Generation 40s – 四十世代

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Hong Kong as a shoppers’ paradise is so far behind the times

South China Morning Post
CommentInsight & Opinion

Peter Kammerer
Peter Kammerer says the city’s laggard mentality in pushing for a hi-tech future will take its toll in many ways, including when the global trend in online shopping hits the local sector in earnest

Hong Kong generally lags behind in global trends. Economically, socially and legally, we’re living in the past. By how much is difficult to gauge, but, by some measures, it could be as much as a decade. If we don’t start catching up, we’re going to suffer big time.

The loss of the US$25 billion Alibaba stock listing to New York was a prime and costly example of how stuck in our ways we can be. Almost three years later, the strictly enforced “one share, one vote” rule that blocked the bid remains in place, even though exchanges elsewhere have realised the importance of the dual-class share structure to ensuring the growth of firms, particularly those in the tech sector. Beyond big business, consider how the refusal to adopt European standards on air quality is affecting health and reputation, how the well-being of workers and their families is undermined by a lack of standard working hours and what a substandard pension scheme means for livelihoods. And we’re not even talking about issues like gay marriage and marijuana that are being legalised elsewhere.

But let’s move onto online shopping, an area that smartphone-loving Hongkongers should have embraced. Getting up-to-date statistics is difficult, but a Consumer Council study from last year comparing figures for 2014 gives a good perspective. That year, 23 per cent of internet-using Hongkongers had shopped online in the previous 12 months, compared to 67 per cent of mainland Chinese, 69 per cent of Japanese, 73 per cent of Germans, 78 per cent of Americans and 81 per cent of Britons.

Hong Kong’s compact size and shop-packed streets may be behind the low take-up. But I’ve a feeling much of it is to do with not trusting online sellers. Hong Kong people love to window shop and see what they’re buying before they purchase. But that gets in the way of the experience that online provides of trying new products from the wider range available, often at a lower price.

My sons long ago realised that, feeding their gym-rat lifestyles with supplements, equipment and clothing. So, too, have consumers elsewhere in the world, with increasingly dramatic effect on cityscapes. Online trade has become so engrained that shops are closing. The trend is especially noticeable in the US, where thousands of retail stores operated by big-name brands like Macy’s, Sears and Kmart, to name but a few, have already closed this year.

The same is happening in Europe, Canada and Australia; it’s inevitable when stores don’t respond quickly enough to customer demands on price, selection and fashion. And if the experience of my sons and their 20- and 30-something friends is any guide, it’s going to hit Hong Kong sooner rather than later. The impact to our economy won’t be huge as, by various estimates, the retail sector accounts for only between 1.3 and 3.9 per cent of gross domestic product. But with the Hong Kong Retail Management Association claiming that about 10 per cent of our city’s workers, or 260,000 people, are employed in the sector, there could be a huge impact on the labour force.

Authorities seem oblivious; they’re still pushing Hong Kong as a shoppers’ paradise. The latest retail sales figures for March showing a 3.1 per cent rise on the same period last year, reversing a months-long drift, gives a false sense of security. But, like it or not, trends elsewhere eventually catch fire in our city and with an explosion of online shopping will come job losses for tens of thousands of people. The half-hearted effort to push new industries has to be replaced by a mindset to fully embrace the hi-tech present and future.

Peter Kammerer is a senior writer at the Post


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Why Hong Kong and Singapore must help their airlines soar

South China Morning Post
CommentInsight & Opinion

Derwin Pereira says no laissez-faire principles can be prized more than the symbolic importance of Cathay Pacific and Singapore Airlines to each territory

When unbearable abdominal pain attacks you while you are flying 37,000 feet above the Pacific, hours away from your destination, you literally are at the mercy of the cabin crew. How they react depends on the culture of the airline, the crew’s practical training, and, finally, on a visceral capacity for human responsiveness.

I fell ill, with what was diagnosed later as a kidney stone attack, two hours into a recent Singapore Airlines flight from San Francisco to Singapore via Hong Kong. Members of the inflight staff gave me medication based on the advice of specialists on the ground. When the flight landed in Hong Kong, an ambulance was ready for me. So was a member of the airline staff who chaperoned me to the nearest hospital. I was on the next flight home after the check-up.

