THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Economy + Finance
Beijing urges bigger yuan role for HK: China wants HK to play a more active role in developing its burgeoning offshore yuan market and the territory has an indispensable part in the process, Chinese Vice Commerce Minister Wang Chao said. China is seeking to promote the use of the yuan overseas as part of a longer-term plan to make it an international reserve currency along with the US dollar, and has said it supports the growth of the yuan market in HK. During his visit to the territory in August, China Vice Premier Li Keqiang unveiled a string of measures to further develop the offshore yuan market in HK, including allowing foreign investors to buy mainland shares and bonds. 
Skies widen for insurance firms: Local insurance brokerage companies have been given the green light to set up shop in the mainland, after a new deal under the Closer Economic Partnership Arrangement. Signed on December 13, the latest supplementary agreement further opens up the mainland service- sector market with drastically lowered thresholds. The deal will increase the number of liberalized service sectors under CEPA from 44 to 47, with 301 liberalizing steps. Under a pilot plan limited to Guangdong province, including Shenzhen, insurance brokerages may from next year set up wholly owned agencies if they have 10 years of relevant experience, HK$500,000 assets and been running a mainland representative office for more than a year. Earlier, non-mainland companies were subject to a capital requirement of US$200 million (HK$1.56 billion), 30 years of experience and a mainland representative office for three years, a government spokesman said. 
Decision time as public backs third runway: A decision on whether to go ahead with the most expensive infrastructure project in HK's history will be made by the current government before the city's next chief executive is chosen in March. Secretary for Transport and Housing Eva Cheng said there was overwhelming public support for building a HK$136.2 billion third runway at the airport on Lantau, with 73 per cent of nearly 24,000 respondents backing the idea in a government-commissioned survey. Nearly four-fifths of them called for a fast decision, and Cheng agreed. The Airport Authority says the third runway will bring HK$912 billion in economic benefits in the 50 years to 2061, and that it is essential to cope with growth in air passengers and cargo, which are expected to double from the present levels in the years to 2030.
Financial Secretary dismisses speculation on property cooling measures: Financial Secretary John Tsang dismissed speculation the government might unwind its measures to cool down the residential property market. Tsang said these measures had helped stabilise the city's economy amid an uncertain global outlook and the government would continue with them. Tsang was attempting to clarify remarks he had made earlier. During a visit to South Africa, he signalled that the government was prepared to reverse the property market curbs if prices continued falling. 
Tourism sector to get new watchdog: Proposals for a statutory body to regulate the tourism industry and assume the regulatory functions of the Travel Industry Council were unveiled. A new Travel Industry Authority would oversee travel agents, tour guides and tour escorts, Tourism Commissioner Philip Yung said. The move comes as the government seeks to increase confidence in the regulatory regime. There have been several high-profile complaints of misconduct by tour guides who tried to coerce mainland visitors into shopping. The government aims to submit legislation within 2-1/2 years and says it will take a minimum of three years to set up the authority. 
Weak dollar makes HK more expat-friendly: HK is not terribly expensive to live in - if accommodation costs are excluded. HK plunged in global and Asian rankings of the most expensive cities to live in and has been overtaken by Beijing and Shanghai, human resources consultancy ECA International found in the study. But the survey, designed to help multinational companies calculate expatriate salaries, leaves out housing costs - factor them in and HK rises to second place. “HK is pegged against the US dollar,” ECA International director Lee Quane said. “The weak dollar means the city is now cheaper than a number of other locations including Singapore, Beijing and Shanghai, where there has not only been significant price inflation, but also currencies have strengthened.”

