[SCMP Column] China great north-south divide

December 14, 2020
The north’s challenges are probably also not helped by Xi Jinping’s recently elaborated “dual circulation” strategy which is focused on new, modern sectors, and appears likely to bring greatest benefits to the Greater Bay Area and the Yangze River Delta - which Hong Kong appears well-laced to take advantage of.
As I was pouring over the political challenges arising from these yawning regional differences, I was reminded that China is not alone in wrestling with politically and socially divisive mismatches between distant economic regions. In the US, California, Texas and New York alone account for almost a third of the country’s GDP, with much of the rest accounted for by the eastern states north from Florida to Illinois. Small wonder that Biden is fretting over the poorer, rural heartland that remains resolutely red in support of Trump and the Republicans. [ Read More ]

[SCMP Column] Crisis of financial illiteracy

December 12, 2020
For Anne Richards at Fidelity International, such findings provide a sobering indictment of our education systems. She asks where on the curriculum even in our advanced economies is “real world money maths”, alongside the calculus, trigonometry and algebra that people like me juggled with at school, but then never used again (despite a career in financial journalism)? [ Read More ]

[SCMP Column] The language of 2020

November 30, 2020
“From the sobering discourse of pandemics and politics, to the light-hearted neologisms that have emerged in times of darkness, language is the common thread connecting these shared experiences across the world,” it closed, as the English language developed rapidly to keep pace with the political upheaval and societal tensions that defined the year. [ Read More ]

[SCMP Column] Big pharma and COVID

November 28, 2020
Even before clinical trials have ended, news of the imminent readiness of vaccines that are likely to bring the Covid-19 pandemic under control has triggered celebrations, sighs of relief and yet another excuse for lifting international equity markets. [ Read More ]

[SCMP Column] Virtual purgatory

November 23, 2020
I share his enthusiasm for the power of interruption as “conversational hygiene”: “It forces you to ensure the seaworthiness of a comment before putting it out. It forces you to think at pace,” he argues. How many of your zooms have been queues of monologues rather than conversations? Donald Trump may in his presidential debates have debased the value of interruption, as he has debased so many things, but its over-riding merit in providing “conversational hygiene” remains strong. [ Read More ]

[SCMP Column] RCEP and the return of multilateralism

November 21, 2020
If I have one clear regret amid this week of positive developments, it is that China has only feebly taken advantage of the four-year window of opportunity created by Trump’s eccentric withdrawal from the multilateral stage to give substance to its continuous lip-service commitments to multilateralism. [ Read More ]

[SCMP Column] China fisheries challenge

November 16, 2020
“To meet the seafood gap, China will likely attempt to increase domestic freshwater and offshore aquaculture, increase seafood imports, possibly expand the distant water fishing industry, and invest in seafood production abroad,” Crona’s report says. None of this will happen without international controversy. And none will happen without creating massive environmental challenges, both inside China, and internationally.
[ Read More ]

[SCMP Column] Measuring riches

November 14, 2020
Whether you agree or not with the involvement of the Chinese government in the Chinese economy, the roles of state enterprises, heavy investment in infrastructure or the extensive use of subsidies, the ICP bean counters illustrate vividly China’s global leadership here. The report says China accounted in 2017 for almost 15 per cent ($3.5tr) of the world’s government spending, with the US at 11 per cent and Japan at less than 6 per cent. [ Read More ]

[SCMP Column] Lucky Republicans

November 09, 2020
Trump may have come to grief this week, but the grievances and paranoias that have forged and maintained his core remain as strong – and as dangerous – as ever. In theory, Trump’s defeat provides what many would regard as a profoundly welcome opportunity to purge such a venal and divisive spirit from the Republican party, but whether this will happen is far from clear. With Trump loyalists like Tom Cruz, Tom Cotton and Josh Hawley already flagging interest in a presidential run in 2014 – not to mention Ivanka Trump and Mike Pompeo – the Trump legacy seems to have a lot of life left in it yet – and great potential still to traumatise a Republican party in the next four years. [ Read More ]

[SCMP Column] Single's Day lessons for retail

November 07, 2020
This kind of volcanic growth has been par for Alibaba’s e-commerce course since it first launched November 11 as “Singles’ Day” back in 2009. After a 26 per cent jump in the “gross merchandise value” of sales last year – to RMB268.4bn, or around US$38bn – after a 27 per cent jump in 2018, we could be forgiven for expecting more modest expectations in this massively-disrupted pandemic year. [ Read More ]

[SCMP Column] Being disaster-prepared

November 02, 2020
In September, the WHO’s Global Pandemic Monitoring Board’s “A World in Disorder” report provided a stark choice: pay the brutal medical and financial price of pandemics like Covid-19 that will cost the global economy $20tr or more, or instead spend about $39bn a year investing in pandemic preparedness – about $5 per person per year. The case for international cooperation on disaster preparedness could not be clearer, and what is true for the Covid pandemic is similarly true for the rising costs of climate change, and for the thousands of routine natural disasters this triggers year by year. [ Read More ]

[SCMP Column] Vietnamese trade challenge

October 31, 2020
Latest in this unending queue of allegations of unfair trade is the threat against Vietnam to slap tariffs on its exports for “unfair currency practices” – for the cognoscenti a “Section 301 investigation”. Robert Lighthizer, Trump’s trade Rottweiler-in-chief, has complained that the recent meteoric rise in Vietnam’s goods trade surplus with the US could not have been possible without manipulating its currency to help its exporters. For good measure Trump has lambasted Vietnam as “almost the single worst abuser of everybody.”  [ Read More ]

[SCMP Column] Trump's victim mentality

October 31, 2020
Trump has lambasted Vietnam as “almost the single worst abuser of everybody.”  [ Read More ]

[SCMP Column] Aviation leads the recessions

October 26, 2020
As the pandemic recession wreaks havoc through the global aviation, travel and tourism industries, with Cathay Pacific last week joining a long list of floundering airlines worldwide, this adage can never have been more chillingly true. [ Read More ]

[SCMP Column] Pensions in crisis

October 24, 2020
As companies go bankrupt, or as people lose jobs, so the pensions linked with them will flounder. Even those still in work, most with defined contribution schemes that are vulnerable to stock market performance, are likely to see pension savings shrink. As pension expert Amin Rajan wrote in the Financial Times earlier this year: “Risk has been transferred from those who were unable to manage it, to those who do not understand it.” [ Read More ]

[SCMP Column] Hong Kong role in US-China conflicts

October 12, 2020
In the midst of the terrible US-China economic conflict, and the US unilateralism that has put in jeopardy the world’s institutions built around multilateral cooperation, there can be no more important role for Hong Kong than to remind both China and the US that we should stand by, and strengthen the multilateral institutions and processes that have served us well over the past 70 years. This is a valuable role that even a minnow can play. [ Read More ]

[SCMP Column] Steel in crisis 2

October 10, 2020
The US Dept of Commerce says that in this year’s second quarter, the US steel industry lost a net $459m. In Japan, the country’s annual production has fallen below 80m tonnes for the first time in 52 years. Just last week, the steelworkers’ union IndustriAll Europe called a European Steel Action Day to protect the 300,000 jobs in Europe’s faltering steel sector. European steel production fell 40 per cent in the second quarter as demand in the all-important automotive industry collapsed, with 45 per cent of the steel workforce facing temporary layoffs and reduced working. [ Read More ]

[SCMP Column] Auditing tariff war

October 05, 2020
In brief, whatever the merit of concerns about China’s trade and economic practices, Trump’s tariff war uselessly and expensively pointed the guns in the wrong direction. America’s trade war has been dreadful, and has proven impossible to win. A strategic rethink is needed, but who will be the ones able to provide it? [ Read More ]

[SCMP Column] Trusted travel

October 03, 2020
Creating a robust set of protocols need not be rocket science. The aviation industry has had protocols in place for many months to protect travellers. So too has the International Maritime Organisation agreed protocols enabling the world’s 1.6m seafarers who are starting, or reaching the end of, their contracts to travel securely between their home countries and the ships they are boarding or leaving.
[ Read More ]

[SCMP Column] Science and lies

September 28, 2020
Trump would be indifferent not just because he probably does not drink tea, but because he lacks interest in the “permanence” that Prof Hairer sees in mathematical research and discovery: “If you prove something, then it’s really universal truth,” he said on receiving his prize. [ Read More ]

[SCMP Column] One trillion trees

September 26, 2020
We need to remember that not all forests are born equal. Indonesia may occupy just 1 per cent of the world’s forested area, but accounts for 10 per cent of all plant species, 12 per cent of all mammal species and 17 per cent of bird species. And the taiga, or boreal forests, that hang on for grim life across millions of square miles of Siberia, Greenland, Canada and Alaska – accounting for about 20 per cent of all forests – soak up one third as much carbon as tropical forests, and less than one sixth of temperate forests. [ Read More ]

[SCMP Column] Pandemic push for electric vehicles

September 21, 2020
While there were just 17,000 electric vehicles on the world’s roads in 2010, the International Energy Agency (IEA) reports that there are today about 7.2m. They forecast this to grow to between 140m and 250m by 2030. Not only will there by then be about 430 electric car models to choose from, but production costs will be down, and perhaps most important, improvements in battery technologies will transform the business. [ Read More ]

[SCMP Column] The cost of war

September 14, 2020
I recall former President Jimmy Carter noting last year that the US was “the most warlike nation in the history of the world… a country that had been at peace for only 16 of its 243 years”, and echoing Martin Luther King, who pointed out, in 1967 during the Vietnam War, that “the United States remains the world’s greatest purveyor of violence.” [ Read More ]

[SCMP Column] Reinventing tourism

September 12, 2020
The UN’s World Tourism Organisation is now forecasting a global fall of 60-80 per cent for 2020. They say the global total of international tourists will fall by 850m to 1.2bn, with revenues down $910bn to $1.2tr, and tourism jobs down 100m to 120m. [ Read More ]

[SCMP Column] Dangerous seeds

September 12, 2020
But in reality, there is probably good cause to worry about the collateral dangers of yet another e-Commerce ruse to amplify sales numbers and persuade advertisers to throw more good money at the growing community of “influencers”, whether in China or elsewhere. The global problem of pesky invasive species disrupting ecosystems cannot be underestimated. As a fascinating study by Sarah Hayden Reichard from the University of Washington in Seattle and Peter White at the University of California reported, “invasive plants, animals and fungi are second only to habitat loss and degradation in endangering native plant species”. They reported that the estimated annual cost amounted to more than $35bn. [ Read More ]

[SCMP Column] Wooing Europe

September 07, 2020
Over the two years since my “ghosted” memo, various Chinese actions have made China’s challenge only harder. Whether justified or not, there is widespread western concern about China’s early, fumbled management of the Covid-19 outbreak which enabled the global pandemic to take hold. There is resentment at China’s apparent early recovery from pandemic lockdowns while so many economies are still suffering catastrophic reversals. A sense of triumphalism around the development of a “Health Silk Road” to sell PPE and other medical equipment to countries still struggling with the pandemic has also not helped.
[ Read More ]

[SCMP Column] Reinventing Railways

September 05, 2020
The high-speed cargo rail network is growing like topsy for a range of fascinating reasons. It of course helps that China Railways is spending over $114bn a year on new railway lines and rolling stock. China’s unglamorous engineers take their infrastructure uniquely seriously – not just roads, railways, ports and power plants, but also wind, solar and hydrogen power and 5G telecoms.
[ Read More ]

[SCMP Column] Nuts and butterfly effects

August 31, 2020
Producers have for a decade or more been predicting strong growth in global demand for nuts and nut-based products, partly because rising affluence worldwide seems to equate with a lot more nutty snacking, and partly because of the broadening shift away from meats and dairy products and towards plant-based diets. Their nutritional value is increasingly valued, even though too many nuts can apparently be quite harmful to the kidneys. Particularly popular have been pistachios: bemusingly, researchers have found that the time it takes to break open infuriatingly reluctant pistachio shells, combined with the sight of a growing mountain of shells, results in pistachio-eaters consuming almost half as many calories as consumers of other kinds of nut. [ Read More ]

[SCMP Column] Measuring what matters

August 29, 2020
Back since the Asian Financial Crisis of 1998, Hong Kong citizens have by these measures taken a terrible beating, aggravated by inequality as deep as any community in the world. Incomes have stagnated. Employment has for many become deeply insecure. Confidence of our youngsters in the education system has been badly undermined. The sense of personal safety has been undermined. Trust in the government has been hammered. Perceived freedoms have been dramatically eroded. [ Read More ]

[SCMP Column] Weird weather weird politics

August 24, 2020
This would all be sad enough if it were a problem confined to American shores. But it is not. As with the pandemic and the climate challenge, the political battle now being fought in the US is of global importance and has massive consequences for us all. It is as important to contain the Trumpean virus as it is to contain the coronavirus. A heavy responsibility sits on the shoulders of American voters. [ Read More ]

[SCMP Column] Woman Leaders and the pandemic

August 22, 2020
With women leading just 19 of the 194 countries studied by Garikipati, it will clearly be some time before we get enough women leaders – and women in positions of power in more general terms – to build an exact science around the difference female leadership makes. Here in Hong Kong we have a work in progress: while Carrie Lam has on balance managed the pandemic challenge with reasonable skill, she has inspired little confidence in almost any other area of leadership. She in no way stands near Angela Merkel or Jacinda Ardern as a source of confidence. She is perhaps more comparable with Myanmar’s Aung San Suu Kyi. But that must surely be a story for another day. [ Read More ]

[SCMP Column] Eight Pandemic Lessons

August 17, 2020
If this is the inevitable minimum economic price of a pandemic, then the question surely arises: why not massively divert funding to pre-emption of future pandemics, and fast effective response systems? Massive investment – perhaps in the trillions – should be channelled into health care systems, in ensuring adequate stockpiles of equipment held in anticipation of future need, and improved salaries for “essential workers”. Many countries have food stockpiles to bolster food security. Why not the same for health security? The World Bank says total healthcare spending worldwide in 2017 amounted to $7.8 trillion. Doubling this sum could be well justified if it pre-empts the crippling trillions lost economically from lockdowns and international economic dislocation. [ Read More ]

[SCMP Column] New Zealand's China Vulnerability

August 15, 2020
The task of government should be to encourage diversification of exports and to fight relentlessly to open markets and keep them open. That is why New Zealand is such a strong advocate for multilateral and plurilateral trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and for Free Trade Agreements (eight are in force, and a further nine under negotiation). It sees its job as “giving exporters more options to sell to more markets.” [ Read More ]

[SCMP Column] Dual Circulation

August 08, 2020
The radical success of that opening up policy, lifting so many hundreds of millions in China out of poverty, means that Xi Jinping’s team remain fully committed to extensive engagement in the global economy. So don’t expect decoupling to be total, or to come quickly. And despite Washington’s belligerent positioning, I recall Yukon Huang and Jeremy Smith from the Carnegie Endowment writing here in the SCMP in June: “US dependence on Asian manufacturing is both deeply rooted and [has been] remarkably stable over time.” [ Read More ]

[SCMP Column] Tyranny's shades of grey

July 27, 2020
The report concludes: “There is little evidence to support the idea that the CCP is losing legitimacy in the eyes of its people… By 2016, the Chinese government was more popular than at any point during the previous two decades… As such, there was no real sign of burgeoning discontent among China’s main demographic groups, casting doubt on the idea that the country was facing a crisis of political legitimacy.” [ Read More ]

[SCMP Column] The Unlucky Class of 2020

July 25, 2020
The Class of 2020 has by most standards and in most places in the world, faced a perfect storm of challenges. In Hong Kong, the months of street violence through the second half of 2019, and the onslaught of the Covid-19 pandemic from February, have presented gigantic challenges for anyone seriously trying to study. The suspension of classes and enforced self-study across Zoom and other virtual platforms added severe practical challenges. [ Read More ]

[SCMP Column] Patterns of bad behaviour

July 20, 2020
I believe there is still time to turn the facts – the causes and effects – the right way up. Like Kissinger said at the National Committee on US China Relations last November: “Many aspects of the evolution of China are challenging to the US, [but] a permanent conflict between them could not be won and would end in a catastrophic outcome… They have to get used to the fact that they have that kind of rivalry.” [ Read More ]

[SCMP Column] The right to make mistakes

July 18, 2020
That freedom should sit not just with me, or with Hong Kong’s courageous street demonstrators, but with our government officials and our political leaders. The crux is in the imperative to protect “good-faith disagreement”. My present concern is that much has been said and done in recent weeks that is clearly in bad faith.
[ Read More ]

[SCMP Column] The WTO's new boss

July 13, 2020
As Brazilian diplomat Roberto Azevedo steps down prematurely next month with virtually no trade liberalising achievements to his name during a six year tenure, the battle is now on to appoint a successor. And the stakes could not be higher. After six years of being throttled by a skeptical United States, culminating last December in the strangulation of the WTO’s dispute settlement process, the time has come for the WTO to do or die. [ Read More ]

[SCMP Column] Gap years and left-behind countries

July 11, 2020
But it still shocks me to see how far the region has lagged the countries here in east Asia. While between 1970 and 2019 the World Bank says China lifted its GDP 156-fold from US$92bn to $14,343bn, and South Korea 182-fold from $9bn to $1.64tr, Pakistan’s GDP has grown from $10.8bn to just $278bn – a 26-fold increase. That is even worse than Bangladesh (up 34-fold to $303bn) and India (up 46-fold to $2.87tr), and sits well below Nigeria (up 37-fold to $448bn) and Brazil (up 44-fold to $1.84tr). [ Read More ]

[SCMP Column] Migration all over again

July 06, 2020
Add the news that the British Government, after decades of procrastination, and provoked by Beijing’s decision to impose a National Security Law on Hong Kong, is preparing to offer full British passports to holders of the British National (Overseas) passport, and the potential is high for emigration enquiries to leap off the charts. About 300,000 Hong Kong people hold the BNO, and about 2.9m more are thought to be eligible. [ Read More ]

[SCMP Column] Beijing's security's bill

July 04, 2020
What CBS did not record is that once the PLA troops had trundled nocturnally into their barracks, vacated just hours earlier by British troops, they were almost never seen again. That remains as true today as ever. The muscular exertion of national power predicted by so many commentators never happened. [ Read More ]

[SCMP Column] Online bankruptcy settlement

June 29, 2020
Which strikes me as abysmally inept timing, since it is exactly at a time like now that Chapter 11-type arrangements are critically needed. Most of the companies that will be filing for bankruptcy in coming months will be undeserving victims of the pandemic lockdown. Drab queues of expensive and protracted litigated settlements seem wholly inappropriate when no one party is any more guilty or culpable than another as the pandemic has frozen in place businesses and business partners alike. [ Read More ]

[SCMP Column] A clumsy EU courtship

June 27, 2020
Some Europeans have been encouraged by recent hints from Beijing that some real practical liberalisations are back on the agenda after eight years of retrenchment. As Kevin Rudd and Daniel Rosen noted in the SCMP this week, policies are being discussed to improve the “market-based allocation of factors of production”, and emphasise “employment first”. They say this new reform agenda is encouraging competition, giving better protection to private firms, improving intellectual property protection, strengthening market pricing, formalising protection of property rights and “restricting administrative interference in market activities”. Only time will tell. [ Read More ]

[SCMP Column] Carbon taxes

June 22, 2020
According to the widely used “dynamic integrated model of the climate and economy” (DICE) created by Nobel economist William D Nordhaus at Yale, the price currently needed to squeeze us towards zero carbon in 2050 is about $31. Other models argue that even now we need to price at $50 or more. At present, just six economies have reached this level – France, Norway, Finland, Liechtenstein, Switzerland and Sweden. [ Read More ]

[SCMP Column] Race violence and the collapse of trust

June 20, 2020
The explosion anger and violence in the US over racial abuse and persistent police discrimination has had the peculiar effect of shifting focus away from China and its authoritarian rule to the US and its shockingly unresolved history of slavery. As a distant observer of the US, it is a shock to see such glaringly open wounds 200 years after the abolition of the slave trade, and 155 years after the total abolition of slavery? Surely this is a sobering reminder of how slowly time heals if proper remedies are not put quickly into effect. It is also a reminder of why Beijing has made such slow progress in winning over the hearts and minds of Hong Kong’s feisty population since the transfer of sovereignty 23 years ago. [ Read More ]

[SCMP Column] Aviation in crisis

June 15, 2020
We need soberly to remember that for most of its history, the aviation industry has been a perilous industry. The Financial Times’ Miles Johnson reminded last week that from 1960 to 2000 that aggregate profits of the US airline industry “would have been enough to pay for the delivery of just two 747 jumbo jets”. [ Read More ]

[SCMP Column] Financial Services Challengers to Hong Kong

June 13, 2020
The reality is that China’s (and the world’s) reliance on Hong Kong as the indispensable conduit for financial services linking the Mainland with global markets remains as significant today as it was back in 1995 when Louis Kraar so erroneously predicted that “it’s over” for Hong Kong.
[ Read More ]

[SCMP Column] US Bluster

June 08, 2020
US efforts to recuse Hong Kong’s status as an independent trade and customs territory would also be problematic, and without question would be fiercely challenged by Hong Kong’s administration. Hong Kong has in its own right been a member of the World Trade Organisation from its formation, and has protected this independent WTO status as fiercely as it has its local autonomies under the one country two systems” arrangements. So it is neither for the US, nor China for that matter, to revoke this independent status. [ Read More ]

[SCMP Column] Multilateralism vs bias and fake news

June 06, 2020
Just look at his unremitting attack against postal voting, where he claims without evidence that there is massive postal voting fraud, and that postal voters don’t vote for Republican Party candidates.
The US claim that China wilfully misled the world about Covid-19 is also false, but who wants to plough through a long and chronologically careful tracing of events from December last year, when a simple “Blame China” narrative has such strong political appeal? A simple untruth has more political power than a complex truth. [ Read More ]

[SCMP Column] Security and Ontology

June 01, 2020
A significant proportion of Hong Kong’s population do not challenge Beijing’s demand for locally enforcible national security laws, in particular after so many peoples’ security – and livelihoods – has been put in peril by foreign-supported street anarchy over the past year. Most countries – including the US and the UK – have rigorously-enforced security laws, and the Hong Kong administration can be criticised for having failed in the 23 years since 1997 to deliver its Basic Law commitment to introduce such a law. [ Read More ]

[SCMP Column] Covid Meat Crisis

May 30, 2020
While the Covid-19 pandemic may have been linked to a squalid wild animal food market in Wuhan in central China, we should not forget that the 1918 Spanish flu pandemic is thought to have originated in pig farms. Modern intensive farming is less a victim of the present global pandemic than the likely cause of future pandemics. [ Read More ]

[SCMP Column] China and soft power

May 25, 2020
Despite the indisputable benefits gifted through China’s Belt and Road infrastructure investment, through the Asian Infrastructure Investment Bank, and through its globally dominant role as a significant trading partner, Beijing is still in the nursery slops of winning “soft power”. And with every positive initiative, it steps on its own foot – with brutish South China Sea diplomacy, toughening positions on Taiwan, angst-creating muscularity in Hong Kong that is raising questions about the integrity of the “One Country, Two Systems” commitment, and trade “punishments” against countries like Australia and South Korea.
[ Read More ]

[SCMP Column] APEC and trusted international travel

May 23, 2020
Take the TDC’s Fashion Week, which is planned for July and last year attracted 14,000 participants. Or the Hong Kong Rugby Sevens, which have been postponed to October, and last year attracted 40,000 spectators a day. Or the Singapore Grand Prix in September. With almost all airlines grounded worldwide at present, with no plans for a return to the skies; with a global patchwork of lockdown rules which would impose on any traveller four sterilised weeks of quarantine; and with no agreed rules for deciding whether travellers from particular countries can be regarded as “safe”, the blunt reality is that these events stand no chance whatever of going ahead. Even Japan’s postponed Olympics, now planned for July 2021, may be a stretch. [ Read More ]

