THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Economy + Finance
HK economy contracts as exports fall: HK's trade-dependent economy shrank 0.1 per cent in the second quarter from the first three months of the year, weighed down by a drop in exports, in a further sign that cooling demand in China and Western countries is taking a toll on the Asian financial centre. Economic slowdowns in Europe, the United States and China have weighed on Hong Kong's exports, which fell 4.8 per cent in June, while global market turmoil caused by the euro zone debt crisis has depressed activity in the city's stock market and financial services sector. The government also revised down its full-year forecast for economic growth to 1-2 per cent from 1-3 per cent, down sharply from a 5 per cent expansion last year.
Homes action: New steps to cool the red-hot housing market were announced on August 30 as Chief Executive Leung Chun-ying presented a package of 10 short and medium-term measures. In the longer term, Leung said, the Lands Department and Department of Justice are looking into formulating the legal framework for the "HK land for HK people" policy which he pledged during the chief executive election. Initially, there will be short and medium term measures to increase the supply. Leung said the government is concerned about the heated property market, given the sluggish global economy and high liquidity in international markets.
HKMA chief braces for a global downturn: Norman Chan, the HK Monetary Authority's CEO, is cautious about risks related to the tough global economic conditions facing the city, as well as the local real estate bubble. "The economic signal is mixed," said Chan. "On the one hand, HK's economy may be affected by the economic downturns in the United States and Europe. On the other hand, the property market is showing signs of overheating." A prudent monetary policy is required to prevent banks from taking too many risks when the property market is facing a potential downturn, Chan said.
Silver lining for Chinese consumption: Despite weak economic data, mainland and HK consumers are slowly recovering their confidence, amid expectations the new Communist Party leadership will take steps later this year to boost domestic consumption. A global survey released this month by MasterCard found that the biggest improvement in sentiment in 14 Asian economies was in HK, where the survey rating rose to 51.8 on a scale of 100 in the first half of this year, up from 29.9 in the second half of last year. This was the first rebound in the rating since early 2010. The mainland's consumer confidence rating rose to 77.4 during the first six months from 64.8 in the previous six months. A rating of 50 and above represents positive sentiment.
Talks on minimum pay fail to reach conclusion: Workers earning the HK$28 per hour minimum wage will have to wait to hear if they can expect a pay rise this year after a review panel failed to reach any conclusions during a tough all-day meeting. It comes as a survey showed the vast majority of Hongkongers wanted to see a big increase in the minimum wage. A decision has to be made by the end of October, the deadline for a final recommendation to be submitted to Chief Executive Leung Chun-ying. It is then up to the Executive Council to decide whether to adopt it. Labour minister Matthew Cheung said inflation was just one of the factors that had to be taken into account -with economic growth, unemployment data and the business environment considered alongside the consumer price index.

Domestic politics
Record 292 sign up for Legco poll: A record 292 candidates will battle it out for just 54 seats in next month's election for the expanded Legislative Council. As the two-week nomination period closed last night, 219 candidates had signed up to fight for the 35 directly elected seats. They will run on 69 slates, up from the 53 which contested the last election, when only 30 seats were available. But much attention will focus on the political heavyweights battling it out for the five new "super seats" in the functional constituency for district councils -so called because they will be elected by a city-wide ballot of the 3.2 million voters without a vote in any other functional constituency. Another record was set as 16 candidates secured functional constituency seats after being nominated unopposed, up from 14 four years ago.
New minister in subdivided flats probe: New development chief Paul Chan is at the centre of an investigation by buildings officials just days after taking office over claims that he and his wife illegally subdivided properties. The couple also face claims that they understated the selling price of another flat to avoid tax. Political analyst Sung Lap-kung said Chan had showed a lack of political sensitivity. "Leaving the properties to his wife is not a good excuse," Sung said. Candidates for next month's Legislative Council elections said it was no longer appropriate for Chan to stay as head of a bureau that supervises buildings and he should resign as soon as possible.
C. Y. Leung defers policy address: In a break with tradition, Chief Executive Leung Chun-ying will delay his first policy address until January. The deferral from October is to give the government time to build a constructive partnership with the Legislative Council that will be elected next month, Chief Secretary Carrie Lam said. Ma Ngok, a professor of government and public administration at Chinese University, said Leung's decision to defer the speech was a sign of caution.
C.Y.'s rating slides to its lowest point yet: Chief Executive Leung Chun-ying's popularity rating has plunged to another record low, the latest poll by the University of HK's public opinion programme has found. Leung's approval rating is lowest among people below the age of 30, the survey found. Observers say the poor results for Leung two months into his term of office could make it hard for him to push through key reforms and regain public confidence. The results come as Leung faces pressure to transfer his interest in property consultancy DTZ Holdings to a trust, as he had promised to do before his election. He was also rocked by revelations that the wife of his new development chief was linked to a company that owned controversial subdivided flats, while the debate over the introduction of national education in HK schools continues to divide.

