THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Economy + Finance
HK faces risk of recession: HK is facing growing risks of a technical recession and rising unemployment after retail sales and exports shrank, Financial Secretary John Tsang  has warned. The city would not be able to escape the impact of the European debt crisis as recent figures showed signs of a slowdown. Internal consumption, he said, was the major driving force to support the city‟s modest 0.7 per cent and 1.1 per cent growth in the first and second quarters as exports had largely lagged. If retail sales continue to lag, the city‟s economy “may record a negative growth again” in the third quarter following a 0.1 per cent contraction in the second quarter. “It will be difficult for exports to return to growth in the short term,” he said. “The risk of a technical recession is increasing and unemployment will probably rise.”
HK banks told to remain alert to risks: Financial Secretary John Tsang  has warned banks in the city that although they are relatively well positioned in terms of capital reserves, they need to remain alert to economic risks. Tsang said the lenders maintained an average capital adequacy ratio of 15.9 per cent, higher than international levels of 10.5 per cent. But even though the economy had remained stable, this could be affected by weakening exports and monetary easing measures from other countries, warned Tsang. He also said HK should continue to help drive the internationalisation of the yuan and build on its leading status as an offshore yuan hub.
Two Kai Tak sites chosen for HK-only buyers in pilot property scheme: Two sites at the former Kai Tak airport have been selected for a pilot scheme in which homes will be sold only to HK permanent residents for 30 years. Chief Executive Leung Chun-ying said the "HK property for HK residents" policy was finalised. The land leases will be written to specify that during the 30-year period, flats can be sold only to buyers with permanent residency in HK. Secretary for Transport and Housing, Professor Anthony Cheung, said he did not think the policy would affect the city's free economy status. The announcement came as property prices hit an all-time high.
HKMA acts to cool property market after US launches QE3 stimulus: HK's central bank moved to cool the city's overheating property market by making second mortgages harder to get, but some analysts are betting the new measures won't be enough to dampen prices. The announcement by Norman Chan, chief executive of the HK Monetary Authority, came on the heels of the US Federal Reserve's unveiling on Sept. 13 of a third round of quantitative easing measures (QE3) to provide liquidity and to keep US interest rates low until 2015. Because the HK dollar is linked to the US dollar, local rates will remain low, underpinning the real estate market. Financial Secretary John Tsang said the latest round of Fed easing substantially increased the risk of a bubble forming in the local property market, and the new HKMA measures would cool it.
Commission proposes minimum wage rise by HK$2 - but workers not impressed: HK's minimum wage should rise HK$2 to HK$30 per hour, the group set up to review the pay floor has ruled - a decision criticised by both workers and bosses. Employers say the 7.1 per cent increase will lead to price rises, especially for food, and higher building management fees. Unions and workers' advocacy groups say it will do little to ease poverty and will soon be eaten up by inflation, which stood at 3.7 per cent last month. The Minimum Wage Commission will submit its recommendation to the government next month and the Legislative Council must approve the rise. The new rate is expected to come into force in May at the earliest.
Minister tells forum plans for New Territories new towns will go ahead: A public forum on government plans to develop new towns near the border with Shenzhen descended into chaos on Sept. 22 but left officials determined to push the scheme through. Throughout the three-hour forum, villagers, environmentalists and social activists waved banners and chanted slogans. The moderator repeatedly appealed for the crowd of 6,000 to remain calm and rational. Development Secretary Paul Chan said one argument for the development was undeniable - everyone wants somewhere to live. Some activists fear the new towns will form a special economic zone with visa-free access for mainlanders.