[SCMP Column] The peoples vaccine

May 18, 2020
While the US has been the most brazen, it has not been alone. In an equally brazen effort at least to win bragging rights to be the first to release a vaccine, the Chinese government has financed massive trials with nine potential vaccines currently in development, 1,000 scientists leading the charge, and securing help from the Chinese military. This counterproductive rivalry has triggered unsubstantiated US accusations that Chinese spies are trying to steal secrets in their search for a Covid-19 vaccine. [ Read More ]

[SCMP Column] Pernicious protection

May 16, 2020
Just when tariffs internationally should be brought down to reduce the price of – and access to – critical imports – and not least to enable China to fulfil its challenging obligation to import an extra $200bn of US goods between now and the end of 2021 – the likelihood is that the opposite will happen. As unemployment in the US heads towards 20 per cent, and the economy is heading for double-digit contraction in 2020, surely high tariffs should be an early target to bring price relief to US families. [ Read More ]

[SCMP Column] Perfectly predictable pandemics

May 11, 2020
While it is easy to understand why leaders like Donald Trump, facing presidential elections in six months time, would prefer to point fingers of blame for the deepening pandemic crisis at home at dark foreign forces, it is troubling to witness the implicit racism that the pandemic has stirred. [ Read More ]

[SCMP Column] Tourism interrupted

May 09, 2020
What does that say in Hong Kong for the tens of thousands of jobs that have for decades been driven not just directly by aviation and the airport, but by our massive trade fair and exhibition businesses, by our forlornly abandoned Ocean Park and Disney, by hotels, luxury retail outlets built around Mainland tourism, and of course our thousands of bars and restaurants. [ Read More ]

[SCMP Column] Covid through a Migration Lens

May 04, 2020
Suddenly without incomes, they can no longer afford to stay where they are. Even if they have savings  an air ticket, lockdowns and quarantines mean they are unable to fly home. Unable to buy even subsistence needs in the migrant economy where they are trapped, they have the additional stress of families back home unable to receive the remittances that many entirely rely on. [ Read More ]

[SCMP Column] Covid andCommodities

May 02, 2020
Perhaps the key lesson from the pandemic for the world’s commodity markets, and the world economy as a whole, is that we are all integrally interconnected, and have been so for the better part of the past two centuries. The challenges we face are best tackled together, cooperatively, whether they concern a pandemic, climate change or more routine international economic challenges. Let’s hope our leaders have the common sense to recognise this before even more harm is inflicted than already visited on us by COVID-19. [ Read More ]

[SCMP Column] Education sector pandemic

April 27, 2020
The Covid-19 pandemic has rocked the foundations of this critical sector of our economies, at the same time creating a crisis for millions of millennials who see their future livelihoods in jeopardy. As schools and universities are shut, with e-learning schedules being sticky-plastered into place at speed, 18 year olds focused on the big leap into university education can’t sit for exams, and are in a quandary about how they will qualify for university places.
[ Read More ]

[SCMP Column] Getting biblical

April 25, 2020
Plague number five was livestock, as we today watch hundreds of millions of pigs culled in China, victims of African swine flu, and billions of farmed shrimp succumbing to Decapod iridescent virus 1 (Div1 for short) across 11 provinces in China, and the almost annual culls of chickens downed by Avian flu. There is not much to learn here from Exodus, especially when you throw in the fungi, bacteria and viruses cutting a swathe through Europe’s olive orchards, Cavendish bananas and the collapse of honey bee populations. [ Read More ]

[SCMP Column] Time for Cooperation

April 20, 2020
So far, that high level of scientific cooperation has been notably absent at a political level, and if we are quickly to bring Covid19 under control and save thousands of unnecessary deaths, that has to change – fast.
Leaders can feel angry and frustrated that China’s political leaders slowed the release of information that would have allowed early interventions to prevent the escape of the virus out of China. They can also be dismayed at the procrastination of the World Health Organisation over guidance that might have curbed its spread. [ Read More ]

[SCMP Column] Aviation Recession

April 18, 2020
Of its 200 aircraft, over half are grounded. Chek Lap Kok has become one of Hong Kong’s most expensive aircraft parking lots. Of Cathay Pacific’s 26,000 staff, most are currently taking unpaid leave.
Similar stories are being reported by airlines worldwide. Around 40 airlines have grounded their entire fleets. Approximately half of the world’s 26,000 commercial aircraft have been mothballed. In Germany, Lufthansa has fully decommissioned 40 of its aircraft, wound up its low-cost carrier Germanwings, and is restructuring two other subsidiaries, Austrian Airlines and Brussels Airlines. [ Read More ]

[SCMP Column] No news is good news

April 14, 2020
As the global coronavirus pandemic forces us to abandon today’s routinely hyperactive daily lives, it is perhaps timely to let our minds drift back to quieter, smaller times when the option to leap onto planes across the world, or to have intimate conversations with Alexa, did not exist, and where “virtual” lives only emerged at night in our dreams. [ Read More ]

[SCMP Column] Falling trade, saving jobs

April 11, 2020
We are only now beginning to sense the scale of the economic harm necessarily inflicted in the fight against the spread of the virus. That is mainly because this harm is still not clearly perceptible and has yet to be captured by any of the data gathered by our statisticians. The disastrous domino effects of domestic lockdowns and international self-isolation are now beginning to be seen, but not yet felt. [ Read More ]

[SCMP Column] Pandemic reset

April 06, 2020
A more profound stress is emerging over how China, Europe or the US have tackled the coronavirus. China is keen to demonstrate to the world that its top-down state-managed assault on the virus provides a superior model not just for getting on top of the virus, but also for managing the economy. Beijing can make a good case: around Hubei which bore the brunt of the coronavirus, the six surrounding provinces, all of them the size of medium-sized European economies, have escaped with few Covid cases, and a tiny handful of mortalities.
[ Read More ]

[SCMP Column] Covid Tambora and cholera

April 04, 2020
These must surely have been relieving bits of news to workers in the Wuhan wet market where the first pandemic victims appeared, no matter how unsavoury the culinary habits they encourage. Welcome too that they upended the unseemly accusations by Chinese and American officials alike that military researchers had either deliberately or accidently unleashed the virus on the world. [ Read More ]

[SCMP Column] The coronavirus tech revolution

March 30, 2020
Just as the SARS outbreak spawned China’s E-Commerce revolution, so the dreadful COVID-19 epidemic is in the process of incubating a new and even more radical revolution, turbocharged by the imminent rollout of 5G services. While we are all fervently hoping that the epidemic will quickly subside without too high a human cost, my bet is that much of the tech revolution developed to enable us to continue functioning safely during the crisis will remain once it has passed. It will benefit the world, but nowhere more than China. [ Read More ]

[SCMP Column] Predicting the future

March 28, 2020
It seems so obvious to say that the future is not – and never will be – perfectly knowable, or even predictably manageable, but is instead the product of complex contest between numerous forces that are often obscure and unpredictable. [ Read More ]

[SCMP Column] Pandemic Decoupling

March 23, 2020
So the globalised economy is not so much being decoupled as being reconfigured. As China’s domestic consumer market has grown on the back of rising wages and enhanced spending power, so more of the supply chain is being “domesticated”. Supply chains are simplifying and becoming shorter to make them less fragile and vulnerable. They are also likely to become more regional – though an audit of which countries worldwide today have China as their main export market, and their main source of inputs, makes it unclear just how large that China-dominated region will be. [ Read More ]

[SCMP Column] Jobs and bankruptcies

March 21, 2020
In an economy with no unemployment safety net, and pension provisions that provide negligible security in old age, these are numbers that should concentrate the government’s mind. An early recovery in Hong Kong is going to depend on substantial government support. For cash-strapped companies, low-interest loans miss the point, and US Treasury Secretary Steve Mnuchin may be right in predicting US unemployment up to 20 per cent, and calling for $1tr economic support package, perhaps including cash handouts to families in need. [ Read More ]

[SCMP Column] Real world impacts of the pandemic

March 16, 2020
The International Air Travel Association’s chief economist Brian Pearce estimated even before Friday’s grave downward lurch that the aviation industry would likely lose $113bn this year – with $58bn of this concentrated in the Asia-Pacific. Alongside IATA, the World Travel and Tourism Council says 50m jobs are in jeopardy.

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[SCMP Column] Storm in a WIPO teacup

March 14, 2020
It is true that there could be no better way of subverting and capturing quiet control of the global economy than by capturing its main regulatory bodies, and for sure there are paranoid souls who believe this is Beijing’s intent. But the evidence of Beijing’s engagement over the past decades contradicts this. Beijing’s officials have learned well the west’s rules, and have reinforced their application, even in new and sensitive areas like telecoms and technology standards.

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[SCMP Column] India versus China

March 09, 2020
India is also uncomfortably closer to China in terms of human rights than Trump and his administration would like to acknowledge. While China’s draconian policies against the Muslim Uighur minority in Xinjiang have rightly attracted international criticism, there are awkward similarities with Mr Modi’s controversial Citizenship Amendment Bill, which if enacted would render stateless many of India’s 200m Muslims. [ Read More ]

[SCMP Column] Decoupling and other myths

March 07, 2020
It might indeed be true that the current US administration is exerting pressure on US multinationals to bring manufacturing home, to “make America great again”, and that paranoid forces in the US security and defence community see spies in every Chinese company. Politically in the US, China is indeed being demonised, and globalisation is used as a dirty word. But the data suggest less change than the media imply. [ Read More ]

[SCMP Column] Hong Kong job security

March 02, 2020
Since 1998, most Hong Kong people have churned with little dignity through four, perhaps five, job changes. With weak social safety nets, capturing a new job involved swallowing a lower salary. The result, 22 years later, is that for many Hong Kong families, salaries are barely changed from 1998, and confidence is poor that the job will continue to provide future security.
As families have struggled from pay-cheque to pay-cheque, savings have been a luxury most could not afford, which means that as more and more approach retirement and old age, the resources to provide security in later life are simply not in place. Job insecurity over decades has generated endemic insecurities for thousands of Hong Kong families. [ Read More ]

[SCMP Column] ABAC and flygskam

February 29, 2020
As it warns that British families are going to need to live without air travel (instead travelling more by train), without fossil-fuel powered cars (using bikes and public transport) and without meat from methane-belching cows, it raises acutely awkward questions for places like Hong Kong. Apart from the Mainland and Macau, there is nowhere we can travel except by air (and surely many families would go slowly stir-crazy without the chance to fly out once or twice a year). As the key business headquarter hub for Asia (even after the recent horrors of street violence and Covid-19) a severe clamp-down on air travel would be unacceptably punishing to some of the main pillars of the economy. [ Read More ]

[SCMP Column] Australia's climate schizophrenia

February 17, 2020
How can any coherent climate position be forged by a prime minister who has attacked “coalphobia” by bringing a lump of coal into Parliament, and who meticulously defends the coal and natural resource industries as pillars of the economy, generating a huge percentage of the country’s foreign exchange earnings? [ Read More ]

[SCMP Column] Future Skills

February 15, 2020
We already know that 50 per cent of existing jobs will disappear in the next 20 years: “Hard skills will still matter, but they are perishable. The only enduring skills will be soft skills, and future jobs will be soft-skill intensive. Knowledge becomes a critically important currency.” [ Read More ]

[SCMP Column] Future Floods

February 10, 2020
It seems I am ever the contrarian. While all eyes are pointed north towards Wuhan and the possibility of a pandemic, my eyes are turned firmly south, towards the Antarctic and melting ice.
Here in this coldest and remotest of regions, there may be no threats to us in the coming days or weeks, nor might we recognise any threat for years, but here, over our lifetimes, the clock is ticking on one of the gravest threats to us all. [ Read More ]

[SCMP Column] Coronavirus infects the global economy

February 08, 2020
Assuming disruption for a minimum of four months, that means losses for airlines and the tourism sector internationally of over $18bn. Not just Cathay Pacific has slashed flights to China destinations: American Airlines, Delta, United, Lufthansa and British Airways are among leading airlines that have slashed services to curb their losses.

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[SCMP Column] Britain's Brexit finale

February 03, 2020
The issue of whether the UK sticks with European standards and regulations, or diverges in order to forge trade deals with countries like the US with significantly different regulations, will loom quickly. Trade negotiations themselves will take years, and will generate plenty of drama – not just with the US and the EU. As the Financial Times’ Philip Stephens noted: “There is no insurance policy against Mr Trump’s capriciousness.” [ Read More ]

[SCMP Column] Curbing coal

February 01, 2020
At present, China’s leaders seem to be vascillating in their commitment to renewable energy, and to squeezing their reliance on coal. The cavalier actions of governments that should know better – like those in the US and Australia – can only make it easier for Beijing to find excuses for vacillation.

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[SCMP Column] Revisiting global pandemics

January 27, 2020
A Brookings report published at the time said “a mild (pandemic) scenario will cost the global economy US$360bn”. A World Bank study published at the end of 2008 predicted that a mild pandemic would strip US$330 billion from the world economy, with more severe options costing US$3 trillion, cutting global GDP by 5%.

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[SCMP Column] Digital taxes

January 24, 2020
Despite ongoing controversies, there are signs a basis for agreement can emerge. The accounting geeks will tell you it is all about “sales factor apportionment”, “modified residual profit splits” and “global formulary apportionment”, but in words of one syllable, technology companies will be pressed to pay tax where their users and revenues are, rather than simply where they have a permanent establishment. There will need to be worldwide agreement on minimum corporate tax rates. [ Read More ]

[SCMP Column] The sad slate of Hong Kong Happiness

January 20, 2020
Most useful to Hong Kong might be the OECD’s Better Life Index, which builds on eleven qualities essential to wellbeing: housing, stable income, secure jobs, community, education, environment, civic engagement, health, life satisfaction, personal safety and work-life balance. Hong Kong scores terribly by most of these qualities, so this index would provide an impeccable starting point both for explaining our miserableness, and for tracking progress towards more fulfilling lives.

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[SCMP Column] GDP mismeasuring our lives

January 18, 2020
Perhaps the single most interesting starting point might be Sean McGuire’s Genuine Progress Index created in Maryland in 2010. While this adds “invisible” goods like leisure and unpaid housework, it also deducts “regrettables” like commuting, pollution and crime prevention and prison costs. Notably, in Maryland, health insurance, locks on doors, child support, food and energy waste, and tobacco consumption are all negatives.

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[SCMP Column] Luo flies to the rescue

January 13, 2020
Looking into Wang Zhimin and Beijing’s obscure “Hong Kong mafia”, the quality of their counsel seems to have been poor, perhaps wilfully misguided. The case for throwing them aside in favour of a strong political leader seems better justified than was the case in 1992. [ Read More ]

[SCMP Column] Hong Kong Port and GBA

January 11, 2020
The Chinese government says that in 2018, the Shanghai/Yangze region accounted for 47 per cent of China’s exports, followed by Guangdong with 27.5 per cent and the Tianjin hinterland with nearly 22 per cent, explaining the meteoric growth of the Yangze, and Bohai Bay ports, but to think of this growth as something that has emerged at Hong Kong’s expense is naïve. Remember that Hong Kong’s two biggest port operators – Hutchison Ports and Cosco – are also the world’s biggest port operators. Alongside its dominant position in Hong Kong, Hutchison runs Yantian in Shenzhen, and has stakes in Shanghai and Ningbo ports.

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[SCMP Column] China and Europe

January 06, 2020
To transform over three decades from being a global pariah at the margins of the world economy to being a dominant trade and investment force and a leader on many new technologies has stretched the credulity of many former enemies or adversaries. Suspicions abound that make it difficult for many in Europe to trust China as a champion and rule maker for future international trade liberalisation. [ Read More ]

[SCMP Column] Words of the Year

January 04, 2020
Companions to Brexit include perplexing and impenetrable words like back-stop, which I still don’t fully understand, and the most impressive of them all – prorogation. It seems this means little more than “shutting down for a few weeks”, but sounds more impressive coming from the mouths of Eton- and Oxford-educated aristrocrats.

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[SCMP Column] Earth and Marine Observing

December 30, 2019
The report anticipates massive potential gains for Hong Kong from using EMO technologies in the health Industry, in areas like pandemic detection or influenza monitoring: “As an industry, health is financially larger than transport, yet realises only 5.3% of the value from EMO, compared with transport at 57.9%...”

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[SCMP Column] A dangerous national security obsession

December 28, 2019
The US military establishment began to get alarmed when Police and Fire Departments across the US were “going out to Best Buy” and buying DJI drones. One US competitor noted: “Counties like Los Angeles realised that instead of buying a $1m helicopter they could buy a $1,000 drone.”
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[SCMP Column] Trade order adjustment tax Dan Rogoff

December 21, 2019
It was mostly “greenwashing” then, and the cynic in me says that it is mostly greenwashing today – marketing departments’ eloquent efforts to sell their corporate virtue. You can see it all around you at corporate events, where speakers and audience alike are sporting those multi-coloured circular lapel pins that signal efforts to comply with the UN’s 17 Sustainable Development Goals. Greenwashing has become rainbow-washing.
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[SCMP Column] Brexit lessons for Hong Kong

December 16, 2019
For Britain’s endangered democracy, the Johnson landslide is profoundly important. After the biggest victory since Mrs Thatcher in 1987, Britain’s Conservative government now has an 80-seat majority to act freely on its own mandate, for the first time since 2005. No fudge and muddle with uncomfortable coalition partners. No ruinous gridlock in Westminster, and mind-numbing obsession with constitutional protocols.
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[SCMP Column] The imperilled apostrophe

December 14, 2019
Since 2001, the self-confessed pedant John Richards, a former sub-editor on the Boston Standard in Lincolnshire in England, has waged a wilful battle against the chronic misuse and painful abuse of that most delicate of the English language’s pieces of punctuation, the apostrophe. [ Read More ]

[SCMP Column] Dispute Settlement in Crisis

December 09, 2019
The US response in defence of their plucky digital champions has been fast and furious. The USTR last week published a 77-page reposte to France’s plans, with Trump at the same time threatening 100 per cent duties on French cheese, wine and luxury goods. More than anything else, the move is intended to discourage a queue of over 20 other countries planning to introduce similar taxes on the US’s digital giants. [ Read More ]

[SCMP Column] Postal services in crisis

December 07, 2019
This was the hey-day of Britain’s postal services, before the internet, email, WhatsApp, Skype, and “e-fulfilment”. And while I love the convenience that electronic communication has brought, I mourn the loss of those morning moments of excitement as mail clattered through the letterbox onto the hall carpet. Those Christmas cards in particular. If I get four or five cards this year, I will be impressed.
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[SCMP Column] A window of calm

December 02, 2019
Chinese officials have repeatedly emphasised that they intend to respect the “two systems”, and Hong Kong’s internationally trusted rule of law. But actions have spoken louder than words. Beijing pressure to introduce Article 23 addressing treason, and their support for the Extradition Bill, are among actions that have cut to the heart of concerns not just expressed by a huge majority of ordinary hard working Hong Kong families, not just Molotov-cocktail-wielding extremists. [ Read More ]

[SCMP Column] Thoughts of Thanksgiving

November 30, 2019
For a feast first indulged in 1621 when the Pilgrim Puritans less than a year off the Mayflower partied on wildfowl and venison for three days with 90 native Indians from the Wampanoag tribe (later “ethnically cleansed”), no celebration so symbolises the gratitude Americans share for the God-given abundance they had found – even though Abraham Lincoln did not proclaim it a national holiday until more than 240 years later.
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[SCMP Column] Trade myths and the WTO

November 25, 2019
Champions of these general mythical theses are the likes of Michael Pillsbury, who argues in his book “The Hundred Year Marathon” that “China regularly hacks into foreign commercial entities… making it the world’s largest perpetrator of IP theft. This allows the Chinese to cheat their way up the technology ladder.” [ Read More ]

[SCMP Column] And now for our next crisis

November 23, 2019
Hong Kong’s young militants may have got the bit between their teeth on the imperative to protect our future freedoms. But they have yet to join the rest of the world’s Millennials in demanding our political and business leaders attend to the climate crisis that might make all of those freedoms meaningless. [ Read More ]

[SCMP Column] Challenging the Washington Consensus

November 18, 2019
For those of us sitting in a different part of the globe, who do not see the world, or China, in such Manichaen black and white terms, this emerging “consensus” is both ignorant and alarming. So it has been encouraging of late to see some strong push-back.
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[SCMP Column] The Singles Day Story of Stuff

November 16, 2019
As Taylor Swift led a long list of international stars in a glittering show to celebrate Alibaba’s spending party, it was mesmerising to watch the “spendometer” whirr giddily at the bottom of the screen as they marked $1 billion in sales in just 68 seconds, $10 billion in half an hour, eventually topping 268 billion yuan, or $38.4 billion, over the full 24 hours. That was 26 per cent up on 2018. [ Read More ]

[SCMP Column] Recession danger

November 11, 2019
The World Trade Organisation recently revised down to 1.2 per cent its forecast for global trade growth this year. Its forecast in April was 2.6 per cent. In Korea, exports fell in October by a shocking 14.7 per cent, the 11th consecutive month of trade contraction, with exports of electronics down 18 per cent and semiconductors down 32 per cent. In an economy where exports account for 44 per cent of GDP, it is hard to imagine the impact of such a downturn.
Singapore has reported non-oil exports down 8.1 per cent in September – the seventh consecutive monthly fall – with electronics exports down 25 per cent. [ Read More ]

[SCMP Column] RCEP and India

November 09, 2019
The Indian government has assured other RCEP negotiators that it will look in the next quarter at how it might sign up to an RCEP deal. But as an acerbic Bangkok Post commentator noted, “India’s idea of a quarter can last 25 years.” [ Read More ]

[SCMP Column] Tackling Inequality in Hong Kong

November 04, 2019
In the interest of full disclosure, I was part of the think-tank’s team shaping the report. On the one hand the study is controversial – David Akers-Jones was never averse to stirring a little controversy. But it is on the other hand painfully obvious, not just in view of Hong Kong’s awful summer of violent street violence, but also in view of upwellings across the world driven by rising concern over inequality. [ Read More ]

[SCMP Column] Groundhog Brexit

November 02, 2019
Whether it is street violence in Hong Kong, Santiago or Barcelona, President Trump’s interminably inconclusive tariff war with China (and most of the US’s other main trading partners), forest fires in California, typhoons barrelling into Japan, or the tragicomic Brexit mess lightened only by the braying humour of speaker John Bercow, we seem to be surrounded by endless terrible cycles of self-destructiveness. Perhaps a little bit of decisive cheer might come this afternoon if England wins the Rugby World Cup in Japan, but even that is uncertain. [ Read More ]

[SCMP Column] Women and slow change

October 28, 2019
It draws fascinatingly on research done at the Georgetown Institute for Women, Peace and Security, that tracks to pace of empowerment of women – measured by inclusion, security and justice – across 167 economies. Predictably Norway, Switzerland, Finland, Denmark and Iceland lead the field. Indeed, the top ten countries are European. But Asia’s economies don’t fare so well. The best we can do is in Singapore which comes in at 23rd, with Japan at 29 and Korea at 33. [ Read More ]

[SCMP Column] Getting to Net Zero

October 26, 2019
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[SCMP Column] Crisis compared

October 21, 2019
Both crises have unveiled deep-seated problems in how a democracy should function. For Hong Kong, the “rotten borough” legislative system concocted by Beijing and Britain’s foreign office in a shared effort to avoid unleashing unfettered democratic forces across the community has come to haunt Hong Kong’s political climate. Each had their own reasons – Britain being anxious to prevent Hong Kong’s pro-China activists from steamrollering the political process; Beijing anxious to encourage political freedoms and expectations that might in due course become shared across the Mainland. Whatever their motives, they have created a political monster that has become almost inoperable. Significant political change must be inevitable in Hong Kong if the past summer’s strife is to be put behind us. [ Read More ]