International affairs
Leung summons Japanese envoy: Chief Executive Leung Chun-ying summoned the Japanese consul-general on August 15 amid a flurry of diplomatic protests following the arrest by Japan's coastguard of 14 activists from HK, Macau and the mainland, who landed on the disputed Diaoyu Islands. During the summons of the diplomat Yuji Kumamaru, Leung reiterated that the islands had been China's territory since ancient times. He urged Japan to release the activist and asked the Japan to refrain from taking any action that could endanger the lives and property of HK people and other Chinese citizens. Both Beijing and Tokyo also summoned each other's ambassadors to lodge protests. China and Japan -where the islets are known as the Senkakus -both claim sovereignty.

Transborder affairs
Warning over entry permit influx: Tourism Board chairman James Tien says a change of rules which would give 4.1 million non-permanent citizens of Shenzhen easier access to HK should be postponed. He warned many of the new visitors could take jobs illegally or become cross-border traders. Secretary for Labour and Welfare Matthew Cheung said the relaxation would benefit the retail and catering industries. The government would step up prosecution of illegal workers. HK will control the number of people entering the city, Chief Executive Leung Chun-ying said amid growing pressure to delay the relaxation of permit rules that will allow millions more mainlanders to pay multiple visits. The likely influx following Shenzhen's announcement of the relaxation ­apparently without consulting the HK government -fuelled concerns about inflation and further strain on infrastructure.
'No visa-on-arrival for new towns': Three new towns being planned in the northern New Territories will not be open to mainlanders on a visa-on-arrival basis, Chief Secretary Carrie Lam said, although she was vague on the idea of the policy for the border area. The idea of offering a visa on arrival to mainlanders entering the 2,400­hectare border area was put forward by the One Country Two Systems Research Institute, a body of advisers to the government including Executive Councillor Cheung Chi-kong. But reports that the scheme could be extended to new towns in Fanling North, Kwu Tung, Ta Kwu Ling and Ping Che angered groups opposed to their construction. It is understood officials may extend a consultation exercise on the towns beyond the end of this month.
Cross-border sailing to begin soon: A HK businessman operating a marina in a pilot development zone in Guangzhou expects a cross-border sailing scheme for private vessels suggested by Guangdong authorities to take effect soon. Ian Fok said he hoped power boats and yachts would soon be able to travel freely between HK and Nansha. This is not possible now because of legal restrictions. Deputy head of Nansha's district government Raymond Sun confirmed there had been discussion among Guangdong officials on cross-border integration.
Barcode boost for border pupils: Kindergarten and primary school pupils who live in Shenzhen but attend HK schools will be able to cross the border quicker, thanks to new technology at the checkpoints. Handheld barcode readers will be used at several border points next month. The total number of cross-border pupils is expected to rise to 17,000 in the 2012/13 school year, up from 12,865 last year. Most of these children are from HK families who live on the mainland.

Legal affairs and human rights
New government accused of ignoring media rights: The new government has repeatedly disregarded the right of journalists to report in its first month in office, the HK Journalists Association (HKJA) says. It also criticised Development Secretary Paul Chan's decision to release a statement at the stroke of midnight on August 5 regarding claims that his wife's firm owns flats that were illegally subdivided. The HKJA said the media were not given advance notice about 16 events involving Chief Executive Leung Chun-ying and his cabinet members since they took office on July 1.

Health
Baby milk legislation to be speeded up: The government will speed up legislation to close loopholes that exempt baby food from nutrition-labelling rules in the wake of tests that showed two brands of Japanese baby formula lacked a nutrient vital to brain development. But it has not set a timetable for the new rules, despite concern over Centre for Food Safety tests that showed two Japanese milk formula brands on sale in the city for years lacked iodine. The results sparked a crisis of confidence in milk formula and calls from a mothers' group for the authorities to close loopholes in the labelling rules that came into force in 2010 that exempt food intended for children under three.
Body to 'advance' Chinese medicine: Chief Executive Leung Chun-ying's ambitious plans to develop the city's traditional Chinese medicine industry took a step forward with the appointment of a task force to help bring the idea to fruition. Leung wants the government's involvement in the industry to go beyond regulation and include promotion of traditional Chinese medicine and research on it. The task force, to be chaired by the health minister Dr Ko Wing-man, will lay the foundations for a Chinese Medicine Development Committee.
HK faces 20-year psychiatry crisis: The severe shortage of psychiatrists in public hospitals is likely to continue for at least two decades, while the city struggles to deal with an increase in fatal tragedies involving mental patients, a leading psychiatrist has warned. Citing standards established by the World Health Organisation, HK College of Psychiatrists president Professor Linda Lam said there should be one psychiatrist for every 10,000 people - meaning HK needs at least 700. At present, there are only 275. "Lack of clinicians in mental health has been a long-standing problem. The manpower for psychiatrists in the city still falls far short of our counterparts with comparable socio-economic standards," she said.

