Strange world - Tsang lectures Davos

PUBLISHED : Thursday, 02 February, 2012, 12:00am
UPDATED : Thursday, 02 February, 2012, 12:00am


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There was that overly earnest and almost pained look again. Donald Tsang Yam-kuen does that whenever he wants to make sure you know that whatever he is doing is for your own good. Perhaps it's that Christian faith he is always talking about - his job is a selfless act.

And so it was when sandwiched between International Monetary Fund chief Christine Lagarde and British chancellor George Osborne, our chief executive earnestly advised European leaders at Davos on how they must act to stem their escalating debt crisis.

And people listened! Sure, there was the obligatory ridicule and derision from the local press. Talk to our usual expatriate pundits who have lived here for too long, and they all think Tsang was just being silly. They need to travel more to know which way the wind is blowing these days. A columnist in The Daily Telegraph suggests Tsang should be put in charge of the euro zone until the debt crisis is resolved. The New York Times used the image of Tsang sitting centre-stage as the lead picture for its story on the World Economic Forum.

Tsang is best known internationally for his intervention in the local stock and futures markets at the height of the Asian financial crisis in 1998. He was then roundly condemned by the likes of US Fed chief Alan Greenspan and billionaire investor George Soros. Now that the shoe is on the other foot and every major Western government has intervened massively to save their own financial systems, even Greenspan and Soros have turned around. Suddenly, free markets be damned, official intervention is in. What Tsang did was, therefore, acceptable - even praiseworthy - as a matter of principle.

We will never know conclusively whether Tsang did the right thing in 1998. But Asia recovered and today it is in much better shape than the West. Governments are now everywhere competing with Adam Smith's invisible hand. So, implausibly, we have Tsang lecturing Davos.