THE CONSULATE GENERAL OF SWITZERLAND IN HONG KONG

Economy + Finance
No Christmas cheer for HK's retailers as they reveal lower-than-expected sales growth: HK's retail sales grew just 5.7 per cent year on year in December, an especially poor performance for the peak Christmas shopping period. "It's very rarely this bad. In 2012, it was 8.8 per cent," HK Retail Management Association chairwoman Caroline Mak said. Total retail sales in December are estimated at HK$49.7 billion. For the whole of last year, the figure came to HK$494.5 billion, an increase of 11 per cent from 2012. The retail slowdown highlights the stiffening competition for the mainland tourist dollar. While HK is typically the first destination for mainland travellers, tourists from tier-one cities with higher spending power are now being diverted to places such as Europe and Australia.
HK may benefit from stricter Singapore policy on hiring of foreigners: Singapore's Ministry of Manpower announced last September that under its new "Fair Consideration Framework", companies would need to consider locals before hiring from abroad. Nick Marsh, managing director of recruitment firm Harvey Nash Asia Pacific, said over the years international companies and talented professionals had left HK and Shanghai for Singapore, mainly because of air pollution, limited school places and high rents. Marsh believes that Singapore's curb on foreign talent could mean that international firms and expats will opt for HK and Shanghai.
An arrivals tax would hit locals too, says CY Leung: Imposing a tax on non-Hongkongers arriving by land could prompt a tit-for-tat move by mainland authorities, Chief Executive Leung Chun-ying warned. "Mainlanders and foreign visitors coming to Hong Kong have offered a bracing effect to Hong Kong's tourism and economy," Leung said. The idea of an arrivals tax of HK$20 to HK$100 on non-locals who enter the city by land was proposed by Democratic Party lawmaker Sin Chung-kai and two People Power lawmakers. They raised it in response to a government forecast that the city would receive 70 million visitors a year within three years.
Learn from Singapore's economic success, John Tsang tells HK: Hongkongers could learn from fierce rival Singapore's experience of using imported labour and reclaimed land to boost economic growth, Financial Secretary John Tsang said. "Over the past decade, Singapore has imported massive amounts of talent … It now has over 1.2 million foreign workers, accounting for more than a third of its working population. She has also created almost 30 square kilometres of additional land by reclamation. Hongkongers may not necessarily buy the growth model of Singapore and we certainly cannot just copy these policies. However, I believe everyone in HK has noticed that we are facing shortages of both manpower and land," he said. He called on Hongkongers to support the administration's efforts in these two areas.
HK needs to develop global network to maintain its leading role in yuan business: HK must play an active role in developing an international network for cross-border business in the yuan if it is to maintain its leadership in a global market for the currency that could grow by 300 per cent over the next decade, HK Monetary Authority chief executive Norman Chan said. "While HK now accounts for 70 per cent of the offshore yuan deposits and payment transactions globally, I think that HK will not, and should not, hold such a big share forever," Chan wrote. HK banks had retained exclusive rights to conduct business in yuan since a decision by the State Council in November 2003 that boosted the city's economy, hit hard by the outbreak of severe acute respiratory syndrome earlier that year. But to realise the country's ambition of having the yuan used globally and ultimately as a reserve currency, since 2012 Beijing has allowed other financial centres, such as London, Singapore and Sydney, to enter the offshore yuan business. However, Chan said, HK is so close to the mainland that "such intrinsic advantage will not erode simply because of the introduction of yuan business in other places".
Property duty rise finally approved: Higher stamp duties to cool Hong Kong's property market finally became law giving effect to a 15 per cent levy on non-permanent residents and corporate buyers and an expansion of duties paid on quick resale of property. The duties had been levied since October 2012. The measures have wide public support and passed by a margin of 30 votes to six in the Legco after a marathon debate. 23 pan-democrats had walked out of the legislative before the vote in protest at the government's refusal to make it mandatory for any change to win lawmakers' approval before implementation. Analysts said the imposition of the stamp duties had popped the property market bubble. Brokerage house CLSA projects a 10 per cent drop in prices this year and a further 5 per cent drop next year. Targeting the stamp duty at non-local buyers has also been effective in squeezing out mainland investors. Property agency Centaline estimates 42 per cent of buyers of new homes were non-local before the additional levy was introduced. Today, that figure was in the “low single digits”.
“It's time to swallow some bitter pills”, says Tsang about the budget 2014-15: Financial chief John Tsang tightened the purse strings yesterday and pledged to consider higher water tariffs and a “future fund” to pay for infrastructure in times of a budget deficit as he set out a worst-case scenario for public finances: a structural deficit in seven years. Tsang estimates a budget surplus of just HK$12 billion this year and of predicted HK$9 billion next year to justify trimming one-off relief measures 40 per cent, saying he was preparing for an ageing population. To address criticism by middle-class people, Tsang retained a salaries tax waiver of up to HK$10'000, and increased allowance for dependent parents and grandparents. He offered no big ideas for increasing revenues.