During my detour through Hong Kong, thinking about Singapore Airlines naturally made me take a comparative look at Cathay Pacific.

Both are premium Asian airlines. Both symbolise the audacious international reach of the minuscule territories where they originated. Both are under pressure from upstarts in other parts of Asia and even in their own regional backyards. Both have loyal customers who see them as national possessions. And both need their governments to accord them the courtesy given to national institutions.

Consider Singapore Airlines. I fly it because I am Singaporean. The airline is celebrating its 70th anniversary this year. For me, though, its provenance dates from 1972, when it became the national carrier of Singapore seven years into the country’s independence.

The airline represents for me the capacity of a man-made institution to outwit hostile natural circumstances through Darwinian determinism. The ethic of survival and success, which motivated Singapore from the first moment of its independence, is written into the airline’s rationale. Singapore Airlines is to the skies what Singapore is to the land.

The airline is a national icon. In Singapore’s internationalised economic space, it is comparable in symbolic significance with the civil service and the Singapore Armed Forces. The civil service has overseen a city state’s transformation from third world to first world. The military ensures that the city remains a state.

Commercially, Singapore Airlines is Singapore’s face to the world, offering the first glimpse of what this country offers to foreigners. Those unimpressed with its standards are unlikely to be enchanted by the nation which lies beyond Changi Airport.

For Singaporeans, to whom the world does not owe a living, Singapore Airlines is a concrete example of how an unexpected nation can make a living, and a reasonably good one at that.

Cathay Pacific, I’d imagine, occupies a similar place in the Hong Kong public imagination. It began life as an airline that capitalised on its Asian locale even in colonial Hong Kong. Two decades into the city’s return to China, Cathay is not only a Chinese airline but also a Hong Kong Chinese airline, its mystique distinguished clearly from the larger cultural context in which mainland Chinese airlines operate.

Symbolically, Cathay is to Hong Kong’s autonomy in the air what the territory’s political and economic institutions are to its special status on the ground. To put it bluntly, Air China is, and is seen as, a Chinese airline, and in the larger framework of Chinese aviation, Cathay was, is and will be a Hong Kong airline.

This is why governments, like their peoples, need to view iconic airlines in special ways.

There is one impediment. Both Singapore and Hong Kong made their mark on the international economy by practising largely laissez-faire policies. Economic nationalism was a suicidal idea because it meant that small entities could be excluded legitimately from larger markets for political or ethnic reasons. Whatever the good or the service involved – whether apparel or airlines – economic access to the global hinterland was essential for Hong Kong and Singapore.

After all, Singapore Airlines could hardly fly from Changi to Seletar – where there’s an airport serving private jets – any more than Cathay could fly from Kowloon to Hong Kong Island. Economic territorialism outside their borders spells physical doom.

Propelled on by the salutary limitations of domestic geography, Singapore and its Singapore Airlines, and Hong Kong and its Cathay remained a bridge between the contending worlds of capitalism and communism even during the cold war.

That was then. Today, West Asian airlines such as Emirates and Qatar Airways are leveraging on their geographical position between Asia and Europe. Meanwhile, the Pacific routes from Singapore and Hong Kong are up for grabs to regional challengers, not least from mainland China itself. Sovereign wealth funds help fuel the rise of some West Asian airlines. Flagship carriers in China or Malaysia have national coffers to fall back on.

To mix metaphors, there is no reason for Hong Kong or Singapore to abjure the sink-or-swim philosophy that made their airlines great. But they must ensure that those airlines do not now sink because other countries are intent on keeping their airlines shipshape.

Singapore Airlines and Cathay must take to the skies, carrying the aspiration of millions inscribed into their names.

