asian economies. “The soft US dollar and possible sustained increase in global food and commodity prices will put more inflationary pressure on HK. “On top of these, the continued rise in the mainland's food prices and local rents are expected to have a more noticeable effect on our inflation this year.” he added. Tsang forecast that underlying inflation rates for 2011 as a whole will average 4.5 per cent.
Grumblings amid $44b giveaways: Financial Secretary John Tsang said the government will dish out nearly HK$44 billion in one-off relief measures and tax concessions on the back of a HK$71 billion surplus and amid soaring inflation. The expenditure includes an injection of HK$6,000 into the MPF savings of all workers. Other than an increase in tax allowances for children and dependent parents, the measures include giving 2.6 million households a subsidy of HK$1,800 in electricity bills. Property rates will be waived for the 2011-12 fiscal year, capped at HK$1,500 per tenement per quarter. The government will also spend HK$1.9 billion to pay two months' rent for public housing tenants. Recipients of Comprehensive Social Security Assistance, old-age and disability allowances will each receive an extra one month of benefits. Critics, however, slammed the government for relying on habitual giveaways to please the public and for lacking a long-term vision. Hang Seng Management College finance professor Raymond So said the measures lack innovation. Centre for Social Policy Studies deputy director Chung Kim-wah said he found the relief measures disappointing and the benefits of the MPF injection for ordinary workers too remote. Economic Synergy legislator Jeffrey Lam said the measures failed to improve the SAR's competitiveness.
Boost in land supply to build 40,000 flats: The financial secretary announced a series of measures to provide enough land in the coming year to build 30,000 to 40,000 flats in his budget speech. But market watchers said more land was unlikely to cool soaring property prices and the target -almost double the annual average of 20,000 flats -was an "illusion". They said the supply strategy to curb rising prices was "a slow remedy that cannot meet the emergency" because the new supply would not be ready until 2015 or even later. "The government hasn't given a timetable when these flats will actually be built," said David Tse, chairman of the Royal Institution of Chartered Surveyors' housing taskforce. "It will all depend on how keen developers are in triggering land auctions and [if they] are successful." Tse said the target was only an illusion and a short-term measure, without an attempt to study the long-term housing demand. 
Yuan deposits soar 402pc to hit 314.9b yuan: Yuan deposits soared 402 per cent to 314.9 billion yuan (HK$373.43 billion) last year, boosted by trade settlement and currency exchange, the HK Monetary Authority said. An increase in HK's yuan deposits is part of the city's ambition to become an offshore yuan centre, which includes creating more yuan investment products. Norman Chan, the chief executive of the HKMA, said last month at the Asia Financial Forum a two-way flow of the currency was important for the long term and for the sustainable development of yuan business in HK. Yuan deposit rates remain relatively low compared with the mainland but they may rise this year. The mainland launched a trial for the qualified foreign institutional investor, or mini-QFII, scheme last month. The scheme allows mainland brokerages and fund houses to raise offshore yuan to invest in mainland bonds and stocks.
Rents up 11.5pc, far outstripping pay rises: HK's overall residential rents were 11.5 per cent higher last month than in February last year. Property agents said the jump was driven by strong demand as the economy continued to improve. The rent rise outpaced average salary growth, which was 2.4 per cent higher in September over the same month last year. 
Public to have say on tour industry reform: Clashes between tour guides and mainland holidaymakers over forced shopping have prompted the government to seek public opinion on reforming the travel industry. A consultation lasting two to three months will be launched in April 2011. It will give a few options for reforming the Travel Industry Council and the industry's regulation. The government will announce reform proposals at the end of this year. According to the bureau's paper submitted to lawmakers, the government is aware that the Travel Industry Council lacks sufficient authority.