Domestic politics
Legco election creates stumbling block for Leung: Chief Executive Leung Chun-ying faces fresh challenges after Sept. 9‟s Legislative Council election produced a more fragmented legislature and signalled the continued rise of radicals in the pan-democratic camp. A divided Legco will make it more difficult for Leung to pursue his agenda on such controversial issues as national education, standard working hours and electoral reform. The Democratic Party lost two seats but, overall, pan-democratic candidates secured 27 seats in the 70-seat Legco, meeting the "critical minority" threshold of 24 seats to be able to block constitutional changes. The pan-democrats won 18 of 35 directly elected seats in the five geographical constituencies. Academics said the setback for the pan-democrats could be attributed to the failure of split-voting strategies and a lack of campaign co-ordination. That is in contrast to rivals in the Beijing-loyalist camp. "One-quarter of pan-democratic supporters [or about 264,000 people] have voted for the radical candidates of People Power and the League of Social Democrats, whose [four] elected lawmakers will have more power to block Leung's policies by alternative means like filibustering," social scientist Chung Kim-wah said. 
Chief Executive Leung Chun-ying faces uphill task building trust with pan-democrats: When the Legislative Council convenes on October 10, Chief Executive Leung Chun-ying, besides finding a more fragmented legislature, is also likely to face an uphill challenge - to regain the trust of the pan-democratic camp and rebuild their working relationship. Pan-democrats say their relationship with the administration was already damaged in July when Leung's administration tried to push controversial restrictions on by-elections and a government restructuring proposal through the previous Legco despite their opposition and filibustering. Pan-democrats won 27 of the 70 seats in the election.
Protest against national education to end after government climbdown: Protesters who have besieged government headquarters for 10 days in opposition to the teaching of national education in HK schools called off their action early Sept. 9 – hours after Chief Executive Leung Chun-ying announced, on election eve, that schools would no longer be required to teach the subject. Leung said the government had scrapped its three-year deadline for schools to begin teaching national education, and said schools would be free to choose independently whether to teach the subject. He pledged not to push for compulsory lessons during his five years in office. Government officials and critics alike agreed Leung had conceded defeat. However, the activists said they would continue their opposition to national education until the government scraps the curriculum, which they consider an exercise in brainwashing students. They say that while the lessons remain an option, pressure will linger for schools to teach the subject in future.
Loh named environment deputy, amid cabinet appointments: Christine Loh, an outspoken critic of HK environmental policy, was named undersecretary for the environment on Sept. 12, amid a flurry of other appointments. Loh, 56, a former legislator and chief executive of the policy think tank Civic Exchange, will take office immediately, the Chief Executive‟s Office announced. Two other undersecretaries and two political assistants were named to the cabinet of Chief Executive Leung Chun-ying on the same day. Deputy police commissioner John Lee, 55, was appointed undersecretary for security; and incumbent Undersecretary for Transport and Housing Yau Shing-mu, 52, will remain in that post. “The selection process for undersecretaries and political assistants for the remaining bureaus is under way,” the Chief Executive‟s Office said.
Chief Executive CY Leung in new bid to block poll challenge by Albert Ho: Chief Executive Leung Chun-ying has tried again to block a challenge to his election victory in March, filing an appeal against a court ruling that partially favoured defeated candidate Albert Ho. A High Court judge ruled two weeks ago that the Court of First Instance had the power to extend a seven-day deadline for election petitions. Ho filed his petition several months after the election, when the illegal structures at Leung's Peak home were revealed. Ho's petition argued that Leung had not been duly elected because he lied about illegal structures during his campaign. Mr Justice Johnson Lam Man-hon ruled that the court had the discretion to extend the seven-day deadline because it had a constitutional duty to oversee and safeguard a free election.
Carrie Lam gets support, but no advice, from Beijing: Chief Secretary Carrie Lam is back from Beijing with words of support from national officials - but no tips on how to handle the recent political turmoil. Wrapping up her first official three-day duty visit to the capital since assuming her new post in July, Lam said mainland officials had expressed support for Leung Chun-ying's administration but gave no advice. On Sept. 24, HK and Macau Affairs Office director Wang Guangya told Lam at a closed-door meeting that he was aware that the HK government was facing difficulties.
Hongkongers more pessimistic about the city's future, HKU survey shows: Hongkongers have grown even more pessimistic about the city's future after fewer than three months under Chief Executive Leung Chun-ying's leadership than they were in the aftermath of a 500,000-strong protest that rocked the city in 2003. University of HK public opinion poll findings released also showed some 40 per cent of respondents expressed distrust towards Beijing authorities - the highest level since the end of British rule in 1997. Meanwhile, more people said they did not trust the local government than those who did. Observers said these were indications that it would be dangerous for the chief executive to initiate changes that would be seen as "political missions" to please Beijing during a high tide of "mainland phobia".

