Generation 40s – 四十世代

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Hong Kong needs a tech upgrade to diversify its ailing economy

South China Morning Post
Comment›Insight & Opinion

Winnie Tang

Winnie Tang says the government should use the upcoming policy address and budget to turn Hong Kong into a smarter city, boost IT education and create more favourable conditions for entrepreneurs, for starters

The public consultation on retirement protection has attracted overwhelming social attention. A reliable and balanced retirement scheme is important to our society, but equally crucial is the government’s technology drive for a better economy. In this way, Hong Kong will be better equipped to face a host of challenges. As an advocate of Hong Kong’s information technology development, I have some suggestions for the upcoming policy address and budget.

First, Hong Kong needs to be a smarter city. Singapore and some mainland cities picked up top awards in the region recently with their outstanding smart city initiatives. Together with Seoul, these emerging smart cities have demonstrated how new developments can lift residents’ quality of life. The government should therefore extend the pilot Kowloon East smart city scheme to cover the whole of Hong Kong.

Meanwhile, the government should seek to integrate all related information, on city planning, transport, medical, commerce and logistics, to better co-ordinate and manage the planning, construction and operation of Hong Kong as a smart city.

Second, we can create a greener world through the internet. While nations agreed at the UN climate summit in Paris to cut greenhouse gas emissions, the success of the accord relies on the co-operation of governments and communities. At the same time, Paris is ambitiously increasing the greening of the city following an online poll in 2015; one million square metres of roof and building facade greening will be installed by 2020. The “gardens on the walls” initiative aims to achieve a better climate, cleaner air and biological diversity. We should adopt something similar.

Third, we can create a better future for our ageing population through e-health initiatives. Savings of 10 to 20 per cent can be achieved on total health care costs through e-health such as telemedicine (diagnosis and treatment from a distance) and the use of mobile devices (providing health care information to practitioners and real-time monitoring of patients’ vitals). This would help ease the increasing financial burden.

Fourth, IT education needs to be updated. Although 80 per cent of Hong Kong households have internet access, the education sector has not been keeping pace with the speed of change in the digital age – the syllabus that sets out computer literacy requirements for junior secondary school students was last updated 14 years ago.

According to US government statistics, by 2020, there will be 1.4 million computing jobs and only 400,000 students with relevant training to fill those roles. Moreover, computer science skills, such as coding, have become essential in many different fields. This is a global phenomenon.

Britain now includes coding as a compulsory subject for children as young as five while Finland will also make it a mandatory, cross-curricular activity from the first year of school, starting from this autumn. Australia and Singapore, too, are contemplating when and how to start compulsory education in coding.

To avoid being left behind, the government should incorporate computer programming as a compulsory subject in primary education to equip students for the future digital world, and stimulate them in logical thinking and problem solving.

Finally, in almost every corner of Hong Kong, you’ll find people starting businesses. The government should spare no effort to create favourable conditions to strengthen the entrepreneurial ecosystem.

It should maximise the use of existing public resources, seek to attract more overseas business incubators, accelerators and venture capital, while doing more to enable office space sharing.

Regulations need to be revised on raising contributions through the internet, such as by using equity crowdfunding and mobile payments. Regulatory reform would benefit not only start-ups but also investors, with the result of boosting the market.

Innovation and technology can diversify Hong Kong’s economy and provide greater employment opportunities for the community.

Dr Winnie Tang is co-founder and chairman of the Steering Committee of the Smart City Consortium


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It will take more than electronic road pricing to ease traffic congestion in Hong Kong

South China Morning Post
Comment›Insight & Opinion

Gary Wong

Gary Wong says the government’s rush to implement its pilot scheme is short-sighted and officials should be looking at other measures introduced by progressive cities around the world

Hong Kong is no stranger to traffic congestion. Secretary for Transport and Housing Anthony Cheung Bing-leung announced that the government intends to consult the public over an electronic road pricing pilot scheme in Central and adjacent areas. The three-month consultation will look at the possibility of charging vehicles during peak hours to ease congestion.

