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April 20th, 2012:

HK must learn the science of policymaking

SCMP – 20 April, 2012

Christine Loh says the degree to which evidence and knowledge are tapped by policymakers on the mainland puts us to shame

China has substantially tightened its air quality standards because that is the way to drive improvements. Chinese scientists who advise the central authorities made this clear on Monday during a private briefing in Hong Kong.

Two-thirds of Chinese cities would fail to meet the stricter standards, which are being phased in nationwide over four years. Officials know this, but they see the improved standards as critical.

The public demands cleaner air. To achieve this, decision-makers rely on scientific evidence to help them see when, where and how they need to exert control for the largest gains. Scientists are called on frequently to work with policymakers; senior Chinese officials request expert briefings so they can better grasp essential issues.

Over the past 20 years, Chinese scientists’ improved ability to understand the complex chemical transformation of air pollutants has enabled them to give pointed advice. This process is well-developed in richer regions like Guangdong.

Indeed, Hong Kong’s scientists have worked alongside mainland partners for more than a decade on many leading national projects, including the Beijing Olympics in 2008 and the Guangzhou Asian Games in 2010.

If there is one thing Hong Kong officials can learn from the mainland, it is the importance of science in policymaking. While we have a large group of well-trained scientists at the Environmental Protection Department, the system doesn’t provide meaningful opportunities for them to work directly with senior officials, who are generalist administrative officers.

Moreover, officials seldom deliberate together with non-government experts from different disciplines, including economics and finance, to help them think more broadly about policy options.

The in-coming Leung Chun-ying administration can strengthen its capacity by encouraging political appointees and administrative officers to deliberate on issues with people who have solid expertise. Deliberation is for understanding; decision-making comes later. In between, officials can reach out to stakeholders, general advisers, non-governmental organisations and the public to test ideas.

The Hong Kong public would probably find such a process more effective because it is built around knowledge from a multi-disciplinary perspective. Officials still make the final decisions and are accountable for them. But a knowledge-driven deliberative process would give them the confidence to face legislative and public scrutiny of their policies.

Hong Kong officials must shape up, too, for one other reason – they need to keep up with their mainland counterparts. Increasingly today, both sides interact to co-ordinate on a range of policies. Many senior mainland officials today are well-briefed even about technical details. This means Hong Kong must pitch an equally competent team for cross-boundary dialogue.

The mainland’s speedy tightening of air quality standards came as a shock to local officials. In future, our top officials must know enough to be considered worthy counterparts and win mainland and local respect.

Christine Loh Kung-wai is chief executive of the think tank Civic Exchange.

incinerator funding rejected by Legco

Clear the Air says: incinerator funding was today rejected by Legco’s Panel on Environmental Affairs

Is it now the time that Edward Yau was held accountable for the incinerator disaster, failure to mandate source recycling, worsened roadside pollution during his tenure  and no shipping emissions control area –  and past due time Yau resigned or was fired?

Is it time AECOM (now out of a contract ?)  listened to their USA office’s Mike Zebell  and promoted plasma gasification to the incoming administration ?

Perhaps Elvis Au can now spill the beans?

Is it now time we changed the members of the Advisory (rubber stamp) Council on

the Environment ?

Lawmakers oppose incinerator plan

The government has failed to win support from lawmakers for its plan to build an incinerator off Shek Kwu Chau, south of Lantau Island. Most members at a Legco panel meeting voiced their opposition to the proposal. They also raised doubts over whether the incoming government would back it.

The chief executive-elect, C Y Leung, has said there’s no need for an incinerator, if waste reduction is carried out properly.

However, the Environment Secretary, Edward Yau, assured councillors that Mr Leung’s election platform was in line with government plans.

Minister throws down incineration challenge

Edward Yau says lawmakers opposed to the government’s waste reduction plans should explain why the city must wait longer for a solution
Cheung Chi-fai
Apr 20, 2012

Lawmakers opposing the government’s waste incineration plans owed the public an explanation on why a city facing a mounting waste crisis must wait longer for a solution – and should offer their practical alternatives – the environment minister says.

In an exclusive interview with the South China Morning Post (SEHK: 0583announcements,news) , Edward Yau Tang-wah said the waste issue deserved rational and objective discussion but had been politicised as major political parties expressed reservations about it.

