Economist.com Cities Guide: Hong Kong Briefing - June 2005

News this month

Victory assured

Donald Tsang Yam-kuen, Hong Kong’s acting chief executive, has effectively secured the territory's highest post. He says he has 710 of the 800 electoral committee nominations; a rival would need 100 such nominations to run, so Mr Tsang will automatically assume the top job. According to recent polls, he is supported by 70% of Hong Kongers. His appointment still awaits formal ratification by the government in Beijing, but there is no doubt that he will be sworn in.

Mr Tsang, a recipient of a British knighthood, served for three decades under colonial rule. He worked closely with Chris Patten, Hong Kong's last British governor and a strident critic of Chinese policy toward the territory. He became the temporary head of Hong Kong in March, after the Beijing-friendly Tung Chee-hwa resigned two years before the end of his second term (the first began after the 1997 handover). Beijing recently overruled Hong Kong's Basic Law—which stipulates a five-year period in office for the chief executive—by announcing that the winner of the poll would merely see out Mr Tung’s term.

Joining the cause

Hong Kong's business leaders have joined a chorus of critics against a new land-reclamation project in Victoria Harbour. In June, around 100 of the city's biggest firms joined local residents to protest against plans for a road bypass that would reclaim a further 23 hectares around the Star Ferry pier in Central. Calling itself the Harbour Business forum, the protest group, which includes HSBC, Jardine Matheson and Standard Chartered, insists the harbour is too vital a part of Hong Kong's heritage to diminish. It plans to publish reports on planning around the harbour, and examine how other cities manage waterfront development.

Recent public outcries have centred on the shrinking harbour and the inland air pollution resulting from buildings walling off the waterfront. In the past 50 years, parts of the harbour shoreline have been stretched by hundreds of metres, and half the original harbour has been filled in, shrinking it to 3,200 hectares. Last year saw mass demonstrations against these developments, with activists successfully campaigning against one 26-hectare project.

When Greens attack

A plan by Disney to serve shark-fin soup at its forthcoming amusement park in Hong Kong drew protests from conservation groups this month. Activists, who claim that the shark-fin trade threatens the fish with extinction, said they would picket the theme park's opening, unless the menu item was withdrawn. After meeting with Greenpeace and the World Wildlife Fund, Disney offered to remove the soup from the main menu and serve it by special request only, accompanied by an educational pamphlet on cruel fishing practices. The soup, a traditional Chinese delicacy, is usually served at banquets and special occasions.

When to hold, when to fold?

Though it seems that Hong Kongers are becoming millionaires at a heady pace, the good times might be hampered by a slowing economy. The Ninth Annual Merrill Lynch/Capgemini World Wealth Report found that 67,500 Hong Kongers had US$1m in assets (excluding primary homes) in 2004—18.8% more than in 2003. But their number is expected to taper off. That coincides with an expected fall in Hong Kong's GDP growth, to 5.3% this year after growing 8.1% in 2004. The report’s stance on the Hong Kong stockmarket was fairly mixed and ultimately neutral.

Rising interest rates are expected to batter residential property prices—perhaps causing a drop of 25% in the next 18 months. From May 23rd, HSBC, Bank of China and Hang Seng Bank increased their prime lending rate by 50 basis points to 5.75%. Standard Chartered lifted its prime lending rate to 6% from 5.5%.

Telecommunications

Hong Kong’s largest fixed-line phone operator, PCCW, returned to the cellular business by buying a 60% stake in Sunday Communications, the city’s smallest mobile-phone company. Richard Li Tzar-kai, the chairman of PCCW, announced on June 13th that his company would pay HK$1.16 billion (US$149m) in cash to two shareholders for the shares. Sunday is one of four Hong Kong mobile operators with a 3G licence.

PCCW left the cellular business in 2002, when it sold CSL, a mobile subsidiary, to Australia’s Telstra for US$2.29 billion. Mobile use in Hong Kong is widespread (some figures put it at 100%, as some people have several phones), and the number of cell-phone users on the mainland has grown to 354m. While Sunday’s sales have fallen for four consecutive years, it is scheduled to kick off its 3G service in June.

Catch if you can

July 2005

Secret Codes: The Art of Hon Chi-fun

Until July 31st 2005

The 60 paintings by Hon Chi-fun at the Hong Museum of Art confirm the 81-year-old as one of China's most important living painters. He is credited as the first painter to meld traditional Chinese calligraphy with modern techniques, such as pouring, screen-printing and collage. He has also written calligraphy with oil and airbrush, instead of ink.

While Hong Kong is famous as a meeting point for the Orient and Occident, artists only combined the two cultures in the 1960s. Largely self-taught, Mr Hon's exposure to the west began during a year studying in New York. He later befriended Mark Rothko and Henry Moore. Although a western aesthetic has shaped his work, Chinese traditions clearly loom large.

Hong Kong Museum of Art, Special Exhibition Gallery 1, 2nd floor, 10 Salisbury Rd, Tsim Sha Tsui. Open: daily 10am-6pm (closed Thurs). Tel: (852) 2721 0116. See the museum's website.

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