Generation 40s – 四十世代

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After the Vegas massacre and European terror attacks, is it safe for Hong Kong children to study abroad?

CommentInsight & Opinion
2017-10-09
Mike Rowse says parents must strike a balance when deciding where children should study. Anxiety over American gun violence or terrorism in London can’t be the only factor

The recent tragic events in Las Vegas and spate of terrorist attacks in Europe will have all parents whose children study overseas pondering whether they made the right decision.

After all, Hong Kong has many fine schools and universities. Since we live in, by any measure, one of the world’s safest cities, why send our precious children thousands of miles away, where they might be in danger and we will see them less often? The counter arguments are familiar to all families on this path: some courses are not available here or are better taught elsewhere; living in another country is an enriching experience for most young people on top of any academic benefit; being apart from relatives and friends helps teach self-reliance and is an important step in the maturing process. Where the correct balance lies depends on individual circumstances.

My two teenage children were both leaning toward subjects not covered well or at all by Hong Kong’s tertiary institutions and, after research, felt the best options were in North America, with the UK as a possible fallback. Hence, our family has spent the last three summer holidays scouting suitable colleges for them. One visit to California actually included a side trip to Las Vegas, about a four-hour journey from Los Angeles by car. Press reports of the carnage there have also included some other alarming statistics. The Financial Times, for example, quoted Gun Violence Archive, a non-profit organisation, as saying there had been 274 mass shootings (in which at least four people were killed or injured) so far in 2017.

After weighing the alternatives, my daughter chose the University of California Los Angeles and started there last month. London would have been cheaper but she is studying film making and the proximity to Hollywood was too much of a draw. Would she have chosen differently if the Las Vegas mass shooting had come earlier? Highly unlikely, nor would I have sought to persuade her. Would London – scene of several terrorist incidents in recent years – be any safer?

An officer stands guard at a police cordon near a house in Newport, South Wales, on September 20, during investigations into the September 15 terror attack on a London underground tube train carriage. Photo: AFPImportant decisions in life should be taken on the overall balance of arguments. Provided we are not reckless in the thinking process and don’t ignore some highly relevant and probable adverse conditions, we have to accept that there is a degree of risk in all options. A slightly higher risk of being the victim of a gun crime in the US, or a terrorist attack in the UK, should not be the determining factors.

Similar mental juggling is needed when considering other life choices, such as involvement in sports. When my two (now adult) sons were growing up, both played rugby and football, as did most of their mates. Parents were relatively relaxed at that time about what were perceived as very remote prospects of serious injury. We now know much more about the dangers of incurring injuries in contact sports. Recent studies of the brains of deceased NFL players found evidence of the degenerative brain disease chronic traumatic encephalopathy in 99 per cent of cases.

When my daughter decided to play rugby, naturally the question arose as to whether to steer her toward a more gentle activity. Clearly there are dangers, as parents are reminded every time a child comes home bruised and limping. On the other hand, rugby is a very healthy form of exercise, and promotes camaraderie and team spirit. Moreover, coaches these days are much more alert to safety issues.

This combination of photos provided by Boston University shows sections from a normal brain, top, and from the brain of former University of Texas football player Greg Ploetz, bottom, with stage IV chronic traumatic encephalopathy. Photo: APThis once again comes down to balancing the factors and, without being reckless, reaching a reasoned decision. There are also family politics to account for. Parents of very young children are entitled to be fairly autocratic in making important decisions on behalf of their offspring. But, as children move into their teens and grow more mature, decisions become much more of a joint enterprise. Parents slip into the role of advisers, ensuring that all relevant issues have been considered. After that, they basically have to respect their children’s choices.

I won’t pretend this is a painless process. At moments of severe strain on the nerves, I find the occasional silent prayer, perhaps accompanied by a stiff drink, can provide some solace.

Mike Rowse is the CEO of Treloar Enterprises.

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How Hong Kong can maintain a competitive edge in fintech development

CommentInsight & Opinion
2017-10-11
Kenny Shui and Jonathan Ng say Hong Kong should learn from Singapore, Australia and elsewhere to create a more helpful regulatory environment for foreign and start-up financial technology developers

Hong Kong is a well-known international financial centre, and financial technology is one of the major trends affecting the global financial community. Two weeks ago, the Hong Kong Monetary Authority outlined a plan to launch an enhanced fintech supervisory sandbox this year. It’s clear the government is taking fintech seriously.