But he refrained from saying if chief executive-elect Leung Chun-ying had meddled in his waste policy after Leung announced a “zero” quota for mainland mothers giving birth in Hong Kong private hospitals from next year. Both policies have implications for the transition of the old and new administrations and legislatures.

Yau said those politicians who delayed or disapproved of his plans should explain to the public why they would need to put up with more landfilling of waste equivalent to seven Exchange Square towers a year.

“Will waiting a few more months solve the problem?” he asked. “Why do we have to wait? Is it just because of a single remark by the chief executive-elect? Is it because of the election? Or is it due to the fact Hong Kong has not achieved the highest recycling rate in the world … society deserves a reason why we have to wait.”

Yau said the city could not afford any further delay, as the quest for waste solutions had started more than a decade ago and there had been intensive discussion already.

He also said he had never heard of instructions from the chief executive-elect to halt the projects. He would not say if he had met Leung on the issue, but stressed that Leung’s platform focused on waste reduction, as the current policy did, and did not exclude incineration. “It is a task of necessity no matter who is in charge,” said Yau, adding that he “hoped and was confident” that the next administration would respect the fact.

He warned that further delays might put Hong Kong in a similar situation to the Italian city of Naples, where insufficient waste facilities resulted in rubbish being dumped in the streets.

“The longer we put it off, the longer we have to ask what method will we adopt, the more likely we will be of living the example of what Naples faced,” he said.

While the government was willing to give more in-depth explanations for the need for the facilities, site selection for the incinerator and its waste reduction policies, Yau said lawmakers should explain to the public why they must wait for the government’s multi-pronged waste solution that includes incineration, landfill and recycling.

Yau admitted he had no contingency plan if the funding request for the HK$15 billion incineration project at Shek Kwu Chau was blocked. “Do we really have a plan B, when there is already a three-pronged strategy? Perhaps the plan B is just waiting to see the landfill becoming full. Everyone opposing our plan should ask themselves what is their plan B.”

Yau said there was no magic wand for the situation as relying solely on waste reduction was unrealistic. Even Germany, whose recycling rate was now more than 60 per cent, still relied on incineration. He said the limited capacity of the first incinerator meant only 17 per cent of the city’s waste would be burnt, with the remainder needing other forms of disposal, including landfill.

He also believed it was impractical to build the incinerator after waste charging was introduced. Yau felt encouraged that more than half of the people in a public consultation on charging supported the idea, but did not commit himself to a road map or timetable on it, only agreeing to take the issue further. He refused to say if he had been approached to stay in the next government or if he had any interest in doing so.



The Hong Kong government’s head-in-the sand approach to air quality continues to reap dividends for other cities in the region.

Singapore is the most livable city for Asian expatriates, ranking well ahead of Hong Kong, where the air quality is now among the worst in the world, according to human resources consultancy ECA International. “Air pollution remains a major issue [in Hong Kong],” Lee Quane, ECA’s regional director for Asia, said. “It has the third worst score for this of any Asian city, after Beijing and New Delhi, and is up among some of the worst locations in the world for air quality including Santiago, Mexico City and Cairo.”

ECA ranked Singapore as the top destination globally for Asian expatriates in 2012, unchanged from a year ago, with Sydney coming in at No 2. Hong Kong ranked 11th

Transcript: Donald Tsang – make up your own minds !

June 15, 2007 10:49 am

Transcript: Donald Tsang

Victor Mallet, editor of the FT Asia edition, and Tom Mitchell, the FT’s South China correspondent, interviewed Donald Tsang, chief executive of Hong Kong, ahead of the 10th anniversary of the former British colony’s return to China. Mr Tsang will start his final five-year term on July 1. The following is an edited transcript of the interview.

Financial Times: Looking ahead to your next term, what are the priorities going to be? What are the things you want to be remembered by?

Donald Tsang: Well, how I will be remembered is rather irrelevant. What’s important is what I set out to do and whether those things reflect the community’s priorities… [During] my election campaign I explained to the people of Hong Kong what I believed to be important. And I set out… five areas of work which the next administration beginning July 1st will focus on. I’m a simple minded man and I will just do accordingly.

