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June, 2012:

Benefit of tourism doesn’t add up


Sure, some businesses profit from HK’s hordes of visitors, but overall gain to economy is a mirage

Jake van der Kamp 
Jun 21, 2012

Tourism accounted for 6.2 per cent of Hong Kong’s economy in 2010, according to official figures.
South China Morning Post (SEHK: 0583announcementsnews) , June 20

I looked and I looked and I just could not find this official figure. I found one very close to it, however. The figure I found was 5.8 per cent as the ratio of net visitor spending to the size of our economy for the 12 months to March.

There was a difficulty, however, with the figure I found. It was negative. According to the official figures, tourism detracted from the size of our economy.

Here is how it happened. When totting up the contribution of tourism to gross domestic product, you take what the residents of your country spend abroad less what non-residents spend in your domestic market. Make sure you have this the right way around. It’s what you spend abroad minus what the visitor spends here.

Our story is visitors stayed away immediately after the handover of sovereignty in 1997, but the adoption in 2003 of the mainland individual visitor scheme brought a dramatic change in the tide.

For the year to March, Hong Kong residents spent HK$117 billion abroad, from which we deduct the HK$228 billion visitors spent here. The result is a minus figure and the chart shows it has plummeted steadily to 5.8 per cent of GDP.

Now, I know what you will say to this. You will say it’s the wrong way round. We should actually calculate the contribution to GDP as what visitors spend here less what we spend abroad.

No, we shouldn’t. What counts is not the geographical territory but the people who live there. We benefit from things we buy abroad. We do not benefit from things that visitors buy here and take home.

Remember also that what visitors spend here is already included in the turnover reported by shops, restaurants and hotels. We would double count this spending if we added it in again.

But I hear you. Visitors create jobs in Hong Kong. We have many thousands of chambermaids, burger slingers and shop clerks employed because of tourism.

Yes, tourism does indeed create lots of menial jobs. Unfortunately, it creates few jobs with real career upside. It’s a low-end industry.

Bear in mind also that the choice is not between tourism and nothing in jobs. These chambermaids and shop clerks would hold other jobs, probably better ones, if we had no visitors. An economy is a flexible thing that adapts to changes in demand. It is not written in stone that we only prosper if a fixed proportion of Hong Kong’s labour force is employed in tourism.

Bear in mind, furthermore, that tourist purchases do not contribute much to GDP. What tourists buy is almost all imported, and the cost of imports is deducted from GDP.

Tourism is very good for a handful of airline operators, hotelkeepers and shop owners, who all lobby hard to have the Tourism Board tell you that tourism is also very good for you. Don’t lap it up too quickly. In economic terms, tourism is not necessarily either big or good.

But here is the real gem for today. Chief executive-elect Leung Chun-ying says the influx of tourists contributes to inflation.

There is only so much that any shop can hold, you know, and when tourists are bidding for these wares along with residents, well, then supply starts to run tight and the price goes up. Stands to reason. Any fool can see that.

Hmmm … yes, and then along comes the big ship from overseas to deliver more wares to our docks, which the goods vehicle then delivers to the shop. Here’s an idea. Let’s tell the shop to over-order, and then prices would fall and tourism could help bring inflation down.

Here’s another idea. You’re an estate agent by trade, C.Y. Stick with it.

Fear of flying free

SCMP – 21 June 2012

We have been alerted to an interesting wrinkle in the case of Chief Executive Donald Tsang Yam-kuen and the two holiday trips he took on private jets. Readers will recall that several months ago, Tsang admitted flying to Phuket with his wife on a private jet. He then made great play of saying that he paid for the trips. “I always pay for the trip at the market price, even though this may give an impression of being petty-minded,” he had said on RTHK.

In most places, it is illegal for operators of private jets to accept payment for trips. It is certainly the case for private jets registered in Hong Kong, where both the operator and the pilot can be held liable for breaking licensing laws as private jets and jets used for taking paying passengers have different licences. So Tsang may have unwittingly dobbed his tycoon-friend in. It was either that or say – horror of horrors – the flight was free.