Relations HK - Mainland China
‘De-Sinofication' debate re-emerges in HK: Attempts to “de-Sinofy” HK are becoming all too familiar, according to Lew Mon-hung, a delegate to the Chinese People‟s Political Consultative Conference, warned against efforts to turn it into a city-state. He made the comments during a debate on RTHK radio with Dr Horace Chin, a scholar who has called publicly for wider autonomy for HK. He said it was increasingly obvious that many Hongkongers are opting for “de-Sinofication”. He cited the British flags that were waved recently by demonstrators protesting against the government‟s national education programme, and during protests in Sheung Shui against cross-border mainland traders. “Before and after the [September 9 Legislative Council] election, many candidates chanted „down with the Chinese Communist Party‟,” Lew said. “Article 1 of the Basic Law states that HK … is an inalienable part of [China]. That is so whether or not you like China.” But Chin said HK has a quality of “purity” that it should not lose. His latest book, which calls for HK to become a city-state, has been adopted as a guiding philosophy by campaigners pushing for increased independence from the mainland. “The HK government, has not done enough to maintain the city‟s dignity and interests amid increasing interactions with the mainland,” Chin said.

International affairs
HK protesters join anti-Japan chorus: Scores of protesters on Sept. 16 participated in a march to the Japanese consulate to protest Tokyo‟s assertion of control over the disputed Diaoyu Islands. Marchers, which included locals and mainland and Macau visitors, demanded that the Japanese government stop its claim of sovereignty over the islands in the East China Sea. The crowd remained calm when they passed by Japanese department store Sogo, only chanting slogans “boycott Japanese goods”. On Sept. 11, Japan announced it would buy the island chain. Anti-Japan protests have broken out in cities across the mainland, including in Beijing, Shenzhen, Shanghai and Qingdao.

Transborder affairs
Plan to allow 4.1m Shenzhen non-residents into HK shelved: The central government has indefinitely suspended a new policy that would allow 4.1 million non-residents of Shenzhen to enter HK on multiple-visit permits, Chief Executive Leung Chun-ying announced on Sept. 7. The policy would not come into force until its impact on HK was assessed further, and the city‟s ability to cope with the influx was confirmed. It was originally going to allow 4.1 million non-residents of Shenzhen to enter HK from September 1, using multiple-visit visas under the individual visit scheme. The visas were previously available only to Shenzhen‟s 2.8 million permanent residents. That plan caused consternation among many HK residents, who felt the surge would overwhelm local infrastructures and push up prices of consumer goods.
HK government cracks down on cross-border parallel traders: Parallel traders from the mainland risk having their entry permits cancelled if they breach HK's laws, Chief Secretary Carrie Lam said on Sept. 18. Lam said the city's government would ask Shenzhen authorities to cancel the permits if immigration laws were broken. She made the announcement after chairing a cross-departmental meeting to discuss the problem of thousands of traders who cross the border to buy goods in HK for resale. While buying goods in HK for sale across the border is not illegal in the city, the traders are breaching immigration laws by working in HK. Chief Executive Leung Chun-ying said that parallel trading had severely affected the daily lives of people in North District and disturbed social order.

Legal affairs and human rights
Advocates say HK not doing enough for rights of the disabled: A delegation with representatives from 29 disability concern groups will attend a meeting of the UN committee on the rights of the disabled that starts in Geneva on Sept. 17. "Disabled rights have not improved in the past four years," Human Rights Monitor education officer Kwok Hiu-chung said. "The government may have stepped up superficial improvements like building certain facilities around town, but the mindset hasn't changed - handicapped people's needs are still treated as welfare, not a right."
QC to advise on mainland mums: HK has invited a Queen's Counsel to advise on how to reverse a law that automatically grants right of abode to all babies born to mainland parents in the city. An expert on the Basic Law said the move was a strong sign the government intended to resolve the matter in the courts. Secretary for Justice Rimsky Yuen said the government had made "positive" progress in its study of the issue and promised it would be completed in "slightly longer than three months".
HK journalists call on Beijing to curb mistreatment of city's reporters: The HK Journalists' Association has called on the central government's liaison office to curb cases of assault and intimidation by regional authorities on reporters from the city working on the mainland. Addressed to the office's director, Peng Qinghua , the letter described as "unreasonable" and "intolerable" the interference of local-level officials and security officers in the work of Hong Kong journalists on the mainland.