The HKMA’s sandbox, along with the Securities and Futures Commission’s and the Insurance Authority’s new sandboxes are all examples of a “safe place” for fintech entities to test products in a restricted environment without the usual regulatory consequence of pilot activities.

We recently presented an advocacy study highlighting four aspects of the existing fintech supervisory sandbox that could be improved: collaboration, inclusivity, facilitation and scalability. It is encouraging to see that the HKMA’s enhanced sandbox reflects our considerations in at least three areas, but we still believe improvements can be made.

The first aspect is in collaboration. Plans to link the SFC’s and Insurance Authority’s new regulatory sandboxes with that of the HKMA, creating a single point of entry for cross-sector fintech, is welcome.

But because Hong Kong has separate regulators, time and effort may still be needed to assess the viability of linking the three sandboxes. Thus, the government should consider a new administrative office, perhaps under the existing Financial Stability Committee. This would allow multiple inputs from different regulators, so the administrative office could ensure cross-sector regulatory procedures are more streamlined and efficient.

Second is inclusivity. We appreciate that the HKMA is taking the needs of fintech firms into account, establishing a “fintech supervisory chat room” to provide direct feedback, but they still need to collaborate with banks to participate in the fintech supervisory sandbox. Sandboxes in jurisdictions such as Australia, Singapore and the UK are even accessible for fintech start-ups.

Therefore, a more inclusive approach for fintech start-ups should be considered. The administrative office should grant eligible start-ups up to 24 months for product testing.

The third aspect is facilitation. While the plan to set up a single point of entry to facilitate cross-sector fintech product testing is welcome, further improvements are possible. More specifically, there is no single point of contact in Hong Kong to assist overseas fintech companies in obtaining operating licences.

Take as an example Lufax, one of China’s largest internet finance platforms, which chose Singapore over Hong Kong to set up its first overseas platform. The decision can be attributed to the fact that Singapore has a single regulator to deal with, while Hong Kong’s various regulators made the licensing process more time-consuming.

Hence, the new administrative office should act as a one-stop shop to assist large and overseas fintech companies get the appropriate licences by dealing with the different regulatory bodies if they want to establish a platform in Hong Kong.

Lastly, while the HKMA has made attempts to address the three aspects above, scalability needs to be considered. Once the testing period ends, successful fintech start-ups can either obtain a full licence or consider reapplying for the sandbox if a licence has not yet been granted. However, those eligible to reapply may want to expand their market reach.

To rectify this aspect, upon successful completion of sandbox testing, the start-up could be allowed to apply to have their initial testing restrictions lifted, such as by expanding the number of customers.

Improving Hong Kong’s regulatory sandboxes does not necessarily mean we will succeed in fintech. However, if we don’t try to improve, the chances of success will be diminished. In light of Hong Kong’s comparative advantage in finance, we should seize this opportunity and maintain our competitive edge in fintech development.

Kenny Shui is a senior researcher and Jonathan Ng is an assistant researcher at the Public Policy Institute of Our Hong Kong Foundation


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Hong Kong’s young democracy campaigners risk losing sight of the real changes needed in society

2017-10-06
Anson Au says democracy is just another form of government, far from perfect and equally prone to ideological excess. Instead of chasing universal suffrage, Hong Kong needs to negotiate the best way forward to create a better society

The past couple of weeks have seen a resurgence in the push for democracy among youth in Hong Kong. Zealous cries for a new order have filled the air once more, in the wake of the anniversary on September 28 of Occupy Central, which ignited massive dissent among thousands of youth bound to the vision of democracy.

And just two weeks ago, former governor Chris Patten concluded his four-day visit by rallying Hongkongers to the pursuit of democracy and urging Beijing to consent.

Joined by a host of global media outlets, these sentiments betray a belief in the inherent good of ­democracy – but overlook the purpose of governance itself.

We must stay grounded. ­Democracy, as with all forms of governance, is but a means to an end – which is the establishment of a good society. My research explores what constitutes a good society and what can destroy it, and it shows that the answers don’t lie in any one form of governance.

We must separate ideology from practicality in the context of governance for a good society. As history tells us, it’s when we fail to do so that a society moves to atrocious ­extremes.

First, democracy is not without its dark side. Whereas popular belief holds that it’s inherently good, political research uncovers the ­uncomfortable truth that this isn’t the case. Democracy is not built upon the premise of bringing about “the most good for the majority”. Rather, it’s structured upon “the most good decided by the majority”.