The first thing I said we need to do is to find the reasonable level of physical development but balance it with environmental protection and heritage preservation. We have been lagging behind in terms of infrastructural investment over the last few years in relation to our neighbours with whom we compete. For that reason we have to think hard [about] what we need to do while we have the resources, the financial resources. But we are acutely conscious of the need to preserve our cultural heritage. So we need to strike a balance on this. For that reason I’m reorganising my government and administration to focus on this and make sure a balance is struck.

The second area is the quality of life in Hong Kong. It needs to be tackled. That includes air quality, water quality and so on. This is fundamental. We are investing quite a lot and I don’t think we’ve done enough yet. This is not only a territorial issue. It’s a regional issue.

The third area we need to do is a bridging between the rich and the poor. This is always very difficult. We are not going to do an income redistribution thing. But we must not ignore the fact that the rich [are] becoming much more rich over the last few years, particularly [as] we are now quickly emerging as a global financial centre. The financial analysts, investment bankers are getting very very rich and very well rewarded while those at the grass roots remain where they are. Incomes are not falling but the gap is widening. So we need to do something about it and I set out what I propose to do, particularly with the pursuit of social enterprises as European countries have done quite successfully….

I don’t believe in taxation as such particularly for [re]distribution purposes unless it’s absolutely necessary because I believe in small government and what I need to do is involve those guys in helping the poor – the big companies… together with the organisational power of the government, with the commercial knowledge and marketing network of the commercial enterprises… and the NGOs… to get more jobs for the unemployed in the marginal districts that we have…

[A dividend tax] has been mooted but we do not need the tax at the moment. I do not need the revenue because I’ve balanced my budget. But it’s being debated. If you look at [financial secretary] Henry Tang’s report on broadening the tax base – GST [general sales tax] and particularly dividend taxes… It’s certainly not impossible. If I need the money I will do it… But I cannot use taxation to solve the poverty issue. I think the European countries have taught us a lesson in this…

Then we also need to look at the human resource aspect of Hong Kong. Although we are immigrating a lot of people but we are not aggressive enough. We have to continue to invest a lot more in education. We will have to attract a lot more people in Hong Kong from all walks of life, all nationalities into Hong Kong to strengthen its place as an international financial centre and a global city. The human stock must be improved in the sense that we are older. Life expectancy in Hong Kong is the highest in the world – the highest in the world. In fact we are higher than Japan. But our fertility rate is the lowest in the world. That can only be bridged in the short term by immigration and in the longer term by heavy investment in education and training.

And finally I really wish to resolve this question of universal suffrage. And I think we have to get it over and I do not wish to hand over this problem to my successor in 2012.

So those are the five areas of work which I believe are essential for the work of the next administration while we continue to grow Hong Kong as a global financial centre. That’s our way of life. This is our future, where it’s going to provide the jobs and the opportunities for the people in Hong Kong. I do believe that we have the fundamentals like New York and London to create a global financial centre and a reasonably good living for 10m people here at the end of the day. We’re at seven. I think we can do well for 10… in the long term.

The optimum level city – look at the size of Manhattan and New York and London, for instance. You’ll find the power of the city can operate with all the underpinnings of a global financial centre. It’s not only the merchant bankers and the Financial Times. You need art. You need the West End. You need Wimbledon. They all need Yankee Stadium. They all need Broadway. That’s all in the make-up of a good city…

We must not allow the population to age and then shrink. We must grow in order to be competitive. It’s where success will lie is adequate stock of human resources of the right quality to sustain a global financial centre. Our universities are doing very well. We have the best business school in Asia [at the Hong Kong University of Science and Technology]. We are going to continue to do that but what’s more we need an injection of new blood from all nationalities particularly from the mainland as well to grow our market in the mainland…

I’ll be very happy if I maintain 7-7.5m by the end of my term. But I can see a city like us using physical development and good use of land and so on can accommodate a population of that size [10m].

FT: With regards to politics, how can you possibly bridge this divide between what the pro-democracy camp wants and what Beijing is prepared to give?