Derwin Pereira heads Pereira International, a Singapore-based political consultancy. He is also a member of Harvard University’s Belfer Centre for Science and International Affairs

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Hong Kong has a stake in the birth of a Greater Bay Area in China’s south

CommentInsight & Opinion
Sonny Lo says Beijing’s commitment to foster regional integration in southern China is clear. With plans already afoot, it’s up to Hong Kong to play its role well, alongside Guangdong and Macau

The most important Hong Kong-related part of Premier Li Keqiang’s ( 李克強 ) annual work report delivered at the National People’s Congress last Sunday is arguably the idea of a Greater Bay Area for Guangdong, Hong Kong and Macau.

A day after he spoke about it, Guangdong governor Ma Xingrui (馬興瑞) expressed hope that the Dawan area (literally, “big bay area”) should not only be comparable to New York, Los Angeles and other coastal economies, but also have a way of coordinating regional differences in tax systems and transport networks.

Echoing Ma, the Guangdong Development and Reform Commission director He Ningka (何寧卡) called for a concrete blueprint for deeper integration, which would involve strengthening infrastructure networks to enhance interaction and spur innovation; consolidating trade relations to support“One Belt, One Road”; and creating high-quality, environmentally friendly cities where people live and work.

The idea of a Greater Bay Area is not new. The mainland government has, in recent years, sought the deeper integration of Hong Kong and Macau into southern China. In the nation’s 12th five-year plan, for example, the government urged the two cities to promote coordinated growth and “develop a world-class metropolitan cluster”.

Most recently in the 13th five-year plan, unveiled last year, Hong Kong was designated a global offshore renminbi business hub, and expected to further promote its professional and financial services. The main idea is to make it a regional hub by not only strengthening its cooperation with the development areas of Qianhai, Nansha and Hengqin on the mainland, but also playing a more active role in Beijing’s belt and road initiative.

For now, while Hong Kong is fostering deeper integration with Shenzhen’s Qianhai, Macau is doing the same with regard to Hengqin. The recent agreement by Hong Kong and Shenzhen to develop the Lok Ma Chau Loop into an innovation and technology park represents genuine efforts at deeper integration.

The entire thrust of the integration blueprint reflects China’s development strategy for its south. Guangdong is expected to be the locomotive for the region. The fact that a 2009 cooperative outline for the Pearl River Delta area, in one early mention of regional integration, came from a Guangdong think tank was illustrative of the province’s leadership role.

Similarly, the remarks made by governor Ma immediately after Premier Li’s report indicated Guangdong’s pivotal role in the central government’s planning strategy.

To stay competitive, Hong Kong and Macau must reposition themselves to adapt to Beijing’s plan.

First, they should review their population and education policies to welcome mainland talent and high-quality immigrants, as well as nurture more scientists and technology experts.

Both cities should also build on their strengths – Hong Kong as a monetary and financial hub, and Macau as a diversified tourism hub. Macau’s recent moves to diversify its economy – away from the casino business towards theme parks and golf resort development in neighbouring Henqin – is illustrative of Beijing’s planning. Macau is expected to play a crucial bridge between China and other Portuguese-speaking countries, just as Hong Kong should utilise its common-law heritage to expand its connections with many other countries in the world.

The two special administrative regions are endowed with sound legal systems and strong rule of law, which will enable both to remain competitive in the coming years. But Hong Kong and Macau must train more local people to better understand mainland China, including in the areas of history, law, politics, economy, education and cultural values.

In the face of these developments, the “one country, two systems” framework is likely to develop into a new system in Hong Kong by 2047 and in Macau by 2049, when a new region of economic integration is likely to be formed.

Sonny Lo is a political commentator

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Criticism of Hong Kong’s proposed third runway should be based on facts

South China Morning Post
Comment›Insight & Opinion

Raymond Li

Raymond Li says there are many mistaken ideas among the public about a three-runway system at the airport, and they need clarification

In February this year, the Town Planning Board completed its review of the draft outline zoning plan supporting a three-runway system at Hong Kong International Airport and agreed to submit it to the Chief Executive in Council for approval. This will pave the way for the implementation of the three-runway system which is essential to meet our long-term air traffic demand.

Many opinions were heard during the board review meetings, some of which were misconceptions that have unfortunately persisted despite attempts at clarification. The Civil Aviation Department would like to address some of these.

