Hong Kong, as everyone knows, is a business city. Perhaps no where else is the single-minded pursuit of profit so admired by the population. And yet, this is increasingly a city of consumers with very different interests from business.
Pressure is mounting for a powerful watchdog to attack price-rigging cartels as awareness of their effect grows. The prospect of tougher economic times ahead is making competitiveness a policy imperative for the Government.
So far, the response has been disappointing. Consumer council proposals for a competition authority with the power to investigate and censure offenders were rejected. Instead, a government body will monitor restrictive practice in the public sector.
The Competition Policy Advisory Group (Compag) represents a nervous first foray into the antitrust business. Crucially, it will not cover private-sector abuses, leading to the obvious sobriquet of toothless tiger.
When the consumer council first advocated a competition law and enforcer a year ago, business groups voiced strong opposition. The Government remains lukewarm, but knows Compag must be seen to work.
The summer currency crisis is concentrating minds. Hong Kong is now Southeast Asia's most expensive city. Tourists are not coming and the possibility of international firms moving to cheaper locations is real enough. Cutbacks in the finance industry may be a leading indicator of things to come.
So how to make Hong Kong competitive? With the peg immutable, attention inevitably focuses on the domestic economy. As a service centre, the high cost of doing business is an obvious disincentive. Economists disagree over the cause of inflation, but cartels undoubtedly help keep prices high.