Hong Kong leader-elect sorry for illegal structure

HONG KONG – Hong Kong’s leader-elect on Thursday publicly apologised for an illegal glass canopy at his home, months after his election rival admitted to building an unauthorised basement.

In a city where people are regularly prosecuted over illegal additions to their homes, Leung Chun-ying said the canopy had been demolished as soon as he realised it had been built without the necessary approvals.

“I tender my apologies to the public for this oversight. It was not intended,” he told reporters.

“I never tried to hide this from the public,” he said, noting that he had hosted many journalists in his home and showed them around his cherished vegetable patch in his back yard.

The glass canopy measured 110 square feet (10 square metres) and hung over the back door leading into the garden.

“I want to stress this was a glass canopy, not a glass house,” the incoming chief executive, or de facto mayor of the southern Chinese city, said.

Leung was chosen to replace outgoing chief Donald Tsang by a pro-Beijing committee in March, promising to improve governance and uphold the rule of law in the former British colony of seven million people.

His main rival in the election race, Henry Tang, was engulfed in scandal during the campaign when he admitted to having built an elaborate entertainment den below his luxury home without construction permits.

Misconduct in Public Office

Clear the Air says: Denise Yue is wrong, yet again. Misconduct in public office , a common law offence, does apply to Tsang , and Henry Tang also, unless the two did not hold public office and were not paid from Government funds ?


Misconduct in public office is an offence at common law triable only on indictment. It carries a maximum sentence of life imprisonment. It is an offence confined to those who are public office holders and is committed when the office holder acts (or fails to act) in a way that constitutes a breach of the duties of that office.

The Court of Appeal has made it clear that the offence should be strictly confined. It can raise complex and sometimes sensitive issues. Prosecutors should therefore consider seeking the advice of the Principal Legal Advisor to resolve any uncertainty as to whether it would be appropriate to bring a prosecution for such an offence.

Definition of the offence

The elements of the offence are summarised in Attorney General’s Reference No 3 of 2003 [2004] EWCA Crim 868 (‘AG Ref No 3’).

The offence is committed when:

    • a public officer acting as such
    • wilfully neglects to perform his duty and/or wilfully misconducts himself
  • to such a degree as to amount to an abuse of the public’s trust in the office holder
  • without reasonable excuse or justification

Read the Legal opinion attached

Cap 221   Section: 101I Punishment of indictable offences 10 of 2008 09/05/2008

(1) Subject to subsections (2) and (5), where a person is convicted of an offence which is an indictable offence

and for which no penalty is otherwise provided by any Ordinance, he shall be liable to imprisonment for 7 years and a fine. (Amended 12 of 1986 s. 2; 50 of 1991 s. 4(1); 49 of 1996 s. 6; 10 of 2008 s. 15)

read what the ICAC says

1.                      Sir Anthony Mason NPJ stated:

“… to quote the words of PD Finn, ‘Public Officers: Some Personal Liabilities’ (1977) 51 ALJ 313 at p 315: ‘The kernel of the offence is that an officer, having been entrusted with powers and duties for the public benefit, has in some way abused them, or has abused his official position.’  It follows that what constitutes misconduct in a particular case will depend upon the nature of the relevant power or duty of the officer or of the office which is held and the nature of the conduct said to constitute the commission of the offence.”[1]

2.                      The centrality of abuse of the public office in the sense discussed above is reflected in Sir Anthony Mason NPJ’s encapsulation of the elements of the offence:

“In my view, the elements of the offence of misconduct in public office are:  (1) A public official;  (2) who in the course of or in relation to his public office; (3) wilfully and intentionally; (4)  culpably misconducts himself.  A public official culpably misconducts himself if he wilfully and intentionally neglects or fails to perform a duty to which he is subject by virtue of his office or employment without reasonable excuse or justification. A public official also culpably misconducts himself if, with an improper motive, he wilfully and intentionally exercises a power or

discretion which he has by virtue of his office or employment without reasonable excuse or justification.”[2]

3.                      The reformulation runs as follows:

“The offence is committed where: (1) a public official; (2) in the course of or in relation to his public office; (3) wilfully misconducts himself; by act or omission, for example, by wilfully neglecting or failing to perform his duty; (4) without reasonable excuse or justification; and (5) where such misconduct is serious, not trivial, having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities.

