THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Policy Address 2014
Help for poor as Chief Executive reveals HK$10b spending spree in policy address: Boosting land supply, helping the poor and enhancing HK's long-term economic competitiveness were at the core of Chief Executive Leung Chun-ying's policy address on Jan. 15. After criticism that his maiden speech 12 months ago boasted grand visions and slogans but little detail, Leung unveiled initiatives that will cost taxpayers more than HK$10 billion a year. While Leung's generosity to the working poor drew applause from advocates for the underprivileged, his policy blueprint offered little relief for the middle class, who shoulder the lion's share of the tax burden. There were also questions about how the money for relief measures would be funded. Ivan Choy, a political analyst at Chinese University, said he feared Leung's spending proposals would trigger conflict between poor and middle-class and lead to increased tensions between the chief executive and the rich. Leung told media executives after his speech that the government's big fiscal surplus would more than cover the new spending, but that the government would manage public finances prudently. In his speech, Leung officially endorsed the target of building 470,000 flats in the next decade. But he spoke only briefly on political reform, the subject of a five-month consultation and massive public debate ahead of the 2017 election for chief executive. Leung said the government was committed to achieving universal suffrage.
Policy address revives plan for technology bureau: The government is once again proposing an innovation and technology bureau as it looks for long-term solutions to sustain economic growth. Other proposals to boost the economy include increasing the number of trade offices on the mainland and elsewhere in Asia to tap new markets, as well as starting negotiations for a free-trade agreement with the Association of Southeast Asian Nations. Despite concerns that the city is becoming overcrowded, the government will not limit tourist inflows, because they contribute to local employment. Instead, it will build more hotels and tourism-related facilities on Lantau, targeting high spenders. Business groups welcomed the overall direction, but wanted more specifics. They also expressed disappointment in the lack of measures to help the city's struggling small and medium-sized enterprises. 
HK$1 billion each for funds to boost recycling and reuse of old landfill sites: Chief Executive Leung Chun-ying has vowed to pour HK$1 billion into a new fund to support recycling and tackle the looming waste crisis. Another HK$1 billion fund will help find new uses for 18 hectares of land at six closed landfills. The two initiatives come with politicians and lawmakers at an impasse over funding requests by environment officials to extend the city's three landfills. The government wants to expand the landfills in Tseung Kwan O, Ta Kwu Ling and Tuen Mun - which will all be full by 2019 - to take waste until a planned incinerator is ready. The Tseung Kwan O proposal was shelved because of strong opposition, and legislators also decided to delay discussion of the other two plans. The recycling fund was one of the demands made by lawmakers in return for approving funding for landfill extensions. Leung did not set out the eligibility criteria or rules for disbursing the fund. The money could be directed towards recycling plastics and small electrical goods. At present, about 90 per cent of recovered waste is exported elsewhere for recycling.
More express dissatisfaction with Leung Chun-ying's policy address, new poll finds: Dissatisfaction with Chief Executive Leung Chun-ying's second policy address has soared in the days since he delivered it on Jan. 15, new poll results show. Just 23 per cent of Hongkongers are satisfied with the policy address despite the announcement that more than HK$10 billion will go towards new measures to help the poor, a University of HK survey showed. More than two-thirds of the respondents said Leung did too little to help the middle class. The public's dissatisfaction rate with the address rose 10 percentage points, from 31 per cent in an instant survey on the day of the address to 41 per cent in follow-up polls conducted over the next two days.