[SCMP Column] Hong Kong Business as Usual

October 19, 2019
The IMF’s half-yearly World Economic Outlook released this week forecast global growth this year of 3 per cent – down from 3.6 per cent last year, with aggregate growth in high-income countries at 1.7 per cent. While Hong Kong’s growth is forecast to tumble from an April projection of 2.7 per cent to a new forecast of just 0.3 per cent, it is not alone. Singapore’s April forecast of 2.3 per cent growth has been revised down to 0.5 per cent, and Macau is now forecast to contract by 1.3 per cent this year, compared with an April forecast of 4.3 per cent growth. [ Read More ]

[SCMP Column] Fish subsidies to the rescue

October 14, 2019
Fearful that even this modest fisheries subsidy ambition will fall flat in December, WTO negotiators have been clutching at other straws which might have a chance of being agreed by next June’s WTO ministerial in Kazakhstan even if they will not be “text ready” by December. These include a clutch of “Joint Statement Initiatives” (JSIs) – another good example of the WTO habit of creating labels that are literary coffins for important and sometimes interesting initiatives. [ Read More ]

[SCMP Column] Lobbying in Geneva

October 12, 2019
“There can be no winners from policies that close off markets, increase prices for consumers and manufacturers, disrupt global value chains, all of which undermine sustainable and inclusive growth, especially for the most vulnerable groups and economies in our region,” ABAC members reported. [ Read More ]

[SCMP Column] Trade wars good and easy to win

October 07, 2019
Most US business organisations say there have been some companies shifting manufacturing out of China, but it seems very few of these have brought production back to the US. Instead it has triggered some trade diversion across Asia, to Mexico, and to the EU. It seems the biggest single beneficiary of diversion away from China has been Vietnam. The US Census Bureau says trade diversion to Vietnam has lifted their exports to the US by 40 per cent in the first quarter of this year, with Korean exports up 18.4 per cent, France up 16.5 per cent and India up 15 per cent. [ Read More ]

[SCMP Column] Cognitive flexibility

October 05, 2019
My thoughts cast back to the months of student riots across Europe in the early seventies. I remember a long discussion with the then-Vice Chancellor of our university, a formidable academic with a lifetime dominated by reason and logic, where he confessed: “I’m not equipped to deal with these upheavals. I’m trained to see both sides of an argument. In these circumstances, this is a fatal weakness, not helpful at all.”
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[SCMP Column] Financing fossil fuels

September 30, 2019
Referencing research published in the “Decolonial Atlas”, it names JP Morgan Chase as the world’s number one banker of fossil fuels ($196bn since 2016), the number one banker to the top 100 companies in fossil fuels, the number one banker of Tar Sands Oil, the number one banker to Arctic Oil and Gas, the number one banker to LNG, and the number one US banker of coal mining. [ Read More ]

[SCMP Column] Messing with mosquitoes

September 28, 2019
This is not just because they too have been around for a very long time (found locked in amber from 350m years ago). Nor because they, like cockroaches, will thrive and spread as rising temperatures widen their survival range further north and south from the equator. But because global warming will simply enhance their capacity to kill and debilitate humans around the world, perhaps long before seas rise, water supplies fail, or food shortages and migration trigger wars and more subtle forms of fatal conflict.
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[SCMP Column] Time to reset capitalism

September 23, 2019
Much of the mysterious alchemy of company and market behaviour over the past decade has without doubt been due to the perverse influence of quantitative easing and near-to-zero interest rates, which has so enriched anyone holding property or equity assets, and punished those with savings or pension plans.
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[SCMP Column] Where is the climate money

September 21, 2019
For politicians anywhere in the world, immediate issues trump distant ones, and local issues trump global ones. Economists may tell us that US$2.38tr a year is a tiny proportion of global GDP, and the Global Commissioners on Adaptation may tell us that by spending $1.8tr a year for the next 10 years we will reap economic rewards (or avert economic harm) amounting to four times that sum, but such arguments carry little weight with politicians tasked to fend off an impending recession, reduce debt, keep people in jobs, restore health systems, or improve housing. [ Read More ]

[SCMP Column] Rebuilding hope for Hong Kong

September 16, 2019
We need to recognise that there are no quick and simple solutions to the problems that have brought turbulence to Hong Kong streets in recent months, but that with careful attention paid to the many different forces at play, solutions can be found.
Whatever the “strongman” complaints about Xi Jinping, if he and his administration are serious that the “two systems” part of “one country, two systems” is indispensable for China’s successful reengagement with the global economy, then they too must play a constructive role – not hectoring critics, but showing a recognition of the unusual chemistry of Hong Kong’s citizenry. [ Read More ]

[SCMP Column] Not waste but resource recovery

September 14, 2019
Most of us still take a crude approach to rubbish, summarised as the 3Bs – bash, burn, bury. At the heart of Monday’s discussions was an effort to transform this to the 3Rs – reduce, reuse and recycle. Some quite persuasively argued that we should abandon the idea of “waste management”, and instead talk always about Resource Recovery Management, or “2RM”. Because the only way of building a truly circular economy which reduces “lap sap” to a minimum is to regard all waste as a resource that can be recovered. [ Read More ]

[SCMP Column] Recessions and yield curves

September 09, 2019
Meanwhile, hundreds of millions have been immiserated over a decade of stagnant incomes, and miniscule earnings on their savings or their pensions. Karen Petrou, managing partner at Federal Financial Analytics, laid out the arithmetic clearly: put $2000 a year over 20 years into a savings account that pays a historic average of 5 per cent, with inflation at 2 per cent, and you would end up with a nominal savings pot of $69,438, inflation adjusted down to $49,598. Your $40,000 would have earned an inflation-adjusted $9,598 – about 24 per cent. [ Read More ]

[SCMP Column] A first move to restore calm

September 07, 2019
Hong Kong’s awesome street protests (I can think of no other city worldwide whose compactness and excellent transport infrastructure would make it possible for so many hundreds of thousands of people to surge as fluently across the length of the city as we are seeing daily in Hong Kong), its ninja demonstrators acting out computer war games oblivious to the real dangers linked with real world violence, and the epic ineptitude of the administration’s responses to community concerns, may together make for marvellous “Breaking News” on the world’s media.
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[SCMP Column] International workers and remittances

September 02, 2019
The World Bank and the International Labour Organisation (ILO) call these workers “migrant workers”, but I have always balked at this. The international workers we talk about here should not be muddled with migrants. They are not fleeing conflict, or seeking to settle permanently in foreign countries. Most of these workers retain their family roots back in their home countries, and plan to return.  They are “international workers” rather than migrants, and are fleeing the lack of work opportunities in their home countries to support their families, with the intention in due course of returning home. [ Read More ]

[SCMP Column] We got no bananas

August 31, 2019
Not that there are no other banana species. On the contrary, there are still around 1,500 species worldwide, including large numbers of savory bananas that we tend to call plantains. But there are none with the characteristics needed to meet global mass demand (worldwide, it is estimated we eat a total of at least 100bn bananas a year). Big importers like the European Union (which accounts for about a third of world imports) and the US (which imports 25 per cent) are set to be particularly vulnerable.
Combine such species vulnerability, which has been actively encouraged by many of the world’s leading agro-industry conglomerates, with climate change, and questions roil over our future food security. [ Read More ]

[SCMP Column] Messages not messengers

August 26, 2019
It is true that poor communication can cause or aggravate crises. We have daily proof of this in Donald Trump’s foot-in-mouth tweets, or in Boris Johnson’s unanchored braggadocio on the Brexit crisis. But if ever there was an example of needing to shoot the message rather than the messenger, the Extradition Bill crisis must be the epitome. [ Read More ]

[SCMP Column] Grim Greenland joke

August 24, 2019
At present, the entanglement of comedy and tragedy are screamingly obvious. It is hard not to be distracted by the comedic antics of the present US President, even as he inflicts harm on the world economy, and on his own people. It is hard not to gaze at the dishevelled Boris Johnson speaking alongside the immaculately groomed Emmanuel Macron and not think “buffoon”, even as he drives the hapless British people off a cliff. [ Read More ]

[SCMP Column] Saying no to the nuclear option

August 19, 2019
Not only did some of the country’s seniormost leaders, including Zhao Ziyang, spend time in the square talking with student leaders and seeking common ground, but none of the Beijing-based PLA were willing to move against the students. As a “People’s Army” they were unwilling to move against China’s own people. When finally the brutal attack came, it was at the hand of troops ignorant of the student movement brought in from the country’s interior provinces.
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[SCMP Column] Not-so-special economic zones

August 17, 2019
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[SCMP Column] Sliencing Science

August 12, 2019
This is nowhere clearer than in the evidence of harm being done by climate change. Nothing could be more inconvenient to supporters invested in fossil fuel industries, or to policymakers keen to develop natural gas fracking as a means of keeping petrol prices low, and reliance on energy imports to a minimum. Remember, Donald Trump has claimed that global warming is no more than scaremongering by the perfidious Chinese who are bent on undermining the competitiveness of US manufacturing.
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[SCMP Column] The housing imperative

August 10, 2019
I concede that after the dark and violent past fortnight, there are certain urgent priorities that overshadow everything: bring an end to the violence; bring protests off the streets and into manageable fora where grievances can be heard and considered. [ Read More ]

[SCMP Column] Getting out of the Bunker

August 05, 2019
As each of our four Chief Executives has taken up office since 1997, I have said to whoever in government was willing to listen that they must, absolutely must, in their “first 100 days” do something, anything, that sends a clear message that they stand up distinctly for Hong Kong people. None has done it. Today’s pickle is part of the price paid.
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[SCMP Column] Arctic armwresting

August 03, 2019
While the Arctic remained a white wilderness buried under hundreds of feet of ice and snow laid down over millennia, the shape of the Arctic Ocean’s shoreline was only of academic interest. But suddenly it matters. Suddenly, Greenland (population of 60,000 and a Danish dependency since 1953) is seen clearly as the world’s largest island, at 2.1m sq km almost a third the size of Australia.
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[SCMP Column] APEC's post 2020 vision

July 29, 2019
While APEC’s work on its post-2020 vision is now well advanced, with draft documents in circulation for the past 15 months still lack the one thing it absolutely needs: a vision. As yet, no-one has distilled a successor to the “free and open trade and investment” vision of the Bogor Goals. That Bogor vision may have lacked detail, but it succeeded in motivating region-wide liberalisation for a generation. [ Read More ]

[SCMP Column] A bad week

July 27, 2019
Reports of harm to hotels and tourism, to retail businesses, and to thousands of ordinary Hong Kong people trying to go about their normal daily business, have added anxiety that Hong Kong’s political upheavals will inflict powerful – and perhaps long term – harm on people’s livelihoods. [ Read More ]

[SCMP Column] Is China hurting from the trade war

July 22, 2019
For Trump to frame a convincing storyline of the tariff war bringing gains to the US economy, it is also necessary to show evidence of flows of companies back into the US, and of new jobs being created. Neither are evident. US payroll processor ADP reported last month that the US added fewer jobs over the past few months than at any time in the past nine years. The chief economist of Moody’s Analytics commented: “Job growth is moderating. Labour shortages are impeding job growth… and layoffs in bricks and mortar retailers are hurting.” China’s trade surplus with the US remains as large as ever. [ Read More ]

[SCMP Column] Rhubarb and the Opium Wars

July 20, 2019
Cultural ignorance and differences may generate unexpected and unhelpful consequences – for both sides. As the US and China continue to arm-wrestle over the US-initiated tariff war, both Beijing and Washington should think hard on that. [ Read More ]

[SCMP Column] Homage to Bretton Woods

July 15, 2019
Of particular concern since Donald Trump’s administration took office, has been the abandonment of what Paul Volker, former chairman of the US Federal Reserve, calls “certain basic rules of good behaviour”. This would include sudden and pre-emptive withdrawal from agreements – ranging from the Trans-Pacific Partnership, to the Paris Climate Accord, to the Iran Nuclear Deal. It also includes the framing of trade negotiations as lists of ultimatums, the preposterous use of “national security” threats as justifications for sweeping protection, and the wilful strangulation of the WTO’s trade dispute mechanism.

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[SCMP Column] Extradition Bill part two

July 13, 2019
Hong Kong people need Carrie to “speak truth to power”, and the sooner she is seen to do this, the sooner people in Hong Kong and around the world will see her without puppet strings attached.

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[SCMP Column] London food rules

July 08, 2019
As we are beset on all sides by extreme responses – from food fads and fantastical diets to ever-more-exotic junk foods – she frets that in the confusion this has created “we have stopped trusting our own senses to tell us what to eat”. She questions how we can transition to a point where we can “enjoy the benefits of the global food revolution without getting swallowed by it”.

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[SCMP Column] WTO Dispute Settlement

July 06, 2019
Compare the glorious, self-confident simplicity of APEC’s 1995 Bogor Goals – “free and open trade and investment” – drafted as the ink was drying on the Uruguay Round trade agreement that created the WTO, with the contorted prose in last week’s G20 leaders’ communique: “We strive to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open.”

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[SCMP Column] Losing bags on airlines

June 24, 2019
Much of the pain and trauma linked with lost luggage is not the fault of airlines alone. There can be many reasons why you and your luggage tend not to leave Los Angeles together. But airline marketing people and advertising agencies do us all a gross disservice by concocting stories of bliss and transcendent relaxation on our flights around the world. The sooner they acknowledge the pain and stress linked with almost every stage of air travel, the sooner the credibility of the world’s favourite airlines will recover from their current low levels. [ Read More ]

[SCMP Column] Life after the extradition bill

June 22, 2019
Our legal community, and the legal protections the government has provided, have put Hong Kong among the most trusted jurisdictions in the world, and all this has foolishly been put at risk. It is the integrity of our legal system that differentiates us from every other Chinese city, and sits at the core of the “one country, two systems” principle. It works as much to the advantage of China and Chinese companies as it does to the thousands of global companies based here. Urgent action is needed to restore faith.

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[SCMP Column] Sweating about rare earths

June 17, 2019
Why then have the national security-obsessed team gathered in the White House around Donald Trump suddenly brought rare earths to front of mind? Why is China’s leadership toying with the idea of restricting rare earth exports as a possible retaliation against the US tariff war? Xi Jinping himself has added fuel to the fire by visiting the Ganzhou rare earths factory in Jiangxi, home to the country’s biggest manufacturer of neodymium-iron-boron magnets.

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[SCMP Column] Marathon Man

June 15, 2019
As a convincing explanation of why high-achieving sorts dominate the sport, she completely fails, even though the data suggests her original theory is correct: the 2018 Running USA National Runner Survey sampled over 4,000 runners to find that an astonishing 80 per cent had Bachelors or higher degrees. If the numbers matched the national picture, a bare 30 per cent of the runners would fall into this elite category. And almost 30 per cent of runners earned more than US$150,000 a year, compared with a national median wage of just under US$47,000 [ Read More ]

[SCMP Column] Mexico and snake oil

June 10, 2019
The insight from this flurry of tariff attacks is that it is a mistake to think the Trump administration is interested in any trade deals unless they deliver votes in next year’s Presidential election. With no principled anchor to steady economic or trade policy, the cynical reality is that deals that deliver votes will be signed (include the Mexico immigration deal, and completion of the long-delayed USMCA). Those that don’t, will be left to drift. And so long as the economy does not crash, playing tough with China is the best vote winner of all. Not for no reason were so many snake oil salesmen successful.

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[SCMP Column] What a waste

June 08, 2019
Seven key economies - Malaysia, Vietnam, Thailand, Indonesia, Taiwan, India and Turkey – have seen their waste imports leap from 489,000 tonnes in the first half of 2017 to almost 1.37m tonnes in the first half of this year. There is a perverse irony that much of the new capacity to manage this surge in waste imports is being provided by China-owned companies who have been swift in shutting operations down on the Mainland, and moving them into South East Asia.

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[SCMP Column] Clash of Civilisations

June 03, 2019
I was always amazed first that they were there, and second that they spoke such impeccable Mandarin. They would almost always be occupying some US company’s “representative office”. They had learned Mandarin at one of hundreds of Chinese-language programmes funded at US universities by wealthy Taiwanese exiles. They were often Mormons, and were secretly distributing bibles to nibble at the foundations of “Godless communism”.

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[SCMP Column] Hong Kong's Skill Problem

June 01, 2019
A government, and a business sector, more clearly aware of the workforce challenges we face would be pressing hard for education reforms. Education budgets would be focused less on fact-based learning squeezed into our youthful years and based in big education institutions, and more on lifetime learning that is employer- or web-based, built around short, tailored courses and focused on learning-to-learn, digital literacy and social skills.

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[SCMP Column] US-China technology wars

May 27, 2019
People around Trump like Mike Pompeo, Mike Pence, Peter Navarro and Steve Bannon start from a premise that China is an enemy with malevolent intent that is using existing global trade rules to undermine the democratic, freedom-loving west, and in particular using new technologies and investments embedded in global value chains as a kind of Trojan Horse to attack the US from within.

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[SCMP Column] A problem with sand

May 25, 2019
Apart from describing the scale of the future challenge in meeting demand for sand (they say demand will rise to at least 60m tonnes a year by 2030), the UN report spends much time wringing its hands on what to do. Better regulation and transparency seems central. But the quest for alternatives to sand is proving tough. Slag and ash from blast furnaces might be helpful. Mining and metallurgical waste is talked about. And as Michael Wong has noticed, demolition waste will play a part.

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[SCMP Column] Arctic Cold Wars

May 20, 2019
By today, China has become by far the largest foreign investor in Russia’s Arctic wastes, most visibly in its stake in the Yamal LNG project, which supplies gas to Jiangsu province. That is why it so covets its observer seat at the Arctic Council table.

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[SCMP Column] No such thing as Sustainable Palm Oil

May 18, 2019
In terms of rain-forest and biodiversity loss, Indonesia’s record is still miserable. According to the NGO Global Forest Watch, Indonesia has lost 24.4m ha of rainforest cover between 2001 and 2017, and is still losing between 700,000-800,000 ha a year. Tens of thousands of orang-utan have been lost because of hunting, and the loss of their habitat.

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[SCMP Column] More tariff wars

May 13, 2019
It is easy to see why the US gets so passionate about IP, but it is not the “existential” issue so many Americans claim. IP may be central to the US’s view of itself as the world’s technology leader – but it is also a massive earner. The US may have a miserable trade deficit in manufactures, but it has a handsome surplus in services exports, and right up there is the money it earns from royalties in payment for IP rights. In 2017, this amounted to US$128bn – second only to earnings from tourism and education services ($211bn), and well ahead of financial services ($109bn) and transport services ($89bn). A tighter deal on IP protections would mean a significant boost to services exports.

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[SCMP Column] Global Biodiversity under threat

May 11, 2019
In coastal areas (like Hong Kong or the Pearl River Delta) 100-300m people face extreme flooding threats. One third of the world’s fish species are over-exploited and under threat. The loss of “pollination services” from butterflies and insects threatens crops worth up to US$577bn.  Just under 300m hectares of forests have been lost since 1990. Half of the world’s living coral has been lost since 1870, and may all be gone before the end of the century. Of the 8m known animal and plant species, 1m face extinction. Out of 6,190 domestic animals that humans use for food, 559 are now extinct, and 1000 are threatened.

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[SCMP Column] Trade talk on the brink

May 06, 2019
The report calculates that the US economy has suffered $3bn a month in tax costs and $1.4bn a month in “deadweight losses” because of tariffs. It says there has been trade diversion amounting to $165bn a year, and large but unmeasured costs to reorganise supply chains: “Almost all costs are being borne by US companies and customers,” it notes. The main victims are farmers and blue-collar workers, Trump’s “core”.

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[SCMP Column] Ganbei to China's Baijiu

May 04, 2019
China’s law of big numbers means that even though Chinese people drink much less per head than most western countries (an average 7.2 litres of alcohol per year, says the World Health Organisation, compared with 9.8 litres in the US, 13.4 litres in Germany and a giddying 14.4 litres in the Czech republic), the sheer size of the economy makes it by far the world’s leading alcohol market.

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[SCMP Column] African Swine Flu in China

April 29, 2019
The Fever is hard to wipe out because it lives on for so long in pork products (it can live for one month in salami, 140 days in cured Iberian pork, and almost 400 days in Parma ham), and because pigs are carried such long distances to capture countrywide price differences.

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[SCMP Column] Jokowi's wayang theatre

April 27, 2019
Measures such as the World Economic Forum’s Inclusive Development Index show Indonesia ranking 36th worst, out of 74 countries ranked – behind Vietnam (33rd), China (26th), Russia (19th and Malaysia (13th). It can be of little political comfort to be ahead of the Philippines (38th) or India (62nd). Nor can there be comfort in being the world’s sixth-worst performer in terms of wealth inequality, based on property and other asset-based wealth.

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[SCMP Column] Beijing's Belt and Road Party

April 22, 2019
Without question, some of China’s Belt and Road projects have provided painful and embarrassing learning experiences: the creation of heavy debt burdens; unwelcome environmental or community impacts; the fragility and unfamiliarity of legal systems in many of the recipient countries that have created unexpected and unwelcome challenges in dealing with legal disputes. Even more important, it has reminded Chinese investors that the biggest obstacle to infrastructure-building is not a shortage of cash, but a shortage of well-designed, “investor-ready” projects.

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[SCMP Column] Japan's Reiwa era

April 20, 2019
Reiwa’s “auspicious harmony” defines a commitment to change, however cautious, and a sense of strength and comfort from the deep traditions of the country – a community that is at ease with itself. As Tama University’s Brad Gosserman recently commented: “Japanese have surveyed the world and decided that they are comfortable with the devil they know.” In just four days the Heisei era will be gone. Long live Reiwa.

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[SCMP Column] Death by dinner

April 15, 2019
The study revealed huge differences between countries. The worst country (Uzbekistan) saw 890 diet-related deaths per 100,000 of its population, ten times higher than Israel with 89.  Among the world’s 20 most populous countries, Egypt dubiously boasted the highest level of diet-related deaths (552 per 100,000 of the population) while Japan boasted the lowest – less than 100. China boasted the highest rates of heart attack deaths (299 per 100,000) and cancer deaths (42).

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[SCMP Column] Space and Charismatic Science

April 13, 2019
Remember Europe’s 1970s Project Daedalus, which aimed to explore Bernard’s Star (at 5.95 light years, the second closest star to the Earth after Alpha Centauri)? It is estimated the cost would have been $174 trillion dollars, but scientists argued that somewhere between the year 2110 and 2350 global GDP would have grown so large that it would be affordable. They were not bothered that with the technology of the day it would take over 1,000 years to reach Bernard’s Star.

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[SCMP Column] Rattus rattus Hongkongus

April 08, 2019
And there is evidence that Hong Kong is home to a classier kind of rat. Pest controllers recently failed over a number of weeks to exterminate a rat in a Wanchai restaurant, because it refused to eat anything but mangos. All manner of baits and poisons were left, with no success. Eventually the sated rat was caught one morning, still asleep on the restaurant floor after an overnight mango feast.

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[SCMP Column] China's coal schizophrenia

April 06, 2019
Climate activists have put increasing pressure on banks and insurers that have traditionally funded coal-fired power, with some success – except with China’s financial institutions. While China’s banks account for only 12 per cent of direct lending to coal plants, they dominate as underwriters of bonds and share issues. The IEEFA study tracks that 238 international banks have channelled over US$377bn to coal plants as underwriters, with ICBC, CITIC and the Bank of China in the lead. The IEEFA researchers say that Chinese banks account for around 73 per cent of such bond and share issues.