The misconduct must be deliberate rather than accidental in the sense that the official either knew that his conduct was unlawful or wilfully disregarded the risk that his conduct was unlawful. Wilful misconduct which is without reasonable excuse or justification is culpable.”…/FACC000003_2011.docx

Civil service chief faults Tsang for accepting gifts

But Denise Yue, who played role in Leung Chin-man’s job fiasco, says anti-graft rules leave boss in the clear

Tanna Chong  SCMP
Jun 21, 2012

The outgoing secretary for the civil service yesterday called Chief Executive Donald Tsang Yam-kuen’s acceptance of gifts from tycoons “misconduct”, but said her boss had not broken any rules because none applied to him.

Denise Yue Chung-yee’s remarks came in response to a question at a farewell media session about the recent uproar over Tsang’s rides on private yachts and jets and his bargain deal to rent a luxury penthouse in Shenzhen.

The scandals have exposed gaps in the anti-graft law, which currently does not apply to the chief executive. An independent commission to review the situation chaired by former chief justice Andrew Li Kwok-nang said earlier this month that the exception was “totally inappropriate”.

“I agree [Tsang’s dealings] were misconduct,” Yue said. “But he did not violate any rule since there was no mechanism whatsoever until Andrew Li Kwok-nang proposed one.”

Yue, who turns 60 in October, will end 38 years of government service on July 1, when she and Tsang leave to make way for the administration of chief executive-elect Leung Chun-ying.

Reflecting on the Tsang case, Yue recalled the conflict of interest controversy row surrounding her decision in 2008 to let former housing chief Leung Chin-man work for a developer with whom he had official dealings. She called the case “a milestone” that taught her a lesson.

In 2004, Leung Chin-man, who was then housing director, played a key role in the sale of a government housing estate to a subsidiary of New World Development at a discount. After retiring four years later, he drew fire when the company gave him a job, a move some saw as a deferred reward for helping the sale.

The scandal led last year to restrictions on post-civil-service employment for government officials. Yue said it was important for government officials to avoid both real and perceived conflicts of interest.

“Apparently there was a gap between my balance and public perception between an individual’s right to work and public interests,” said Yue, who has been leading the city’s 160,000 civil servants since January 2006. “It was a milestone and I learnt my lesson.”

Yue said what she would miss most after retirement was the sense of satisfaction she got from her job, but joked about her retirement plans.

“Maybe I will regain that sense of satisfaction by watching early-bird movies, which are offered at a discount,” Yue said.

Yue has no plans to take up a paid job herself. “Even if I do you do not have to worry about me. I can recite the post-service rules to its last word.”

[1] At §69.

[2] Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381 at §84.

Download PDF : 1203_EN_Is_Donald_Tsang_Guilty_of_the_Offence_of_Misconduct_in_Public_Office

Sydney’s secret undersea scrapheap

Sydney’s seafront and harbour is well known for its pristine tidiness, but delve under the water and it is a different picture.

Now divers are attempting to clean up the rubbish that accumulates from the city’s waste water.

Duncan Kennedy reports.

Tsang’s Exit in Hong Kong Marred by Scandal


HONG KONG—Donald Tsang is preparing to leave office after seven years as Hong Kong’s leader mired in scandal and record-low approval ratings, tainting a legacy that until just a few months ago would remember him for his market acumen and decades of loyal government service.

Enlarge Image


Associated Press

Hong Kong Chief Executive Donald Tsang attended a question-and-answer session at the Legislative Council in Hong Kong on March 1.

