Mind the Gap

Welcome to Hong Kong, where business and government leaders think knowledge is too powerful a tool

PUBLISHED : Sunday, 05 June, 2016, 3:54pm
UPDATED : Monday, 16 January, 2017, 10:26am

Onlookers in Asia dread the rise and rise of Donald Trump. As I said in my column last year a confluence of socioeconomic, cultural and technological shifts have come together at the intersection of “we’re as mad as hell and we’re not going to take it any more.” Donald Trump could be the accidental president.

We are in a time where people are trying to correct the perceived shortcomings of capitalism from within their system. Americans value their elections (despite their flaws) and lust after the combative and restorative nature of politics.

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In Hong Kong, our business establishment tries to convince people about the futility of opposing their commerce through protest or legislative filibustering. We simply must quietly go along with business as usual. John Slosar, chairman of Swire Pacific said in an SCMP interview that filibustering hurts Hong Kong even though it is a common tactic in developed countries and legislatures.

Why should everyone meekly roll over and agree to every project where almost all of the value accrues to our home-grown cartels, conglomerates and tycoons? They have nothing to offer people except more of their same unprincipled attitudes and unapologetic selfishness. It is baffling why we should be any different than people in developed countries in the way they oppose big projects that affect their lives.

Private jet booking system for Hong Kong airport leads to slots going to waste

They say that Hong Kong is first and foremost an ‘economic society’ — a strange description of a mythical place where business comes first. Unfortunately, they fail to understand that after the return of the city to Chinese sovereignty the citizenry call it their home. Their priorities demand more sustainable policies. Like Mao, our business and government leaders think that knowledge is too powerful a tool, leading to wisdom, thoughts and questions, which undermined their rule.

Our government recently demonstrated its inability to understand free market pricing in a town where the economy is supposed to represent the world’s freest economy. Transport chief Anthony Cheung Bing-leung said he would review how runway slots are being booked and abused by profiteers and the government would consider adding more slots and applications.

Hong Kong airport runway slots being hijacked for profit via online booking system

Cheung said “loopholes” in the online booking system for private jet operators led to the “speculation of slots”. “Precious runway slots are becoming scarcer for private jets at Hong Kong’s airport because a new online booking platform has been hijacked by unscrupulous players rigging the system for profit,” he said.

Any savvy financial trader will realise the glaring problem and the remedy. If middlemen are making speculative profits, then the government must be underpricing take-off and landing slots. So follow what other North American airport authorities do: auction the slots for all users.

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Encourage the efficient use of the scarce resource. Less valuable users will be displaced by more valuable ones who are willing to pay more. Landing and take off fees will reflect scarcity. Big commercial jets operators will bid up prices against smaller planes. The outcome of auction prices will ultimately make travel more expensive for people who want to fly smaller business jets. The fee would eventually be equal for the two types of transport.

Now that is how the government should handle our airport policy. Building and subsidising a third runway for private jets where the profit isn’t fully captured by the government, but by middlemen or private jet operators, is ludicrous.

Peter Guy is a financial writer and former international banker