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[SCMP Column] Brexit April Fools

April 01, 2019
Like Richard Ashworth, the forlorn, emotional and lonely Conservative Member of the European Parliament in Strasburg last week, I would like to offer Brexit up as a cautionary tale, not just for Europe, but for all aspiring democracies worldwide: “We are the generation who have lived through the longest period of peace as well as the greatest level of prosperity ever. Never take it for granted. Value it. Fight for it. Defend it every day.” Sadly, I suspect very few of those now tearing the UK asunder will even know Richard Ashworth, let alone have heard his warning. British politics has always been parochial. [ Read More ]

[SCMP Column] Shippers Environmental Challenge

March 30, 2019
Global warming and CO2 emissions are only part of the shipping industry’s problem – and not the most immediate one at that. Since the 1960s, shipping has been doing the world’s oil refiners a favour by taking off their hands the viscous black sludge – literally the dregs of the barrel – that remains after diesel, petrol and other lighter fuels have been refined away. Dense in sulphur, particulates and other nasty residues, our shippers heat this unpleasant gloop and burn it out on the open oceans. No-one has cared very much until the ships have come close to port. No-one recognised back in the 1960s that CO2 emissions were a problem even when they were coming from a ship 1,000 miles from land in the open Pacific.
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[SCMP Column] Xi Jinping in Europe

March 25, 2019
The media noise about Xi’s Europe trip might be all about Belt and Road infrastructure business, but this exaggerates the importance of Belt and Road, and diverts attention from the main purpose: to work with important trade groupings around the world to reaffirm the primacy of multilateral routes to tackling global problems, and discretely to deflect the unilateralist divide-and-rule pressure being exerted by Donald Trump and his trade Rottweilers, who are due to land back in Beijing on Thursday to resume talks aimed to resolve the US-China trade war to Trump’s satisfaction. [ Read More ]

[SCMP Column] Death in the City

March 23, 2019
Accommodating our living is challenge enough, but accommodating our dead is creating challenges that governments worldwide are secretly sweating over. And squeamishness about discussing our dead means the challenge does not get the urgent attention it needs. As Caitlin Doughty author of “Smoke Gets in Your Eyes”, about the global cremation industry, complains: “People are being robbed of the dignity of death by a culture of silence”. [ Read More ]

[SCMP Column] Age of Environmental Breakdown

March 18, 2019
Since I was born in 1950, the IPPR report reminds me that the annual number of floods worldwide has increased 15 times, extreme temperature events 20 times, and wildfires seven-fold. It notes that extreme weather events were responsible for economic losses put at $326bn in 2017 – hardly good news for the insurance industry worldwide, or for our insurance premiums. [ Read More ]

[SCMP Column] Airlines Implausible Skies

March 18, 2019
The behavior of our fellow human beings seems never at its best in such anonymous, displaced circumstances. Watch the tight, polite smiles as fellow travelers jostle with each other for overhead luggage space, or climb over your legs in mid-flight expeditions to the toilet. My daughters still recall nightmares from the dreadful violent sucking sound of the toilet flush. [ Read More ]

[SCMP Column] The C919 and China's Next Existential Trade Threat

March 16, 2019
The C919, China’s first home-grown commercial aircraft, due to go into service in 2021 after several years of delay, is a poster-child for everything the present US administration hates about China’s rise. It has been conceived explicitly to attack the duopoly power of Airbus and Boeing in commercial aviation. It has been launched and developed with the help of massive, and imprecisely-understood subsidies. In the bid to play technology catch-up in aviation, it is the product of a plethora of joint ventures with – and technology transfer from – US aerospace companies. And it is set to compete directly with Boeing’s MAX8 and Airbus’s A320neo as the workhorse of the huge short-haul commercial aviation market. [ Read More ]

[SCMP Column] APEC's Business Travel Card

March 11, 2019
For anyone travelling regularly on business, the time saved in not having to apply for visas ahead of every journey is huge. And the cash savings in visa-linked fees can be considerable. As someone who travels perhaps 15 to 20 times a year across the APEC region, I have tried to calculate the savings, and arrive at a number close to US$1,000 a year. But the arcane complexity of visa rules and fees make accurate calculation challenging. Do you want a single-entry or multiple-entry visa? Do you want for 6 months, or a year, or 10 years? The US has 19 different types of visa depending on your status (a student?) or purpose of visit.
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[SCMP Column] World Human Hair Trade

March 09, 2019
Recent heart-rending BBC reports of young – and not so young - Venezuelan women selling their hair to keep starvation at bay as they trecked overland towards Colombia and the US border reminded me of one of the world’s least understood export industries – the global trade in human hair. [ Read More ]

[SCMP Column] The State of Trust

March 04, 2019
Based on a survey of more than 33,000 people across 27 markets, the Edelman Barometer has over its 19 year life always provided fascinating insights, however shaky its methodological foundations, and however variable the possible assumptions underpinning people’s responses. [ Read More ]

[SCMP Column] The Future is Female

March 02, 2019
As International Womens’ Day approaches, barely a day goes by without one media outlet or other paying tribute to a brilliant woman entrepreneur striding confidently out to conquer the world.
As an ageing male with a sneaking fear that I only succeeded in life because back in the 1960s and 1970s those awesomely talented and ambitious women were stymied by the clubby male mysogeny of the day, I feel nervous about pushing back. But push I must: I really do get tired of the feminist focus on executive glass ceilings and too few seats in the boardroom. [ Read More ]

[SCMP Column] GBA Forging the Future China

February 25, 2019
Let’s start with some basic insights: first, it is “an outline plan” of barely 50 pages. Lots of details are not there. It is doing what China is good at, and what many in the US currently negotiating a trade deal hate: providing a top-down framework intended to guide and shape future economic development – in this instance of the 70m-strong economic region that surrounds Hong Kong. [ Read More ]

[SCMP Column] In Defence of Subsidies

February 23, 2019
Reporting after an interview with Altmaier, the Financial Times Berlin correspondent summarized: “Paris and Berlin have been left fuming by Brussels’ refusal to countenance a deal between Siemens and Alstom. In recent days the two countries have emphasised the need to create and foster “European industrial champions” and warned of the risk of Europe ceding its technological supremacy to a rising China.” [ Read More ]

[SCMP Column] Kakistocracy and the three Ks

February 16, 2019
For business, this KKK puts clean, efficient global trade and investment at risk. It puts our global supply chains at risk. It puts at risk our trust in the rule of law, and the strong global growth that has so effectively lifted millions out of poverty over the past 70 years. The link between KKK and poverty, underfunded health and education systems, poor infrastructure, low trust in government, and even disregard for environmental protection is well established.
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[SCMP Column] Surveillance Capitalism

February 11, 2019
“They know everything about us, while their operations are designed to be unknowable to us. They predict our futures and configure our behaviour, but for the sake of others’ goals and financial gain. This power to know and modify human behaviour is unprecedented.” [ Read More ]

[SCMP Column] Earn, Learn, Return

February 09, 2019
Her legacy was captured in the idea of “Earn, Learn, Return”. The idea was radical, and fundamentally at odds with existing western ideas about international labour mobility. It was radical because it had absolutely nothing to do with the politically toxic problems in many countries linked with migration. [ Read More ]

[SCMP Column] Global Syndemic

February 04, 2019
The once-fusty British medical journal The Lancet, joining forces in a “Lancet Commission” with the University of Auckland, the World Obesity organisation, and the Milken Institute School of Public Health, has just released an awesome but virtually unreadable expose on the Great Global Syndemic – the grave combination of the epidemics of obesity, undernutrition and climate change that now looms over us. [ Read More ]

[SCMP Column] Belt and Road Troubles

February 02, 2019
This is of course a bit rich from a US that has both directly and through the IMF sat at the heart of debt crises in South America, across Asia in 1998, and more recently among the western economies in 2008. But put that on one side, and before we all get too carried away make one thing clear: the idea that the BRI is floundering is nonsense. It is not going away, and remains at the heart of Chinese foreign policy. [ Read More ]

[SCMP Column] What Trade War

January 26, 2019
Guo Ping’s 2019 message is fascinating: “If we can develop the simplest possible network architecture, make our transaction models as simple as possible, ensure the highest level of cybersecurity and privacy protection, produce the best products and provide the best services, then no market can keep us away.

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[SCMP Column] Digital Detox

January 21, 2019
The digital detox is valuable not just because it forces a careful audit of what is important, and what is not, but it frees up a huge amount of time to use your day in different ways. Tim Harford, for example, wrote letters to friends he had come to neglect: “Some old friends seemed genuinely touched to receive a letter: nobody has ever been touched by a Facebook “Like”.”

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[SCMP Column] Nuclear solution

January 19, 2019
Their advice to China, which is building more nuclear, more wind, more solar than any other nation, but is still by far the world’s worst emitter of CO2: “Solving the world’s climate problem without solving the China coal problem is flat-out impossible. So China must do what Sweden did, but on a bigger scale.”

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[SCMP Column] China's tobacco monopoly

January 14, 2019
Surely there is an irony that in spite of the current fierce US campaign against the anti-competitive role of China’s state enterprises and national monopolies or oligopolies, not a whimper has been heard against this most-egregious and long-lived of all Chinese state monopolies, nor on the potential to export US tobacco. If anyone truly cared for the health of China’s people, this would be an industry long gone. The fact that instead we see plans for the monopoly to raise international funds on the Hong Kong stock market, speaks cynical volumes.

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[SCMP Column] In praise of subsidies

January 12, 2019
Trump’s trade team claim China’s distinct model constitutes an existential challenge to the liberal market economy painstakingly built over the past century. What I see from here in Hong Kong is much more tooth-and-claw competition than Trump’s men admit, and an industrial policy that is different only because it is being effectively implemented. Forget the straw man, and there is something to learn from that.

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[SCMP Column] Britain's misplaced military aspirations

January 07, 2019
From my Asian end of the telescope, those in the UK who aspire to rebuild the UK as a global and military power should be put back in their box, and quickly. As an SCMP editorial concluded last week: “Britain is free to boost trade and investment with whomever it likes. But its policies have to be in the interests of (its) citizens, be fiscally responsible, and make economic and strategic sense. Costly naval bases in south east Asia that raise tensions with allies and rivals alike are not in keeping with such an approach.” As one of those citizens, I strongly agree.

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[SCMP Column] Christmas Ghosts

December 22, 2018
The Ghost of Christmas Present shows me homes that are teeming with marvelous digital gadgets that have purged the chores that shaped my mum’s grueling weekly calendar. He shows me families in China and other once-dirt-poor countries that have today been lifted out of dismal poverty to join our hyper-consumptive frenzy. But he also shows me families fragmented across the globe, and “citizens of nowhere” like me who will spend Christmas thousands of miles away from parents, grand-children, and most of our childhood friends. He shows us under-exercised and over-fed on alarmingly processed food, and fades away just in time to usher in the Ghost of Christmas Yet to Come. [ Read More ]

[SCMP Column] Katowice climate crisis

December 17, 2018
But the warnings are now clear and gripping. We need the messaging to drop down from the stratosphere to become relevant to us today and in our local communities. For Hong Kong, Typhoon Mangkhut was just such a message, and as we close on what is expected to be Hong Kong’s hottest year on record, how long before our next massive local warning?

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[SCMP Column] Huawei and technology hegemony

December 15, 2018
Huawei is of course leading the 5G roll-out in China itself, confident that the commercial launch of services will be in full swing in 2020 – fully five years ahead of the US, the EU, Japan, South Korea and Australia, according to the tech consultancy Eurasia Group. And it is this lead, which will enable early development of the “big data” services underpinning AI, autonomous vehicles and “smart city” developments, that fills US security wonks with such angst – and leading US tech companies too.

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[SCMP Column] Brexit bloodbath

December 10, 2018
I noted back in the immediate wake of the Referendum that “British people voted as children, with a terrible temper tantrum, for which the price to be paid will be incalculable”. Sadly, two years on, it is Britain’s politicians who are voting as children, and the incalculable price continues to rise.

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[SCMP Column] Our global trash challenge

December 08, 2018
China plans by 2020 to make its waste-import ban a total ban (at present the banned list covers 24 categories of goods, expanding to 32 categories at the end of this year), at which point our big-consuming economies will fast be approaching an unavoidable moment of truth, at last taking full and direct responsibility for our wasteful ways.

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[SCMP Column] Hong Kong in the Greater Bay Area

December 03, 2018
Surely for Hong Kong, the first challenge is to recognize the implied transformation from a specialized city economy that faces outwards, helping outsiders get access to the dark and mysterious Mainland markets, to a city beginning to look inward as part of a large and diversified regional economy that over the next decade is likely to grow to be as big as Germany. Should my ATM card not work on ATMs across the GBA? Should my Octopus card not serve me as well in Jiangmen as in Hong Kong? Should I not be taking weekend breaks in the Pearl River Delta just like a Londoner weekends in the Cotswolds or Cornwall?

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[SCMP Column] Digital reality check

December 01, 2018
Some may repost that the new AI- and robot-driven technologies will reduce the need for human labour, and so eliminate this danger. But that is not what labour economists at the World Bank and elsewhere have learned. Their data shows clearly that while some jobs will without doubt disappear, the Fourth Industrial Revolution is in net terms creating more new jobs than it is destroying. The challenge is to make sure tomorrow’s workers have the skills needed to capture and use the new technologies. [ Read More ]

[SCMP Column] Marshall School SMEs going global

November 26, 2018
Perhaps unsurprisingly, the Marshall School’s economy comparisons put Hong Kong and Singapore – traditional homes to thousands of “mini-multinationals” – far out in front in providing supportive environments to SMEs. Australia, Canada, the US and New Zealand do well. Japan and Korea would do better if they provided a better environment for women-led SMEs. As for Papua New Guinea, Russia, Indonesia and Vietnam, perhaps the less said the better.

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[SCMP Column] Teresa May's Brexit

November 24, 2018
As historians look back on the tragic and improbable Brexit story, I sense they will see the cause of democracy disserved, and an economy harmed. They will see communities divided, and politicians hopelessly inadequate to resolve the serious challenges they faced – farce masking tragedy.

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[SCMP Column] Cleaning the trade mirror

November 19, 2018
For the record, and obviously, China is no paragon in the world of government procurement, and is still only in the process of acceding to the WTO’s Procurement Agreement. It nowadays has developed a fairly comprehensive website flagging upcoming procurement contract opportunities but the site is only in Chinese, so is not open to most international bidders.

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[SCMP Column] PNG's APEC coming out party

November 17, 2018
So there is a sense in Port Moresby this weekend that the APEC Leaders’ meeting is something of a coming-out party. For many of APEC’s developing member economies, the organisation has for more than two decades played a major role in channelling growth and development – and there is confidence that this will continue into 2019 as Chile takes up chairmanship. Hopefully it will not include Maseratis and Bentleys.

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[SCMP Column] Reinventing toilets

November 12, 2018
As Bill Gates noted, keeping his poop-jar firmly at arm’s length: “This small amount of feces could contain as many as 200 trillion rotavirus cells, 20 billion shigella bacteria and 100,000 parasitic worm eggs." And then some.

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[SCMP Column] China's consumers

November 10, 2018
Away from the Shanghai headlines and Xi Jinping’s promises of intent, the World Bank last week quietly provided endorsement of China’s claim steadily to be opening up. In its annual Ease of Doing Business study – perhaps the world’s most comprehensive and rigorous assessment of the barriers that block access to the world’s markets – it reported that China now ranks 46th out of 190 economies worldwide.

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[SCMP Column] Mid-Term inequality

November 05, 2018
I find it fascinating that in the current fiercely fought US Mid-Term elections, almost no air time is being devoted to such issues, but rather to Honduran migrants, being tough on trade, and the big China threat. Better Trump’s preference for “entertaining diversion” on international issues than any focus on the difficult challenges at home.

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[SCMP Column] Into the Mid-terms

November 03, 2018
A Trump vindicated would cast a dark cloud, and point towards six gruelling years ahead, not just for China, or Asia, but for the entire global economy. It would test the mettle of all those who believe the liberalisation championed since the 1944 Bretton Woods agreements has in net terms been a source of great good for most people worldwide. These are such interesting times.

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[SCMP Column] Climate threat local and personal

October 29, 2018
Up close and personal in the US, means seeing 1.7m people evacuated in North and South Carolina as Hurricane Florence swept in, and over 500,000 people losing electricity. It means 375,000 people being evacuated in Florida in anticipation of Hurricane Michael, with pecan and cotton farmers losing their entire crops, 2m chickens killed, vegetables with US$480m lost, and 3m acres of commercial timber destroyed. It means devastating forest fires across California.

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[SCMP Column] Reforming the WTO

October 27, 2018
Both the EU and Canada focus on three urgent areas of reform: modernisation of the rules, to cover things like digital trade, international investment, domestic regulations, the role of state-owned enterprises, industrial subsidies and forced technology transfer; changes to the crippling “consensus” rule that blocks any reform if any one of the WTO’s 192 members object; and rescue of the dispute settlement system.

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[SCMP Column] Global warming indifference

October 22, 2018
The earth is 45m centuries old, but this century is the first in which one species – ours – can determine the biosphere’s fate. We can be technological optimists about our ability to navigate the challenges, but we need to offer politicians something more relevant and easier to appreciate than a mean global warming. It’s hard not to be a political pessimist.

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[SCMP Column] Khashoggi, trade and trust

October 20, 2018
With the full facts of the final hours of Mr Khashoggi still ghoulishly unclear, the grisly snippets suggest a barbaric and unforgivable disregard by Saudi’s autocratic leader-in-waiting for the niceties of diplomatic civility. They also reveal the embarrassing haste of Trump and the White House to concoct alibis on Bin Salman’s behalf that might whitewash such brazen uncivilized murderousness.

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[SCMP Column] Ding Uk challenge

October 15, 2018
Over the decades all sorts of proposals have made to wind up the scheme, and so far, all have been undermined. But a smart set of new ideas crossed my desk last week from David Webb of fame: “Given the long queue and uncertain prospect of a claim, some would surely be willing to surrender their ding “rights” for a cash payment from the government.”

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[SCMP Column] Cross harbor tunnel fees

October 13, 2018
I have always queried how strongly the different cross harbour tunnel charges influence which tunnel a car-owner chooses (around three quarters of all vehicles using the tunnels are private cars). After all, for most car owners, paying average annual car-operating expenses of over HK$160,000, and using a car because they prefer to, not because they need to, I have always been tempted to think they are more driven by convenience and speed than the dollar cost of a tunnel fee.

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[SCMP Column] The charisma of cars

October 08, 2018
The US may suffer a trade deficit in goods, but its fast-growing surplus in the export of services, which sat last year at US$230bn, remains politically uncounted and ignored. There will in due course be a price paid for resting trade strategy on the car-culture dreams of the 1960s.

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[SCMP Column] Pacific Islands and APEC

October 06, 2018
Between 2013 and today, one suspects that the views of defence establishments in Washington or Canberra have become much less sanguine. China’s activity in the not-so-distant South China Sea, and its growing overall military muscle-flexing, have without doubt soured sentiments, but the Lowy Institute’s more measured perspective surely still holds true.

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[SCMP Column] Longevity

October 01, 2018
So at the heart of our longevity challenge is employers unfocused and unwilling to abandon employment practices that are no longer fit for purpose, educators unwilling to adjust to the life-time learning needs that are associated with a 60-year working life, and government officials who are complacent, ignorant, and reluctant to bang heads together.

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[SCMP Column] Jobs disruption

September 29, 2018
The WEF report, and the SCMP Workshop leave me with a sense of angst. If you are lucky to work for big and successful companies like Cisco, Ernst & Young, DHL or Microsoft, then the chances of “futureproofing” your working life seem good, whatever the disruption raging around us. But for that 80 per cent outside this lucky circle, taking personal responsibility for one’s own lifelong learning seems a mountain to climb.

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[SCMP Column] Preparing for a long war

September 24, 2018
I recall the revered CBS anchor, Walter Cronkite, returning from Vietnam in February 1968 to say: “It seems now more certain than ever, that the bloody experience of Vietnam is to end in a stalemate. To say that we are closer to victory today is to believe in the face of the evidence, the optimists who have been wrong in the past.” It took another seven years for the US government to recognize reality and end the war. I hope it does not take today’s US administration so long.

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[SCMP Column] Mangkhut and the next crash

September 22, 2018
The contrast is clear. Hong Kong’s relative resilience, and likely rapid recovery, contrasts sharply with the dreadful failure to anticipate the 2008 crash, and the slew of emergency measures that had to be thrown into place in almost-panic circumstances – measures that together almost certainly sowed the seeds of the crash that many are saying is soon to come.

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[SCMP Column] Just Imagining Trade

September 17, 2018
We then have our International Import Expo in Shanghai from November 5, at which we will be able to talk to the world about how our economy is open for business. You are then scheduled to attend the ASEAN leaders’ summit a week later, and the APEC leaders’ meeting in Port Moresby on November 17.

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[SCMP Column] Parcel Post

September 15, 2018
Satisfying though it may be to demonise China’s exporters for exploiting the UPU’s quirky rule book, and tag the issue onto his general China trade war, Trump has decided to attack the root of the problem: he last week delivered a Memorandum to the 192 members of the UPU who were holding an Extraordinary Conference in Addis Ababa. This demanded radical overhaul of the unfair Terminal Dues system, and threatening to adopt “self-declared rates” if the meeting “fail(s) to yield reforms that satisfy the criteria set forth”. The UPU has until November 1 to satisfy the Trump administration. [ Read More ]

[SCMP Column] Life after Lehman

September 10, 2018
A fascinating examination in the Financial Times last week of “the story of a house” following the crash illustrates that many of the houses sold in foreclosure auctions across the US were snapped up at firesale prices by private equity firms. Stephen Schwarzman, head of Blackstone, now has a portfolio of 80,000 homes, making his firm “one of America’s biggest private landlords”. Inequality would not have become the inflamed issue it is today if the victims of the crash had been supported as assiduously as our banking institutions.

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[SCMP Column] Conghua horses

September 08, 2018
After short debate, the idea was shot down. The most potent objection was not the massive cross border challenge of protecting Hong Kong’s pampered and expensive horses from a wide range of equine diseases lurking on the Mainland. Rather it was a richly flippant debate over whether the horses would be allowed right of abode in Hong Kong - a very controversial issue for Hong Kong’s human population at the time.

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[SCMP Column] NAFTA revisited

September 03, 2018
In a 2015 report, the US Congressional Research Service summarized multiple studies on Nafta: "In reality, NAFTA did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters. The net overall effect of NAFTA on the U.S. economy appears to have been relatively modest.”
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[SCMP Column] WTO Dispute Settlement

September 01, 2018
WTO rules say there should be seven judges on the appeals body, each appointed for four years, with the ability to renew for a second four year term. WTO rules also say that each appeal must be overseen by three judges. As the US has blocked approval for new judges to be appointed when the terms of existing judges have expired, there are now three vacant seats.

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[SCMP Column] Chinese students abroad

August 27, 2018
Prof Kirby’s question on China’s politically illiberal regime as an incubator for innovation is nevertheless more easily asked than answered. Global educational performance measures like the Pisa tests suggest that China’s universities – indeed its whole education system - are today home to a large proportion of the most accomplished students on the planet. They are today being credited with an increasing share of leading research in many fields, in particular in the sciences.

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[SCMP Column] Tariff war

August 25, 2018
Trump’s “defence” would probably be that the structural imbalance in the US trade relationship with China is so serious that short-term pain must be a price worth paying. His administration would argue that present tactics may be regrettable, but are necessary for the long term.

