Letters to the Editor, January 2, 2018
Billions in tax lost to illegal tobacco gangs
I am responding to Avia Lee Pui-yee’s letter (“High tax rise will help illicit cigarette trade”, December 18).
Ms Lee is quite correct in saying a large rise in tobacco tax would lead to a rise in illicit cigarettes. In 2009 and 2011 excise tax increases were extreme and caused an influx of illegal cigarettes which took over 40 per cent of the market share in Hong Kong.
We must congratulate the Customs and Excise Department for the actions it has taken against those involved, but even with its endeavours the incidence of illicit trade is still high at 27.5 per cent in 2016, (2017 figures are not yet available) and ranked the fifth-highest in Asia.
In 2016 the illicit market was estimated to be 1.4 billion sticks of tobacco, resulting directly in a tax loss to the Hong Kong government of HK$2.5 billion, and an even greater losses when you take into account the funding needed for the Customs and Excise Department, police, courts and Correctional Services Department, for the resources they must use in trying to counter the criminals.
We must not continue to fund the triads and organised crime syndicates and, as Ms Lee points out, a crackdown on illicit tobacco must take place.
This must be carried on until the syndicates have been destroyed. Only then can other tobacco-associated matters be assessed.
A freeze on tax would greatly help in this fight and [if that can’t be done] we believe at most a moderate and consistent excise increase in line with inflation is the most effective approach to balance the government’s tobacco control objectives with the fight against organised crime.
Members of Hong Kong United Against Illicit Trade (HKUAIT) have been meeting with various officials and government departments and will continue to do so in the new year.
Jeff Herbert, adviser, HKUAIT
K-pop has a positive effect on teenagers
I disagree with Yonden Lhatoo about the “so-called Korean wave of popular entertainment” (“K-pop is an infectious disease, not a cultural export”, December 30).
A lot of teenagers admire K-pop stars because of the hard work they have put in to becoming successful. This inspires these youngsters to also aspire to achieve their goals. Listening to K-pop music is a positive way for teenagers to relax.
The tragic suicide of boy band singer Kim Jong-hyun (Jonghyun) will have made many youngsters more aware of the problem of depression. It may help them have a better understanding of the condition.
Hopefully, they are more sympathetic to those peers who are suffering from psychological problems, including depression. I do not know how long K-pop will last, but it is hugely popular with a lot of young people.
Joey Wong, Kwai Chung
Funds’ limited scope for diversification
I wish to offer two perspectives in response to Daniel Ren’s report on the future of Fund of Funds (FoF) in China (“Mainland’s first funds of funds off to a rocky start”, December 16).
First, FoFs are designed to encourage long-term savings and investment because they allow “broad diversification and appropriate asset allocation with investment expertise in a variety of fund categories”.
In this context, to unnecessarily encourage investors to focus on first month investment performance is unhelpful. Second, as four out of the six funds outperformed both the China equity and bond markets during this period, this hardly qualifies Chinese FoFs’ performance as lacklustre. Ren should analyse the challenges faced by FoF managers in China (vis-à-vis their US/European counterparts) and offer ideas to eliminate these constraints over time.
For example, Chinese FoFs can only invest in China equity and bond funds offering limited scope for asset class and geographical diversification. They should be allowed to invest in overseas funds over time like their US/Europe counterparts. Financial education is a multi-party effort involving the industry, regulator, academia and the media.
Ren’s criticism without addressing the key issues seemed inadequate. Worse, it undermines the broader financial education efforts of other market participants.
Thomas Cheong, president, North Asia Principal Financial Group
Purchasing flats overseas makes sense
I refer to the report (“With HK flats out of reach, younger buyers look abroad”, December 27).
I think it is a good investment for young Hongkongers to buy property in places where it is much cheaper than in Hong Kong, for example Thailand and Japan.
As one person mentioned in the report, for many young people their salaries will never be enough to enable them to buy a flat here with skyrocketing prices. So, instead of waiting for prices to fall, they are making purchases in overseas markets. It represents an important investment and when it is not rented out can be used by them as a holiday home.
This would be perfect for young Hongkongers who enjoy travelling overseas.
It can help them get on the first step of the property ladder.
Jeana Cheng Ka-yi, Kwai Chung