Domestic politics
Justice minister Rimsky Yuen says HK should accept 'imperfect' reform package: The justice secretary is asking Hongkongers to accept even an "imperfect" electoral reform package in order to safeguard the city's standing in the international community. If the city fails to accept the proposal ultimately put to the Legislative Council to achieve universal suffrage in 2017, then its international ranking in some of the most influential global indexes could suffer, warned Rimsky Yuen. He also said further changes to the method for electing the chief executive would be possible beyond 2017.
Pan-democrats stand united after protest: Pan-democrats must stand together as Beijing toughens its line on HK's fight for political reform, moderate members of the camp said. Lawmakers from four parties came together to deliver the message a day after radical counterparts stormed an event at which members of the Democratic Party took an oath of support for the Occupy Central movement's civil disobedience plans on Feb. 5. Members of the Democratic, Civic and Labour parties, the Association for Democracy and People's Livelihood and unaffiliated lawmakers issued a statement expressing support for Occupy Central and condemning the "malicious" attempt to disrupt the event on Feb. 5.
Elsie Leung sees little hope of consensus on political reform: A leading light of the Beijing loyalist camp has given a gloomy prognosis for hopes of consensus on political reform. Elsie Leung, a former justice chief and now vice-chairwoman of the Basic Law Committee, says huge differences remain over how to elect the chief executive in 2017, as the government's five-month consultation approaches its halfway point.

Relations HK - Mainland China
HK and Macau Affairs Office joins backlash against 'locust' protest: The State Council's HK and Macau Affairs Office has joined a growing chorus of condemnation against those who organised and took part in Feb 16's "anti-locust" protest in Tsim Sha Tsui. The China News Service quoted the office as saying it "sternly opposes" any behaviour that would affect HK's prosperity and stability, obstruct HK-mainland co-operation and harm the feelings of people in both places. The office also said, according to the service, that HK's prosperity was inseparable from the nation's development and that the individual travel scheme had boosted the city's competitiveness, its economy and social development. Chief Executive Leung Chun-ying also weighed into the debate on Feb. 18, echoing sentiments expressed by four other top government officials on the protest, which called for a curb on tourists from the mainland. Leung said: "Activities targeting tourists ... mainland or foreign … should be condemned. The government will follow up on this matter … if any illegality is found." On Feb. 16, about 100 protesters marched from the Star Ferry pier to Canton Road, a street lined with luxury stores popular with mainland tourists. They called the tourists "locusts" for overwhelming the city and hogging its resources and referred to them as Shina, a derogatory term used by the Japanese against the Chinese after the first Sino-Japanese war ended in 1895.

International relations
Aquino must say sorry: Xinhua: The official Xinhua news agency denounced Philippine President Benigno Aquino as "disrespectful" for his continued refusal to apologise for the Manila hostage tragedy that killed eight Hongkongers, and it warned of further sanctions. Xinhua questioned whether Aquino was competent to hold office and held him responsible for the failure to resolve the saga, three years after the killings by gunman Rolando Mendoza and the botched rescue operation. The HK government announced a "first phase" of sanctions last month. Xinhua said the sanctions were modest and would only affect 800 Filipinos per year, but added that the city's government was ready for tougher measures.
Show 'sincerity' over Manila hostage row or face further sanctions, Leung tells Philippines: Leung rejected reports that suggested the families were demanding a personal apology from Aquino for criminal acts committed by sacked police officer Rolando Mendoza in 2010. "I must explain clearly that the families of the victims are not demanding, and have never demanded, that the Philippine president apologise for the behaviour of the individual," he said. "They are seeking an apology from the Philippine government for the failure and lapses of their officials in handling the rescue operation, during which eight HK residents lost their lives and seven others sustained injuries." Leung also urged the Philippine government to show more sincerity in resolving the incident in order to avoid further sanctions. The government has already cancelled the 14-day visa-free arrangements for visiting Philippine officials and diplomatic passport holders.
Key Apec meeting switched from HK: Hong Kong has been replaced by Beijing as the venue for a meeting of Apec (Asia Pacific Economic Co-operation) finance ministers and central bankers later this year. About 800 people were expected to attend the Hong Kong meetings. The surprise move by the central government, described by one Apec officials as “rare”, led to wild speculations about the reasons for the switch. Apec officials said the decision was made because US President Obama asked for the leaders' meeting to be pushed back from October to November. The organisers dismissed the theory linking it to a radical political rally planned to take place in the city's main financial district that summer. The explanation did not stop politicians in Hong Kong from connecting it to the Occupy Central movement.