Domestic politics
Tables turned - Leung lags Tang in top job bid: Leung Chun-ying found that public popularity does not necessarily translate into support among those who have a say in who will be the next chief executive. The opinion poll-dominating candidate for the top job and his allies suffered setbacks in the voting for sub-sector representatives on the 1,200-strong Election Committee - his known supporters winning 58 seats, little more than a third the tally for rival Henry Tang. Former chief secretary Tang saw more than 170 of his known supporters gain seats, while the pan-democrats' tally was 205. But with most of the members still playing their cards close to their chests, the outcome remains uncertain. More than 700 members remain publicly undecided and their preferences will depend on indications from Beijing. Sub-sectors of the committee inclined to back Tang include commercial, finance, financial services, wholesale and retail, industrial and tourism, and real estate and construction. 
Tang halves Leung's lead in popularity: Chief Executive hopeful Henry Tang has cut sharply into his opponent's lead in popularity, with the latest poll showing him having support from 29.7 per cent of the HK public - up from 18.8 per cent in October. He now lags just 12.1 percentage points behind opponent Leung Chun-ying, down more than half from 28.7 percentage points behind two months ago. Dr Ma Ngok, a political scientist at Chinese University, said Tang's popularity received a boost when he rolled out a group of heavyweight supporters at his rally on December 19. "In contrast, Leung's campaign team is weaker and the public is prompted to associate it with the bad times of [former chief executive] Tung Chee-hwa's administration, since it includes some core members of Tung's campaign team," Ma said. Ma said that Leung's high-profile criticism of Sing Tao Daily, which reported alleged investment losses by Leung, had also hurt his image. 
Riddle of liaison office visits: Two of the main candidates to be the next chief executive have been seen meeting mainland officials at the central government's liaison office. The discussions have fuelled speculation they may be trying to lobby Beijing for its direct support as the race heats up. Former Executive Council convenor Leung Chun-ying confirmed that he had visited the liaison office's headquarters, but refused to disclose further details. Leung's rival, Henry Tang, also called in at the liaison office, but sidestepped questions about the visit, saying he "would not comment on private activities". Beijing has not publicly indicated its backing for any candidate, though Tang is widely believed to be the preferred choice. James Sung, of City University, said he doubted whether Beijing would show its preference at this stage. 
No consensus on Legco by-elections: One of four proposals to fix what the government calls a "loophole" in rules for Legislative Council by-elections garnered the most support in a public consultation, the administration said. But it also said there was no consensus on how to address this perceived problem. Secretary for Constitutional and Mainland Affairs Raymond Tam said there was "no majority view" on any of the four options. The proposals were introduced after five lawmakers resigned last year to force what they hoped would be a de facto referendum on the pace and scope of democratisation. Most parties boycotted the vote and all were re-elected easily. 
Party bursts on scene with vow to protect '99pc': A new political group called the Labour Party has been born - with the clear goal of speaking for the labor sector and the underprivileged. "We are here to unite 99 percent of society," said founding leader and lawmaker Lee Cheuk-yan. "The working class, the underprivileged, young people, women, small and medium enterprises - all are victims of the current system," said Lee, who was elected unopposed as party chairman. The new party will be governed by the four ideals of democracy, justice, sustainability and unity. The party maintains it will not use radical means to make its point even though it wants full public support.

Relations HK - Mainland China
Tsang wins praise but Wen issues warning: Premier Wen Jiabao has acknowledged Donald Tsang's efforts over the past year but has warned him to prepare for more complicated circumstances in the remaining six months of his term as chief executive. Tsang would have to scrupulously fulfil his duties to meet expected challenges, Wen told Tsang when Tsang delivered his last annual report in Beijing. “In the remaining half year of the SAR administration, it has to further explore HK's development potential, especially to develop the economy, improve livelihood and put forward the Basic Law,” said Wen. Rounding up this year, Wen fully acknowledged Tsang's efforts in advancing the economy and improving “tremendous livelihood issues”. Tsang briefed Wen on the implications and difficulties that HK faced as a result of the influx of pregnant mainlanders and how his administration would deal with it. "Wen acknowledged the high concern of HK people over the issue. I told him we hoped to enhance co-operation with mainland departments to tackle the middleman agencies," Tsang said. At the centre of the issue is the right of abode granted to all children born in HK.
'HK citizen' identity strongest in 10 years/Beijing envoy criticises HKU poll: Despite increasing economic integration, locals are viewing themselves more strongly as Hongkongers rather than Chinese citizens than at any time in the past decade, a survey has found. The University of HK's public opinion programme has conducted such surveys from time to time since the 1997 handover. Dr Robert Chung, the programme's director, said: "This [trend] is contrary to the [direction of] China's economic development in recent years, so it must be due to factors beyond economic development." A senior HK-based central government envoy has criticised as "unscientific" and "illogical" the way questions were posed in a recent University of HK survey that found that locals identified themselves more strongly as Hongkongers than as Chinese citizens. The comments by Hao Tiechuan, of the central government's liaison office, marked a rare attack against an academic survey, apparently because the findings were deemed undesirable.

International affairs
Discussing politics normal, British consul says amid US row: The British consul general has weighed into a row between China and the United States over the work of diplomats in HK, saying his staff discuss "political and economic issues" as part of their duties. The comments came after the Foreign Ministry commissioner in HK, Lu Xinhua, said he had repeatedly asked US consul general Stephen Young and other US diplomats not to make critical comments about the city's internal affairs. "It would be inappropriate for foreign consulates to comment on any issue concerning HK's elections. This is what we strongly oppose," Lu said. The ministry's HK office issued the third warning in three months to US diplomats to stay out of HK affairs. It was prompted by the remarks by Young about the upcoming chief executive election and vote-rigging allegations in the wake of last month's district council polls.