Looking back, the government has already completed three studies on electronic road pricing – in 1985, 2001 and 2009. However, the city has yet to launch any charging schemes. How, then, can we expect a three-month consultation to find the silver bullet?

In order to relieve growing traffic problems on Hong Kong Island, construction of the Central-Wan Chai bypass began in 2010. It will connect the Island Eastern Corridor to the Rumsey Street Flyover so vehicles can travel between Sheung Wan and Wan Chai without having to pass through Central.

In February 2014, Cheung said the government would not launch the electronic road pricing pilot scheme until after the new bypass had opened, then scheduled for 2017. This was to ensure drivers would have alternative routes to choose from.

However, construction delays now mean the bypass is only expected to be operational in 2018. Cheung has now changed tack, saying that such delays would not affect the implementation of the pilot scheme.

One electronic road pricing principle is “user pays”. However, how many vehicles are actually destined for Central? How can the administration ensure that the “user pays” principle is accurately applied to vehicles entering Central?

The government has yet to put forward any concrete analysis. So why insist on rushing through the public consultation in three months?

Instead, why not wait and observe how the Central-Wan Chai bypass affects traffic flows before making a decision? Or does the insistence of implementing the pilot scheme suggest that the government isn’t confident that the bypass will be ready even by 2018?

Another fear is that once the electronic road pricing system is implemented, only the rich will be able to use the roads in Central. How, then, should different types of vehicles be charged? What type of vehicles should be exempt?

Changing habits through charging people fees is a principle of electronic road tolls, too. The more exempt vehicles there are, the less effective the system is in reducing traffic. Other countries usually only exempt emergency vehicles. Apart from emphasising that fees should be set high enough, the Hong Kong government should also put more thought and analysis into the fee-charging mechanism for different vehicles.

One key reason why congestion is so serious in the Central business district is that there aren’t enough parking spaces. Drivers are often forced to circle the area looking for a space. Some risk being fined by leaving their vehicles in no-parking zones.

As a response, the government has proposed increasing fines by 50 per cent for illegal parking. Although measures such as fines and road pricing may help reduce the number of vehicles, the fact is that a lot of drivers need to locate a legal parking space but are unable to do so. Therefore, a higher penalty is unlikely to create a huge deterrent effect in Central.

To solve this, Hong Kong could consider developing hi-tech, three-dimensional deck-style parking systems, as used in Japan.

Across the globe, cosmopolitan cities have varying degrees of traffic problems. Apart from establishing electronic road pricing systems in congested areas, governments are also exploring other ways to tackle traffic problems. From the perspective of reducing traffic at source, increasing the cost of first-time vehicle registration and license fees is one option. Governments can also look at optimising public transport routes and improving reliability. A multipronged approach is the best way to enhance traffic efficiency.

Gary Wong is a governor at the Path of Democracy think tank and a Chevening Scholar

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Time to thoroughly overhaul Hong Kong’s small-house policy and root out those who abuse it

South China Morning Post
Comment›Insight & Opinion

John Chan

John Chan says the sale of small-house building rights to developers often involves deception by indigenous villagers, and this unfair privilege must not be allowed to continue

The recent conviction of a developer of small “ding” houses in the New Territories and 11 indigenous male inhabitants sparked a strong reaction from the Heung Yee Kuk, the body which represents the interests of indigenous inhabitants in the New Territories.

The kuk sees the right to build and sell ding houses as a customary right protected by the Basic Law and has vowed to fight against the criminalisation of the sale of “ding rights” to developers, not ruling out seeking a National People’s Congress Standing Committee interpretation of the Basic Law to achieve their objective.

The small-house policy dates back to 1972 when the New Territories was still predominantly rural. Under the policy, a male aged 18 or above descended from a resident of one of the 550 recognised villages – identified by Indian surveyors of the British Army in 1899-1902, after Britain took over the New Territories from Qing China in 1898 – may apply once during his lifetime for permission to erect a ding house for his own use. He can either apply for a free building licence to construct a three-storey dwelling with a floor area of 700 square feet per floor on his own land, or apply for a grant of land from the government to build it.

