scmp: Revolt looms over competition law

Revolt looms over competition law

Pan-democrat says camp will review their support for proposed anti-monopoly legislation, after government makes concessions to business lobby

Tanna Chong Updated on Oct 19, 2011 http://goo.gl/bJhE1

The government risks losing the support of pan-democratic lawmakers for its embattled competition bill after yesterday announcing concessions to make the proposed legislation more acceptable to business.
Six changes have been made to the bill in response to concerns raised by the business sector, but at least three of the four major chambers said they were still not satisfied.

However, the dilutions have prompted Civic Party legislator Ronny Tong Ka-wah - a core member of the 23-vote pan-democratic camp - to reconsider his support for the bill, which aims to curb anti-competitive behaviour and provide a level playing field for companies in Hong Kong.

"I am surprised and disappointed at the concessions, which will drastically reduce the effectiveness of the bill," said Tong, vice-chairman of the Legco committee scrutinising the bill. "I need a rethink of our stance, which used to be solid support."

The pan-democrats plan to meet Secretary for Commerce and Economic Development Greg So Kam-leung today to discuss the bill.

So said the government had made the concessions in the hope of speeding up Legco's vetting of the bill, which is seriously behind schedule to meet a hoped-for vote next July.

"We hope to be able to address the business concerns, in particular those of the SMEs, while maintaining the integrity and effectiveness of the bill," said So, who on Tuesday will brief the Legco committee on the amendments.

Tong was most alarmed that the government had cut the proposed maximum penalty - from 10 per cent of global turnover for the entire period of anti-competitive behaviour to 10 per cent of Hong Kong turnover for a maximum of three years. He also decried the watering-down of payments that businesses would have to make for lesser infractions.

Another change took away the right of individuals and companies to lodge complaints of anti-competitive behaviour directly with the proposed competition tribunal.

Previously, they could go either to the tribunal or the proposed competition commission. Now, they can complain only to the commission, which will refer cases to the tribunal. The commission is an administrative body; the tribunal is a court.

Other changes include the introduction of a warning notice for non-serious anti-competitive agreements, such as restrictions on advertising and collective refusal to supply goods; setting a market threshold to protect small businesses; and excluding mergers from two conduct rules - concerted practices and abuse of substantial market power. But no companies will be treated leniently if they have infringed any one of four key rules, including price-fixing and market-sharing.

Three major chambers, including the General Chamber of Commerce and the Chinese Manufacturers' Association, welcomed the changes, especially the deletion of the provisions for private lawsuits. But they said the threshold of HK$100 million for non-serious anti-competitive agreements was too low to offer protection for small businesses.

A government source said there would be a review of the law "a few years after its implementation" and would not rule out that the right to file private litigation could be reinstated at that time.

tanna.chong@scmp.com

scmp:One pilot missing in Xian air show crash

One pilot missing in Xian air show crash

Aviation expert blames outdated engines for fighter's failure, but another cites controls

Minnie Chan Updated on Oct 15, 2011 http://goo.gl/J1Y15

A mainland-made JH-7 fighter-bomber plunged nose-first into the ground at an air show in Xian yesterday morning. One pilot who ejected was injured, while the other was missing, state media reported.
China Central Television showed footage of the plane falling from the sky and bursting into flames when it hit the ground. The reports identified the plane as a "Flying Leopard" - also known as the JH-7 - a two-seater stalwart used by the Chinese Air Force.

Xinhua quoted air show director He Liang as saying the plane plunged into a wetland near the Pucheng Neifu Airport in Pucheng county at about 10.45am, during the first day of the show staged by the China International General Aviation Convention. One pilot managed to eject, but the other was still missing, he added. He said no one on the ground was hurt.

People two kilometres away could see heavy smoke billowing above the airport, Xinhua said, adding that the show had continued.

The Ministry of National Defence said that no People's Liberation Army aircraft took part in the air show.

Andrei Chang, chief editor of the Canadian-based Kanwa Defence Review, said this meant that the plane had only recently rolled off the production line and had not yet been delivered to the air force.

"It means the two pilots are test pilots for its manufacturer, the Xian Aircraft Industry Corp, because it was on display at the company's production base," Chang said. "I am not surprised by today's accident because the JH-7's Mk 202 engine is too old and outdated."