Both modern history and the ­recent past have witnessed atrocities willed into being by the majority of a given society. Minorities in a populace often belong to economically impoverished and politically marginalised categories. As such, they possess significantly less ability to resist convenient and swift suppression by a hostile, intolerant majority. In Yugoslavia, they were the Bosnian Muslims and Croats, popularly hated minorities unable to resist violence by Serb militants.

In the days leading up to the establishment of Nazi Germany, they were the already stigmatised Jews, homosexuals, elderly and disabled – powerless to resist oppression, arrest and cleansing by a regime that channelled, rather than moderated, ideological hatred among the majority.

In Rwanda, they were the Tutsi and moderate Hutu leaders, defenceless against the anti-Tutsi radicalism washing over the Hutu state. The result was the infamous Rwandan genocide, whose ghosts still haunt the nation and human rights committees the world over. When organised by the majority alone, the state becomes a voice for the majority alone – rather than moderate hateful sentiments harboured by the majority, it channels them.

Strongman ­tyrants can ascend to power in democracies by capitalising on ideological fervour and insecurities among the majority. We need not look very far into history: the broad, recent rise of the far right across Europe and America prove the contemporary relevance of this admonition.

Both Geert Wilders in the Netherlands and Marine Le Pen in France championed, to great success, Islamophobia and the rejection of refugees in appealing to lower- and middle-class xenophobia. They were only narrowly beaten by more moderate candidates.

In the UK, Brexit attracted popular support, despite the economic disasters that pundits confirmed it would bring. On the ill-informed, misleading platform that Britain could accrue more capital outside the European Union, Brexit succeeded in convincing a majority more invested in nationalism than practicality. And most recently, Donald Trump rose to the White House by targeting immigrants and trumpeting the purge of big money from governance. Manipulated for their insecurities with employment, a majority rallied behind his claims, despite his very apparent financial conflicts of interest.

Second, Hong Kong is seeing divisions between the young and old. Young adults have lashed out against older citizens for retreating from the push for democracy, ­accusing them of political apathy, or worse, treason against Hong Kong society. But difference should beget discussion, not exclusion.

The legacy of Occupy Central has been … distorted into ideological fervour among youth

Incendiary reactions to difference show how the legacy of Occupy Central has been an improved consciousness of democracy, but distorted into ideological fervour among youth not unlike that of the Red Guard and other cross-national cases in world history. The convergences evoke historical memories of very real dangers.

In China, the Red Guards turned over their families, peers, teachers and schools to state punishment. In Cambodia, French-trained cadres led by Pol Pot swept the country with party purges and fratricides for a modernised, agrarian society.

Both cases show what happens when a country’s young ideologues rally behind a mode of governance for its own sake. Families are divided; the younger and older generations are split; unrest and violence ensue. Institutions embodying tradition are destroyed, and evidence-based assessments of what’s good for society are abandoned. Uprooting a plant always pulls up with it soil, grass, and living creatures. What does a heavy-handed democratic revolution threaten to uproot – policies, relations, institutions – along with the existing mode of governance? What will fill the gaping hole left in the earth afterwards? Who will benefit?

What does a heavy-handed democratic revolution threaten to uproot along with the existing mode of governance?

Third, stop focusing on democracy. Democracy, as with any governance, is only a means to an end. Thinking otherwise gives rise to ideological sentiments with disastrous consequences, as historical precedents have shown.

Furthermore, it distracts us from discussing the changes, the actual fruits of governance, that we want to see. Affordable housing; more ­resources for health services; a better old-age living allowance.

The calls for universal suffrage fail to address how any such issues or policies would be improved.

Real, positive change can only happen in Hong Kong by negotiating at the table, not by overturning it and attempting to build a new one; by engaging with actual policies and relations, instead of an abstract “fight”; by discussing the real, concrete needs of Hong Kong citizens, more than ideals written by a few on paper. We must forego visions of governance motivated by ideology to see the ends, rather than the means, in order to build a better society and prevent disaster.

I do not blame ethnic majorities for extreme crises. Ethnic majorities do not create extreme crises, but they can empower the ones who do: ranging from the endorsement of right-wing fascism to platforms that literally fracture nations.

Democracy claims to benefit all of society, but so does virtually every other mode of governance – what matters is how it is brought to effect.

A system lives for the people – not the other way around. We must refocus on the practical consequences of governance itself.

As Nelson Mandela – at a widely televised New York town hall in 1990 with American news anchor Ted Koppel – said in response to a question about the type of economy he envisioned for South Africa: “We are not concerned with models. We are not concerned with labels. We are practical men and women whose solutions are dictated by the actual conditions existing in our country. It does not matter whether the cat is black or white – so long as it can catch mice.”