Domestic politics
Financial Secretary's popularity plunges after budget: Financial Secretary John Tsang's popularity plunged by 15 percentage points almost immediately after he delivered the budget, a University of Hong Kong poll showed. The fall is the most drastic seen after any of Tsang's four budgets. His approval rating was 36 per cent. Political parties lambasted the budget, with critics saying it failed to tackle a growing wealth gap or inflationary pressures. Some legislators said they may try to veto the budget for the first time in the city's history. In the worst case scenario, the administration might face a governance crisis. The Basic Law requires the chief executive to dissolve the Legislative Council if he disagrees with a Legco decision to veto the budget after negotiations. But political scientists said that worst-case scenario was unlikely and predicted the government might bow to pressure before the budget was put to a Legco vote next month. 
Lawmakers in last-ditch bid to alter election reform bill: Lawmakers are making last-ditch efforts to amend the 2012 election plan ahead of Wednesday's (March 2) Legislative Council meeting, where a marathon debate is expected in the finale of HK's constitutional reform. The city's long march to democracy will take another step after the vote, which spells out detailed arrangements following the passage of the reform proposal in June last year. But the pan-democrats fighting for 16 amendments are unlikely to succeed. Under the Legco's split voting system, the passage of amendments requires a simple majority of members present during the vote in both the functional and geographical constituencies. At least seven lawmakers in functional seats and six directly elected will oppose the amendments. 
Fierce battles likely in district council elections: More than three million voters have the chance to take part in what are set to be the most heated district council elections in recent years. "The passage of the [electoral] reform [package] could attract more voters to come out and cast their ballots," said Chinese University political scientist Ma Ngok. "But the conflicts within the pan-democratic camp may diffuse its support and dash its hope of victory." The pan-democratic camp was split in the aftermath of the electoral reform saga. A new People's Power party is being led by former League of Social Democrats' lawmakers Wong Yuk-man and Albert Chan. It will field 60 candidates to take on the Democratic Party. Meanwhile, 30 so-called Young Turks left the Democrats to form the NeoDemocrats, with 10 of them to contest the district council polls. The pro-government alliance also has more competition from within its own ranks. The New People's Party -formed by former secretary for security Regina Ip is targeting middle-class voters and will field 10 candidates. The pro-business Economic Synergy, formed after the split of the Liberal Party in 2008, will also field 10 candidates.

Relations HK-Mainland China
Think big for the nation, HK told: HK is just getting used to being part of China's five-year plans. And with a new one about to be adopted, the city is receiving some expert advice: don't dwell on the details. Think big. "We must look at the big picture," said Peter Leung, the former director of the HK Economic and Trade Office in Guangdong, "such as what the country needs in the next stage of development and how HK can benefit from the opportunities arising from this". With HK's fortunes increasingly intertwined with the mainland's economy, many people in the city are eager for some indications of its future under the latest plan. The nation's 12th five-year plan, the road map for development through to 2015, will be discussed and endorsed at the annual National People's Congress meeting in Beijing next month.

International affairs
Filipinos 'not pressed' to shun HK inquest: Manila never pressured any Philippine witnesses in the hostage tragedy not to come to HK to give evidence at the inquest, Philippine vice-consul Charles Andrei Macaspac said. "There's no pressure on them, on whether they want to go or not. That's their own individual decision," he said. None of the 116 Philippine witnesses is expected to attend the inquest, which started on February 14. Eight Hongkongers died in the siege of their bus in August last year after it was hijacked by former policeman Rolando Mendoza. When asked about plans by the families of some victims to seek compensations from Manila, Macaspac said his government's doors were open.

Transborder affairs
U-turn over cross-border study: Faced with a tide of criticism, the government said it would hold more public consultations on a cross-border planning study that appears to threaten HK's autonomy. The Development Bureau said it would hold further briefing sessions and discussion forums over the next two months on the study, which plots the future development of an area encompassing HK, Macau and Guangdong. "The Action Plan for the Bay Area of the Pearl River Estuary," was jointly produced by authorities in HK, Macau, Shenzhen, Dongguan , Guangzhou, Zhuhai and Zhongshan with the aim of improving the region's quality of life. The blueprint would not result in any new-town initiatives or large-scale construction work and HK would maintain full autonomy over the city's planning, the Planning Department said.
Rail projects set for five-year plan: Proposed cross-border infrastructure projects, such as a railway linking HK and Shenzhen airports, are expected to be listed in the nation's 12th five-year plan. The draft of the blueprint for the nation's development also pledges support for the development of offshore yuan business in HK and six of the city's knowledge-based industries. Local deputies to the National People's Congress discussed the draft at a meeting, ahead of next month's annual NPC meeting in Beijing, which will endorse the road map for development through to 2015.