Health
Deadly virus won't spark HK Sars epidemic, scientists say: The coronavirus that has recently emerged in the Middle East and killed one person has been confirmed as a different bug from the one that caused the deadly Sars epidemic in 2003. Dr Thomas Tsang, controller of HK's Centre for Health Protection, warned the new virus could still cause a serious outbreak, even though gene sequencing had proved it was different from Sars. The virus will be listed as a notifiable disease under HK law in the next few days. "It is a precaution to give the government legal grounds to implement infection control measures, such as the isolation of an infected person, tracking anyone with whom the patient had close contact, and quarantining hotels or apartments if necessary in case there is an outbreak," Tsang said.

Environment
HK suffers most deaths in region from ship pollution: HK has suffered the most from ship emissions in the Pearl River Delta, with locals accounting for 75 per cent of deaths related to sulphur dioxide released from vessels, a think tank Civic Exchange found. It urged the city's administration to be more proactive in tightening restrictions and to seek support from its mainland counterparts. The think tank suggested the government seek support from the central government and apply to the International Maritime Organisation to set up an emission control area. It also suggested the government make it compulsory that ships switch their fuel to 0.5 per cent sulphur at berth.
60% of plastic pellets spilled from freighter recovered, official says: About 60 per cent of the 150 tonnes of plastic pellets that spilled into the sea from a freighter during Typhoon Vicente in July have been recovered, the Marine Department said. So far, 92 tonnes of pellets had been retrieved and some of the remaining pellets might no longer be in HK waters. The government said the pellets were harmless, but green groups said they could become coated with poisons and be mistaken for food by animals.

Culture and Education
National education guidelines should be scrapped, says panel: A government-appointed panel set up to scrutinise national education has suggested "invalidating" the curriculum's guidelines. The recommendation marks a second setback for the programme, which triggered huge protests at the government headquarters earlier this month against what critics called an attempt to brainwash youngsters with lessons in patriotism.The Committee on the Implementation of Moral and National Education would advise the government to "invalidate" the curriculum guide, said chairwoman Anna Wu on Sept. 27. It would also recommend that schools be allowed to use a different name for the controversial subject to suit their own curriculum, which could contain religious or other social elements.
Thousands boycott classes in national education protest: About 8,000 students and teachers took part in a citywide class boycott on Sept. 11 to demand the scrapping of the national education curriculum. Participants attributed the higher-than-expected turnout to Chief Executive Leung Chun-ying's weak response to the issue. He announced on Sept. 8 that he would let schools decide whether to teach the controversial subject instead of making it mandatory. But protesters said "threats of indoctrination" still remained because the government could force schools to implement the policy through measures such as subsidy requirements. Associate professor of sociology Chan Kin-man said the high turnout at the demonstration held at Chinese University Mall was a sign of public discontent and distrust in the government.
HK$500,000 to reserve place in HK's English schools: The English Schools Foundation has introduced a new debenture scheme seeking HK$500,000 to reserve a place - a sum almost 10 times the maximum amount specified in its former corporate scheme. The new scheme has been introduced as international school debentures are rising because of a shortage of places. Parents said middle-class parents would be hardest-hit and might not be able to afford to send children to ESF schools. The foundation said proceeds would be reserved for capital projects. Treasurer Robert Gazzi said the new debenture was in line with the ESF's goal of raising HK$1 billion every decade for the next 50 years to ensure its schools were in good condition and could be replaced when necessary.

Macau
Macau's La Scala corruption trial postponed until 2013: More than 70 witnesses will be summoned for the bribery trial of HK tycoons Steven Lo and Joseph Lau, lawyers say. And it will consider thousands of pages of legal notes. But proceedings won't get under way until next year, following an adjournment on Sept. 17. Lo and Lau are accused of offering a HK$20 million bribe to Macau's disgraced former public works chief Ao Man-long in 2006 to secure a deal for five plots of land for the luxury La Scala residential development. They also face money laundering charges. Macau's government declared the land sales invalid in June. Ao was jailed for 29 years for corruption offences.

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