The JH-7, fitted with British Rolls-Royce Spey Mk 202 engines, was first seen at the 1996 Zhuhai air show.

However, Antony Wong Dong, president of the International Military Association in Macau, said the accident might have been caused by a failure of flight control systems.

"The Mk 202 is very reliable. A nosedive should not be caused by an engine problem, it is a flight control issue," Wong said.

scmp: Planners think big for Kowloon East

Planners think big for Kowloon East

New central business district's main draws include a railway system and huge office spaces, but it will need to shed its image as drab and hard to reach

Cheung Chi-fai and Joyce Ng Updated on Oct 14, 2011 http://goo.gl/pxy8k

A HK$12 billion monorail system and the rebranding of a "dull and remote" district are key elements in plans to turn Kowloon East into the city's second central business district (CBD2), double the size of Central, officials said yesterday.
The area which includes Kwun Tong, Kowloon Bay and the old Kai Tak airport site will be home to offices - including 11 government departments - spanning 5.8 million square metres of total floor space, or double the area provided in Central, Secretary for Development Carrie Lam Cheng Yuet-ngor told a news conference yesterday.

But the area will not rival Central for the most prestigious, prime office sites, officials said.

The new site will become the best choice for grade-A office space for companies that do not need a base in the traditional but overcrowded business districts like Central and Wan Chai.

"This is not Central the second. The most important business district will remain in Central," Lam said.

"From the perspective of positioning, it is essential for most financial institutions to stay in Central. For one thing, the West Wing of the government headquarters will be turned into offices of the Securities and Futures Commission, which will be a nominated tenant in the lease. That will keep many institutions close to it," she said.

In his policy address on Wednesday, Chief Executive Donald Tsang Yam-kuen said increasing the supply of office space was vital to maintain Hong Kong's competitiveness, but Central lacked room for expansion. Rising demand pushed up rents and lowered the vacancy rate last year.

Another key attraction for the new district, renamed Kowloon East, will be its nine-kilometre, emission-free monorail system with 12 stops connecting Kowloon Bay and Kwun Tong MTR Station via Kai Tak.

Officials said the rail system would cost about HK$12 billion to build. Subject to public consultation and detailed design, the system - operating at an interval of two minutes with expected daily passenger traffic of about 200,000 - could start operating by 2023.

Lam said a footbridge system, to be financed by five private developers, would link major business towers in Kowloon Bay. The government will consider other pedestrian connections there and in Kwun Tong.

Lam said rebranding was also key to the planned CBD2's success because the former industrial area had a reputation for being dull and remote.

"The first thing we have to do is to remove a road sign outside the [Eastern Harbour Tunnel] that tells motorists they are heading to Kwun Tong industrial district," she said.

Architecture, street art and green projects will also play a role in helping the area evolve into a quality business district, the secretary added.

David Tse Kin-wah, from the Royal Institution of Chartered Surveyors, said he supported the scheme, adding that the monorail was the "most crucial" element for success.

Kowloon East, he said, was likely to attract architectural firms, construction companies, bank back-up services, information technology outfits and logistics operators who favoured larger floor spaces, which would be in ample supply in the district's renovated industrial buildings.

scmp:Buyers may have unfair advantage under new HOS

Buyers may have unfair advantage under new HOS

Authority advisers say revived scheme arrangements such as a fixed premium will almost guarantee profits

Joyce Ng Updated on Oct 14, 2011 http://goo.gl/PqY48

The newly revived subsidised Home Ownership Scheme gives flat buyers advantages denied to owners under the old scheme, and this may be considered unfair, Housing Authority advisers warned yesterday.
Their comments came after Chief Executive Donald Tsang Yam-kuen announced in his policy address on Wednesday that the HOS, suspended in 2002, would be revived with changes in pricing and resales practices. The Housing Authority will build an annual average of 5,000 flats between 2016 and 2020 for households earning no more than HK$30,000 a month.

Under the old scheme, a flat owner had to pay a premium to the authority when reselling it on the private market. This was deemed necessary because the authority had sold it to the buyer at a steep discount. If the discount was 30 per cent, for example, the gain in market price had to be shared with the authority, which would be paid 30 per cent of that gain.