This year, a series of scandals pointing to a cozy relationship with local tycoons, including acceptance of private jet and yacht rides, provoked public ire and drew thousands to street protests.

As the end of his term nears, critics are lambasting the 67-year-old Mr. Tsang, nicknamed “Bow Tie” for his accessory of choice, mostly for failing to address the city’s widening wealth gap or to boost its competitiveness.

His abrupt fall from grace followed a career that had earned praise for several accomplishments, including steering Hong Kong through the global financial crisis and helping pass the city’s first minimum-wage bill. He was awarded British knighthood just before Hong Kong’s 1997 handover to China. He is a practicing Catholic known to attend church every morning.


Mr. Tsang’s support level has dropped to 39%, his lowest ever, according to a poll taken this month by the University of Hong Kong, compared with a popularity rating of 72% when he first took office in 2005.

“It’s disappointing,” says political observer Cheung Chor-yung of Mr. Tsang’s final months in office. “People didn’t anticipate that he would leave office like this.”

Mr. Tsang, who steps down on June 30 as chief executive after 45 years in government, will be succeeded by former cabinet leader Leung Chun-ying, who was chosen to lead Hong Kong on a platform promising affordable housing and a government free of ties to powerful tycoons. Mr. Leung was selected by the city’s election committee after lobbying by Beijing, a choice that underscored the public’s broad resentment over Mr. Tsang’s administration.

Mr. Tsang, for his part, had resisted calls to resign and repeatedly issued tearful apologies for his errors in judgment, which include staying at luxury hotel suites costing more than US$6,000 a night on official trips, a sum nearly three times the local median monthly income.

He admitted to legislators in a recent session that he failed to adequately address the city’s wealth gap, currently the highest in the developed world.

“Before, I always believed that you just needed to make the economy grow, to make the pie grow bigger—and through the trickle-down effect, every level of society could benefit,” he said. “But practice and theory aren’t the same thing.”

His office didn’t return calls seeking comment on Monday.

Under Mr. Tsang’s administration, the ranks of people in poverty rose 5.4% to 1.2 million, while the waiting list to receive public housing—home to nearly half the city’s population—also expanded. Last year, the average wait time was two years.

Meanwhile, the city’s fiscal reserves ballooned, growing from 296 billion Hong Kong dollars (US$38 billion) in 2005, when Mr. Tsang took office, to HK$679.9 billion this year. Such growth has been fueled, in part, by a surge in Hong Kong’s property market, which has seen prices rise 82% since late 2008. The government, which owns all land in the city, has been a major beneficiary of the boom.

Last year, the government used part of its surplus to give HK$6,000 payments to all permanent residents, a move widely panned by lawmakers and administration critics.

“The government isn’t without money,” says Christine Fang, who heads the Hong Kong Council of Social Services. “But they just give it out as candy. There’s no real planning.”

As a seasoned bureaucrat, Mr. Tsang was criticized for being too hesitant in his approach. “He didn’t need to account to the people, and of course he didn’t want to bite the hand that feeds him,” said Alan Leong, member of the city’s Civic Party who unsuccessfully ran against Mr. Tsang for the city’s top job in 2007.

In his previous role as the city’s finance chief, however, Mr. Tsang won wide praise for successfully staving off short-sellers and currency speculators during the 1997-1998 Asian financial crisis by buying billions of dollars worth of stock in Hong Kong-listed companies.

In 2005, Mr. Tsang—then the city’s No. 2 official—was tapped for leadership by Beijing after mass protests effectively ousted his predecessor, Tung Chee-hwa, over the former chief executive’s handling of a severe acute respiratory syndrome, or SARS, outbreak, and for controversial antisubversion legislation. Mr. Tsang was selected for his post not by popular vote, but by an election committee of 800 largely pro-Beijing business and political elites.