The policy was faulty from the start as, from the late 1960s, the colonial government started massive land resumption in the New Territories to develop new towns. Property developers, seeing the chance to reap huge profits, also started massive acquisitions from indigenous owners of land not yet included in the government’s resumption plan. This resulted in many indigenous men left with no land to exercise their “ding right” to build a house. Many thus chose to sell their rights to the land-owning developers.

Some have claimed that the policy of giving privileged housing rights to male indigenous inhabitants has turned into an endowment, simply handing lavish wealth to these men when they cooperate with the developers and sell their rights.

Such houses can only be sold after the owner of the ding has finished construction of the house, completed the formality of paying additional premiums, complied with all other conditions in the building licence or the land grant, and obtained from the government a certificate of compliance.

The element of illegality in the sale of ding rights is as follows: when applying for the granting of a building licence, the indigenous male inevitably needs to make a false declaration stating that he is applying to build a ding house on his own land and that he has not made any agreement or promise to dispose of his rights, when in fact he is not the beneficial owner of the land on which the house is to be built, and a secret agreement already exists with the developer for the disposal of the house long before the application is submitted to build it.

The kuk estimates that up to 240,000 male indigenous inhabitants in the New Territories are entitled to exercise their ding rights while, since 1972, more than 40,000 ding house applications have been approved and more than 90,000 are awaiting approval.

A study by think tank Civic Exchange published last year showed that the 90,000-odd applications, when approved, would require at least 11 to 12 sq km of extra land, or 1 per cent of Hong Kong’s total land area. There is no way of knowing how many of these outstanding applications have been filed with false declarations. What we do know is that, by comparison, the total land sold by the Hong Kong government in the year 2014-15 was not more than 0.35 sq km. Surely we cannot allow the use of the city’s precious land resources for private gain through illegal means.

One of the colonial officials who masterminded the 1972 policy, former chief secretary Sir David Akers-Jones, said in 2012 that there was a need to put an end to the policy as there would not be sufficient available land in the New Territories to allow all the indigenous males to exercise their right.

Clearly, it is time for a thorough review of this faulty policy. At the same time, the outstanding applications must be examined with microscopic scrutiny to screen out the false declarations.

John Chan is a practising solicitor and a founding member of the Democratic Party

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Well connected: The growing reach of China’s internet sector

South China Morning Post
Comment›Insight & Opinion

Edward Tse and Matthias Hendrichs

Edward Tse and Matthias Hendrichs say 2016 will be a year of further expansion for China’s internet and tech businesses, both at home and abroad

Wuzhen, a small town in Zhejiang (浙江) province, became the centre of global attention when it hosted the second World Internet Conference last month. The theme was “An interconnected world shared and governed by all: building a cyberspace community of shared destiny”. More than 2,000 participants joined the event. Among them were President Xi Jinping (習近平) and other heads of state, prominent local internet business leaders and leaders of major foreign internet companies such as Brian Chesky (Airbnb), Jimmy Wales (Wikipedia) and Reed Hastings (Netflix). The conference included discussions on a range of topics, from global internet governance, cyber security and the internet industry as the engine of economic growth, to social development, technological innovation and philosophy of the internet.

Xi gave the keynote speech, underlining the growing importance of the internet industry for China. He set out his vision of “cyber sovereignty”, urging the international community to support a “multilateral” approach to the governance of a shared future cyberspace, while also emphasising the need for all nations to join hands in fighting internet surveillance and cyberattacks.

Alibaba’s Jack Ma pointed out that the internet has drastically changed almost every aspect of people’s lives in China and that the potential for internet entrepreneurs to incubate more innovative business models and breakthrough technologies is limitless.