Donald Tsang: That’s where the challenge is. It’s not an easy job. Any constitutional change is difficult for any nationality and any territory for that matter – and particularly difficult for Hong Kong because we are not a sovereign state. We must achieve universal suffrage as a special administrative region of the People’s Republic of China. That is important. So we have to work within the framework of the Basic Law. Mr Wu Bangguo merely repeated what is in the Basic Law. There’s nothing more to it. Don’t read too much into it.

But if the Democrats are wishing to go beyond what is in the Basic Law then we’ve got a problem. So we need to knuckle down with what we have and achieve universal suffrage at the same time. I’ve got a plan as you know. In the summer this year I will put out a green paper and set out the various mainstream thinkings on this subject and start a public consultation. I’m not talking about interim steps going towards universal suffrage. I’m talking about the ultimate arrangements. I hope that after the consultation I will be able to put up a package that will achieve that and see how the population reacts.

I’ve been working on it for two years now since this debacle of the last debate on this subject in 2005. I gained experience and the opposition also gained the bitter experience of spurning not a bad interim package. So everyone needs to be careful. You need to accommodate. You cannot just be strident and obstructive. You have to compromise in any political negotiation – within Hong Kong first… It’s not too difficult to gain the public support for a package. There are nearly half a dozen packages in town each of which can gain about 60, 65 per cent support from the population. What is tricky is how are you able to get two-thirds majority in the legislature. Now I nearly got there in 2005. I was two to three votes less. But what the Democrats need to think about is not that they have got a proposal but they need to come up with a proposal that will get 40 votes in Legco. There’s no point telling me they have got a package and 22 votes. I got one and we had 37 [votes] last time and we could still not get through. That’s the challenge…

At the end of the consultation I have to stick my neck out and suggest to Hong Kong people having the consultation, having heard you, I believe this is what we want from the central government… Legco will debate on it and I hope this package will get me the 40 votes.

FT: Couldn’t you get the votes by giving the democratic camp more of what it wants? Do you think that the PRC government appreciates the autonomy part of the Basic Law?

Donald Tsang: If I do that [compromise with the Democrats] then I lose the other side. I won’t get 40 votes…

Autonomy does not reach constitutional development. It has nothing to do with our constitutional development. Constitutional development is always set out as a tripartite arrangement. Now I’ve got autonomy to deal with the economy, the social order and law and order in Hong Kong – that’s fine. But there are only a few things in the Basic Law [for] which we have to seek central government agreement: foreign affairs, defence and constitutional development. It’s always there. Since the time of the Joint Declaration. So that’s the rule of game. Now you cannot just suddenly change it …

I do have a difficult job. I have to manoeuvre between in Hong Kong the so-called democrats and the so-called conservatives… And I have to come up with a package which they all agree in a consensus and the thing is passed through the legislature and I have to at the same time persuade [the] mainland that this is the best for Hong Kong, for sustaining stability and prosperity longer term and meet the international criteria of universal suffrage which is promised in the Basic Law. There is no dispute that we will get therebut how and whether it will upset Hong Kong’s fundamental values and our position as an international global financial centre providing all the goodies and improvements of life to the Hong Kong people [remains to be seen].

FT: How do you manage the relationship with Beijing? It all seems very cordial in public, but behind closed doors, will you get tough and really fight for things you think Hong Kong –

Donald Tsang: I don’t want to get into the details. All I can say is that they are very frank and very sympathetic and very empathetic exchanges between us. I’m very impressed by the selfless way they have handled Hong Kong issues from the word go, when they are dealing with Sars, when dealing with an international financial crisis or dealing with constitutional development. They do have our national priorities at heart. They also have the interests of Hong Kong at heart. So the exchanges are frank. The exchanges are candid and professional.

FT: What competitive issues does Hong Kong face in maintaining its status as an international financial centre?