Environment
Worries over pellet spill persist despite promises: Government pledges on the spill of 150 tonnes of plastic pellets during Typhoon Vicente did little to ease the fears of Hongkongers. It said it would keep the public up to date about the clean-up operation on beaches and post the results of tests on fish online. But environmentalists, shoppers and the fishing industry are still concerned that the pellets will pollute fish caught locally. Two weeks on from the typhoon, Chief Secretary Carrie Lam said the government had learnt from its handling of the issue and admitted it should have informed the public about the spill. The pellets are not toxic in themselves, but environmentalists fear they will absorb toxins which will then pass into the food chain.
Scientists to launch own air quality index: Pollution scientists who developed a new air quality alert system for the government that was never adopted plan to launch it themselves. The experts say their air quality health index (AQHI), to be provided on a website as early as next month, will offer the public better, clearer and more timely advice on health risks than the present government system. Modelled on a Canadian approach, the new index will be calculated on the risks of hospital admissions for respiratory and cardiovascular diseases from the sum of four air pollutants -sulphur dioxide, nitrogen dioxide, ozone and particulate matter. The current air pollution index (API), introduced in 1995 and never revised, does not take health risks into account and is based on the highest level of concentration on a given day of just one of the four pollutants. Friends of the Earth welcomed the new index but said the government should replace its own system.

Culture and Education
National education 'vital to fill gaps', paper says: The Communist Party's mouthpiece newspaper has waded in to the debate about national education, with a commentary arguing that the controversial curriculum would correct deficiencies in Hongkongers' knowledge of the nation. The commentary, which appeared in Chinese in the overseas edition of People's Daily, said surveys had shown that youngsters in HK knew little about China, a situation that was "not desirable". People's Daily is seen as representing the views of top leadership in Beijing. Its sister paper, the Global Times, sparked anger recently when its Chinese-language edition accused critics of national education of being "brainwashed by the West".
Parents turn up heat on national education: A parents' concern group seeking to delay the introduction of national-education lessons in schools is urging supporters to write to their children's schools to voice their opposition. The group hopes to pressure the government to put off the launch of the curriculum, which primary schools can choose to begin teaching from next month. Eva Chan, a co-founder of the Parents Concern Group on National Education, said it was time to tell school principals that gaining "knowledge about China goes beyond [instilling] a narrow sense of nationalism". Critics of the curriculum fear pupils will be "brainwashed" by lessons praising the Chinese Communist Party.
Tens of thousands expected at fresh protest against national education: Pupils and parents will surround the government's headquarters on Sept. 1 in their latest move against the introduction of the national and moral education curriculum ahead of the start of the new school term next week. The National Education Parents' Concern Group said it expected tens of thousands of participants to demonstrate at the government's headquarters in Admiralty. Group spokeswoman Linda Wong said the government had been deaf to their demands, even though scores of protesters took to the street in an anti-national education march last month. The group said the start of the school term would not mark an end to their campaign but a beginning of their action. Wong called the gathering a "commencement ceremony of civic education".
Survey finds most oppose new subject: Three-quarters of parents and pupils questioned in a large-scale survey say the controversial national-education curriculum should be withdrawn and a new consultation exercise held, despite government claims of majority support for the plan. The survey was carried out by the Boys' and Girls' Clubs Association. "We think it is not suitable to be launched as an independent subject," said Eva Ho, the association's assistant director. The association argues that schools should focus on civic education, incorporating universal values such as human rights. It interviewed 1,995 secondary school pupils and 1,409 parents of primary-school children this month. Some 74 per cent of pupils and 77 per cent of parents said the government should withdraw the subject and carry out more consultation.

Macau
Site sale voided in Macau graft probe: Macau's chief executive has invalidated the sale of five plots of land at the centre of a corruption case involving HK tycoons Joseph Lau and Steven Lo, it was revealed on August 14. The land in question is the site of the HK$20 billion La Scala luxury residential project. Lau and Lo are due to face trial in Macau next month on charges of paying a HK$20 million bribe to former Macau public works chief Ao Man-long to secure the plots. Ao was jailed for 29 years for corruption and money laundering.

Varia
Birth ban will leave HK with fewer workers: A ban on mainland women giving birth in HK will leave the city with fewer workers to take care of a rapidly ageing population in future, the latest projections from the Census and Statistics Department show. While he was still chief executive-elect, Leung Chun-ying announced in April that there would be a quota of "zero" for mainland women to give birth in the city's hospitals from next year, with an exception for those women married to HK men. The decision proved popular with Hongkongers, who fear the influx of mainland mothers will increase competition for health care and education, but the department says the ban, if extended for the next three decades, will leave the city with 330,000 fewer workers than it had previously expected.

Press articles related to Switzerland and Swiss matters
Banks hand workers' details to US (SCMP, August 17): HSBC and several Swiss banks have handed over details of tens of thousands of current and former employees to US regulators in exchange for leniency for allegedly helping US clients avoid taxes, say lawyers representing bank staff. The banks have been subject to a tax investigation that resulted in Swiss bank UBS paying US$780 million in fines to the United States Department of Justice in 2009. Private bank Julius Baer said it had "provided certain information about its historic US business in full compliance with Swiss law". Credit Suisse said its co-operation with US authorities was in the interests of the bank and its employees. Douglas Hornung, a Geneva-based lawyer who represents 40 current and former Swiss employees of HSBC, Credit Suisse and Julius Baer, said the banks' action violated data protection and privacy laws in Switzerland.

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