Letters to the Editor, May 26, 2014
Corruption is harming A-shares
The recent announcement regarding the through train stock scheme to start in October, where investors can cross-invest in the China A-shares market and Hong Kong stocks from opposite sides, has caused a great deal of excitement.
Chairman of the Hong Kong Securities Association, Jeffrey Chan Lap-tak, has said turnover for the Hong Kong stock market could increase by at least 20 per cent.
Similar predictions were made when the Hong Kong market's trading hours were extended in March 2011 and 2012 [in two phases]. In fact, market turnover has dropped since then.
The problem is the Hong Kong stock market is stuffed with mainland firms, which have performed very poorly, driving investors away. While major stock markets like the Dow Jones Index, S&P 500, Germany's Dax index and the UK's FTSE are trading at or near new highs, China's A-shares are near five-year lows.
Meanwhile, the Bombay Stock Exchange (BSE) index is trading at an all-time high, having almost tripled since 2009 and has gained over five times since 2000.
Why has the Indian stock market outperformed China's by such a wide margin, especially as China's gross domestic product is over four times bigger than India's? China's growth rate is at least 3-4 percentage points higher, its foreign exchange reserves dwarf India's by over 12 times and it receives at least four times more foreign direct investment.
The answer is that India's stock markets (listed companies) are run for the benefit of shareholders whereas the Chinese listed companies are run for the benefit of the state or as employment agencies for the state (that is, state-owned firms hire people to provide employment to the masses rather than for commercial purposes). As a result, minority shareholders suffer.
Besides, corruption is rampant in Chinese companies with dishonest managers. This has driven away investors from Chinese stocks and the market is without wind.
Market turnover cannot be increased by extending market hours or introducing the through train. It can only be increased sustainably by running firms for the benefit of all shareholders, especially the minority ones, better corporate governance, transparency and by installing competent, honest and accountable managers.
Unless, these conditions are met, we can forget about healthy markets on the mainland or in Hong Kong.
Sanjiv Singh, Mid-Levels
Beijing has shot down sensible ideas
I agree with Malcolm I'Anson's suggestions for Hong Kong's future political system ("Resolve election debate soon without public nomination", May 16).
They are sensible and simple. However, that is why they will not be adopted by the Hong Kong and Beijing governments. The sticking point with the latter is just having the nominating committee consisting of democratically elected legislative and district councillors.
Others have suggested this before, but this suggestion has been shot down as not being "broadly representative" of society and that it would not keep separate the legislative and executive parts of the government.
There are many moderate proposals that try to accommodate the straitjacket imposed by the Basic Law and yet could achieve a better democracy for Hong Kong. We need to wait to see what the Hong Kong government comes up with.
Jennifer Eagleton, Tai Po
Activists will not achieve their aims
The intention of the people who lead and plan to participate in Occupy Central is laudable. However, I think it is unlikely that the movement will prompt the government to rethink its approach to achieving universal suffrage. Just look at the way the administration has dealt with filibusters.
There are similarities between Occupy Central and filibuster tactics. Critics say Occupy Central is holding Hong Kong hostage - if the government keeps ruling out the possibility of public nomination, Central will be paralysed, leading to tremendous economic losses.
The same can be said about the filibuster in Legco. For example, some lawmakers support such tactics in support of a universal pension scheme. However, filibusters can lead to the disruption of welfare payments.
These lawmakers presumably hope that the government will eventually be left with no choice but to give in to their demands, but the reality is very different. Officials respond by saying that it is the interests of the underprivileged, who depend on these welfare payments, that will be harmed.
This puts added pressure on advocates of the filibuster, and they find themselves losing public support.
I think the problems caused by the actions of the Occupy Central activists will be more easily solved than filibusters in Legco.
If people block roads, the police will arrest them. It may take time to clear all of them from the roads they have targeted, but it will certainly take less time than ending a filibuster, which can drag on for weeks.
The government uses the Basic Law to back its approach to the kind of universal suffrage it wants to see [for the chief executive election in 2017], and is unlikely to compromise. It took a similarly hard line initially regarding the proposed introduction of national education, even though this policy was clearly ill-conceived.
Occupy Central has raised public awareness. I would like to see more time being allocated for public discussion and consultation about the make-up of the nominating committee.
Jack Tang Ching, Tin Shui Wai
Tolerant approach is important
Cultural differences can cause disputes between Hongkongers and mainland visitors, which appear to be increasing.
I can understand why sometimes Hong Kong citizens respond angrily to the way some mainlanders behave. They welcome visitors from all over the world but say they must accept the rules and accepted norms of behaviour in the city, and some of those from north of the border fail to do this.
However, often Hongkongers just follow the crowd and back those who support confrontation.
Instead of that kind of gut reaction, people have to try and be patient.
We have to try and show understanding, oppose discrimination and help visitors learn what is acceptable behaviour here.
Serena Mak, Kwai Chung
Steep price hike for basic phone service
I recently received a letter from HKT, saying that my contract for a basic, residential phone line was about to expire, and that renewing it could be done through two options. I could either enter into a new service plan for 24 months, or renew the existing service at an increased rate. So far, so good.
Reading through the letter, it appeared that one option would lead to a monthly price rise of 80 per cent, while the other would result in a 65 per cent increase.
I called HKT to try to understand the rationale behind this, given there was no change in services provided. It justified the hikes by referring to inflation (plus 3.9 per cent year-on-year as of March); the need to invest in infrastructure (my line is a simple, PSTN - public switched telephone network - line, for which the network was probably set up decades ago); and by the fact that there were only two plans on offer, so I should just choose one or the other. Quite tellingly, HKT, unlike other service providers, does not set out its tariffs on its website.
One can only be bemused at such astonishing practices, about which the Office of the Communications Authority may surely care to comment. HKT's motto is "here to serve". Perhaps this should be changed to "here to serve ourselves".
Christelle Espinasse, Mid-Levels
Negotiations can resolve differences
The territorial dispute in the South China Sea between China and Vietnam is escalating.
I am disappointed that the governments of both countries have allowed this to happen.
It is important now that the two sides agree to sit down together and discuss their differences.
If this happens, then hopefully there will be no repeats of violent incidents, including the recent anti-Chinese protests in Vietnam.
Anson Chung, Tsuen Wan
Left in the dark over departure times at station
For weeks the departure boards at the Airport Express at Hong Kong station have been out of service pending replacement.
This is very inconvenient as it means that you have no idea how long you have before the train leaves. Thus a farewell may be rushed when it does not need to be, from fear that the train will suddenly depart.
I do not understand why the old display system couldn't have been left in operation until the new system was up and running.
Christopher Ruane, Lamma