Donald Tsang: First of all we have to reach the best international practice – coming from Basle, coming from international organisations as regards corporate governance and as regards the operation of the securities markets. We have either pioneer or be in the forefront in market sophistication in the same way as London and New York is doing – introducing new products, new regulatory regimes, making sure that on the one hand the market is fertile, lots of people coming… into it from international organisations at the same time investors get protected. That is what our performance will be and we will move up the governance scale so that we are in the same ranks as New York and London distancing ourselves completely from the likes of Singapore or Shanghai or everybody else where they are still very much a territorial market hardly going beyond international… And the second thing must be a completely level playing field for business and that requires not only the convertibility of the currency but also requires the absence of any foreign exchange controls where money can flow in and out without any government impediment…

We must have the best legal underpinning and I do believe it must be a common law system as well to provide the flexibility to cope with the ever changing market… And then once we apply these things, we must have total freedom of information flow. Not only on the market itself how individual companies are doing. You must be able to tell the political backdrop which complements what is happening in the market…

FT: What are the prospects for some kind of linkage between Hong Kong and Shanghai’s financial markets?

Donald Tsang: We are helping Shanghai as much as possible to modernise the market. There are two different markets. One is an external international global market in Hong Kong and one is a regional market in Shanghai trading in renminbi which is not a convertible currency and the market is closed to foreigners by the way… These are two different markets altogether…

We are not doing too badly. We have overtaken New York in terms of value of IPOs. Now my sight is set on London. So we are doing all right but I am not complacent. But we cannot just compare Hong Kong’s market with a market like Shanghai. It is a closed market.

But there are lots of room for cooperation. There’s no reason why through arbitrage arrangements that shares, stocks listed in Shanghai cannot through some financial instruments be traded in Hong Kong … Similarly I do not see why Hong Kong stocks cannot be co-listed in the Shanghai stock market through an arbitrage arrangement. Not in a competitive mode in a complementary manner and that is perfectly feasible and the only [international] market that can do it is Hong Kong because we have the renminbi circulation here … and we are capable of doing a clearance arrangement and a settlement arrangement here in Hong Kong for that purpose. So I can see a lot of scope.

A merger of the markets is difficult because we have two different regulatory regimes. We are an international platform way ahead, about 15 years ahead in terms of regulatory measures.

We are discussing this [cooperation]. We are discussing the mechanics of it, how it can be done without undermining the fiscal system and the financial system in the mainland which is important to us as well. At the same time I want to make good use of the pool of renminbi in Hong Kong in a better way… We are using renminbi for trade transactions. We are dealing with renminbi for soaking up bond issues.

Depository instruments are quite feasible in fact … It’s not difficult at all to do this. All you need is cooperation between the monetary authority of Hong Kong and the central bank in the mainland. And we are pals. We work together very closely already so there is really not too much difficulty for doing the arbitrage arrangement but this would be a big step for the mainland. They quite rightly so have to be very cautious how it might impact on the mainland market … I do not want to characterise [China’s reaction] in any way but I’m very enthusiastic…

So we are helping them to promote domestic stocks. They can help us to propagate our stocks on the mainland without compromising each other’s financial regime. I think it will be a fine idea and there is lots of room for doing this…

FT: What’s your position on a possible competition law for Hong Kong?

Donald Tsang: It is in my manifesto but we won’t do it just to make the lawyers happy. We have to do it to make sure the market is more accessible, deprived of unnecessary monopolistic and oligopolistic activities in the market and provide easy access and encourage competition, making sure that small and medium sized enterprises in Hong Kong have a proper place in the market.

FT: How long is it going to take to clean up the pollution problem in Hong Kong? Do you accept that there is a pollution problem?

Donald Tsang: We have [a pollution problem]. Every city is a challenge. We are leaving no stone unturned. This is one of the main planks in my [campaign] manifesto. But it is not a territorial issue. It is a regional issue. I am putting tonnes of money, billions of dollars in changing our vehicular fleet… I am leaving no stone unturned in this but I must also recognise the fact that we have got a neighbour that is growing and they are acutely conscious about environmental impact as well. They are putting [desulphurisation equipment] in their power plants and they are also at the same time shutting down dirty factories but this is going to take time.

But we have set ourselves a target… We have got an agreement with them to reduce our emission level by half, generally half… using 1997 as a benchmark and 2010 as the destination…

It will be reached… I’m certain the air quality in Hong Kong in terms of a variety of emissions will be a lot better by the time I leave office in 2012 than now. And I would also wish to do something about global warming as well although we are doing pretty well in terms of carbon emission compared to Europe and compared to America. I will be an active player in this.