Other Chinese internet leaders expressed their optimism about artificial intelligence, virtual reality and the Internet of Things. Baidu exhibited its prototype of a self-driving car. Its CEO, Robin Li, believes such cars will be commonplace in three to five years. Tencent aspires to build platforms that connect people with other people, products and services. CEO Pony Ma believes the internet can “help unlock the full potential of public services” such as health care and education by eliminating inefficiencies and lowering costs. Jia Yueting, CEO of LeTV, a fast-growing company which started as a content provider over the internet, talked about his vision of creating “lifestyle ecosystems” for consumers.

China’s internet industry saw strong growth in 2015. The number of users reached 670 million, with mobile users accounting for close to 90 per cent. Purchases from mobile phones account for around half of all Chinese e-commerce retail sales. Last year also marked a series of market consolidations, including mergers between mobility service providers Tencent’s Didi and Alibaba’s Kuaidi; classified advertising websites and; group-buying website Meituan and local review platform; as well as online travel agency platforms Ctrip and Qunar.

Leading Chinese internet companies took further steps to “go out” to the rest of the world. Alibaba hired former Goldman Sachs executive J. Michael Evans to help make it a major player in the US. Recently, it opened offices in Munich and Paris to expand its European operations.

To take on Uber in markets outside China, Didi Chuxing has invested in Lyft, Uber’s main rival in the US, India’s top car-hailing app Ola, and Singapore-based GrabTaxi. Guided by former Google executive Hugo Barra, smartphone company Xiaomi is expanding in India, Brazil and Indonesia. And LeTV is funding a US$1 billion investment in Nevada to build an electric vehicle manufacturing plant, saying it wants to take on Tesla.

On the other hand, more foreign tech companies are looking to China as an essential part of their global plans. December saw Apple and Samsung each reaching agreements with UnionPay to bring their payment systems to China. Google may follow with AndroidPay. That news came after Uber announced a US$1 billion China push, LinkedIn took its total number of China users past the 10 million mark and Airbnb secured US$1.5 billion for its China expansion plans.

This year should see the growth of China’s internet industry accelerate further. Lower-tier cities and rural markets will become the next frontier. Online retail sales in China’s rural markets are expected to reach 460 billion yuan (HK$ 549 billion) this year, nearly three times higher than in 2014, according to Ali Research. Beijing is also investing heavily in internet infrastructure, spending US$182 billion over three years to extend the country’s broadband and 4G network reach to almost every part of the country.

Issues such as the “Great Firewall”, media censorship, inadequate intellectual property and data privacy protection continue to present challenges for both foreign and domestic firms to grow their internet businesses in China. These issues will continue to be tension points between China and other countries, especially the US. Successful Chinese entrepreneurs will continue to take advantage of imperfections in Chinese society to identify new opportunities and build innovative solutions that address rapidly evolving consumer preferences and needs.

The World Internet Conference showed that Beijing sees the internet as a national priority; China can play a leading global role. Some observers have ridiculed, rightly or wrongly, China’s proclamation of a “world conference” given its censorship practises. Regardless, the government seems determined to move forward and it is trying to align with the private sector to continue building a thriving internet sector and use it to drive innovation and entrepreneurship in China.

In this context, Chinese entrepreneurs are developing a wide range of innovative ideas, and seem in general much more confident and outward-looking. In their attempts to build ecosystems, some Chinese tech companies will end up collaborating with others, while others may compete head-on. More foreign tech companies would like to enter – or re-enter – the Chinese market, given its huge size. Some will seek to collaborate with Chinese firms. At the same time, more Chinese tech companies and investors will seek partnerships or investment opportunities outside China, especially in Silicon Valley or Israel, creating a web of relationships unseen before. There will probably be more consolidation, through mergers and acquisitions, as well as the emergence of new entrepreneurial companies. This year, expect more excitement from China’s internet sector, which will increase its relevance on the world stage.

Edward Tse is founder and CEO, and Matthias Hendrichs is managing director, of Gao Feng Advisory Company, a global strategy and management consulting firm with roots in Greater China. Dr Tse is author of China’s Disruptors