Anson Au is a visiting researcher in the Department of Sociology at the Hong Kong Baptist University and a research officer at the LSE Health and Social Care and Department of Social Policy (joint) at the London School of Economics and Political Science.


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Hong Kong needs to throw more caution to the wind when it comes to backing start-ups

BusinessCompanies
THE VIEW
2017-09-22
The biggest problem is an acute shortage of angel investors and seed money available, even before any venture capital money becomes involved – we need to take unconventional risks to succeed

The Hong Kong government is trying to transform the economy from its traditional to a new innovative economy, but doesn’t realise that creative failure rather than cautious success will lead the way.

Last week, Hong Kong launched its HK$2 billion (US$256 million) Innovation and Technology Venture Fund (IVTF) to encourage investment in local innovation and technology start-ups in an effort to improve economic activity.

The government is inviting venture capital funds to apply to become co-investment partners of the new fund, said Nicholas Yang Wei-hsiung, the Secretary for Innovation and Technology. The government will only make investments alongside VC funds.

The government is risk averse even though it needs to take more risks to build Hong Kong’s new economy. It does not want to directly and autonomously choose which investments to make because historically, civil servants do not want to take responsibility for losses.

Yet successful venture-capital investing requires the ability to accept and learn from losses. So the IVTF is depending on venture capitalists to do the due diligence and cover the bureaucrats’ collective reputations.

Matching funds are the easy way out for the government because this assumes that venture capitalists in Hong Kong are actually effectively serving the unique needs and problems of the city’s start-up ecosystem. Instead, the government needs to take on the most difficult part of kick-starting a new economy – tech or otherwise.

The biggest problem in funding start-ups in Hong Kong is that there is an acute shortage of angel investors and seed money available before venture money.

VCs prefer to invest minimum amounts of about US$3 million and more. Then, there is so much private equity available globally that private companies like Uber can be valued at US$60 billion and still be funded by private money. VC has grown so big that you can’t tell the difference from private equity.

And that tends to crowd out investment at the smaller, seed levels. As high net worth investors would prefer to make bigger investments in bigger, non-listed companies.

But, the problem in Hong Kong’s funding channel is that many start-ups are looking for less than a million US dollars, more like US$500,000 to roll out their product after a few years of development, or angel money of US$100,000 to begin a business.

Start-ups can attract investments of US$3 million and up if they demonstrate revenue or profits, or have completed a desirable technology. But Hong Kong’s relatively new world of new-economy start-ups require more support at an earlier stage. And only the government has the resources.

Hong Kong entrepreneurs have less experience in developing start-ups and even fewer have the initial capital. Even the GoGoVan founders had to desperately scrape together HK$20,000 each seven years ago. Lack of capital and experience are major problems in Hong Kong.

Incubators in Hong Kong tend to rent or give out shared office space; some may render business advice, but few are capable of actually funding start-ups.

Start-ups and their founders also tend to require lots of attention from their investors. Business plans rarely go according to plan. And turnaround strategies rarely turn around, since so much guidance and intervention is required.

The start-up game requires a tolerance of low-level failure. Using a VC expression, this means it is important to “fail early and fail often”.

The success rate is low for start-ups. And most people should be working for someone as employees rather than running their own business. It takes tremendous self-confidence and determination to launch a business. Historically, it has been much easier to flip property.

Local Hong Kong investors tend to ask start-ups the wrong questions. They ask, “How does it make money?” The right question is “ What problem does this solve?” There’s a big difference in mentality and mission.

It is difficult to raise VC money in Hong Kong. Many of them are interested in businesses that can scale outside Hong Kong, into mainland China and internationally. They are looking to turn a 10-million dollar company into a billion-dollar company in a few years. Mainland China is the only place in Asia where this can happen quickly.

I detect a natural prejudice against Hong Kong Chinese-founded start-ups. Most VCs think Hong Kong Chinese cannot operate successfully in China and are treated like foreigners in China as they need to take on a mainland joint venture partner.

This is especially risky in terms of divergent management attitudes or outright intellectual property theft or misappropriation.

The entire government and local financial community needs to take on more risk if it wants to transform the Hong Kong economy away from property development and traditional industries.

Hong Kong’s financial industry professionals are still divided over how they can remake the city’s stock exchange. Many of the conservative, traditional stockbrokers think the proposed start-up board is too risky in terms of regulation.

But we will need to take unconventional risks to succeed.