Legal affairs and human rights
Beijing blamed as HK's press freedom declines: HK's press freedom has declined for three consecutive years as Beijing interferes with the city's media through its liaison office, according to an annual report by monitoring group Reporters Without Borders. The France-based group's 2014 press freedom index ranked HK 61st worldwide, a position the local Journalists Association called "worrying". This compared to 58th last year and 54th in 2012. Not only had Beijing failed to improve its treatment of outspoken dissident bloggers and journalists, it had also used "its influence over the media in HK, Macau and Taiwan, compromising their independence", the group noted.
Challenge to ban on refugees' right to work dismissed by top court: HK's top court unanimously dismissed refugees' and torture claimants' right to work in the city. In a judgement, the Court of Final Appeal said there was “no constitutional right to work existed in favour of the Appellants, and therefore, no question of proportionality arose for consideration.” “The Court also held that there was no right to work at common law for the Appellants,” it added. The decision would be a blow to thousands of asylum seekers and other protection claimants currently living on a social welfare stipend.
Journalists stage march in defence of media freedom: The “Free Speech, Free Hong Kong” protest was organized by the Hong Kong Journalists Association, which said 6000 took part. Police put the figure at 1600. The association claims recent events threaten freedom of the press and speech in the city. It says these include the dismissal of Commercial Radio host Li Wei-Ling, an outspoken critic of the government, and claims by Chinese-language newspapers Apple Daily and AM730 that mainland-backed firms had pulled advertisements because of their editorial stances.
Editor critically hurt in triad-style 'hit': Motorcycle hitmen carried out a 'savage' knife attack that left one of Hong Kong's most influential journalists, Kevin Lau Chun-to, in a critical condition. The attack, for which no motive has yet been established, was described by police sources as 'a classic triad hit, which was designed to maim, not kill, to send a warning'. The attack prompted a wave of local and international condemnation, including a strongly worded statement from Chief Executive Leung Chun-ying. There was speculation that the attack was connected to Lau's journalistic work, including the newspaper Ming Pao's recent articles about the business affairs of senior mainland figures.

Health
Ban on Chinese live poultry extended in for four months: A ban on live poultry from the mainland, to prevent the entry of the deadly H7N9 flu virus, has been extended for four months but sales of live local chickens resume on Feb. 19. Secretary for Food and Health Dr Ko Wing-man said the extension of the ban on mainland chickens would give the government time to seek a site where mainland birds could be segregated from the local birds while virus test results were awaited. University of HK microbiologist Yuen Kwok-yung said the decision would reduce the risk of cross-infection. But he warned the greatest risk for Hongkongers contracting the virus remained visits to live-poultry markets on the mainland. Usually, about 7,000 live chickens are imported from the mainland each day, while local farms supply about 12,000.

Environment
Public warms up to cash-for-trash payment proposal: Signs of consensus have emerged over a pay-as-you-throw fee system for rubbish, with most respondents to a four-month consultation favouring a monthly levy of less than HK$30 for a typical three-member family. Waste disposal fees have been suggested as a way to improve the city's dismal recycling rate and ease pressure on rapidly filling landfill sites. But green groups warn that a low fee may not be a sufficient incentive to recycle. Secretary for the Environment Wong Kam-sing said there was a need to strike a balance over the fee.
HK's air quality to 'drastically improve' within five years, says Christine Loh: HK's air quality will show “drastic improvements” over the next four or five years and start to see “measurable results” in the second half of this year, undersecretary for environment Christine Loh says. Recent government data indicates that roadside air quality is worsening, but the undersecretary said the situation will improve. Objectives set out in last year's seven-year air-quality roadmap have already been met without much political resistance, she said, in stark contrast to stalled action on other environmental issues such as waste, energy and conservation. An HK$11.4 billion initiative to replace some 82,000 old commercial diesel vehicles was finally approved by the Legco financial committee last month and is to begin next month. A scheme to replace catalytic convertors – devices which covert harmful emissions into less harmful ones – on 20,000 taxis and public light buses powered by LPG is expected to be approved by the summer, while a plan to retrofit some 1,400 franchised buses with selective catalytic reduction devices – which reduce harmful emissions – is also scheduled for legislative approval this year. Maritime pollution is one of the city's biggest causes of sulphur dioxide emissions – a toxic byproduct of burning coal and petroleum. Loh expects legislation for a mandatory fuel switch, which will force all ocean-going vessels berthing at HK to switch to a lower-sulphur fuel, to be passed by Legco before the summer recess and to go into effect by early next year.