Economy + Finance
Financial chief John Tsang sees bumpy year for markets and exports: HK has a challenging year ahead as the investment market and exports would be affected by economic problems in the United States, Europe and Japan, the city's finance chief John Tsang warned. But Tsang said HK would benefit from the development of mainland China and Asia in general. "In November, [mainland] China had deposits of 103 trillion yuan (HK$131.8 trillion), 15 times that of HK. The HK government is keen to work with the mainland authorities to help the city's players capture the opportunities arising from the internationalisation of the yuan and capital market reforms there," Tsang said. He said the government was lobbying Beijing to relax the daily foreign exchange cap of 20,000 yuan per day for HK residents. HK and the mainland are also working on a mutual recognition scheme to allow HK-domiciled mutual funds to be sold on the mainland, and to let mainland funds sell here.
'HK could be out of money within 20 years', warns John Tsang ahead of budget: Financial Secretary John Tsang warned that fears public spending was rising too fast were "not without reason" - doing little to ease talk of a split with Chief Executive Leung Chun-ying. Leung used his policy address to announce a huge increase in recurrent spending, much of it on welfare, and insisted that the government could afford the bill of up to HK$20 billion per year. Tsang said that while the government could afford the cost for the foreseeable future, the day would come when surpluses turned to deficits. Tsang warned that recurrent spending, once implemented, could be difficult to cut, and said spending could snowball if factors such as inflation and a growing number of beneficiaries were taken into account. Tsang announces his budget next month, and is expected to warn that the city's fiscal reserves risk drying up in 20 years due to costs associated with the ageing population.
HK's status as world's freest economy threatened by Singapore, says Heritage Foundation: HK has been ranked the world's freest economy for the 20th consecutive year by a right-wing US think tank. But the free-market-orientated Heritage Foundation has warned that increasingly populist policies, perceived levels of corruption and potential political instability mean the SAR's lofty position is being threatened by Singapore. The report said Singapore's openness to global investment had encouraged a more competitive financial sector. Mainland China dropped a place to 137th.
HK urged to raise its game as Asia's financial hub: Finance industry leaders have delivered an icy assessment of HK's claim to be Asia's commercial centre. They warn the city faces rising competition from the mainland as Beijing continues its reforms and further loosens its grip on currency and interest rates. "Economically, mainland China and HK will be one country, one system by 2020," Charles Li, chief executive of HK Exchanges & Clearing (HKEx), said at the Seventh Asian Financial Forum in HK. "By then, the Chinese economy will be entirely open and its currency should be fully convertible, on top of the reforms of the financial system." Lawrence Lau, chairman of CIC International (HK) - the first overseas business unit of China's largest sovereign wealth fund, CIC - said investment capital should be able to move in and out of the mainland freely by 2020. He urged HK to make the most of its competitive advantage, as Beijing was pressing for full convertibility of the yuan and liberalisation of its capital account.
Expanded powers sought for regulators: The government will seek amendments next year to expand the powers of regulators so that they can unilaterally take control of giant financial firms, including international ones, to pre-empt government bailouts. The proposal to seek law change, laid out in a consultation paper released on Jan. 7 to collect the public's views over the next three months, is aimed to bring HK in line with the new international rules brought in by the Financial Stability Board formed by the leaders of the Group of 20 developing economies. Under this new international regime, all major markets are required to empower regulators to handle big financial firms' failures speedily without resorting to taxpayers' money.