Under the new arrangement, the premium - the difference between market price and discounted purchase price - would be fixed at the time of purchase. The flats would be priced with reference to applicants' mortgage repayment ability, suggested as a 40 per cent mortgage-toincome ratio. If the market goes up by the time the flat is resold, most of the rise in market price can be recouped after deducting the fixed premium.

Wong Sing-chi, a Democrat and a member of the authority's subsidised housing committee, said the new scheme almost guaranteed that flat buyers, the lucky few, would make a profit. "This will create new social conflict," he said. "The old scheme owners would find it unfair."

Wong suggested giving a resale discount to the old scheme owners.

A caller to a radio programme sounded the same warning. "The new scheme mixes people's investment needs and housing needs," he said. "It's a Mark Six for the public."

Housing secretary Eva Cheng said that while she had taken note of these concerns, the scheme could help people to buy a home on the private market. "We understand there are views that the new scheme would offer 'double subsidies'," she said.

"The new principle of the future HOS is to facilitate upward mobility. We won't forget to make it balanced, so that the arrangement is fair to existing HOS homeowners and acceptable to society."

scmp: Tsang relaunches HOS in policy addres

Tsang relaunches HOS in policy address

Lai Ying-kit Updated on Oct 12, 2011 http://goo.gl/1yIk1

Chief Executive Donald Tsang Yam-kuen announced in his final policy address on Wednesday the relauch of the Home Ownership Scheme shelved nine years ago.
The subsidised housing scheme is designed to help aspiring homebuyers who have been priced out of the residential property market.

Tsang said the resumed HOS would involve construction of 17,000 flats over four years from 2016 to help families who earn less than HK$30,000 a month buy homes. An amount of between 2,500 and 6,500 flats would be made available each year and the government's long-term target was to set the amount at around 5,000 flats a year.

Under the HOS, the government builds small-and-medium flats and sells to buyers at subsidised prices. The scheme was shelved in 2002 as part of efforts to rejuvenate the then-battered property market.

Its resumption comes amid a rising property market in Hong Kong. Property prices have risen by about 12 per cent this year – surpassing records in 1997 – because of a small supply of flats, low interest rates and abundant liquidity.

“We share the public's concern about rising property prices and the difficulty in buying affordable small and medium flats. The pressure is most felt by families whose household income exceeds the limits for public rental housing application but who may not be able to afford owning a flat,” he said.

“In response to the aspirations of low and middle-income families to buy their own homes, the government now puts forward a new policy for the resumption of the HOS,” Tsang added.

He said the first batch of new HOS flats was expected to be ready for pre-sale in 2014 or 2015. They would be between 400 and 500 square feet in size and be priced at around HK$1.5 million to HK$2 million.

He said flat prices under the resumed scheme would be set with reference to the mortgage repayment ability of eligible households, rather than to the market price of a comparable flat in the private market in the previous scheme.

The flats would be restricted from re-sale to open market for the first five-years after purchase – the same period as previous subsidised housing schemes.

He said the Housing Department had started preliminary planning and investigations for sites identified in Sha Tin, Tsuen Wan and Yuen Long, and would commence similar work for other sites shortly to start the first phase of the project.

Tsang said the actual number of flats to be built or put up for sale each year would be flexible depend on demand at the time.

“When there are enough reasonably priced small and medium flats in the private market, we will adjust the number of subsidised flats to be built and sold for the year. We may even stop building and selling such flats,” he said.

This was Tsang's seventh and final policy address since he took office in 2007. He singled out housing as the first policy area to deal with in the blueprint. The policy address was made at the first Legislative Council meeting held in the new government headquarters in Tamar.

Tsang also pledged to increase the land supply, enhance the existing urban renewal scheme and provide 15,000 new public housing rental units each year in a bid to address recent public concerns over housing.

Tsang said he had set a target of providing 40,000 residential units of various types a year on average. To achieve the target, he proposed plans to look out for new lands from industrial sites, green belt areas in the New Territories, and 150 hectares of agricultural land in North District and Yuen Long, now mainly used for industrial purposes or temporary storage, or deserted.

"Even when demand for land declines, land development will continue. The newly-developed land will be kept in the government's land reserve and made available when appropriate. By doing so, we will be able to supply sufficient land for more than 40,000 units each year when demand rises,” he said.