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[SCMP Column] Confucius

August 20, 2018
Yes it is true that they are opaque and tiresomely uncommunicative, don’t include materials about Taiwan independence, Tibet, or Tiananmen in their lesson plans, and are paranoid about the Falun Gong, but in almost every way they are strikingly similar to the British Council, Alliance Francaise or the Goethe Institute.

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[SCMP Column] Liveability indices

August 16, 2018
It does not matter how “liveable” Vienna or Calgary may be. If a company’s business is driven by activity in the US or China or the EU, your staff are never going to be sent to such liveable places. Rather than tantalise us with the idea of balmy lives in lovely quiet backwater cities, surely someone at the EIU ought to be noting that a huge proportion of international companies are in reality only choosing between a handful of “cities that count”, and devoting time to comparing liveability between this handful.

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[SCMP Column] Aging opportunities

August 13, 2018
Workplaces need restructuring to make it easier for older staff with creaky joints or poorer eyesight to function efficiently – as BMW has done with its production lines in Germany. As we demand barrier-free access around the city for people who are wheelchair-bound or have other physical infirmities, why should older people expect less?

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[SCMP Column] China's tech challenge

August 11, 2018
Already, China’s tech progress has challenged a long-held western view that no centralised command economy can be as innovative as one built on a vigorous, transparent and market-driven democracy. China’s success has not been that it spends lots of state money on innovation, but that it seems to have done so reasonably effectively. China’s challenge to the west is not that it has an industrial policy, but that its track record suggests it might actually succeed in achieving its ambitious goals.

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[SCMP Column] Upstart Shenzhen

July 30, 2018
What the Greater Bay Area will become is as yet unclear, but its potential, and Beijing’s vision for the future of southern China, are awesome. In place of counterproductive rivalries, there is the opportunity for each component part of the Pearl River Delta to play to its strengths, and to work closely with other parts of the region to counterbalance weaknesses. That applies as much to Hong Kong and Guangzhou as it does to Shenzhen – but as the dynamic upstart of the region, it is the opportunities for Shenzhen that gleam out most clearly.

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[SCMP Column] Into Africa

July 28, 2018
For those puzzling why Beijing remains so quiet on a strategic response to the tariff war launched on China by the US, this Import Expo deserves attention. As China continues to reassure the world that it is opening up, this massive import promotion event is being built up as a significant “coming out” party, and a formal attempt to give substance to recent rhetoric over opening the economy.

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[SCMP Column] Migrating manufacturing

July 23, 2018
As the spending power of China’s middle classes rises, so more and more export manufacturers are turning to China’s domestic market for growth – giving them few reasons to move any manufacturing offshore. More likely, they are adding new manufacturing plants in Chinese interior provinces, where the consumer population is growing, and low-cost activity can still be sustained.

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[SCMP Column] Land supply challenge

July 21, 2018
Power to release such military land sits with Beijing, doubtless on the recommendation of the PLA, but surely there can be no harm in requesting. After all, Article 13 of the Garrison Law says that if military land is no longer needed for military purposes, it “shall be turned over without compensation to the HKSARG for disposal.” If that is not an open invitation, I don’t know what is.

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[SCMP Column] Trade war impacts on Hong Kong

July 16, 2018
While Edward Yau and Kenneth Chan may be right to duck at this stage – they don’t after all want to lend official authority to any form of alarmism, especially after Beijing has told media to avoid talk about trade war – that does not mean some serious “back of the envelope” assessments are not urgently needed.

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[SCMP Column] Redefining the trade agenda

July 14, 2018
Harvard economist Dani Rodrik, writing here in the SCMP on Thursday, was right to counsel both China and the European Union to be restrained, and resist the temptation to retaliate. If there is going to be a global row over trade, then both the EU and China would do well to resist the Pied Piper call to define the problems in profoundly flawed Trumpian terms. They should take the time to redefine the problem, and seek solutions that better suit the majority of the world’s economies.

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[SCMP Column] The bias epidemic

July 09, 2018
And with Trump’s venal politics steadily gaining ground, it is distressing that no ready responses come to hand. As Harford concludes: “We journalists and policy wonks can’t force anyone to pay attention to the facts. We have to find a way to make people want to seek them out. Curiosity is the seed from which sensible democratic decisions can grow.” Or is that his desirability bias kicking in – simple wishful thinking? [ Read More ]

[SCMP Column] The power of wai ya

July 02, 2018
The Japanese call it “gaiatsu”. The Chinese call it “wai ya”. It’s the positive use of foreign pressure to drive domestic reforms that might otherwise be difficult or impossible. Nowhere has it been used more helpfully that in driving trade liberalisation in the face of entrenched domestic lobbies and vested interests.

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[SCMP Column] America's opioid crisis

June 30, 2018
I find it hard to get my head around America’s opioid crisis. It is hard not to be alarmed by reports of more than 300,000 Americans dying since 2000 from abuse of prescription opioids – more than deaths in car accidents, or from gun violence.

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[SCMP Column] Mosquito season

June 25, 2018
With so much scientific brainpower and money being spent on eliminating the threats from mosquitoes, I sense that significant progress is being made. But that raises a separate, distinct question: would it actually be a good thing to exterminate all mosquitoes?

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[SCMP Column] How tariffs backfire

June 23, 2018
Hopefully by now it is beginning to dawn on Trump’s trade team how naïve it was to think that trade wars might be good and easy to win. What they have yet to realise as they ratchet up their tariff “punishments” is that the main victims of these actions are their own global multinationals, and of course the US’s own consumers.

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[SCMP Column] Industry policies

June 18, 2018
The base US case is made clearly by a research assistant at the New York-based Council on Foreign Relations, Lorand Laskai. Laskai starts from the US government’s huge report justifying the Section 301 initiatives against China, calling it “a searing indictment of China’s disregard for intellectual property, discrimination against foreign firms, and use of preferential industrial policies to unfairly bolster Chinese firms.”

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[SCMP Column] FDI crash

June 16, 2018
Even more striking: foreign investment flows into the United States slumped by 40 per cent, from US$457bn to US$275bn, and by 42 per cent into the European Union, from US$524bn to US$304bn. This investment earthquake meant that Asia was the world’s most important destination for foreign investment, with its share, steady at US$670bn, accounting for 33 per cent of global flows (compared with 25 per cent in 2016). China (attracting US$136bn) and Hong Kong (attracting inflows of US$104bn) remain the world’s second and third most important destinations for FDI, after the US.

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[SCMP Column] Trade victimhood and hyprocracy

June 11, 2018
As someone who has for more than 30 years tried to understand the practical development of international trade and investment – and the benefits these have brought to most people worldwide – I have of course found Donald Trump’s thoughts and actions on trade extremely challenging.

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[SCMP Column] Vanilla and the commodity curse

June 09, 2018
It would be nice to share their optimism, and it is just possible that this time it is different. But for those Madagascan vanilla farmers at the grindingly poor end of the US$57bn global ice cream market, the likely reality is not so rose-tinted.

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[SCMP Column] Quality Japan

June 08, 2018
The US might have been Japan’s primary economic driver from the end of World War 2, but that is changing. China can for sure deliver “scale”, but it will for some time still be Japan that delivers “quality”. Consciously capturing and capitalising on this could provide strong and long term foundations for future competitiveness. I don’t think it is just the cherry blossom season that is bringing a new sense of optimism.

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[SCMP Column] Iran sanctions

June 08, 2018
A week ago, my main gloomy worries were over the dangerous escalation in the US-China trade conflict. Today, that seems positively manageable by comparison with the abyss that has opened up under the Iran Nuclear Deal. Despite optimistic comments about Trump hosting North Korea’s Kim Jung-un for denuclearisation discussions in Singapore in a month’s time, I wonder what on earth can persuade Kim to trust Trump’s sanctions-lifting promises, once Trump’s betrayal of the Iranian nuclear deal sinks in.

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[SCMP Column] Thucydides Trap

June 04, 2018
As Donald Trump’s hyperactive team hurtle from G7 belligerence in Paris, to Pacific Ocean defence talks, and a likely summit with North Korea’s Kim Jung-un in Singapore, to mercantilist trade battles in Beijing and snarling unfinished business in Nafta, it is time to pause and think afresh about Thucydides’ story.

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[SCMP Column] Sporting asylum

June 02, 2018
It seems Australia is quite a magnet for such extra-curricular ambitions. In the Sydney Olympics in 2000 it was reported that dozens tried to remain in Australia, while at the 2006 Melbourne Commonwealth Games, a total of 19 athletes sought asylum. One for the more famous was Omari Kimweri, a Tanzanian boxer who hid for nine months on a tobacco farm outside Melbourne before turning himself in for asylum. Ten years later, he won the World Boxing Council silver flyweight title – fighting as an Australian.

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[SCMP Column] Supercharging baby

May 28, 2018
Take the “Babypod”, examined by science writer Erik Vance in this month’s Scientific American, which is among dozens of devices that plays music to your still-unborn child with the aim of giving the fetus a head start: “Our initial hypothesis suggests that music... activates the brain circuits that stimulate language and communications. In other words, learning begins in utero,” Babypod’s website says. And they mean that quite literally: it is a bulb-shaped silicone speaker that is inserted inside a woman’s vagina.

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[SCMP Column] Pillaging the planet

May 26, 2018
A fascinating piece of research by a team at Leeds University in the UK, examining the performance of around 150 countries worldwide in terms of their social progress, and the unsustainable damage they are inflicting on the environment, shows a dreadful link. We simply don’t seem to be able to improve people’s livelihoods without at the same time using more resources than the planet can afford.

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[SCMP Column] Pensions and savings

May 21, 2018
The titans of global finance were gathered for the World Bank meeting in the newly-opened Convention Centre. The auditorium was packed, and on the podium the heads of the world’s leading fund management houses were gunning for one thing alone: for Hong Kong to establish a compulsory pension scheme.

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[SCMP Column] Sharing economy

May 12, 2018
Uber and Airbnb may have started life as icons of the “sharing economy”, but today they are simply large and powerful international businesses fighting about regulatory hurdles to their new business model against similarly powerful local entrenched business interests. The idea is long faded of Uber enabling car-pooling or letting car-owners earn some money on the side, or of Airbnb letting families earn some pocket-money by letting out a spare bedroom – in Hong Kong at least. I don’t agree with the Hong Kong government blocking these companies’ development, but let’s not get bamboozled into thinking this is anything to do with the “sharing economy”.

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[SCMP Column] Trade skirmishes

May 07, 2018
The signal was clear that Trump is giving the China trade issue the highest priority. But at the same time the size and composition of the “team” powerfully illustrated the divisions across the US administration on how to manage trade relations in general, and with China in particular. Few could be as far apart on economic policy as Steve Mnuchin, a former Goldman Sachs boss, and Peter Navarro, author of “Death by China”.

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[SCMP Column] Deep Ocean Mining

May 05, 2018
For decades, the quest for riches scoured from our oceans has been the stuff of fiction. Back in 1974, the CIA hoaxed the world by saying they were launching Project Azorian, a Pacific Ocean search for mineral-rich manganese nodules 4,900m deep. In fact, they were secretly looking for – and indeed found – the sunken Soviet submarine K-129.

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[SCMP Column] May madness

April 30, 2018
After three days last week feting French President Emmanuel Macron and his wife, and three hours frostily lunching Germany’s Chancellor Angela Merkel, he has less than two weeks to decide on whether to put a bomb under the three-year-old Iran Nuclear disarmament deal, or whether to kick the can down the road.

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[SCMP Column] Rosling and Factfulness

April 28, 2018
Shockingly – because answers are readily available in frequently-used public sources, and used commonly in discussions about global economic and social trends - not a single one of Rosling’s respondents got all the answers right. Fifteen per cent of respondents scored zero. The average score was two. How did you fare?

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[SCMP Column] Liveable smart cities

April 23, 2018
In many ways, Hong Kong is the perfect template for liveable city planning, with its world-beating Mass Transit System, the integrative potential of a compact high-rise city dominated by just a small number of developers, just two vertically-integrated power suppliers, one of the world’s best and digitally integrated healthcare systems, and one of the world’s best-endowed digital infrastructures.

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[SCMP Column] Importing and Exporting

April 16, 2018
The results were perhaps not unexpected, but were sobering nonetheless. As for the world’s 20 largest economies, China is the leading source of imports for 11. It is the second most important source of imports for a further four. In only two countries – France and Switzerland – is China not one of their top five sources of imports.

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[SCMP Column] Discriminating against women

April 14, 2018
Many difficult and controversial things still need to be done to make sure we capture the full potential of women in the workplace. Many are being discussed, and some are even being acted upon as I write, but some have not even begun to register in the public mind. For me, the most obvious and pressing of these is the need to revamp our education systems to enable women in their 40s, after children have risen into their teens, to reskill systematically for what in future is likely to be a further 30-year career.

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[SCMP Column] Trade and Smiley Faces

April 09, 2018
Chinese exports worth US$46.2bn – mainly machinery, mechanical appliances and electrical equipment ($34.2bn), transport equipment ($2.7bn) and a grab bag of products like chemicals, base metals and plastics ($8.2bn). [ Read More ]

[SCMP Column] Caveat Emptor

April 07, 2018
This attitude also probably explains a massive difference between shopping on Tao Bao and shopping on Amazon: Amazon agrees to accept returns and refund dissatisfied shoppers. Tao Bao offers no such service, and Hong Kong’s online shoppers seem OK with the deal: I am buying super-cheap, so if the product turns out to be faulty, I will just throw it, and pray for better luck next time.

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[SCMP Column] Airlines and the long haul

April 02, 2018
Airline marketing people and advertising agencies do us all a gross disservice by concocting a story of bliss and transcendent relaxation on that flight from Singapore to London, or to New York via Los Angeles. The sooner they acknowledge the pain and stress linked with almost every stage of air travel, the sooner the credibility of the world’s favourite airlines will recover.

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[SCMP Column] China's futures

March 31, 2018
While, as with the rest of the world, traditional trading in equities products, interest rate contracts, and oil and natural gas contracts, a lot of China’s commodities trading activity has developed to be very specific to China’s own economy, and its trading needs.

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[SCMP Column] Debt and systemic stress

March 29, 2018
The US Fed is predicting that the 1 percentage point increase in interest rates since early last year will add $15bn to US corporate interest rates this year, and $39bn in 2019. The Congressional Budget Office says interest costs in the US will triple over the coming decade, from US$269bn last year to $818bn in 2027.

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[SCMP Column] Winning trade wars or winning elections

March 26, 2018
With so much obvious likely pain at home, and such clear difficulties in achieving targeted objectives versus China, you have to come back to Trump’s preposterous claim that trade wars are good and easy to win, and ask a different question: How will Trump measure a win?

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[SCMP Column] Li Kashing and old age

March 19, 2018
In a fast-ageing society like Japan, demand for baby diapers is in sharp decline as fewer and fewer children are being born. Demand for women’s napkins is static, as the country’s female population is static. But demand for adult diapers is booming, as the over-65s account for more than a quarter of the country’s population. They now outstrip baby diaper sales.

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[SCMP Column] Hygge and Expensive Cities

March 17, 2018
It seems that Singapore (not conspicuously happy) ranked the world’s most expensive city for the fifth consecutive year mainly because it is the world’s most expensive place to run a car, with clothes and food also very expensive. But the EIU offers consolation in that domestic helpers are cheap. Hong Kong ranks up there for lots of reasons we know well, linked with the costs of owning a home, and petrol prices more expensive than anywhere in the world except Oslo. It seems, like Singapore, our groceries are also immensely more expensive than elsewhere.

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[SCMP Column] Over the Moon

March 12, 2018
While North-South diplomatic exchanges have surged unnoted, the imaginative decision to invite the North’s athletes to the Winter Olympics as part of a united Korean team, and to invite along Kim Yo-jong, sister of the North Korean leader, as head of delegation to the Olympics, seemed to have an electrifying effect. Ms Kim was the first member of the immediate Kim family to come into South Korea since the fighting ended on the peninsula in 1951. [ Read More ]

[SCMP Column] An easy trade war to win

March 10, 2018
It is possible that the White House trade team may in due course get round to tackling issues like intellectual property abuse, but in the meanwhile to point the barrels at the very allies the US will need alongside it to wage these behind-the-border battles inside China seems counterproductive at the very least.

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[SCMP Column] PNG's digital challenge

March 05, 2018
It is true that regional studies show quite alarmingly how our digital leader economies are seeing growth rates significantly stronger than all laggards, resulting in widening inequality across our region, but that is at present not something that should be allowed to distract hard-pressed PNG officials and businesses from capturing what they can. At these levels of poverty and exclusion, it is the absolute progress that counts, however modest – not the progress relative to Korea or Japan or Singapore.

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[SCMP Column] Pew picture of the US

March 03, 2018
According to Pew: “In the eyes of most people surveyed around the world, the White House’s new occupant is arrogant (75 per cent), intolerant (65 per cent) and even dangerous (62 per cent).” Just 26 per cent see him as well qualified. Can he get comfort from the fact that survey respondents in the Philippines see him as charismatic and well qualified? But then, here is a country well-used to “show-man”, celebrity leaders.

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[SCMP Column] The temptation to squander

February 26, 2018
In light of a fast-approaching “future jobs” crisis, significant billions should be reserved for radical change in the education sector – not just in curriculum change to build digital literacy, and better kit for our kids in schools, but in new investment in mid-life learning programmes, and a transformation in the way we deliver vocational training. Funding for companies to drive extensive in-company career training would be a valuable complement. Nothing could be more clearly in the interests of Hong Kong’s future, and would make barely a dent in our current HK$1.7tr reserve pool.

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[SCMP Column] Future job crisis

February 24, 2018
My hunch is that the future will be filled with more jobs, rather than less; that skills mismatches will be a core problem; and that old-fashioned attitudes to ageing and retirement are blocking our older adults from ensuring we meet the challenges.

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[SCMP Column] Planetary plastics crisis

February 22, 2018
So clear is the challenge that governments and even the world’s main plastics producers and users, have long passed the “denial” phase. They admit the problem needs to be fixed. James Quincey, CEO of Coca Cola, which uses 110bn of the 480bn plastic bottles every year, is under no illusions: “The world has a packaging problem.” But still his best commitment is to ensure recyclability by 2040. McDonalds has gone a little better by saying last month that all packaging will be from sustainable sources by 2025.
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[SCMP Column] Universal basic incomes and post-work utopias

February 19, 2018
The movement, driven mainly in the UK, the US and some European countries, clearly has roots back in Karl Marx’s vision of the freedoms in a communist society where workers could “hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner”. One also sees roots in socialist William Morris’s 1880s vision of future factories surrounded by gardens in which employees work just four hours a day, and in John Maynard Keynes’ “age of leisure and abundance” that would arise as technology advances.
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[SCMP Column] Surveillance

February 17, 2018
China is doing nothing that other governments worldwide are not also doing, but this loss of privacy is surely unnerving. Before we are confronted with a fait accompli, should we not be asking whether it is acceptable or desirable for all of us to go around legitimately filming each other, just in case someone commits a wrong against us? Are we better off in a world under watch? I know what George Orwell would have said.
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[SCMP Column] Chinese travellers in Hobbiton

February 12, 2018
As in other areas, China’s laws of big numbers are transforming the world of tourism, and not just in New Zealand. The Germany-based China Outbound Research Institute calculates that over 150m Mainland Chinese travellers ventured overseas last year – the largest number from any nation. And this is predicted to grow beyond 200m in the next five years. Admittedly, 68m of the present total were travelling  to Hong Kong and Taiwan, but that still meant 83m travelled more intrepidly – outnumbering the 83m German overseas travellers, and the 68m from the US.
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[SCMP Column] New Zealand glimpse into anti-globalisation

February 05, 2018
No longer. Community anxieties that have lifted people like Donald Trump to power are only too real and well-founded. So too the eccentric forces that prompted British voters to call for Brexit. So too the shock election victory of New Zealand’s Labour Party in October last year, which brought to power Jacinda Ardern, and her left-leaning cabinet, including David Parker and Fletcher Tabuteau. 
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[SCMP Column] About Pandemics

February 03, 2018
Whatever the shortcomings of the present treatments for our annual flu seasons, they are light-years superior to the treatments known or deliverable in 1918, so mortality rates should be significantly lower. But we have to remember that even if survival rates are higher, the sheer size of the world population today would make for sobering mortality rates. As the Centres for Disease Control in the US noted recently: “Even with modern antiviral and antibacterial drugs, vaccines, and prevention knowledge, the return of a pandemic virus equivalent in pathogenicity to the virus of 1918 would likely kill more than 100 million people worldwide.” [ Read More ]

[SCMP Column] Megacities and urbanization

January 27, 2018
The risk and challenge is not over-reliance on one metropolis or another, but over the massive challenge of urbanization. Over the past 35 years, China has managed the movement of at least 500m rural people into cites, many of which – like Shenzhen – did not exist when Deng Xiaoping aroused the country from its Maoist introversion. It was only five years ago that for the first time in China’s history, more Chinese people were living in cities than living in the countryside.
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[SCMP Column] Trump's Tourism Slump

January 21, 2018
Already, the US tourism industry has suffered what some are calling the “Trump Slump”. From his early efforts to block travel to the US from a number of Middle Eastern economies that he deemed were sources of terrorism, to his attacks on Hispanics (remember his comments about Mexicans on the campaign trail: “They’re bringing drugs. They’re bringing crime. They’re rapists.”), his decision to engage in trade wars with Canada and Mexico, his biggest trade partners, and his recent slur on “s***hole countries”, it is hardly surprising that the flow of international tourists into the US is faltering, and may decline further. [ Read More ]

[SCMP Column] Davos Trade skirmishes

January 19, 2018
In many ways, the Trump rhetoric has made a positive result virtually unachievable. He has repeatedly and hyperbolically talked of the 1994 Nafta deal as “the worst deal ever” implying that any new deal will by definition have to be saleable as “the best deal ever” – for American workers at least. With Canada’s prime minister under political pressure to avoid embarrassing concessions, and Mexico’s president facing elections on July 1, it is difficult to see what they can offer that would enable Trump to declare such a “best ever” deal. [ Read More ]

[SCMP Column] Progress for Women

January 14, 2018
Note the current controversy in the UK over the BBC’s China Editor, Carrie Gracie, who in Beijing earned £135,000 (US$185,000) a year, compared with the £200,000 earned by her male counterpart in New York, and Prime Minister Theresa May’s preposterous distinction between “boy’s jobs” and “girl’s jobs”. [ Read More ]

[SCMP Column] Crazy Art

January 11, 2018
The formal trigger for this explosion of angst is of course the November 15 sale at Christie’s of Leonardo da Vinci’s Salvator Mundi for US$400 million. For me, the ridiculous price is less bemusing than the backstory: is there not delicious irony in a Muslim Saudi Arabian prince buying a picture of Christ with a title meaning “saviour of the world” for a new museum in Abu Dhabi? [ Read More ]

[SCMP Column] Cryptocurrency concern

January 05, 2018
The tech-savvy idealists and libertarians will at this point dismiss me as a dinosaur that is myopically unable to recognise our inevitable future. But I take comfort that I remain in good company. A recent YouGov survey in the US said that 62 per cent of respondents either had never heard of bitcoin or believed they were used for criminal purposes. A customer survey by HSBC found that 59 per cent of respondents had never heard of blockchain technology. Of the 41 per cent who knew about it, around four fifths did not understand it. [ Read More ]

[SCMP Column] Predictions and wishful thinking

December 31, 2017

Hong Kong and China. Wishful thinking, that Hong Kong people will acknowledge the reality of our economy’s gradual integration with the mainland; we will champion for adoption across the Greater Bay Area those legal, institutional and business strengths that have made Hong Kong so competitive, and so aided China in building access to world markets; our graduates will seek opportunities across the mainland just as Londoners compete across Europe, or New Yorkers across the cities of the US

Likely reality: ongoing political gridlock on issues linked with integration; continuing resentment at elite mainland graduates and business leaders growing roots in Hong Kong; official reluctance to take a lead in building the institutions that will define the Greater Bay Area.

