Hong Kong is well known for being 'business friendly' but this isn't the same as being competitive. In fact, the public is fed up with monopolies, price fixing and cartels. The International Monetary Fund has been a strong advocate of a competition law. Its special investigation of competition in Hong Kong concluded in 2000 that our economy was not competitive when compared with an average member state of the Organisation for Economic Co-operation and Development.
Hong Kong officials have a very long tradition of tolerating anticompetitive behaviour. The bank interest rate cartel established in 1964 was only abolished in 2001 because it was a hindrance to Hong Kong's success as an international financial centre. In 1995, the city ended the long-standing telephone monopoly and introduced an industry-specific competition law to regulate the telecoms sector, as well as set up the Office of the Telecommunications Authority to safeguard market competition.
The property sector does not have to observe the normal rules of buying and selling. Many families make the largest investment of their lives when they buy a home. Yet the government has refused for years to force developers to supply basic information about the size and features of new flats and prohibit them from circulating misleading price details. Only now, as a result of public pressure, is it willing to consider legislation to regulate the sale of all new residential properties and impose tough penalties.
A year ago, the government also put forward a general competition bill to the legislature. Business interests argue it is unfair to expect small and medium-sized enterprises to obey laws against price fixing, collusion and similar practices. The General Chamber of Commerce, Hong Kong's biggest and most influential business chamber, proposed that minor infringements should be allowed. Their case is unacceptable. First, it accuses small businesses of practising price fixing and other anti-competitive behaviour. Second, it doesn't explain why consumers should have to tolerate malpractice.
If the competition bill is not passed during the current legislative term, it will lapse and Hong Kong will have to wait for the next administration and legislature to pick up the pieces.
Greg So Kam-leung is the minister responsible for ensuring we get a competition law that's on a par with those of other advanced economies. He has had problems winning support. In 2009, he delivered a speech titled 'Why Hong Kong needs a competition law' that focused on the need to keep up with market developments and the evolution of best practices worldwide. But he failed to explain how such a law would benefit Hong Kong people. He needs to make the link between fair markets and the benefits for families and the community if he is going to win this battle against vested interests.
Not even students are safe from exploitation. In June, officials admitted unfair practices were increasing in the textbook market. The solution was to set up a task force, as if this were a new problem. Let's pass the competition bill and be done with the constant rip-offs we all have to suffer.
Christine Loh Kung-wai is chief executive of the think tank Civic Exchange. email@example.com