Transborder affairs
Construction begins on HK-Zhuhai-Macau bridge:  Construction finally began on the giant HK-Zhuhai-Macau bridge, after a year's delay caused by a legal challenge to its environmental assessment report. That delay means extra manpower and equipment will be needed to meet the 2016 deadline for the mammoth project, Chief Executive Donald Tsang said. 
Self-service system for mainlanders at borders: Immigration chiefs will allow hundreds of thousands of frequent mainland travellers to cross the border into HK using self-service e-channels, a system originally designed to shorten waiting times and ease the pressure on border officials. However, there are fears it may be abused. One lawmaker fears city hospitals could suffer because pregnant women from the mainland without the required medical booking letters may use the scheme to cross the border and give birth. The e-channels allow travellers to bypass counters and one-on-one scrutiny by immigration officers. Immigration officials dismissed the worries, saying the self-service channels would free up more officers when it started next month.

Health
Cull halts HK live-chicken supplies after H5N1 found: HK will have no live-chicken supplies for three weeks, with the government to cull 17,000 chickens in the Wholesale Poultry Market after a chicken found dead there was confirmed to have the deadly H5N1 bird flu strain. Government inspections and viral tests will be strengthened. Commenting on the cull, Dr Ho Pak-Leung, director of Department of Microbiology of The University of HK, said the government's actions were "appropriate". He said the coming week would be crucial in observing whether market poultry workers develop bird flu symptoms. He said anyone with serious respiratory symptoms should have an H5N1 test.
Evidence of killer bug found at Tamar: Traces of the bacteria that cause legionnaires' disease were discovered in the new HK$5.5 billion government headquarters at Tamar days after education chief Michael Suen was diagnosed with the potentially fatal condition. The block at the centre of the health scare is home to the offices of seven government departments, including the Constitutional and Mainland Affairs Bureau, the Education Bureau, the Environment Bureau and the Security Bureau. Centre for Health Protection controller Dr Thomas Tsang said preliminary results from samples taken on December 22 showed Legionella pneumophila bacteria were found in four samples taken from the tap in the private toilet of Suen's office. He added that the disease was not inter-personally transmitted and was usually contracted through inhaling contaminated water droplets. 
Seafood revealed as biggest source of dangerous toxins: Seafood is the largest source of potentially harmful dioxin-based toxins in the diet of Hongkongers, according to a major food study conducted by the Centre for Food Safety. The highest levels were found in mandarin fish, followed by oysters and pomfret. However, the toxins are not consumed at dangerous levels based on Hongkongers' normal eating habits, so the findings were no cause for alarm, said Dr Xiao Ying, a food safety officer at the centre.

Environment
Incinerator project gets green light a second time: A controversial plan to build a rubbish incinerator off Lantau Island was approved for a second time when government advisers cleared its environmental impact report. The scheme was originally approved in April, but it was sidelined by the delay to the HK-Zhuhai-Macau bridge project. Under the plan proposed by the Environmental Protection Department (EPD), 16 hectares of sea will be reclaimed for the incinerator just south of Lantau near Shek Kwu Chau. It will be able to incinerate 3,000 tonnes of rubbish and will have a small mechanical sorting facility. The reclamation will lead to a loss of 31 hectares of marine habitat, but the government says it will create a 700-hectare marine park between Shek Kwu Chau and the Soko Islands.

Culture and Education
AmCham warns of schools 'crisis': The American Chamber of Commerce has warned the chief executive that HK's status as a world-class city is under threat because the shortage of international school places has reached a "crisis point". In a paper submitted to Donald Tsang's government, the business organisation said it wanted a permanent committee to be established to ensure schooling would be available for children of foreign investors and professionals. In recent months, British and Canadian chambers of commerce have warned that the shortage of school places could weaken HK's status as a financial hub.
Poll rivals share vision of cultural bureau for city: The next government will probably create a bureau to promote the city's cultural industry, because the two front runners for the top job made that pledge. Former Executive Council convenor Leung Chun-ying said he would consider forming a cultural bureau and start a matching fund to support artists. His rival, Henry Tang, vowed to consider adding a bureau to oversee the development of cultural and creative industries.
Arts hub to stage first official shows: A marriage of Cantonese opera performances with contemporary arts and new media inspired by the traditional art form are set to be the first official cultural programmes staged by the HK$21.6 billion West Kowloon arts hub. West Kowloon Cultural District Authority chief executive Michael Lynch said programmes blending local traditions and contemporary art “give some sense of what the future West Kowloon” will look like.

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