Economist.com Cities Guide: Hong Kong Briefing - January 2006

News this month

A sticking point

Tension between South Korea and Hong Kong may be beginning to ease. Relations have been fraught since South Korean farmers led a violent protest outside the World Trade Organisation's summit in Hong Kong on December 17th, shutting down the central city in the process. Police eventually suppressed the demonstration using tear gas, pepper spray and beanbag bullets, but the riot injured some 140 people—including 67 police officers—and led to the arrest of about 900 people. Hong Kong’s move to prosecute some of the protesters sparked uproar in South Korea. Now only three South Koreans face prosecution, for allegedly attacking police officers; charges against eight others, plus three non-Koreans, were dropped on January 11th.

The decision to release most of the protesters came after weeks of pressure from South Korea. Two days after the riot, South Korea’s vice foreign minister came to Hong Kong to apologise and to ask for their release, a plea that was declined. Three South Korean politicians then came in early January to echo the foreign minister’s appeal, and farmers threatened to send up to 1,000 people to protest against the prosecutions. City leaders refused to budge for some time, saying that the trial would proceed under the stipulations of the law. Now that most of the charges have been dropped (for lack of evidence), some Hong Kongers worry that the prisoners’ release was merely a result of foreign pressure.

Artistic differences

Plans for a new arts hub have widened the rift between Hong Kong’s chief executive, Donald Tsang, and the Legislative Council (Legco), the city’s partially elected parliament. In early January, a Legco subcommittee proposed dramatic changes to the plan for the West Kowloon Cultural District, which is intended to boost Hong Kong’s image abroad. At the heart of the row is who will develop the HK$40 billion ($5.2 billion) project: Legco wants the government to abandon its plan to give 65% of the 40-hectare district to a single developer, and instead auction off commercial sites in smaller parcels. Other recommendations include making the planning process more transparent and increasing Legco’s oversight. But these proposals have gained little traction: Rafael Hui, the city’s chief secretary, and Michael Suen, the planning minister, rejected most of the changes.

The West Kowloon project has already weathered much controversy. The government originally intended to hand the entire district to a single developer; the new 65% scheme, adopted last October, has done little to appease critics. The latest conflict is ill-timed for Mr Tsang: the fight comes less than one month after Legco rejected a Beijing-approved plan for limited democratic reform, arguing that it did not go far enough. The impasse over West Kowloon threatens further to undermine Mr Tsang's reputation for responsive leadership, which characterised his rise to power last year.

On the list

As the mainland’s financial sector prepares for full liberalisation later this year, some of China’s biggest banks are looking to list on Hong Kong’s exchange. Bank of China, the country’s second-largest lender, will launch a $6 billion-$8 billion initial public offering on Hong Kong’s bourse sometime in the next six months, with about 15% of the bank for sale. According to the South China Morning Post, the bank received state approval for the move in the first weeks of January.

Bank of China will be the third mainland bank to list on the Hong Kong exchange. The territory’s bourse is regarded as a better place to list than the mainland’s nascent domestic exchanges: Hong Kong’s financial transparency and rule of law lend some credibility to institutions that had been under state control until recently. The two mainland banks already listed in Hong Kong have had great success thus far. The share price of Bank of Communications has risen by 55% since its offering last June, while China Construction Bank’s share price has grown by more than 25% since its $9 billion listing in October, the world's largest IPO in four years.

Toxic avenger

One of Hong Kong’s favourite foods could be used to clean up some of the city’s most polluted areas. A local researcher has confirmed that the phoenix oyster mushroom, a dietary staple of the city’s 6.9m residents, is not only tasty, but produces compost that is excellent at eliminating toxic waste. The Sunday Morning Post reported in early January that Chiu Siu-wai, an associate professor of biology at the Chinese University of Hong Kong, had just completed the first large-scale clean-up using compost from the mushroom’s cultivation. About 150,000 tonnes of soil at an old shipyard had been cleansed of toxins at a fraction of the cost of other methods. This had published a paper on this procedure in late 2003, but this was the first time she had put it to use.

In a city where vacant land is scarce, any process that could clean old industrial areas cheaply would be a boon. The government has spent five years and HK$160m ($20.6m) trying to clean the site of the old airport in the centre of Victoria Harbour to make way for redevelopment. Ms Chiu estimated she could have done it faster for about HK$500,000.

Old money

The head of the Hong Kong Monetary Authority is attacking the time-honoured ritual of giving money to friends and relatives at Chinese New Year, which falls this year on January 29th. Joseph Yam, the authority’s chief executive, has branded the practice of giving away crisp new banknotes for lai see, or good luck money, as wasteful and environmentally unsound. He has urged people to give slightly used notes that are as “good as new”, rather than insisting on freshly printed ones.

Last year, he said, Hong Kong’s three note-issuing banks printed 300m brand new notes totalling about HK$24 billion ($3 billion). While many of those notes were printed to replace worn-out ones, a sizable number were made simply to meet the demand for lai see. It took 400 metric tonnes of cotton to make the notes, which then required 500 cubic metres of storage space and a further 500 trips under armed escort to distribute. After all that fuss, Mr Yam said, $20 is still worth $20.

Catch if you can

January 2006

Hong Kong Fashion Week–Fall/Winter 2006

January 17th–20th 2006

Crammed with posh boutiques and eclectic street stalls, Hong Kong is a fashionista’s paradise. The city’s appetite for style culminates in Fashion Week, which takes place twice a year and lures chic mavens from around the world: last year the major trade fair drew some 25,000 buyers and 1,000 exhibitors. Besides all the business, the city’s already vibrant fashion scene plays host to myriad shows and parties throughout the week.

Hong Kong Convention & Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong (Harbour Road Entrance). Registration is required for the trade fair. Other Fashion Week events takes place throughout the city. Visit Fashion Week’s website for more details.

More from the Hong Kong cultural calendar