Health
Swine flu peak nears end: The health chief Dr. York Chow said the swine flu peak was approaching an end. He said that although there were daily outbreaks in schools, there were not too many cases and they were mild and not spreading rapidly. "Although the number of patients [who died of swine flu was] 20 this month, I believe the number will fall in March and there is no need to suspend classes." There were 20 flu patients in intensive care units of public hospitals as of Feb. 25. On the possibility of industrial action by doctors at public hospitals due to heavy workload and low morale, Chow believed that doctors would not endanger patients' safety.

Environment
Harbour pollution on rise after 10-year fall: Bacteria levels have surged in Victoria Harbour after a decade of declining pollution levels, but no one can explain why. At a monitoring station opposite the convention centre in Wan Chai, the average E coli reading taken at three different depths hit 8,403 units per 100 millilitres of seawater last year. This was more than double the level in 2009 and the highest recorded in 11 years. Rising bacteria levels were also found in stations near North Point, Quarry Bay and Shau Kei Wan. The increases are in stark contrast to the declining trend of the bacteria readings over the past decade, since a multibillion-dollar sewage treatment works began operating at Stonecutters Island in 2001. 
Lawmakers set to deliver ban on idling engines: After a marathon series of meetings and seemingly endless negotiations and amendments, the city will finally take a firm step to tackling exhaust fumes from parked vehicles. A majority of lawmakers say they will support a much watered-down version of an idling engine ban during a sitting of the Legislative Council starting on March 2. Passage of the bill will end a decade-long effort to ban idling engines. Major parties have promised to vote for the bill, which will impose a fixed penalty of HK$320 for the offence, although there are a range of exemptions.

Culture and Education
HK delegates to share their wisdom in schools: HK delegates to the National People's Congress and Chinese People's Political Consultative Conference will be visiting secondary schools to increase teenagers' understanding of modern China. Professor Arthur Li, former secretary for education and manpower and the convenor of a working group for the sessions, said the talks would help pupils better prepare for the new subject of liberal studies under the 3+3+4 school system (three years each of junior and senior secondary school and four years of university). "This is not patriotic education or brainwashing since it is voluntary in nature," Li said. "There will be a question and answer session after the talks where students can ask anything they want. They can ask about corruption, fake products and even about the June 4 incident."
West Kowloon arts hub to get a flying start: Art lovers will not have to wait until 2016 to experience cultural events in the West Kowloon Cultural District as a "nomadic" museum and outdoor events will be coming to town next year. Having assumed his position as executive director of the M+ museum and interactive arts facility about a month ago, Lars Nittve already has a plan to get the museum up and running by the end of this year, before the building is erected. Nittve's idea is to have a "base camp" as a connecting point for the public to obtain information, while a series of pre-opening programmes, such as exhibitions featuring different aspects of visual culture from fine art to design and architecture, as well as outdoor film screenings, are staged in various parts of the town.

Varia
Council approves transport subsidy: The government's controversial HK$4.8 billion transport subsidy scheme was passed, giving low-paid workers a monthly allowance of up to HK$600, despite firm opposition from within and outside the Legislative Council. The new scheme is expected to benefit about 165,000 families, or around 436,000 workers. However, lawmakers, unions and grass-roots concern groups believe it will exclude many low-paid workers from the allowance. They note that the means test is based on family and household incomes and assets rather than on individual incomes, so it will deprive some existing beneficiaries of the money they now receive.

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