Domestic politics
'Referendum' voters back greater public voice in 2017 elections: Tens of thousands of Hongkongers voted overwhelmingly for more public participation in the 2017 chief executive election in a "civil referendum" on political reform - though turnout at the New Year's Day pro-democracy march disappointed organisers. Some 62,000 people voted online or at a packed polling station in Victoria Park in a poll organised by the pro-democracy Occupy Central movement, raising questions on electoral reform. The "referendum" saw 94 per cent of voters demand the public have a say in nominating candidates for chief executive, while 91 per cent voted against a "filter" mechanism for candidates. Dr Chan Kin-man, an Occupy organiser, said it reflected "fervent support" for public nomination.
Low democracy rally turnout not a sign of burnout, says Beijing adviser: Leaders in Beijing and the HK government should not take the low turnout for the New Year's Day democracy march as a sign the campaign was losing steam, a leading mainland adviser on HK affairs said. The lowest turnout for a January 1 march in years - whether the 30,000 claimed by organisers or the 11,000 estimated by police - masked the fact that calls for democracy had been growing, academics said. An online poll on the day only reinforces that point, they said, with 94 per cent of the 62,000 who voted in the so-called civil referendum calling for a more democratic process to elect the chief executive. Chief Secretary Carrie Lam, though, dismissed the poll outcome as not relevant to the reform process. Jiang Shigong , who advises the central government on HK policies, said there was a risk of a growing rift between the city and Beijing if universal suffrage could not be attained. "Tensions between HK and the mainland would escalate," he said. Some analysts feel those tensions could rise quickly if the more radical voices in the pan-democratic camp begin to overwhelm the moderates. 
Satisfaction with city's political situation at all-time low, HKU study finds: Public satisfaction with the current political situation has fallen to an all-time low, a University of HK survey found. A mere 7 per cent of respondents were satisfied with the state of politics in the city, in contrast with 69 per cent who were dissatisfied. It was the lowest since the survey started in 1992. Political commentator and former civil service secretary Joseph Wong  said the results were hardly surprising due to the big number of political debates over the past six months. "In the past, political conflicts were usually between the government and pan-democrats. Now, the central government joins discussions on political reform, and conflicts arise in the pro-government camp," he said. HKTV being refused a free-to-air TV licence and the Court of Final Appeal's ruling that it was unconstitutional to deny social security to new immigrants also added to the fire, he said.
Chief executive vote must protect capitalism, law expert Wang Zhenmin warns: HK must uphold the interests of businessmen as it moves towards universal suffrage to protect capitalism and meritocracy, top mainland legal expert Wang Zhenmin has said. Wang, the dean of law at Tsinghua University and a former Basic Law Committee member, said the business sector must continue to have a voice in the nominating committee that will vet and pick chief executive candidates. In another forum, Basic Law Committee deputy director Elsie Leung said public and party nominations were "too distant" from the political system. Executive Council convenor Lam Woon-kwong warned of "mutual destruction" if all political parties insisted on their views. Civic Party lawmaker Dennis Kwok, who spoke at the same forum as Wang, said his "meritocracy in politics" statement had "no legal standing".

Relations HK - Mainland China
Chief Secretary Carrie Lam warns Hongkongers not to provoke Beijing: Any provocative moves to annoy Beijing will only hinder HK's political reform push, the chief secretary warned on Jan. 4. Carrie Lam made the remarks in response to a break-in at the People's Liberation Army barracks in Admiralty last month by activists. The HK and Macau Affairs Office earlier expressed "grave concern" over the incident, saying the group of activists had disregarded the law when they forced their way into the barracks on December 26, and should be punished. Reiterating the importance of trust if a consensus was to be reached on electoral reform, Lam called on radicals not to carry out acts that were likely to irritate the central leadership and hinder the city's relationship with Beijing.
National security law based on Article 23 not a priority, say leaders: Chief Executive Leung Chun-ying and key ministers presented a united front amid renewed debate over a controversial piece of national security legislation, saying it was not a priority. Article 23 of the Basic Law requires HK to pass laws prohibiting acts of "treason, secession, sedition, or subversion". An attempt in 2003 to pass a law based on Article 23 was shelved after half a million people took to the streets to protest it. But former Basic Law Committee member Professor Wang Zhenmin reignited the debate on Jan. 20 when he called for the article to be implemented. His comments came in the wake of a trespass by activists at the People's Liberation Army barracks in Central last month.
Beijing trying to curb press freedom, says AM730 founder Shih Wing-ching: The founder of a free newspaper says advertisers are backing away from the daily because of its editorial stance, in the latest example of pressure on press freedom in the city. The free sheet's publisher later said all the advertisers were "mainland-backed companies". Shih Wing-ching, the founder of AM730, accused Beijing of trying to curb press freedom in HK. "Beijing will try to shrink the press freedom of HK all around, as they have lost [out] in the city's public opinion since the handover," Shih told Commercial Radio. The news from AM730 comes as staff of the Chinese-language newspaper Ming Pao decry the decision to replace its chief editor Kevin Lau as a threat to editorial independence. And the Hong Kong Journalists Association called on the public to write to Tiong Hiew King, executive chairman of Ming Pao's parent company, Media Chinese International, urging him to safeguard editorial independence.