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[SCMP Column] McDonald's revisit

December 22, 2017
In the words of Larry Light, McDonald’s former chief marketing officer: “Instead of trying to come up with new kale and bean salads, (Steve Easterbrook decided to) fix the familiar. Fast food is not in decline.” [ Read More ]

[SCMP Column] The Christmas Gift of Time

December 18, 2017
Back in Hong Kong and in China, without the excuse of the Christmas season and not satisfied with the consumer stimulus that comes with the Lunar New Year festivities, we only need to turn to the success of Alibaba’s November 11 Singles’ Day to see that the urge to consume is not only pathological, but universal. In the nine years from the “invention” of Singles’ Day, China’s 24-hour, stuff-focused online shopping frenzy has grown 3,000-fold to amount to around US$26 billion – almost 10 times the total of the US’ equivalent over the Thanksgiving weekend. [ Read More ]

[SCMP Column] Whistling in the wind in Buenos Aires

December 15, 2017
From the 44 countries that attended the Mount Washington meeting 70 years ago, just 23 went on to sign up to the General Agreement on Tariffs and Trade (GATT). While the US slashed its tariffs from the strangling levels of the 1930 Smoot Hawley Act, few others at first took similarly ambitious steps away from protection. [ Read More ]

[SCMP Column] HK's Iconic Waterfront

December 10, 2017
The importance of this site simply cannot be underestimated. By 2050, what is being created today on Site 3 will define how the world perceives Hong Kong. It will be on postage stamps, and will provide the backdrop to international TV broadcasters as they talk to the world about Hong Kong. Whether Hong Kong stands out as “Asia’s World City” or by then is just another Asian or Chinese city, will be determined by what we create. [ Read More ]

[SCMP Column] China's Mushroom Explosion

December 08, 2017
According to the Food and Agriculture Organisation (FAO), China in 2014 produced more than 7.6 million tonnes of mushrooms of one kind or another – three quarters of total world production amounting to 10.3 million tonnes. [ Read More ]

[SCMP Column] Cities at risk

December 04, 2017
Among 301 cities surveyed, Hong Kong ranks fifth among cities most exposed to natural or man-made risk. It is the most exposed worldwide to pandemic risk, and the second most at danger from nuclear accident risk. Lloyds puts the total GDP at risk in Hong Kong at US$74 billion – about a quarter of that due to pandemic risk. [ Read More ]

[SCMP Column] Health alarum

December 01, 2017
Take the obesity numbers. If it is true that 29.9 per cent of Hong Kong people are technically obese (using the World Health Organization measure, that means having a body mass index of 25 or above), then according to WHO data, that puts us among the four or five most obese populations in the world – behind the US, Mexico and New Zealand, but ahead of Australia, Canada and the UK [ Read More ]

[SCMP Column] Free Trade is Tough Sell

November 27, 2017

It does not help that in big economies like the US only 1 per cent of companies are actually involved in international trade. While the impact of this 1 per cent is huge in terms of lowering costs for local companies and Walmart shoppers, these impacts are indirect and unappreciated by most businesses, and most consumers. While economies like Hong Kong and Singapore have a much higher awareness of benefits, with 70 per cent or more of companies involved in trade one way or another, we are exceptions that prove the rule.

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[SCMP Column] Colonial Legacy Revisited

November 25, 2017

It is worth remembering that China’s total trade with the entirety of Africa is less than US$180bn a year – less than half its trade with the US, and just two thirds of its trade with Hong Kong. And Zimbabwe is a trade minnow alongside countries like Nigeria, South Africa, Kenya, Congo, or China’s second largest source of oil – Angola. They are embraced by Xi Jinping’s “Belt and Road” vision, but modestly at its margins.

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[SCMP Column] Bad Things Do Get Better

November 20, 2017

From joining APEC 1998, Vietnam’s GDP has grown from US$27bn to US$202bn – averaging growth of more than 6 per cent a year. And yes, exports have surged almost 14-fold to US$177bn last year, but imports have surged in similar measure, to US$174bn, leaving merchandise trade in almost perfect balance. If there were ever an example of the xenophobic economic illiteracy of Trump’s zero-sum view of the world as a bundle of bilateral trade balances, Vietnam surely provides it. Vietnam is a poster child for the net benefits of globalization and commitment to free and open trade and investment. It would in normal times be applauded by the US for its willingness to open up and engage. But these are not normal times, and my newly acquired Florida Gator fans are not the only ones thrown into deep stress.

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[SCMP Column] Superbugs Unplucked

November 18, 2017

This explains the recent angst-attack here in Hong Kong over the love affair local people – and their doctors – have with antibiotics, and the announcement of a five-year plan to contain the threat from bugs that can shrug off all the antibiotics we throw at them. As Maryn McKenna notes: “These are the unintended consequences of the post-World War II drive to feed the world inexpensively by producing meat as quickly as possible – and how those good intentions created a worldwide epidemic of drug-resistant infections that have defeated almost every antibiotic we have.”

Of course, the problem does not sit exclusively with chickens. It is just that chickens is where the scale is – accounting today for almost a third of all meat production, second only to pork. And while back in 1980 most chickens were bought and roasted whole – as so many will be gobbled up with turkeys on Thanksgiving night – by today, almost all chicken meat is served up in one processed form or another – from chicken breasts and chicken thighs to infamous chicken nuggets.

[ Read More ]

[SCMP Column] From Trade to Theatre

November 13, 2017

Trump’s decision to air his new strategic concept at the APEC leaders’ meeting was interesting, and probably contentious. APEC is conspicuously not a military or strategic forum, with its eyes firmly focuses on economic cooperation. And given China’s liberalizing embrace at the meeting, there were many of APEC’s 21 member economies anxious not to beat an “Indo-Pacific” drum. That perhaps explains the muted response to Trump’s speech, with comments only from those with no reasons to curry favour with Trump. Evan Medeiros, a former top Asia adviser to Mr ?Obama, noted that the prospects for the Indo-Pacific strategy were uncertain: “It has no serious economic component, relies conceptually on an ambivalent India, and looks like China containment to many Asian leaders,” he said.

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[SCMP Column] Trump's Bathtime Blues

November 11, 2017

APEC discussions are all about deepening regional integration, fostering globalisation and the net benefits of free and open trade and investment, and reducing inequalities across one of the most economically diverse regions in the world. These are concepts that stick deep in the craw of an “America first” president.

The refusal of the other 20 APEC leaders to give priority to bilateral trade balances must surely test his patience. Efforts in Danang to finalise a TPP11 – a stripped-down version of the original Trans-Pacific Partnership that was sabotaged by Trump’s US withdrawal 10 months ago – must be an open and very public slap in his face.

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[SCMP Column] All for the Greater Good

November 06, 2017

It is nevertheless fair to recognize that the level of economic interconnection remains constrained – by the boundary, by “One Country, Two Systems” distinctions, and by the practical challenges of incentivizing rivalrous governments to cooperate. Too many Hong Kong people still see “Chinese interference” at every turn, and see any Hong Konger looking to build links as brown-nosing Beijing or compromising our hard-fought separateness. As we now turn in earnest to the task of building our role in our hinterland region, much valuable time has been lost.

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[SCMP Column] Nuclear Deal Goes Nuts

November 04, 2017

For thousands of years – back to 6,500BC at least – Iran has been the world’s crucible for pistachio nuts. Not only do Iranians devour them with a passion, at almost every festive opportunity, but anyone anywhere in the world that had heard about, and developed a taste for pistachios, had to turn to Iran. Even through the past century, after crude oil, Iran’s main export has always been pistachios, coming mainly from the south-eastern province of Kerman, famous also for caraway seeds and Iran’s not so awesome auto industry.

[ Read More ]

[SCMP Column] Brexit Madness Revealed

October 30, 2017

Advocates for Brexit have succeeded in creating a trance-like consensus in the UK that the 52 per cent vote in favour of Brexit has created an irreversible commitment to exit that is treasonous to challenge. Why have the 48 per cent who voted to remain been forced into silence, regardless of the reality that every next negotiating round reveals further horrendous consequences for the UK and its future?

[ Read More ]

[SCMP Column] A Democratic Challenge

October 28, 2017

But most awkward of all, I am finding it increasingly difficult to defend democratic politics in terms of delivering superior economic or social progress for our democratic citizens. It has become clear over the decade since the global financial crash in 2008 that in the absence of economic growth, democratic systems perform very eccentrically. It seems candidates for political office in a democracy need to be able to promise superior performance to their rivals, in terms of stronger economic growth, more spending power, well-paid employment, better security and care for our elderly, and so on. Recession and contraction, which involves spending cuts, unemployment, or insecure, ill-paid employment, sells very badly. A politician cannot easily win voter support on the basis of selling “less pain” than a rival.

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[SCMP Column] Playing the Golf Game

October 23, 2017

The huge golfing industry (worth over US$70bn in the US alone, where it accounts for almost 2m jobs) will be quick to counter the error of my thoughts. With over 60m golfers worldwide (and 37m of them in the US), there are doubtless hundreds of readers who are also appalled by my myopic prejudice.

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[SCMP Column] An Assault on Free Trade

October 21, 2017

The irony here is that the US is by far the biggest user of the WTO dispute settlement process, accounting for almost 20 per cent of the 520 cases brought since 1995. The EU’s trade commissioner Cecilia Malmstrom, said last week that the impasse could lead to a breakdown of a system that is central to managing disagreements among the world’s trading nations.

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[SCMP Column] A Better Quality of Life

October 16, 2017

In theory, the Government has had an “ageing in place” policy on the statute book since it established the Elderly Commission 20 years ago. At that point, the proportion of Hong Kong’s population aged over 65 was below 10 per cent. Today, this has grown to 16 per cent, and before 2040 it will sit at 25 per cent. With half of our population expected to live beyond the age of 100 – compared with just 5 per cent 50 years ago – the need to prioritise this issue ought to be self-evident. 20% of households are now elderly with as many as 250,000 currently inadequately housed, and 20,000 more homes projected to be occupied by the elderly in the next decade alone. Already Hong Kong has around 100,000 people suffering varying stages of dementia, and domestic helpers (with not even minimal medical training) are providing care to 40,000 elderly people who live at home alone, and this number is set to explode.

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[SCMP Column] No Logic to US Gun Obsession

October 14, 2017

As an outsider, understanding the US obsession with gun ownership is an absolute impossibility. There is something mysterious and unique going on in the American brain that condones such a tragic national masochism. According to the American Journal of Medicine, the gun-related murder rate in the US is 25 times higher than the average of 22 other high-income countries. While the US has seen 28,000 gun deaths so far this year, Japan has seen just one. While gun-deaths per 100,000 people sits at 10.2 in the US, it sits at just 1 in Australia and Germany, and a bare 0.2 in the UK.

[ Read More ]

[SCMP Column] Let Cool Heads Prevail

October 09, 2017

For Hong Kong’s preposterous independence movement, Catalonia’s demographics are awkwardly similar to our own, and must surely provide fuel for our (currently small number of) silly separatists: our populations are the same, as is our GDP (at US$320bn). In our glory days in the 1990s Hong Kong also claimed to account for 18 per cent of China’s GDP – within a whisker of Catalonia’s 19 per cent contribution to Spain’s GDP. Perhaps it is no small matter that over the past 20 years Hong Kong’s contribution to national GDP has shrunk to around 2 per cent. This begets a modesty that Catalonians clearly do not feel.

[ Read More ]

[SCMP Column] Beauty of PowerPoints

October 07, 2017

When Robert Gaskins and Dennis Austin at the Silicon Valley tech consultancy Forethought sold PowerPoint to Microsoft in 1987 for US$14m, I am sure they had no idea what a wonder they had created – and what a fortune they had signed away. Today, it is estimated that there are almost 350 PowerPoint presentations launched every second somewhere in the world – that’s about 30m a day. The software is installed on about 1.2bn computers worldwide.

[ Read More ]

[SCMP Column] Change of Fortune Looms

October 03, 2017

He forgets that the world’s trade rules – and the architecture of most other international institutions created from the ruins of the second world war – were set largely by the US, underpinned by the US legal system, and forged with US business interests at heart. He forgets that for most economies worldwide gigantic US corporations have over the past six decades built a dominant – even impregnable – position in global markets confident of protection in a home market that remains the largest and richest in the world.

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[SCMP Column] Whoof, Howl and A Miaow for Pet Lovers

September 30, 2017

One of the biggest contributors to this surge has inevitably been China, even though only 5.6 per cent of households currently own a dog, and just 1.5 per cent a cat. Gone are the days when the country’s cities were purged of all dogs, and Mao was offering rewards to villagers who exterminated sparrows that were devouring the country’s rice reserves. China today boasts over 27m pet dogs and 53m pet cats. It is of course one of the world leaders in keeping pet birds and fish. Their petfood market has in the past decade jumped 40 per cent to US$3.5bn.

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[SCMP Column] Brace for the Next Crisis

September 25, 2017

Deutsche Bank has just published its annual long-term assets survey, titled: “The Next Financial Crisis”. It lays out numerous possible triggers – a recession; a clumsy central bank unwind; deflation; an asset market crash; a collapse in market liquidity. Triggers could come from Italy, China, Japan or from Brexit-blighted Britain. The list is long. As one commentator noted: “The range of disaster scenarios shows that the experts simply do not know what will happen next.” And if the experts don’t know, what hope for us mere mortals with measly savings needing to be parked somewhere?

[ Read More ]

[SCMP Column] Two Steps Backwards

September 23, 2017

So the “Myanmar problem” has deeper and more complex roots than the Rohingyan crisis, but the international community is right to be alarmed and outraged. There seems a grave danger that the bloody “area clearance” operation, triggered by an August 25 attack on police posts in Rakhine by the Arakan Rohingyan Salvation Army, may explode into something much bigger.

[ Read More ]

[SCMP Column] Punching Our Weight

September 18, 2017

Trade has grown so strongly that ASEAN is today Hong Kong’s second largest market, behind China, but overtaking the European Union and the US. Total merchandise trade amounted in 2016 to HK$833bn, with services trade amounting to HK$121bn. ASEAN still ranks just 6th as a destination for Hong Kong investment – with a stock of HK$218bn at the end of 2015 – but this will rapidly change as Belt and Road investments gather momentum.

[ Read More ]

[SCMP Column] Dispute Resolution

September 16, 2017

The EU data gets even more depressing: the average value of a claim is just US$52,700 - which means legal fees in even the most simple case will gobble up most of the value of the claim. US officials say the average international dispute takes 446 days to settle – about 15 months – and that US lawyers alone will cost on average US$1,200 an hour. The mind boggles at the likely costs, but we are talking millions of dollars for even straightforward cases.

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[SCMP Column] Halt, Proceed with Care

September 11, 2017

Needlesstosay, there is a worldwide scramble going on at present to locate, and begin extracting both minerals. And behind this is a burgeoning battery-making industry, in which Chinese companies seem headed to overtake global leaders like Panasonic from Japan, and LG and Samsung from Korea. Lots of hype has been beamed on Tesla’s “gigafactory”, but the two global leaders in making lithium-ion batteries are CATL in Ningde in China, and Lishen in Tianjin. By 2020, it is predicted that 9 of the 14 leading lithium-ion battery makers will be in China (many foreign joint ventures), with China accounting for over 80 per cent of production.

[ Read More ]

[SCMP Column] Defusing the War Tension

September 09, 2017

But in recent years – and in particular since Kim Jung-un was anointed in April 2012 – it seems the North Korean’s have begun to imagine a different future. Alongside the fear-driven belief that “nuclear deterrence serves as the strongest treasured sword” – protecting Kim and his regime from the US enemy and the ignominious fate of Gaddafi in Libya and Saddam Hussein in Iraq – the regime has developed a second strategic track, known as the “byungjin line”, which involves economic development, nurturing a private sector and functioning  markets (called jangmadang) and raising wages.

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[SCMP Column] Disaster Management

September 04, 2017

The truth is that the Macau Government and the casino barons that run Macau – and of course the US administration bending to lobbying for a “light hand” by the oil industry concentrated around Houston and the Gulf Coast – have  only the flimsiest excuses for failing adequately to fund the cost of protecting lives and livelihoods during typhoons, hurricanes, and other entirely predictable natural disasters. For the world’s leading economy, with a GDP of US$19 trillion, investment in appropriate infrastructure for storm defences was necessary and affordable.

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[SCMP Column] Colourful Life Lived Well

September 02, 2017

Perhaps inevitably quoting Churchill, David said at the FCC: “Churchill was supposed to have said that “democracy is the worst kind of government, except for those others with have been tried. I should like to think that Hong Kong is the worst kind of place in which to live, except for those others which have been tried.” He defined the “Holy Trinity” that protected Hong Kong and underpinned its unique value: “its decent judicial system, its fairly uncorrupt community, and genuine freedom.”

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[SCMP Column] Challenge of Stagnation

August 28, 2017

Much more important is that sense of stagnation and relentless struggle in a setting where evidence of wealth lies in plain sight all around. McKinsey reported a couple of months ago that up to two thirds of families in many high-income countries have suffered flat or falling real incomes since 2005. In the US, over 80 per cent of households report flat or falling real incomes from wages and capital. In Italy, an astonishing 95 per cent of families report such stagnation.

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[SCMP Column] Liveablility Challenge

August 26, 2017

Like Monocle, the EIU includes in its “Culture and Environment” category a “Humidity/temperature rating” – which always punishes hot and humid places like Hong Kong. But what about those of us that hate to our shivering core the long cold dark winters of northern Europe or Canada? Why do Toronto (ranked a giddy 4th), Calgary (an astonishing 5th) and Helsinki (at 9th) not get punished for those interminable lightless months of miserable cold, and the dreadful monochrome of leafless trees, flowerless streets and grey slushy snow. Why do they not get punished for the awful lumpy layers of clothing you have to put on and peel off whenever you leave or arrive home?

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[SCMP Column] Litmus Test for Trump

August 21, 2017

Already, at least three bruising battles are in prospect. First, Canada and Mexico are bristling fiercely over US efforts to put trade rebalancing at the heart of the negotiation, not least because US complaints over what it believes are unacceptable trade deficits are implausible. In a US$1 trillion trading relationship – three times the trade in 1994 when the Nafta deal was signed – imbalances are tiny, and take no account of the complexity of trading relationships along long and complex Nafta supply chains.

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[SCMP Column] What a Load of Rubbish

August 19, 2017

For waste paper, China accounts for 52 per cent of world exports, most of it from the US or Europe. The business has made many people very rich. Zhang Yin, known inside China as the country’s “waste queen” is said to be one of China’s richest private sector entrepreneurs. Her company Nine Dragons is valued over US$2bn. According to the Economist magazine, California-based Chung Nam last year exported 333,900 containers of waste – most of them to China – and making waste paper the US’s biggest export by volume.

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[SCMP Column] Co-location Conundrum

August 14, 2017

The fact that similar co-location arrangements work fine elsewhere – US immigration officials co-locate in Vancouver processing passengers travelling into the US; British immigration officials work in France processing travelers into the UK from the European continent – counts for nothing. The fact that we already have co-location arrangements on Hong Kong’s western land crossing into Shenzhen provides no confidence that our border security people can work effectively together. The fact that thousands of Mainland troops have for two decades been based in Tamar, Stanley, and other locations inside Hong Kong without bursting out onto the Hong Kong streets and harassing us similarly counts for nothing. The fact that they have done nothing for two decades does not mean we can sleep safe in our beds tomorrow.

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[SCMP Column] Guardian of the Galaxy

August 12, 2017

We humans have performed quite well on this count, but set against most of our invasive species, we have much to learn – and perhaps much to fear. The Smithsonian Museum’s “BugInfo” site says there are around 900,000 insect species known to man, and a further 30m or so we have yet to discover. They estimate there are around 200m insects to every human, and around 40m ants per human – which is about 50,000 trillion for anyone with the patience to count all the noughts.

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[SCMP Column] Beyond the Boundaries

August 07, 2017

So ASEAN’s 50th anniversary is a landmark worthy of serious celebration. For Hong Kong, which has long neglected the south east Asian economies because of its perfectly understandable obsession with developments to our north, there will hopefully be a second serious reason for celebration later this year: completion of Hong Kong’s long-overdue ASEAN free trade agreement. We have down-played an economic region of more than 600m people for far too long. Perhaps on its 50th anniversary, we can make amends.

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[SCMP Column] Humanity's Fat Challenge

August 05, 2017

Susan Roberts, senior scientist at the Tuft University’s Energy Metabolism Laboratory at the Human Nutrition Research Centre on Ageing, is even more blunt – and specific: Obesity is “one of the greatest health challenges facing humanity.” She says 600m people – about 13 per cent of all adults – are obese. That’s double the number in 1980. And the crisis pays no regard to wealth or poverty. Mexico is the “world champion” for obesity levels, just ahead of the UK. And in Malaysia, approximately half of the population suffer diabetes. In China and India, obesity levels have tripled in three decades.

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[SCMP Column] Cities Steer Man's Future

July 31, 2017

Cities have come to dominate our economies. MacKinsey has estimated that 600 urban areas account for 60 per cent of world GDP. Drill down a little, and the evidence is even clearer. In Korea, Seoul and Incheon together account for 47 per cent of the country’s GDP. In Holland, Rotterdam and Amsterdam account for 40 per cent. In the Philippines, the Manila metropolitan area accounts for 37 per cent of the country’s economy. Tokyo – the world’s biggest city with a population estimated at more than 37m – makes 34 per cent of Japan’s GDP.

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[SCMP Column] Same Same But Different

July 29, 2017

When you learn that Toronto is North America’s second largest financial services hub, overshadowed only by New York, and that it is North America’s fourth technology hub, behind California, New York and Boston, then parallels with Hong Kong as a finance and services hub are not unreasonable. So too when you learn that more than half of Toronto’s population are immigrants – lagging only Miami – underpinning one of the most culturally and linguistically diverse cities in North America.

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[SCMP Column] Finding the Right Path

July 24, 2017

The unifying theme here is that the US runs trade deficits with nine of its ten top trading partners. Last year this ran to a whopping overall trade deficit of US$728bn on total trade amounting to US$3.8 trillion. These deficits ranged from US$347bn with China and US$146bn with the European Union down to US$69bn with Japan, US$64bn with Germany, and US$63bn with Mexico. To Trump, this is all the fault of exploitative foreign trading partners, ill-placed generosity on the part of the liberal and open US economy, and currency manipulation – and it must stop.

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[SCMP Column] Vulnerable Choke Points

July 22, 2017

Around 60 per cent of Russian and Ukrainian wheat exports (12 percent of the global total, and growing fast) depend on rail to reach the Black Sea, then go onward through the Turkish Straits past Istanbul and into the Mediterranean. Not only did I not previously realize the huge importance of this region for global wheat production; I did not know that the countries of North Africa and the Middle East are “the most food import-dependent region in the world”, and reliant entirely on supplies delivered through the Turkish Straits. This chokepoint might not worry us in Asia very much, but to many of the world’s most food insecure its smooth operation is crucial.

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[SCMP Column] Keeping the Trade Doors Open

July 16, 2017

In short “one third of China’s GDP in recent years has been generated by the investments, operations and supply chains of foreign invested companies”. Impacts are higher still when you use economic impact tools to calculate the cascading benefits to the economy – by modernising China’s industries, introducing supplier and distributor networks, research and development impacts, introduction of modern business practices, management training and education, legal and regulatory reform. A company like P&G, for example, is calculated to contribute US$11bn a year to China’s GDP, and over 610,000 jobs.