Culture and Education
Tiananmen won't be taboo at new CUHK-Shenzhen campus, says president: Academic discussion of the Tiananmen Square crackdown in 1989 will not be taboo at the soon-to-open Shenzhen branch of the Chinese University of HK, the institution's president Xu Yangsheng said on Feb. 6. Chinese University of HK, Shenzhen, a joint venture with Shenzhen University, will start accepting applications from students next month for the academic year beginning in September. Xu said students who studied at the new institution would take general education courses - including history and law - that were identical to those at Chinese University in Sha Tin. Xu, the former pro-vice-chancellor of Chinese University, pledged to defend the academic freedom of the new institution.
School sorry for hiring unregistered teachers: An international school apologised for employing 16 unregistered teachers. The ISF Academy in Pok Fu Lam said all of its teachers were qualified and it had just been late in submitting registration papers. The school, established in 2003 and charging annual tuition fees of up to HK$180,000, blamed "an administrative misstep" and said that all required documents would "be submitted in a timely manner". A spokeswoman for the bureau confirmed that 16 teachers had been teaching at the private international school before any registration applications were submitted.

Press articles related to Switzerland and Swiss matters
Swiss face EU backlash over curbs on immigration (SCMP, Feb. 11): Switzerland has voted to impose curbs on European Union immigrants, in a nail-bitingly close referendum, which sparked warnings from Brussels that it would review EU ties with the Alpine country. Final results of the vote on Feb. 9 showed 50.3 per cent backed the "Stop Mass Immigration" plan pushed by right-wing populists. The fallout from the result could sink the country's raft of deals with the EU, including on the economic front. Switzerland is ringed by EU member countries and does the bulk of its trade with the 28-nation bloc, but has refused to become a member. The European Commission said it would assess EU ties with Switzerland, raising the prospect of restricted trade and other punitive measures. Swiss Foreign Minister Didier Burkhalter plans to tour European capitals to explain the vote and seek a solution, starting with Berlin. The Swiss government said it would examine over coming weeks how to "recast relations" with the EU, but stressed that current immigration rules would remain in place until the new ones were drawn up.
Swiss succumb to politics of fear with vote to cap immigration (SCMP, Feb. 11): The decision by Swiss voters to cap immigration has imperiled relations with other European states, as it has burnished efforts by right-wing populists' intent on spreading an anti-foreigner political agenda. Voters were stoked by fears of overpopulation and Europe's rising number of Muslims. The fear of loathing over immigration can also be seen in countries across the European Union. The EU could demand a renegotiation of treaties that allow the free trade of everything from Swiss watches to its trademark cheeses. Economic retribution, however, appeared to be a risk the Swiss were willing to take. The Swiss People's Party sold the referendum as a needed step to preserve Swiss identity. “The majority of Swiss have followed a party that repeatedly attracted attention with xenophobic initiatives,” said an editorial in the Swiss daily Tages-Anzeiger. “Switzerland will have to put its relationship with the EU on a completely new basis. All existing and planned agreements will need to be renegotiated.”
UBS helped set up offshore firm for wife and daughter of corrupt railways official (SCMP, Feb. 17): Swiss bank UBS is at the centre of embarrassing revelations that it helped to set up a secretive offshore firm for the wife and daughter of a former senior Chinese official who has since been convicted of corruption. Zhang Shuguang, a former deputy chief engineer of the disbanded railways ministry, is awaiting sentencing after pleading guilty to taking more than 47 million yuan (HK$60 million) in bribes. His wife and daughter were revealed to be shareholders of a British Virgin Islands company of which UBS is named as a master client, meaning an intermediary that helps clients set up offshore entities.
Swiss bankers set up HK firms to dodge US tax (SCMP, Feb. 27): Hong Kong companies were used by Credit Suisse to help US taxpayers avoid taxes, a report by the US Senate's Permanent Subcommittee on Investigations found. The bank discovered its Swiss-based bankers “were well aware that some US clients wanted to conceal their accounts, and either turned a blind eye to the accounts' undeclared status, or actively assisted to hide assets from US authorities”. Credit Suisse said it acknowledged misconduct “centred on a small group of Swiss-based private bankers”. The bank said it provided US client information to the US authorities “to the full extent allowed by the Swiss law”, and was ready to provide more information but was unable to do so, because the US senate had not ratified a double-taxation treaty between Switzerland and the US.

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