International relations
HK cancels visa-free privileges for Philippines officials and diplomats: HK will cancel visa-free arrangements for Philippine official and diplomatic passport holders in its first sanctions against a foreign state. The measure, imposed in retaliation for the country's failure to respond all of the city's demands after the 2010 Manila hostage bloodbath, takes effect on Feb. 5. While Chief Executive Leung Chun-ying said it came after discussions between the two governments this week bore no fruit, international-relations experts said the cancellation could be related to tension between Beijing and Manila over the South China Sea. Survivors and victims' relatives have been asking for a formal apology, compensation, punishment of responsible officials and improved tourist safety. Leung said cancellation of the 14-day visa-free arrangements for the two categories of passport-holders, of whom up to 800 visit Hong Kong each year, was the just the first phase of sanctions. Existing accredited Philippines consular officials will not be affected by the measures. Foreign Ministry spokeswoman Hua Chunying said Beijing supported HK in its efforts regarding the hostage crisis.

Legal affairs and human rights
Top justice officials back independence of HK courts: The two most senior figures in HK's judicial system defended the independence of the courts in the face of calls by Beijing officials for more "co-operation" between the three branches of government and public abuse of judges. Chief Justice Geoffrey Ma said public confidence in the judiciary's integrity rested "on a truly independent judiciary, judges who look no further than the proper application of the law, both in letter and in spirit, and the importance of ensuring transparency in all that the courts do in order to demonstrate the integrity of the law". Meanwhile, Secretary for Justice Rimsky Yuen lambasted people who he said had resorted to "abusive attacks" on judges for reaching decisions with which they did not agree. He added that "true respect of the rule of law" meant people should exercise their rights within the boundaries permitted by the law. The pair were speaking at the opening ceremony for the 2014 legal year. Asked about Beijing officials' view that there ought to be "co-operation" between the executive, legislature and judiciary, Ma said the Basic Law stipulated clearly and repeatedly that HK exercised separation of these powers.
External pressure on HK builds over abused Indonesia maid: HK is facing external pressure to bolster the basic rights of the city's 300,000 migrant domestic workers in the wake of the alleged abuse of an Indonesian maid by her employer. An Indonesian politician said the country's parliament would pursue a new law protecting its citizens coming to work in HK. Meanwhile, a United Nations monitor urged the HK government to relax the two-week rule for maids seeking new contracts and step up inspections to ensure adequate accommodation for live-in maids. Chief Executive Leung Chun-ying said HK would not tolerate physical violence or psychological harm to anyone.
Cybercrime surges in HK fuelled by email scams and extortion: Cybercrimes are the hardest cases to detect and the toughest to crack, the police chief said, as figures showed technology crimes surged by 70 per cent last year despite the overall crime figure dropping to a 10-year low. The rise in technology crime was fuelled by e-mail scams targeting businesses and extortions arising from racy video chats on the internet. Commissioner of Police Andy Tsang said differences in jurisdictions' definitions of cybercrimes added to investigators' problems.