Mr. Tsang’s administration will be remembered for a number of accomplishments, among them helping successfully shepherd the minimum-wage bill, as well as a bill to ban anticompetitive practices. Still, the minimum wage’s benefits have been offset by rising inflation, particularly food prices, which rose 7% in 2011. Legislators likewise say the city’s competition bill—passed last week—has been watered down.

Under Mr. Tsang’s watch, Hong Kong weathered the global financial crisis relatively well, helped by the government’s transparent communications and tightening measures, says HSBC economist Donna Kwok.

Mr. Tsang’s team also helped successfully launch and develop a robust offshore business for the Chinese yuan in the city, capitalizing on efforts to internationalize the currency. In 2011, for example, Hong Kong handled 1.9 trillion yuan ($298 billion) in trade settlement and clearances. Meanwhile, retail growth has climbed, fueled by millions of tourists from across the border.

“The continued resilience of the job market and consumer spending is reflective in part of all the ground work that the authorities have done,” said Ms. Kwok.

However, Mr. Tsang’s successor faces a host of problems, including levels of air pollution that surpass most major Chinese cities, and an international school system oversubscribed by locals and expatriates. Surveys repeatedly indicate such poor air quality and difficulty finding schools have made regional rival Singapore—whose gross domestic product eclipsed that of Hong Kong in 2011— a more attractive base for expatriates in the region.

—Trinna Leong
contributed to this article.

Over Capacity Looming for GB Residual Waste Infrastructure

A new report from environmental consultants, Eunomia Research & Consulting shows that Great Britain is at risk of heavily over-investing in residual waste treatment infrastructure.

According to its report, Residual Waste Infrastructure Review Currently, GB (England, Scotland and Wales) has around 14.8 million tonnes of residual waste treatment capacity either ‘operating’ or ‘under construction’.

Eunomia found that this capacity is made up of 32 dedicated incineration facilities, 5 gasification facilities, 29 pre-treatment facilities (using either mechanical-biological treatment (MBT) or autoclave technologies), 11 Waste Incineration Directive (WID) compliant biomass facilities and 6 cement kilns processing solid recovered fuels (SRF),

However, the report warned that if all of the facilities which have been granted planning consent are built and if waste arisings remain flat then GB will have 5 million tonnes more capacity than it requires.

If any facilities which are currently in planning or unannounced are also built, or if waste arisings continue to fall, as they have for the last five years, then the authors said that the situation will be further aggravated.

Eunomia’s updated bi-annual review of residual waste treatment capacity shows that nationally there is currently a treatment ‘capacity gap’ of 13 million tonnes which has to be landfilled. This is based on current residual waste arisings of 28 million tonnes, with 15 million tonnes treatment capacity either operational or under construction.

However, with a further 18 million tonnes of capacity already consented and another 4 million tonnes of capacity seeking consent, Eunomia said that its research revealed that the GB appears on course to have excess treatment capacity.

The central scenario in the analysis shows the country entering a position of over-capacity in 2015.

This message emerges as countries hitherto seen as leaders in the field of waste management are beginning to face up to structural over-capacity for residual waste treatment, with facilities in the Netherlands and Germany being mothballed.

“The waste treatment industry continues to tell us that the planning system is preventing us from achieving high-levels of landfill diversion. The facts however tell a different story,” explained Dr Dominic Hogg, one of the reports’ authors and director at Eunomia.

“If all consented facilities are built, then we’ll have far more residual waste treatment capacity than we need. In fact we risk ending up in the same position as is now being faced in Germany, where treatment costs are falling and so undermining the economics of recycling,” he added.

Eunomia said that the data presented in the report draws on in-house research, which is updated on an on-going basis.

The consultancy also claimed that its databases hold information on every residual treatment facility in the country, including those in the planning system, and has data on facility capacity, current feedstocks and municipal contracts held.