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[SCMP Column] Ageing Challenges

July 15, 2017

Most important, since a rising proportion of our 350,000 foreign domestic helpers are by default becoming the foundation of our elderly carer network, Dr Law is talking about ensuring they can get basic medical and elderly care training.

How refreshing it would be if Carrie Lam’s team could begin its term by making headway in a socially critical area like this – after years of filibuster and perpetual mastication over issues.

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[SCMP Column] Frustration in Hamburg

July 10, 2017

While many were predictably protesting against globalization and US withdrawal from the Paris Climate Accord, the militancy was perhaps more forcefully fuelled by anger at widening inequality across the world’s economies over the past decade. That should carry a powerful message to China, which is today one of the world’s most unequal economies, and to Hong Kong which among the world’s cities is second only to New York in terms of the extremity of the divide between rich and poor.


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[SCMP Column] Honey Bee Crisis

July 08, 2017

While New Zealand’s exporters make extraordinary claims for their manuka honey, none of them have been scientifically verified. But that cannot be said for Mauri’s “mad honey”, which until recently sold for six or more times the price of normal honey in the markets of Kathmandu. Apparently the Himalayan giant honey bees make different kinds of honey depending on the flowers in season – and the “mad honey” for which Mauri so endangers his life is only made when the bees are feasting every March and April on the pink, red and white blossoms of the rhododendron trees that grow on the north-facing hillsides of the nearby Hongu valley.

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[SCMP Column] Multilateral Deals Superior

July 03, 2017

So when our Australian friends knocked on the door proposing an FTA, this was for Hong Kong a big deal – perhaps not as big as the undeniably significant China-ASEAN agreement, but not to be sniffed at. With a GDP of US$1.4tr, and a population of 24m, it offers the prospect of almost doubling the scope of our FTAs. As Hong Kong’s 8th trading partner (their main export to us is gold) and with 600 Australian companies based in Hong Kong, there is serious business here. Splice in too the fact that 100,000 Australian nationals live in Hong Kong, and a further 98,000 Hong Kong-born people live in Australia, and the people-movement elements of FTAs could be of particular importance. Australia’s services exports to Hong Kong have grown five-fold in the past five years, driven by Hong Kong kids going to Australian schools and universities, property investment, and tourism.

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[SCMP Column] Swept Up in the Storm

July 01, 2017

What a shock it was, barely a month later, to watch the “Black Monday” stock market crash wipe US$2.9bn off Hong Kong’s stock market capitalisation, and the HK$ peg to the US$ come under ruthless assault from a number of powerful US predators. Even more of a shock to see property values crash to 30 per cent of 1997 values. The sobering lesson was that Hong Kong, with no local market of consequence, was an economy that depended on flows – and when the flows dried up as the crisis deepened, so Hong Kong rapidly joined the wounded.

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[SCMP Column] Get on with Running This City

June 26, 2017

Hong Kong has gone through a very tough couple of decades since the 1997 handover, but this has little if anything to do with the transfer of power. Much more it is to do with the Asian Financial crash of 1998, the crash in 2000, SARS in 2003, and the global financial crisis of 2008 – and the perverse impacts on property and share prices of the low interest rate universe in place since then.

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[SCMP Coumn] World Still Integrating

June 24, 2017

Empirically, there is little evidence to underpin King’s claim that globalisation faces a life-threatening crisis. Global foreign investment outflows that rose to US$1.9tr in 2006 tumbled hard to US$1.2tr during the global financial crisis years of 2008 and 2009, but have since recovered to US$1.75tr last year. Imports and exports worldwide took a tumble in 2009, but have otherwise continued to grow – not at the flamboyant pace of the 1980s and 1990s, but still around 3 per cent a year. Between 2007 and 2015, for example, imports have grown from US$16.9tr to US$20.75, while exports have risen from US$17.3tr to US$21.3tr.

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[SCMP Column] The Need for Legal Rethink

June 19, 2017

Even if they decide they have to act, the challenge is how. How does one create competition when a company like Google offers online shoppers its search services for free? How does a regulator prove anti-competitive intent when the offender is an algorithm? As a recent OECD report asked: “Finding ways to prevent collusion between self-learning algorithms might be one of the biggest challenges that competition law enforcers have ever faced.” Understanding how digital dominance works, and how to regulate it, is at present an unanswered challenge.

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[SCMP Column] Bridging the Skills Gap

June 17, 2017

In APEC for the past five years we have been trying to persuade the Hong Kong government to provide data into a region-wide skills database that would help us see the skills shortages as they emerge across the region (not just in the medical profession). Still the Hong Kong government has failed to provide input. If it is so robustly reluctant to provide data for APEC’s skills map, why is it suddenly likely to discover enthusiasm for data in the medical sector where so many vested interests have scant interest in tackling our skills shortages?

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[SCMP Column] Cost of Miscalculations

June 12, 2017

Instead, they discovered that their own internal Conservative Party concerns about immigration and decision-making in Brussels did not match the wide public’s concerns – which in the 10th year of recession since the 2008 financial markets crash are focused on stagnating wages, unemployment, a loss of job security, and anxiety over savage cuts to health care and old age care.

Electoral missteps on financing health care for the elderly undermined support from traditional elderly supporters of the Conservative Party – supporters who had come out in huge numbers to support the Brexit campaign.

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[SCMP Column] Reign of Terror

June 10, 2017

So Teresa May, wringing her hands over the possible failings of Britain’s security services, and Donald Trump, dreaming he has just brokered the terrorism-smashing deal of the century, are missing the point. The wicked and distorted belief systems of this growing army of jihadi martyrs are not for changing. Their beliefs are so fundamentally at odds with the democratic, freedom-of-speech cultures of which we are part, that compromises are logically impossible.

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[SCMP Column] China Shines as Trump Stumbles

June 05, 2017

For China, the global warming initiative seems a perfect platform. Less motivated by Europe’s anxieties to save the earth than a very direct domestic crisis over appalling environmental degradation, it nevertheless has a strong common interest in attacking the global warming crisis. It is also in the process of capturing the opportunity to dominate the globally dynamic renewable energy industry. China is today by far the world’s biggest manufacturer of clean energy technologies ranging from solar and wind to nuclear.

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[SCMP Column] Dangerous Portents

June 03, 2017

Compared to fish, very little is known about squid and their lifestyles. But there is a dangerously naïve belief that it is impossible to overfish them. Why? Because almost all squid have an astonishingly short life-span – rarely more than two years. Like octopus and cuttlefish, they race to maturity with barely decent haste, predate ferociously on fish and other cephalopods, mate, nurture their eggs, and die.

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[SCMP Column] Lessons from Tech Age

May 29, 2017

There will be job carnage in some unexpected areas – among surgeons, actuaries, insurance agents, and para-legals, for example. As the cost of sequencing a genome has fallen from US$100 million in 2001 to US$100 today, and approximately 3 cents by 2020, so the health insurers’ task of anticipating health risks will fall dramatically, according to Steve Monaghan at Gen.Life. The result: insurance premiums will tumble; the actuaries and insurance agents selling us health insurance products will be laid waste; and early warning of possibly serious illnesses will preempt the need for many operations, and spill our surgeons’ gravy train.

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[SCMP Column] Obsessive Addiction

May 27, 2017

This irritates Greenpeace campaigners because of the waste. Apparently, it takes 5,000 gallons of water to make a T-shirt and a pair of jeans – which means China’s garment-makers discharge over 2.5 billion tonnes of waste water every year. In Hong Kong, they say we send 253 tonnes of textiles to landfills every day – the equivalent of 1,400 T-shirts being thrown out every minute.

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[SCMP Column] Harnessing the ocean wealth

May 22, 2017

Laminaria – or brown sea kelp – may not be a deep ocean resource, but is a good example of the still-underdeveloped economic potential of our maritime resources. It is noteworthy that in English, we call kelp seaweed – yes weed. But in the Chinese and Japanese languages the word for seaweed is “hai cai” – literally sea vegetables. Therein lies a deep cultural difference in our perception of the value of this critically important maritime resource.

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[SCMP Column] Price of misjudgment

May 20, 2017

It is not yet too late for the US to reverse Obama’s diplomatic misjudgment. A welcome mat remains in place whenever it decides to join either the Belt and Road, or the AIIB as they begin to gain importance in coming years. But I sense our American Apprentice may not be the man willing to knock at the door. On the contrary, if his over-hasty withdrawal from the 12-economy Trans-Pacific Partnership (TPP) is any guide, he seems inclined to repeat Obama’s mistakes rather than to learn from them. If the “TPP 11” economies, meeting this weekend in Hanoi alongside the APEC Trade Ministers meeting, can salvage a deal in spite of US withdrawal, he will be left to repent at leisure. American companies – and America’s diplomatic standing in Asia – will be the victims.

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[SCMP Column] The Value of Science

May 15, 2017

Already over the decades conservative figures in US politics have constrained and skewed federally-funded science. David Hemenway, professor of health policy at the Harvard T H Chan School of Public Health, last month pointed an awkward spotlight on research awards by the Centres for Disease Control and the National Institutes of Health (NIH): over the past 40 years, the US has seen 2,000 deaths from cholera, diphtheria, polio and rabies, and these diseases have attracted 486 NIH research awards. Over the same time frame, the US has suffered 4 million gun deaths, but received just three research awards on guns and gun-related issues.

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[SCMP Column] Against All Odds

May 13, 2017

The Symposium was launched with some explosive numbers: according to a 2011 study by the World Health Organisation and the World Bank, around 15 per cent of the world’s population lives with some form of disability. That is over a billion people. The price we pay for failing to ensure people with disability can contribute in the workforce amounts to something between US$1.37 trillion and US$1.94 trillion. As for the Asia-pacific region, we have around 650m people living in hardship or poverty because of their exclusion from the workforce because of disability of one form or another. Around 85 million of these are in China.

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[SCMP Column] Instagram’s Big Appetite

May 08, 2017

When once the written word was the message, with pictures to provide visual validation, today it is often the picture itself that is the message, propagated with a viral force and speed that is almost impossible to get your head around. In less than seven years since Instagram launched it has gathered 700m active users – over 100m of those added in the four months since the beginning of this year. These are at the heart of a snaphappy global community that this year is expected to take 1.2 trillion photos, with around 100 billion being added every year. About 85 per cent of these will be taken on smart phones, with just 10.3 per cent taken with what I used to know as a camera.

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[SCMP Column] A City Unwell

May 06, 2017

For a country that is supposed to be among the most advanced in the world, the US is burdened with a seriously malfunctioning healthcare system – egregiously expensive, with large parts of the population lacking insured access to medical care, and eroding health demographics that would rank the country among many developing economies. The OECD says US health care costs amount to US$8,713 per person (about 18 per cent of GDP), compared with an OECD average of US$3,453 (8.9 per cent of GDP). One recent study of cancer care costs put median monthly costs in the US for eight different cancer drugs at US$8,694 – compared with US$2,587 in the UK and US$2,741 in Australia. Recent international comparisons of the cost of an overnight hospital bed put New York at the top, at between US$16,000 and US$21,500, with Canada second at US$10,000 and France and Germany not far behind at US$9,500.

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[SCMP Column] Resurgence of Optimism

May 01, 2017

Here in Seoul, at the year’s second meeting of APEC’s Business Advisory Council, the voices have been unanimous that Trump’s flamboyant January withdrawal from the Trans-Pacific Partnership (TPP) should not be allowed to exterminate one of the world’s biggest and most ambitious trade agreements. At least, not without a fierce fight – likely to be staged during the meeting of APEC Trade Ministers in Hanoi in just under a month’s time.

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[SCMP Column] Honour Female Geniuses

April 29, 2017

The discriminations that keep women out of the workforce, or suppress their capacity to contribute to their full potential, inflict an even higher cost. McKinsey last year shockingly calculated that if women’s participation in the workforce rose worldwide to the participation rate for men – up from the present 50 per cent to 77 per cent – an awesome US$28 trillion would be added to global GDP. China alone would add US$2.5 trillion to its GDP, and the US would add US$3.1 trillion.

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[SCMP Column] Europe at Crossroads

April 24, 2017

But while we hold our breaths this morning over “le French May”, across the Channel in the UK a political master-stroke by “la May Anglaise” has for the first time in nine months made me feel that all is not lost for the UK in the Brexit process. If she wins her snap election with a historic landslide on June 8, as most pundits expect, she will have achieved multiple Houdini miracle escapes at one go. She will get off her back the hard-line Brexit fringe that is threatening to hold her to ransom in the exit process. She will win herself the flexibility to make the difficult and perhaps unpalatable compromises that will inevitably have to be made with the EU over the next 23 months of exit negotiations.

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[SCMP Column] Grave Challenge

April 22, 2017

And credit to them. The World Health Organisation has just released a report that claims over 320m people worldwide are suffering depression, with a similar number crippled by anxiety disorders. This amounts to around 40 per cent of all illness (by contrast, strokes, cancer, heart disease and diabetes together account for 20 per cent). Almost half of these are in Asia, and India and China alone account for 100 million cases – but most of them are either never recognized, or hidden as guilty family secrets.

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[SCMP Column] Global Trade Comes First

April 17, 2017

The report reminds that when the US in 2009 slapped punitive tariffs on allegedly-dumped Chinese tyres in defence of US trye manufacturers, the cost was US$900,000 for each US job saved – equivalent to 22 years of salary for an average tyre worker. In other words, the US could have gifted a 22-year pay-out to those tyre workers, and saved American tyre-users the punishing cost of having to buy more expensive tyres.

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[SCMP Column] Arduous Flight Ahead

April 17, 2017

But the challenge is not small. The competitive backdrop is ferocious as Mainland airlines become stronger and more ambitious. Revenues from business travelers will continue to be squeezed as the post-2008 contraction of the financial services industry continues unabated. Profit margins will continue to be horribly mean.  And the splenetic outbursts of us armchair experts must be recognized as a constant while international air travel remains so intrinsically stressful. Welcome to the unfriendly skies.

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[SCMP Column]Scooping up the Mess

April 10, 2017

In New York, which apparently deals with 100,000 tonnes of dog-poo a year along its 12,750 miles of sidewalk from its population of 600,000 dogs, former-mayor Ed Koch introduced the Canine Waste Law almost 40 years ago. That was when the “pooper-scooper” was first invented, and pooper bags first started to be distributed, often for free.

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[SCMP Column] Hypocrisy of Fair Trade

April 08, 2017

All too often local companies – and industry associations funded to lobby on their behalves – do use such regulations, standards and a myriad arcane tripwires to keep pesky foreign products out of their home market. The hypocracy of “fair trade” is its failure to recognize that our upright local companies are in truth identical to their perfidious foreign counterparts. Wilbur Ross will without question discover numerous examples of unfair practice by foreign companies. What he will discretely fail to notice or acknowledge is those same unfair practices thriving around him in the US, nourished by powerful local manufacturing lobbies, and equally effective in keeping pesky non-American companies at bay in their efforts to sell goods and services to US consumers.

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[SCMP Column] Careless tweets

April 03, 2017

Just as Hong Kong people might have targeted their ire a little less masochistically, so Trump – with a little help from some TIAs – might have done the same. One wonders just how many jobs will need to be lost before Trump discovers what British war-time posters warned seven decades ago: “Careless Talk costs lives”. In this case, “Careless Tweets cost jobs”.

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[SCMP Column] Beyond the horizon

April 01, 2017

This “internationalness” (forgive me, a horrible word) is pivotal for Hong Kong’s successful future – and is likely to be valued as much by Mainland companies listing here or setting up international headquarters and fund-raising operations here as it is by companies from Germany, France, Singapore or the US. It involves widespread fluency in English and Mandarin. It should include the Hong Kong University being China’s strongest English-language university. It involves cross-cultural tolerance that has been a hallmark of Hong Kong for most of my working life here.

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[SCMP Column] Equation for Happiness

March 27, 2017

But then the challenges begin to appear. Generosity in society seems to be in short supply, and trust across the community has been sabotaged by increasingly extreme inequality and severe demoralization over soaring property prices as family incomes have stagnated. Most obviously, anxieties over the embrace of Beijing since 1997 have seriously undermined the population’s sense of freedom. These anxieties seem unlikely to have fallen over the course of the election campaign for our future Chief Executive.

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[SCMP Column] Technology Quest

March 25, 2017

China’s engineers – whoops, party officials – have not simply been driven by the quest for technology leadership, or fear of reliance on technology from overseas. They hate its gigantic deficit in royalty and licence fees to foreign technology-holders. From zero payments for IP in 2000, China today pays royalty and licence fees of almost US$20bn. Since its companies currently earn a meager $1bn a year in such payments from foreign companies, that means an IP deficit of over $18bn.

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[SCMP Column] Playground Rule Explains Trump’s Disdain for Global Trade

March 20, 2017

So our trade negotiators need to be clear: they are doing us in business no favours by spending thousands of hours, and millions of dollars of taxpayer money, negotiating bilateral trade deals. If they want to make a difference – take note Mrs May – they must instead spend their time working on multi-country (plurilateral) deals, and making sure they embrace the tough behind-the-border reforms, rather than on border tariffs.

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[SCMP Column] Where the City Fell Short

March 18, 2017
We were right to see the transformation of Hong Kong from an entrepreneurial to a managerial economy, as middle class parents pushed their kids into the professions. We were right to see Mainland entrepreneurs coming to settle in Hong Kong to keep the entrepreneurial flame alive, but overestimated their stimulus. 
But there was so much I failed to see. First, and perhaps worst, was the failure to notice shortcomings in Hong Kong’s political institutions. When Britain’s colonial rulers walked away, they left behind a competent and honest administration, but departed with the strategic policymakers, who had always been seconded to Hong Kong from ministries in Britain’s government. Administrators were excellent at administering, but were untrained and ill-equipped to forge the policies to be administered. 
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[SCMP Column] Face-to-Face Challenges

March 13, 2017

Set Europe’s deep economic fragility against signs of reasonably robust economic recovery and job growth in the US – with a rise in the Fed’s interest rate predicted on Wednesday this week – and a fistful of powerfully stimulative policies being promised by the new Trump administration, and the surprise must be that the Euro is not weaker than it is.

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[SCMP Column] Saudis Tilt Towards Asia

March 11, 2017

The choice of destinations speaks volumes about Saudi Arabia’s aims and priorities – including a weakening of confidence in a Trump-led US as its primary international ally. Malaysia, Indonesia and Brunei – as Asia’s most important majority-Moslim countries – are important Sunni allies in the ongoing battle with Iranian-led Shiites, as well as long-standing trade and investment partners. China and Japan are not only among Saudi’s most important oil and natural gas export markets, but critically important sources of future investment as the country arm-wrestles itself away from its extreme reliance on oil and gas.

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[SCMP Column] Eat, Drink and be Merry

March 06, 2017

Now, 2000 years later, Europeans undisputedly consume more alcohol that any other community in the world. Against a worldwide average of 6.5 litres of alcoholic content (pick your poison – beer, wine, spirits) consumed per year, Europeans on average consume 12.11 litres, with Russians, Moldovans and Lithuanians far in the lead with up to 17.5 litres a year.

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[SCMP Column] Wages Up for All

March 04, 2017

First, and most important, China’s economic planners recognized that the era of cheap contract labour for export manufacturing operations must inevitably come to an end. As company value chains were broken down – as with Apple, which manufactures all of its iPhones in the Mainland – economic planners realized that China was earning just US$7 per iPhone for its humble, labour intensive assembly role, out of a total sales value of US$500-600. This was a mug’s place in the value chain which simply immiserated the millions of contract migrant labour that filled export manufacturers’ production lines.

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[SCMP Column] At the heart of migration

February 27, 2017

One of our biggest headaches has been that the minute we start talking about international workers, immigration officials come into the room, and begin talking about national security and illegal immigration. In the wake of the “9-11” terrorist attack on New York’s World Trade Centre, the problem perhaps inevitably became even more fraught. These immigration officials had no interest in talking about the increasingly severe problems businesses are facing with labour shortages. That was not their job. Their job is to protect their countries’ borders against attack.

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[SCMP Column] Rare trade deal

February 25, 2017

But realists in Bangkok and elsewhere acknowledged that the celebration was rather hollow. The TFA was a crumb on the table of the now-defunct Doha round of global trade negotiations. It was proposed by WTO director General Roberto Azevedo – and endorsed by the world’s trade ministers – in Bali in late 2013 as a single salvageable initiative after more than a decade of fractious and ultimately fruitless efforts to bring global trade rules into the 21st century.

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[SCMP Column] A world without trust

February 20, 2017

In the US, the contrast is even more breathtaking. An S&P Top 500 CEO earns 335 times more than the average US employee. For the average citizen three questions arise: what miraculous talent can possibly justify such disproportionate reward? Is a company’s success truly mainly due to the talent of a CEO – what about the contribution of a conscientious and highly skilled workforce? And what extraordinary personal spending needs justify an executive demanding such huge rewards.

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[SCMP Column] Absolute measurement

February 18, 2017

I feel sort of sentimental about those innocent early days when an inch was the width of a man’s thumb, which was 1/12th of a man’s foot (reduced by 20% when Britons converted from large Anglo-Saxon feet to daintier Roman feet). A yard was what King Henry I decided was the distance from his nose to the thumb of his outstretched arm. And an acre was the area of land an ox-drawn plough could cover in a day.

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[SCMP Column] Testing times for Apec

February 13, 2017

For the APEC Business Advisory Council (ABAC), this is even more starkly true. As the region’s businesses face an unprecedented assault from an “America First” President flirting with trade war, so their mettle will be tested on  how clearly and persuasively they can challenge the chilling localist and protectionist winds that have been strongly stirred in the US.

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[SCMP Column] Projects for the people

February 11, 2017

The first shock on reviewing Donald’s project list was to see just how glacially these plans have moved. Among the six transport-related plans, the South Island Line is at last open (though it was scheduled to begin operations in 2015). The Shatin-Central Link is not expected to be finished until 2021. The High Speed Rail link to Guangzhou may begin operation late in 2018 if we are lucky – against an original opening date targeted for 2015. The Hong Kong-Zhuhai-Macau bridge should open in 2018, against an original target of 2016. And the bridge to Tuen Mun from the Airport – linked to the Zhuhai bridge – is inevitably also delayed. The fast train to Shenzhen airport has been abandoned altogether.

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[SCMP Column] Ruling the waves

February 06, 2017

China has similarly for many years dominated global fishing – both marine fishing, and inshore aquaculture. Out of a total world marine fish catch of 93.4m tonnes a year, China accounts for nearly 15m tonnes. Of 56m people employed worldwide in fisheries, China accounts for around 14m – 9m at sea and 5m fish farming inside China. Of a total world fishing fleet of 4.6m vessels, China accounts for an estimated 700,000 – around twice the total of the world’s second largest fishing fleet in Japan. But before anyone breaks into a sweat, we should remember that more than two thirds of these vessels are less than 10m long, and only one third have engines.

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[SCMP Column] Calm before the storm

February 04, 2017

I am thinking in particular about the Philippines’ two main foreign exchange earners, and major contributors to the economy – Overseas Filipino Workers (OFW), and Business Process Outsourcing (BPO). Surely both of these pillars of the Philippine economy have to be vulnerable while the Pinocchio Apprentice is railing against migration, and the imperative to bring America’s jobs back home. Given the importance of OFW and BPO to the Philippine economy, the cause for concern must be high.

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[SCMP Column] The Great Wall

January 30, 2017

Even today, we have around the world at least 35 border barriers in “working order”, over half of them constructed since 2000. Many of their stories are quaintly unveiled in the 2008 travelogue “Walls: Travels along the Barricades” by Canadian Marcello Di Cintio – including the berm built by Morocco’s King Hassan II to keep the desert Sahawaris at bay, Indira Gandhi’s 4000km barbed wire barrier separating India from Bangladesh, and of course the Apprentice’s cherished wall along the US-Mexico border, which currently and ineffectually covers 640 miles of the 1,954-mile border.