Fact 1: To meet safety requirements, the maximum capacity of Hong Kong’s existing two runways is 68 flight movements per hour.

Some commentators suggest that the maximum capacity could reach 86 movements per hour if airspace were better managed. This appears to be based on misinterpretation of the 1992 New Airport Master Plan.

The master plan presumed that if the two runways were able to support an “independent mixed mode” – that is, two runways were used for both take-offs and landings at the same time, as if they were two independent airports – the maximum capacity of the two runways could reach 86 movements per hour. Nonetheless, the same report clearly stated that, fettered by the surrounding terrain of Lantau Island, it is impractical for the two runways at the airport to adopt this mode of operation due to incompliance with the safety requirements of the International Civil Aviation Organisation, particularly in relation to the safe distance to be maintained between aircraft during take-off and landing. In other words, the capacity of the existing two runways is constrained, and it is impossible for the two runways to reach 86 movements per hour. Subsequent international consultancy studies reaffirmed this.

Let me draw a comparison with a train station. If there are only two platforms at the station and the trains have to operate at a fixed time interval at each platform, the maximum number of trains that this station can operate is constrained. Without a new platform, the number of trains to be operated by this station will never go beyond the limit, even if more tracks are built to connect this station with other stations. The same applies to the two runways at the airport. Only by building an additional runway can we greatly enhance the number of aircraft movements.

Fact 2: Removing some hilltops on Lantau Island will not enhance runway capacity.

There were views that capacity of the runways could be boosted if the peaks of two small hills on Lantau could be removed. This misconception again probably stemmed from the 1992 master plan. While the report mentioned removing the peaks of two hills, which were 610 and 810 feet high, the suggestion was made in connection with possible options of lowering the climb-out gradients for departure aircraft in case of engine failure. This has nothing to do with runway capacity.
Claims that flight tracks will be in conflict are unfounded

If we were to alter the surrounding terrain for the sake of increasing the capacity of the runways, most of the high peaks on Lantau Island would have to be levelled to satisfy the relevant safety requirements of the International Civil Aviation Organisation. This would mean forgoing the Ngong Ping cable car, Big Buddha and Po Lin Monastery and a part of the Lantau country parks, which does not appear acceptable to the public.

Fact 3: Claims that flight tracks between Hong Kong and Shenzhen will be in conflict are unfounded.

As early as 2004, the mainland, Hong Kong and Macau set up a tripartite working group to formulate measures to rationalise airspace structure and air traffic management arrangements in the Pearl River Delta region to optimise the use of airspace and enhance safety.

The three sides jointly established a plan in 2007, which took into account the operational needs of a three-runway system in Hong Kong as well as the development needs of Shenzhen and other major airports in the region. Progressive implementation of the plan will not lead to any conflict between the flight tracks of the three-runway system and that of Shenzhen airport (or any other airports in the Pearl River Delta).

I have seen a graphic depicting the existing flight tracks of Shenzhen airport together with the flight tracks of the future three-runway system, suggesting that the flight tracks are overlapping and unsafe. We treat this kind of misleading accusation very seriously as there is absolutely no question of the government compromising aviation safety in any manner.
There is absolutely no question of the government compromising aviation safety

Fact 4: Shared use of airspace complies with the Basic Law.

Some people have alleged that the shared use of airspace between Hong Kong and Shenzhen may violate the Basic Law. This is absolutely groundless. As a matter of fact, the International Civil Aviation Organisation has been advocating that air route structure and air traffic management efficiency, instead of national boundaries, should be the prime considerations in planning airspace. Such airspace management is a common international practice, for instance between Singapore and Malaysia, and between Germany and Switzerland.

The High Court earlier rejected an application for a judicial review in relation to the three-runway system. The complaint that the implementation of shared use of airspace under the plan would breach the Basic Law was considered not reasonably arguable. The court also considered that even though the Civil Aviation Department would permit the mainland authority to utilise a small portion of Hong Kong airspace to facilitate air traffic control, and vice versa, the ownership of the concerned airspace would still belong to the original civil aviation authority.