A free version of Eunomia’s report can be downloaded

Download PDF : Eunomia_Residual_Waste_Infrastructure_Review_High-level_Version

Staff petition Post editor

Thursday, June 21, 2012

About 40 South China Morning Post journalists have signed a petition to editor-in-chief Wang Xiangwei, urging him to uphold freedom of the press amid a self-censorship controversy.

The petition comes after Wang decided to report the death of mainland activist Li Wangyang earlier this month as a brief.

When senior subeditor Alex Price questioned the decision in an e-mail, Wang replied: “If you don’t like it, you know what to do.”

Yesterday, Wang e-mailed all editorial staff about an hour after receiving the petition, saying he did not try to downplay the death.

The petition read: “Freedom of the press is the cornerstone of Hong Kong’s success. But recent events have put our paper’s credibility at stake.”

The journalists said a transparent and open management style is important and they called on Wang to explain why the death of Li was made a brief. He should also address the concern caused to Price by the tone of his original reply.

“We hope that you will assure us … we will continue to enjoy a free working environment,” the petition read.

In his reply to staff, Wang admitted the matter should have been resolved in a more constructive way, and despite “local media insinuation,” the death had been reported extensively in the paper.

“Although I chose not to prioritize coverage on the first day it broke until more facts and details surrounding the circumstances of this case could be established, we subsequently splashed no less than three front pages, two leaders, plus several other prominent positions including two articles by myself,” Wang said.


‘Urban homes too dear even for me’

Phila Siu

Thursday, June 21, 2012

The man tipped to become the next housing chief says property prices are so high in popular urban areas that he cannot afford to live there.

Anthony Cheung Bing-leung, president of the Hong Kong Institute of Education, said he is moving to somewhere else in Tai Po when he vacates the property that comes with the job which ends on June 30.

“I have looked at a lot of housing information in urban areas and the prices are very high,” he said.

“That’s why I will be staying in Tai Po. I cannot afford to move to the urban areas.”

Cheung, also chairman of the Housing Authority’s subsidized housing committee and an Executive Council member, is moving into a 2,000-square-foot apartment.

“Can many in the new generation afford the downpayment within 10 years of their graduation?” he asked.

“If we use this criteria, it seems property prices at present are very high.

If many people think the government must intervene, the government should consider doing so.”

But he said it would be wrong to make the generalization all properties in Hong Kong are too expensive as prices reflect supply and demand.

Cheung agreed with Chief Executive-elect Leung Chun-ying’s earlier proposal that property sales in some projects should be made only to Hongkongers.

The proposal was part of Leung’s election platform, which was based on helping people who cannot afford a private flat and are also not eligible for subsidized housing.

Cheung believes this proposal can be carried out by organizations such as the Hong Kong Housing Society and the Urban Renewal Authority.

It should be implemented because there has been concern that overseas buyers will drive up prices, he added.

However, Leung has since changed his stance. On Monday he said it was not time to implement this proposal because the entry of mainlanders into the market has not greatly affected Hongkongers.

Cheung also said that if the prices of new subsidized flats are set at 70 percent of market levels, they may still be too high for the target market.

But the Housing Authority has not made a decision on price levels yet, he added. The final level will be one that the public will find affordable.

Meanwhile, Cheung said the Hong Kong Institute of Education is now being run as a university, though it will be about two years before it can be accredited as one


Teflon man SCMP Lai See    20 June 2012

We see that Edward Yau Tang-wah, the former secretary for the environment, has landed another government job as director of the chief executive’s office. Although well-flagged, it is still shocking that someone who performed so badly can waltz into another job.

Jim Middleton, chairman of Clear the Air, put it more strongly: “Normally, someone who totally failed in his job and visited overseas 59 times in 60 months at public expense whilst his portfolio, the local stagnant stinking air and environment worsened, should be fired.”

Description: Edward Yau sits in Legco.

One wonders how this happened. Was there a deal? Yau was assured that if he just sat there for five years and did nothing at the Environment Bureau, Donald Tsang Yam-kuen would explain things to his successor to ensure Yau wasn’t slung out of the government?