FT: Does it make sense to put so much emphasis on physical infrastructure development? Is there really a future for Hong Kong as a shipping hub?

Donald Tsang: When I talk about [our development programme] it’s the creation of a cultural centre in West Kowloon, creating a sports centre in east south-east Kowloon, talking about construction of a cruise terminal in Kowloon, talking about physical bridges and railways connecting ourselves with the Pearl River Delta and then from there beyond to the rest of the mainland – these are the sort of things I’m talking about.

Now as far as the container ports are concerned I’m acutely conscious of the [ports] competition coming from Guangdong province and from elsewhere and we have to compete… As far as construction of container ports is concerned this is entirely a [private sector] investment. Government does not provide for it… If we cannot compete [and Shenzhen’s] Yantian will [become] the number one port in the world, which it’s likely to be, and that’s the end of matter. I cannot just thump my hand and say come what may we’ll do this and lose our shirt. We can’t do this and I’m not doing this anyway because the next generation container ports will be community [private sector] financed through private participation. I only provide the land or the seashore involved and not anything else. We won’t be shooting ourselves in the foot and losing our shirt by competing with a port which we are not in the same league… The die is cast in that in the next 10 years the largest container port will be in Yantian, will be in Shanghai, not in the likes of Hong Kong or Singapore. We therefore have to go up to the high end of the market and do what we can…

FT: What are your memories of managing Shatin [a “new town” in Hong Kong’s New Territories] as a district officer in 1982-84?

Donald Tsang: It was wonderful. That was my best job in public service. Best job. We got freedom. I did not have environmentalists in my hair in those days [laughing]. We were moving 100,000 people every week into Shatin. We were pulling down mountains. We were reclaiming seas and we were building our new town. We were turning a village into a modern city. It was very exciting for me and the community was very supportive. We worked very happily with them. It was a lot of groundbreaking things we did during my two-year stint in Shatin.

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Tsang pledges to ‘listen humbly’ to public


the unelected Functional puppets in Legco’s system saved Tsang’s arse ! (there is no collusion between Big Business and our current Administration – HAH !)

Tsang also promised , on air on RTHK CE Talkin in October 2011 –

to Professor Hedley that the AQOs would be enacted before the end of his term

to another caller that he would speak to his FS that ESF fees should have a tax break





What happened to malfeasance in public office investigations against Tsang and Henry the basement philanderer ?

Tsang pledges to ‘listen humbly’ to public
Chief executive vows to complete cabinet restructuring
Tanna Chong
1:17pm, Apr 20, 2012

Chief Executive Donald Tsang Yam-kuen vowed on Friday to work rapidly, to complete a cabinet restructuring suggested by the incoming leader, before the current government’s term ends at the end of June.

He also promised to “listen humbly” to the public, in the wake of surviving a confidence vote in the Legislative Council on Thursday. Speaking to the media at the government headquarters in Admiralty, Tsang said: “I respect the chief executive-elect’s thoughts on restructuring the cabinet and will accommodate that procedurally. I hope to finish the work before July 1.”

Chief executive-elect Leung Chun-ying’s policy platform called for recruiting aides for both the chief secretary and the financial secretary, to take charge of population policies and innovative industries. The Commerce and Economic Development Bureau is to be split into a Commerce and Tourism Bureau and an Information and Technology Bureau, while a new Cultural Bureau will be established.

“We will help Leung to draft the1 legislative amendments … the secretary for justice has been informed and is speeding up the subsidiary legislation works,” said Tsang.

Tsang called on Leung to familiarise the various stakeholders with the new power structure. “The chief executive-elect and his team of political appointees have to fully explain their rationale to the public, lawmakers and the media,” said Tsang. Also, Leung’s restructuring proposal has to be reported to the central government and approved by both the Executive Council and the Legislative Council.

As for the vote of confidence, Tsang said: “I will listen humbly to all the opinions raised by the public and remember firmly to remind myself to do my best the remaining work. I will correct [any mistakes] and strive to improve.”

The non-binding motion, raised by Civic Party lawmaker Tanya Chan, was defeated 4-11 in the functional constituencies despite passing in the geographical constituencies 14-7.

Letter to SCMP