Letters to the Editor, March 25, 2018

PUBLISHED : Sunday, 25 March, 2018, 10:18am
UPDATED : Sunday, 25 March, 2018, 10:17am

Why not tax land sites left idle for years?

After reading your editorial, “Political courage has to be shown when it comes to empty flats” (March 22), I have to ask: What about empty land?

If imposing a tax on unoccupied flats (to discourage/penalise hoarding) is being considered, then surely it is logical to extend that taxation principle to include land sites left idle for years.

There are at least 1,300 hectares of brownfield sites in the New Territories that have been sitting idle for decades, that is, not available for redevelopment.

Given the trend of rising property prices, the owners of these sites are in no hurry to work/cooperate with the government to have their land rezoned for development. The later the development, the greater the capital gain from rise in land values.

If they were part of the land supply, hundreds of thousands of homes could be added to Hong Kong’s housing supply pipeline over the coming years.

Hong Kong’s taxation system is very much skewed in favour of property owners. No tax on capital gains and low profit tax rate make carrying costs – of keeping land idle – very low for owners of land and properties. For them, delays in development/sale facilitate maximisation of gains in the longer term. But for households who rent and homebuyers, such delays/withdrawal of supply drive up rents and home prices.

The taxing of idle flats thus opens up a much wider topic – how economic gains on properties, including land, should be taxed and how taxation policy can be used for land-supply management in a land-scarce, crowded city like Hong Kong. As rightly pointed out by your editorial, it takes political courage. Let’s hope the Hong Kong has the courage to promote this topic for wider public awareness and ­debate.

H.H. Fung, North Point

Home truths in Sino-America trade tussle

US President Donald Trump has delivered on his campaign promises to get tough on trade, imposing import tariffs of 25 per cent on steel and 10 per cent on aluminium earlier this month, and threatening US$60 billion of fresh tariffs on China just last week.

During his election campaign, Trump had threatened to ­impose a 45 per cent tariff on imports from China to protect American interests. Meanwhile, after criticising the US for using a “wrong remedy” to tackle trade disputes, China has vowed to take action to ­defend its interests and released a proposed list of 128 US products to target.

China insists that there would be no winners in a Sino-US trade war and the damage would spill over to the rest of the world.

So, as trade tensions between the two raise concerns in the global market, is war the only option?

Trump says he wants to reset the balance of Sino-US trade, currently heavily in China’s favour. In the long run, he wants to designate a set of new international trade rules. He has also said he supports free trade, so long it is “fair and reciprocal”. The goal, he says, is to protect the economic and national security of the US.

Fierce trade frictions are unavoidable in the process of formulating new rules of the game. With dramatic changes in the global political landscape, the complementary trade relationship between China and the US has been transformed into a competitive one. And Trump’s trade protectionism also affects US allies.

However, under political pressure of many kinds, Trump looks likely to abandon economic gains in ­exchange for political interests. Which means China-US trade will face more difficulties.

Meng Xin, Kowloon

US is open for business, never mind Trump

The Trump administration seems intent to damage America’s diplomatic and trade relationships around the globe.

The tariffs on aluminium and steel imports, a warning shot on anti-China tariffs, the resignation of chief economist Gary Cohn, and the firing of secretary of state Rex Tillerson are only the latest deeply troubling signs that all is not well at 1600 Pennsylvania Avenue.

However, China should not mistake one man’s recklessness as an indication that American businesses share his belief.

In fact, from small, privately held businesses to large multinational companies, the United States is open for business.

While Washington appears to be content taking a step back from the world stage, Beijing presses forward with the Belt and Road Initiative. Building a connected trade network with the technology and capacity to transport goods will strengthen local economies throughout the region.

Business has been – and now continues to be – critical to strong, healthy and enduring China-US relations. I vividly recall the wise counsel of Dr Yang Jiemian, president emeritus of the Shanghai ­Institute of International Studies: “The best way for peace is to do business.” Let us seek peace through business.

Benjamin J. Hayford, Texas

Controls go against idea of free port

I refer to your report on Chinese authorities turning cautious about the expansion of the Shanghai free-trade zone (“China turns cautious over Shanghai free-trade port on concerns it might be too free”, March 19).

Officials are reviewing two proposals for the port but have yet to decide on its size and location, and are concerned about likely unfettered trade and capital flows.

I think this kind of close monitoring is too harsh, if the port is to be a fully open market on a par with Hong Kong and Singapore.

For a free-trade port, “freedom” is the essence of its existence. If trade and capital flows are limited, the free-trade port will be undercutting its biggest advantage. How can it then attract ­investors and customers?

Improve supervision, do not impose trade controls.

Gao Neng, Mong Kok