The State Council issued a guideline on March 15 on promoting co-operation within the Pearl River Delta region which clearly stated that the central government supports the development of a third runway in at the Hong Kong airport, to reinforce the city’s position as an international aviation hub. I hope that this article can help dispel misconceptions.

Raymond Li is asistant director general of civil aviation (air traffic management)

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Who needs Chinese customers? When money doesn’t talk in Hong Kong

South China Morning Post

Cathy Holcombe

I once worked with someone whose favourite expression was “Money focuses the mind”, a playful twist on Samuel Johnson’s observation that when a man “knows he is to be hanged… it concentrates his mind wonderfully”.

Transferred to business, the idea is that the prospect of monetary gain inspires talent and pushes aside unnecessary distractions.

One common distraction in economic exchange, as in all human relations, is prejudice. From antiquity to modern times, trade is credited with facilitating exchanges between different cultures, ideas and peoples. Thus it has been said that commerce is the mother of multiculturalism.

Yet research and experience shows that prejudice still often wins out over money. Popular opinions on immigration and trade, for instance, are often dominated by cultural preferences rather than economic self-interest.

One might think such topics are of only academic interest to Hong Kong, a seemingly homogenous society comprised of 94 per cent Chinese, and one of the freest trading hubs in the world. Yet the tensions between Hongkongers and mainland Chinese provide a fascinating case study of the intersection of cultural and economic interests.

Those in the pro-Beijing camp often warn that anti-mainlander passions are driving away opportunity, pointing as one example to the recent drop-off in tourist arrivals and plunging retail sales. Others say that locals have a rational fear of displacement by mainland economic muscle and political clout.

Anyone who lives in Hong Kong sees this question tested in little everyday daily dramas.

Just last week I was getting my hair blow-dried when a mainland woman peeked in and inquired about a haircut. “Too busy,” my Cantonese stylist said, though I was his only customer.

After she harrumphed and left, it was explained to me that “such customers” aren’t worth it. First they will begin with a ritual sniffing of the shampoo bottle, along with an inquisition into the quality and brand of the product. The demands will continue throughout the haircut, prolonging the misery as well as the time it takes to deliver the service.

Any sentient being in Hong Kong has witnessed similar efforts to deflect or discourage mainland customers.

Where I live, on Lamma island, a restaurant manager recently groused that he had a group of 11 visitors from the Motherland occupy two tables on a busy Saturday; they ordered just a couple bowls of chips to share, washing it down with water.

“They squeeze the vegetables for no reason,” a Lamma shopkeeper complained to me once as a group of Mandarin-speakers lurked near her produce. “Watch them haggle over a can of Coke, they want discounts,” she added indignantly.

Still, it is the very definition of discrimination to judge individuals based on group stereotypes. And whatever the case, one can’t imagine a prosperous future without further economic integration.

In attempt to better concentrate minds on the opportunities for shared prosperity, policymakers have invested a lot of time and money promoting a “united China” narrative which emphasises 5,000 years of shared history.

Why haven’t such educational efforts been more helpful? Lee Siu-yau, an assistant professor in the Department of Asian and Policy Studies at the Hong Kong Institute of Education, thinks the answer may be found in the concept of “group malleability”.

Group malleability “refers to the extent to which the core character, morality, and competence of groups are shaped by context and can be changed and developed through effort, practice, and experience,” says Dr Lee.

The broad literature on social psychology shows that those in malleability camp are more accommodating of outsiders than those who believe that behavioural traits are inherent.

Unfortunately, a “unified Chinese narrative” may have the unintended consequence of supporting a belief system that culture is fixed, not malleable.

It might be better for Beijing and Hong Kong to spend their propaganda dollars on narratives that emphasise the heterogeneity of various Chinese experiences, instead of the homogeneity. Dr Lee is currently conducting research to explore this idea.

His results are not expected for another two years. In the meantime, we are left to ponder: is a propensity for squeezing vegetables or sniffing shampoo hardwired into the DNA, or are we to blame 50 years of Communist Party rule?

Cathy Holcombe is a Hong Kong-based financial writer