Health
Elderly man latest to die in HK after contracting H7N9 bird flu: A 75-year-old man infected with the H7N9 bird flu virus died on Jan. 29, making him the third Hongkonger to have succumbed after contracting the disease. The man, who had long-term health problems, had spent seven days in Shenzhen, staying in an area near live poultry stalls. The previous victims had also spent time in Shenzhen, where samples of the virus had been found in wet markets. "It was likely to be another imported case from mainland," said Dr Chuang Shuk-kwan of the Centre for Health Protection.
Sale of live chickens may be banned to protect HK, says CY Leung: It's time to consider whether live chickens should be taken off Hongkongers' shopping list, Chief Executive Leung Chun-ying said on Jan. 28. The chief executive's suggestion came as 20,000 chickens were being culled after one from the mainland was found with the H7N9 flu virus on Jan. 27. The government is also considering whether to separate mainland-imported chickens from local birds while they await test results. Secretary for Food and Health Dr Ko Wing-man said there would be further threats if the custom of buying live chickens was maintained. He said officials across the border were still tracing the source of the virus detected in the mainland chicken. Sales of live poultry have been suspended for three weeks.
Health chief says it's possible more Hongkongers have H7N9 bird flu: Food and Health Secretary Dr Ko Wing-man (on Jan. 9) did not rule out the possibility that more Hongkongers might be having the deadly H7N9 virus after a HK patient came down with the avian flu following a mainland trip. “In the past, the virus has been detected in many samples taken from the environment. It means people should be careful when visiting wet markets, especially where live poultry is on sale,” Ko said. “The risk for people who suffer from chronic illness to visit the wet market is also higher.” Ko said experts have warned that the virus could be more active in winter, and believed more cases would emerge around Guangdong province and other southern Chinese regions. But Ko maintained that HK would not halt all imports of live poultry from the mainland, although it has already suspended supplies from Shenzhen farms for the time being. University of HK’s microbiologist Ho Pak-leung said that while he praised the government for suspending the Shenzhen supply at an earlier stage, Ho stressed it was time for a complete halt on all import of live poultry from the mainland.

Environment
Environment Secretary offers few details on long-term waste plans: Secretary for the Environment Wong Kam-sing revealed that the government was looking towards reducing the city's dependence on its rapidly filling landfills. "[Planning] for the next 20 to 30 years, we will commission a study this year on where we can apply technologies … to minimise our dependence on landfills," Wong said. Wong did not elaborate on the scope of the study and what technologies he was referring to. At present, the city's key waste infrastructure includes at least three landfills, a chemical waste treatment plant, an under-construction sludge incinerator, a network of eight refuse transfer stations and a recycling park. Last year, Wong's plans to extend the lives of the landfills were rejected by lawmakers, while the incinerator plan is being challenged in the courts. Wong has vowed to resubmit those plans early this year.
More Shenzhen lawmakers sign petition against Tuen Mun landfill expansion plans: More than 50 additional Shenzhen lawmakers signed a petition against a proposed Hong Kong landfill expansion on Jan. 23. The lawmakers joined about 200 Shenzhen Municipal People's Congress deputies who have already publicly expressed opposition to the Tuen Mun project. Their addition at the annual meeting of the congress means over half of the city's 404 lawmakers have signed the petition. In addition to lawmakers, the petition has been signed by 200 district-level representatives, dozens of influential industrial associations and more than a million Shenzhen residents.

Culture and Education
Schools double classes to cope with influx: Some primary schools in Tuen Mun and Yuen Long are likely to almost double the number of first-year classes they offer for the next academic year with hundreds of extra places reserved for cross-border children, raising concerns over the schools' long-term sustainability. On a government list of 122 primary schools in seven districts that are expected to serve about 2,800 potential Primary One pupils living on the mainland, three - all from Yuen Long - have reserved 110 places each for the pupils, and 12 - from Yuen Long and Tuen Mun - had reserved more than 80 places each.

Macau
Gambling revenues in Macau increase 18 pc: Macau's gaming industry took in 360.75 billion patacas last year, up 18.6 per cent year on year, on strong demand from mainland tourists, further strengthening its position as the world's largest gaming hub by widening its lead over the Las Vegas Strip. Macau is the only place in China where gambling in casinos is legal. More than 17 million mainland tourists visited Macau in the first 11 months of last year, matching the figure for all of 2012. Mainland visitors account for about 60 per cent of all Macau arrivals, according to official data.

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