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[SCMP Column] The Art of Trade War

January 28, 2017

But in terms of direction, the signals make uncomfortable reading for the US. In Prof Simon Evenett’s Global Trade Alert, widely regarded as the leading tracker of emergent protectionism since the 2008 global crash, the US has launched a breathtaking 3705 discriminatory trade measures against trading partners, making it by far the worst initiator of new discrimination in the entire G20. Even India and Russia rank far behind, while China is a comparative innocent, responsible for just over 1268 discriminatory measures.

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[SCMP Column] Dangerous Allegations

January 23, 2017

Similar gains have arisen from Nafta – both for the US and the Mexican economy. Today, Mexico is the US’s second largest goods export market, with exports amounting to $236bn in 2015. That is equal to US exports to China, Japan, Germany and the UK combined, and it is a five-fold increase from 1993 before Nafta was signed. It is true that Mexico’s gains are even greater – up seven-fold to $295bn – leaving it with a trade surplus of $58bn – but to suggest that US negotiators did a bad job because of some misplaced “asymmetrical” charitable urge is ludicrous. And to abandon this framework in favour of old-style mercantilism can only be harmful for us all.

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[SCMP Column] An Unbreachable Chasm

January 21, 2017

The challenge is not that people are poor, even though Hong Kong has always been home to a significant number of poor people. Nor is it that the gap between Hong Kong’s rich and poor is wider than it has ever been – and wider than in most economies in the world. No, the challenge is that the chasm between Hong Kong’s poor and rich feels unbreachable. It no longer seems possible that we can start dirt poor like Li Kashing, and a generation later feel affluence as a reward for our steady and uncomplaining labour.


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[SCMP Column] Lasting Legacy of Obama

January 16, 2017

Paradoxically, his achievements in the economic domain would have done credit to the most dyed-in-the-wool Republican: the GDP has grown by 16% over the course of his presidency, and unemployment has been reduced from an alarming 10% to less than 5%. Despite the upheaval of the financial crisis, average wages have risen by almost 6.5% - faster than at any point since the early 1970s. Extraordinarily for any democratic presidency, corporate profits have jumped by 57%, and federal spending has fallen by 16%. Perhaps more predictably, public debt has jumped by 36%, but that has more to do with QE than with any Democrat agenda.

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[SCMP Column] Praise Whistle-blowers

January 14, 2017

Whether Hong Kong truly needs a specific whistleblower law is open to debate. The ICAC, which brought the cases against both Donald Tsang and Raphael Hui to court, depends heavily on the Prevention of Bribery Ordinance and carefully created whistleblowing arrangements, and has over its 43 year history built a formidable reputation worldwide for cracking down effectively on corruption.

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[SCMP Column] C-suite team in politics

January 09, 2017

So if Donald Trump’s C-suite team bring into government a zeal to work more efficiently and to eliminate redundant or duplicative processes, all well and good. But if they bring to their new jobs a naïve zealot view that they can impose business-like efficiencies into the US administration, they will either spend their lives frustrated and in constant warfare with officials, or they will inflict serious damage on the “checks and balances” that sit at the heart of all of our functioning democracies.

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[SCMP Column] APEC's Day of Reckoning

January 07, 2017

Imagine the US officials’ plight as they arrive in Nha Trang. The new Trump team will have been in office for just a month. Trade strategy will still be unclear. But all signals to negotiators will have been negative: kill the Trans-Pacific Partnership; prepare for sanctions targeted at China; block any initiative aimed at making it easier for US companies to invest in (and therefore divert jobs to) Asia’s economies.

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[SCMP Column] Health Matters

January 02, 2017

Meticulous dental care ought to make sense anyway, given that dental ill-health is the most widespread source of ill-health on the planet, and that one third of the people my age around the world no longer have their own teeth. Untreated tooth decay affects one third of the world’s population – 2.4bn people, with a further 740m suffering severe periodontal disease. According to the World Health Organisation and other expert bodies, the worldwide cost of dental disease is around US$300 a year, and costs over 160 million work hours due to absenteeism in the US alone.

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[SCMP Column] Movie Magic Still Elusive

December 31, 2016

While China may have more cinema screens than anyone else, and a bigger population, this does not directly or automatically point to global box office dominance. China may have boasted 1.26bn cinema ticket sales in 2015, but the fact that American’s watch at least four times as many films every year means that US box office admissions still outrank China (1.36bn admissions last year). And of course India and Bollywood put both the US and China in the shade, selling more than 9bn admissions last year.

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[SCMP Column] Dismiss thriving desert hub Dubai at your peril

December 26, 2016

As China has extended its international reach, in particular towards the long-neglected African economies, Dubai has become an increasingly important westward hub for China, with a potentially significant role in China’s long term “One Belt, One Road” strategy. It may not yet quite match Hong Kong as a China entrepot, but it is getting there.

In 2015, China’s trade with Dubai amounted to US$48bn – and 60% of Dubai’s imports from China are re-exported, mostly to Africa. From a trickle of trade between China and Africa in 2000, it had surged by 2015 to US$160bn, with Dubai a significant conduit.

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[SCMP Column] Let’s drop ‘stuff’

December 24, 2016

These were years when 11 months of the year were empty of gifts or indulgences. That precious Christmas gift was the one indulgence for which you had craved and prayed for more than 11 hold-your-breath months. My daughters were still in primary school when we officially designated and distinguished “un-birthday” presents to try to remind them how lucky they were. Nowadays, the year is so littered with “un-Christmas” and “un-birthday” gifts that the specialness of Santa’s mystical visit has gone, just as homes have become cluttered graveyards for the  barely-used stuff of Christmases-past.

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[SCMP Column] Cost of Trade War

December 19, 2016

Remember out of the US$179 export value attributed to each iPhone exported to the US from China, the total value-added in China is just US$7. At least one US electronics company that supplies components for the iPhone earns over $40 in exports to China for each iPhone. Hit iPhone exports from China, and you inflict more harm on that US company than you do on Foxconn in China where iPhones are assembled.

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[SCMP Column] Collateral Risks

December 17, 2016

But is this likely to inflict any real harm? Unlikely. China is active and well protected in the WTO itself. It is active in ASEAN’s Regional Comprehensive Economic Partnership (RCEP). It has a large number of significant free trade agreements of its own – not least that with ASEAN. It is active in the formation of the long term vision for a Free Trade Area of the Asia Pacific (FTAAP). And a primary casualty of such a frost would be the finely-balanced US-China Bilateral Investment Treaty, which would make it easier for US companies to invest in China, and for which US companies have been clamouring for several years.

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[SCMP Column] In the Pursuit of Accuracy

December 12, 2016

By disingenuously calling themselves technology groups rather than media groups, the bosses of Facebook, Google, Twitter et al are willfully and unacceptably trying to side-step the ethical and legal responsibility they have to their readers and audiences, and in the process exposing our democracies to grave danger. They allowed entirely fictional entities like the “Denver Guardian” and the “Event Chronicle” to “report” that George Soros as dead, and to “report” that Hillary Clinton had suffered brain damage, had alcohol and drug addiction problems, and had links to money laundering and even sex crimes against children.

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[SCMP Column] Diminishing Act

December 10, 2016

But many shrinkflationary ploys must on balance be regarded as helpful. It strikes me that efforts to reduce overpackaging, even if motivated by a desire to reduce costs and bolster profit margins, are a good thing. So too efforts to reduce the use of plastic bags, and to trim food waste, and to make us print on the clean side of printed sheets of paper. So are the efforts to miniaturize mobile phones or cameras, which greatly reduce the pace at we exhaust so many raw materials. Those little devices in public toilets that ration the use of soap and speedily turn off the water tap surely also have beneficial shrinkflationary effects.

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[SCMP Column] Lasting Sense of Despair

December 05, 2016

But the political cultures of China, Vietnam or Cuba were never truly communist in any philosophical or doctrinal sense of the word. They were all countries in which acute poverty and inequality had arisen as a result of foreign political and economic connivance with corrupt and incompetent political elites. Leaders like Mao and Ho and Castro found resonance with local people not because they were communists or spouted communist mantras, but because they spoke to the pain of local people.

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[SCMP Column] Perilous Day in Europe

December 03, 2016

If alarming dominos fall in Austria and Italy tomorrow, the stage is set for numerous other dominos to wreck political and economic momentum in Europe over the coming year. First, in March, in National elections in Holland, pollsters currently forecast a victory for Geert Wilders’ Party of Freedom. Mr Wilders is currently on trial for inciting racial hatred, in particular against Dutch Moroccans and against Moslems in general. The unrepentant Wilders simply said in a television statement on the last day of the trial that if he is convicted, “millions of Dutch citizens will be convicted with me.” Such is the rising confidence of extremist politicians in Europe today. And Holland is a country that has always in the past been seen – along with the UK – as a champion in Europe for openness and free trade and investment.

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[SCMP Column] Hard Reality of Shipping

November 28, 2016

Industry experts have inclined to call Hanjin’s collapse a “black swan” event, but given the very real likelihood of further collapses in the near future, this swan looks very much more white than black. And the crisis cascades into the massive ship-building industries of China and Korea (Hyundai Heavy Industries laid off 10% of its ship-building workforce earlier this month), and into the viability of leading ports. China, as home to seven of the world’s top 10 ports, faces a massive challenge, with an overcapacity estimated at more than 50m TEUs.

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[SCMP Column] Challenges of Aging

November 26, 2016

So far, so obvious. Except that this is precisely not what our own Hong Kong government is doing. In 2014 (the latest year for which we have numbers) 90% of the 46,000 people who died did so in a hospital bed. Over 40% of our 38,000 hospital beds are occupied by elderly patients. As the Hospital Authority makes the case for a HK$200bn programme to build more hospital wards and add elderly care homes, so the Housing Authority says it does not have the funds to build more housing for the elderly, nor to “retrofit” existing homes to make them safe and livable for the elderly infirm. We are failing to build convenient community clinics embedded close to peoples’ homes. We are actively ignoring the role that private sector care homes might play. And we are head in the sand in terms of training carers in the numbers that will be needed for our rapidly ageing society.

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[SCMP Column] Renewing the Air We Breathe

November 21, 2016

With just 6,200 electric vehicles in Hong Kong out of a total of more than 530,000 cars on the road, it is unclear how quickly policies can be changed. Since vehicle emissions account for 14% of Hong Kong’s greenhouse gases, 14% of harmful respirable suspended particulates, and 20% of volatile organics, it is clear that government leadership is required. There is potential here for Hong Kong and the Mainland to lead the world. Lift electric car ownership to Norwegian levels, and the air that we breathe will be transformed. But maybe I am letting my enthusiasm get ahead of me.

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[SCMP Column] Hope for the future

November 19, 2016

Asia now accounts for around a quarter of Peru’s trade, compared with just 18% in 2000. Despite Peru’s “resource curse” – the global collapse of commodity prices and demand has hurt the economy hard – commitment to globalization and open trade remains unflinching. The selection of President Kuczynski was an encouraging and symbolic reaffirmation of this commitment – in stark contrast with the moods in the US and the UK that have conceived Trumpism and Brexit.

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[SCMP Column] Shopping City Losing its Sheen

November 14, 2016

If this change is indeed structural, then we in Hong Kong face a significant social and economic challenge. We have a large proportion of our workforce facing a stagnant and declining future. Significant policy attention must be paid to finding the well-paying job opportunities of the future. Noteworthily, Shenzhen may be leading the way, with an economy being built around innovative green and high-tech activity – from Huawei’s telecoms to DJI’s world-leading drones.

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[SCMP Column] Looming Challenges

November 12, 2016

As APEC leaders gather in Peru in the coming week, with President Obama flying in for his “swansong” (is there such a thing as a black swansong?), the Trump victory will cast a long and ominous shadow. Trump’s bark may prove worse than his bite, but leaders in Peru would be rash to understate the challenge looming ahead. The commitment to liberal trade and investment that has unified APEC’s 21 member economies for the past 27 years is under unprecedented threat.

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[SCMP Column] A Year of Tough Challenges

November 07, 2016

Unnoticed, but equally important for Hong Kong, a further casualty may be the Trade in Services Agreement (TiSA). Almost no one pays any attention to this 23-country plurilateral negotiation that has been going swimmingly for the past two years, but for services economies like Hong Kong, this is hugely significant.

Top negotiators are in Geneva as you read this, with the aim of dotting “i”s and crossing “t”s on a deal that is slated to be ratified by Ministers on December 5-6. But key differences remain unresolved between the US and other negotiators – in particular on the freedom of data flows and the treatment of State-owned Enterprises (SOEs).

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[SCMP Column] Stretching the Limits

November 05, 2016

But where are equivalent Hong Kong regulations limiting such monstrous abuse by developers? Bear in mind that a typical car parking space is 160 sq ft, and shipping containers are 200 sq ft (containers are being fitted out and used as temporary student housing in Holland). If they exist, it seems major property groups are taking scant notice.

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[SCMP Column] Shaping Future Trade Patterns

October 31, 2016

The new production chains constructed around China allowed manufacturers radically to lower their production costs, giving to the world for 20 years or more what I call “China’s deflationary gift”. This once-off structural lowering of costs drove massive trade growth, and massive wealth dividends to the advanced economies where most high-value-adding activity remained. But by the early 2000s most of this dividend had been reaped.

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[SCMP Column] Much Ado about Tattoos

October 29, 2016

In some ways, the corporate prejudice seems odd. After all, tattooing has been around for a very long time. Oetzi the Ice Man discovered high in the Alps a few years ago carried tattoos from 5000 years ago. Mummified remains sporting tattoos have been discovered from as far afield as Alaska, Siberia, Egypt, the Philippines and the Andes. And the earliest residents of the UK were called “painted people”, or  Pritoni – from which the word Britain comes. The word tattoo comes from the Tahitian word “tatau”, meaning “to write”. Through time immemorial, Maoris from New Zealand have carried their “moko”, or unique facial tattoo as a sign of their unique identity and bravery. They even signed treaties with faithful renditions of their unique moko. No wonder the New Zealand All Blacks sport so many acres of finely-honed body art.

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[SCMP Column] The Only Way to Democracy

October 24, 2016

Already the country has paid a significant economic price for its failure to forge some form of democratic reconciliation. As the second largest economy in the 10-member ASEAN grouping, with a population of just under 70m, its economy has grown by just 3-3.5% in the recent past, compared with 11.7% in Indonesia, 8.7% in Singapore, and 12.9% in nearby Vietnam. With tourism contributing directly or indirectly about 21% of the country’s GDP, and 2.4m jobs, the frequent coups and red shirt-yellow shirt clashes have had a powerful negative impact on tourism growth and the livelihoods of millions of Thais working in the tourism sector. Many argue that the country has lost its economic edge - neither technologically sophisticated enough to compete with the likes of Korea or Japan, nor cheap enough to compete with neighbours like Vietnam or Cambodia.

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[SCMP Column] Losing Glimmer?

October 22, 2016

In principle, Mainland Chinese demand has a long way to grow. Only 30% of Shanghai women claim to own a diamond, whereas in Hong Kong over 80% own a diamond or three. Annual growth in demand for diamond and gold jewellery from the Mainland was growing a 7% a year for most of the past decade, but has now slipped to barely more than 4%. This will arguably improve as China’s middle classes grow (almost 300m households are expected to earn over US$15,000 a year by 2030, by comparison with 153m last year) but big bets had been put on faster growth, with a result that the supply of diamonds has swollen much faster than demand.

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[SCMP Column] A Show of ‘Soft Diplomacy’

October 17, 2016

In one respect, China has no choice but to embrace the Lusophone world: the preposterous decision to base Macau’s legal system on the Portugese legal system means it is almost wholly dependent on legal professionals flown in from Portugal (undoubtedly a large proportion of the 8,100 Portugese living in Macau). There was some modest sense in retaining the British Common Law legal system in Hong Kong given the pervasiveness of common law contracts in international business, but contracts built upon Portugese Law? Surely this is not much of a competitive advantage in terms of international business connectivity.

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[SCMP Column] First Real Test

October 15, 2016

This is why, before judging him, it is important to review what he has achieved in Davao since he first became Mayor in 1988. Duterte is as close as you can get in Davao to political “royalty”. His father Vicente was once provincial governor to Davao. His daughter Sara is also prominent in local politics. His reputation may have been built on a long-standing “law and order” and anti-drugs platform (he has tough anti-smoking policies in place too) but to his credit Davao counts among the Philippines’ better performing municipal economies. He has build a better transport infrastructure than can be boasted by most municipalities in the country, and Davao is for example one of the few regions that have buried electricity and telephone cables underground – eliminating the shanty raggle taggle of power and telephone lines that decorate most Philippine cities. As a Financial Times commentator noted last week: “He has shown a common touch in promising measures to improve the everyday lives of ordinary Filipinos by restarting delayed rail projects and easing Manila’s notorious traffic gridlock.”

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[SCMP Coumn] Wage Talks cannot Fix ‘Real’ Problems

October 10, 2016

In truth, there are few major economies worldwide that are not currently wringing their hands over the challenges facing their communities’ poorly paid, and how most appropriately to respond. In Switzerland, this took the form of a formal referendum on whether to introduce a national basic wage to all citizens, regardless of whether they work or not (voters firmly rejected the idea). In the UK and the US where the travails of the blue-collar middle – who have seen so few improvements in their livelihoods over the past three decades – have poisoned local politics, the arguments have moved on from minimum wages and welfare measures to job-protection and barriers against foreign workers.

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[SCMP Column] Essential Growth Catalyst

October 08, 2016

The now almost inevitable failure of the TPP means that the China-ASEAN-led Regional Comprehensive Economic Partnership (RCEP), which includes Australia, New Zealand, Korea, India and Japan, excludes the US, and is due to be completed by the end of the year, will provide the primary architecture for driving trade liberalization in the Asia-Pacific. As a Financial Times journalist wrote last week: “Not only would (RCEP) exclude the US, but it would also include worse safeguards for intellectual property, internet freedom, workers’ rights, wildlife and the environment.” Most important, China is at the heart of the rule-making process, while the US is not even at the table. Grimly, it seems that neither Trump nor Clinton greatly care.

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[SCMP Column] High Price of Big Scientific Research

October 03, 2016

These last two scientific endeavours must surely be candidates for an Ig-Nobel Prize, with this ignominious list released only last week in Harvard. As with the Ig Nobels, they surely amuse, but make us think. Like this year’s Ig Nobel Reproduction prize – to Egyptian Ahmed Shafik for studying the effects of wearing polyester, cotton or wool trousers on the sex life of rats - or the Economics Prize to a New Zealand team which assessed the perceived personalities of rocks – or my personal favourite, the Peace Prize to a Canadian team that studied “The Reception and Detection of Pseudo-Profound Bullshit”.

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[SCMP Column] The Bigger Crisis Within

October 01, 2016

According to the Global Report on Internal Displacement (GRID), prepared by the Norwegian Refugees Council and its Norway-based sister, the Internal Displacement Monitoring Council, a total of 27.8m people were last year forced to flee their homes without crossing into a second country – 8.6m to escape conflicts, and a sobering 19.2m people fleeing natural disasters like earthquakes, floods or typhoons. For comparison, Europe has suffered an influx of around 1.8m, with Germany accepting perhaps a half of them thanks to Angela Merkel’s controversial compassion – a compassion that is costing her and her party dear ahead of next year’s national elections.

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[SCMP Column] Alarm over global trade

September 26, 2016

Focusing in particular on steel, where accusations against China for “dumping” surplus steel on global markets has put in jeopardy China’s recognition as a market economy, the latest Global Trade Alert reveals that at the end of last year 91% of all steel traded worldwide was affected by trade discriminatory measures – compared with 50% of world steel trade in 2009. Today Government export incentives provide sweeteners for 88% of world steel trade, compared with 77% in 2010.

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[SCMP Column] Painful progress

September 24, 2016

The International Labour Organisation (ILO), which contributes to our problem of winning proper attention for the challenges of managing the international movement of labour by muddling its statistics, says that 150m of the 330m migrants worldwide are simply international workers living outside their home countries. Around 30m of these are in the Asia Pacific.

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[SCMP Column] Appeal of ‘sin taxes’

September 19, 2016

I see sin taxes falling into three clear areas: biasing tax charges onto items that are self-indulgent wants rather than basic needs; disincentivising spending that harms our health; and punishing spending that harms our environment (or contributes to global warming). At the heart of such a system would need to be a fundamental and controversial shift in our tax system, away from taxes on salaries and towards VAT- or GST-type taxes on spending.

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[SCMP Column] The high cost of bad air

September 17, 2016

Both the World Bank and UNEP are emphasizing that these pollution-driven ailments inflict not only social harm and personal tragedy, but carry a very high economic cost too. I recall a World Economic Forum study released almost exactly two years ago that said the six main contributors to premature death and poor health worldwide – cardiovascular disease, strokes, diabetes, respiratory illness, cancer and mental ill-health – would cost the global economy US$47 trillion in the 20 years from 2010 to 2030 – with impacts heavy enough to bankrupt many of Asia’s health care systems.

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[SCMP Column] HK’s deepening inequality

September 12, 2016

As I have already written three times so far this year, the deepening inequality that has been marked worldwide, but nowhere more than Hong Kong, has poisoned democratic politics in all corners of the globe – from the US, to the UK, to the Philippines. The fact that the world’s top-earning 1% - a total of 70m families that earn US$71,000 or more a year – have walked away with most of the economic gains delivered by the growth of the past three decades – has created deep resentments across the world’s middle classes, who have felt income stagnation and job uncertainty throughout this long period and see no future prospect of improvement.

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[SCMP Column] Political Mess

September 10, 2016

Interestingly, we have a younger, more militant and confrontational set of Legislators. The youngest Legco member in our last Legco was 35, and the average age of Legislators was 58. Today our youngest member is 23, and 8 are younger than 35. We don’t yet have the average age of our 70 new legislators, but it will be significantly below 58. The youthfulness of geographically elected members contrasts sharply with the greyer age profile of functional constituency members. (Should we not feel embarrassed that every single functional constituency member is a man?)

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[SCMP Column] Economic conundrum

September 05, 2016

The demographic challenge among today’s poorer economies is rather different, but they account for only a small proportion of world consumption, and are likely to remain weak drivers of global economic growth. India – by 2050 expected to become the world’s most populous country – is predicted to have a working population of more than 1bn by mid-century – up almost 300m from today. Its workforce is set to overtake that of China somewhere between 2025 and 2030. At the same time, Nigeria is predicted to become the world’s third most populous country, and Indonesia the world’s fifth, by 2050. Indonesia’s workforce is set to almost double over the half century to 190m.

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[SCMP Column] Big is not Good

September 03, 2016

AB InBev’s publicity materials betray how oblivious they are to the poverty of their offering. Under the ridiculous broad strap-line of “Dream People Culture”, they say their dream is “to be the Best Beer Company Bringing Together People for a Better World”. Pardon? As Financial Times reports more soberly noted, the deal has more to do with strengthening presence in Latin America and Africa, “whose markets have not been disrupted by a shift in tastes towards craft beers”.


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[SCMP Column] Why We Need APEC

August 29, 2016

As the voices of protectionism and xenophobia have risen, perhaps APEC’s work is more important than ever. For those of us that through the past 30 years of experience are confidently convinced that openness and globalization are on balance a very good thing, these paranoid voices need to be addressed – and no place better than APEC. Perhaps those mind-numbing plane journeys are worthwhile after all.

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[SCMP Column]A pension crisis unfolds

August 27, 2016

For Hong Kong’s MPF savers, the message is similarly grim. If you earn HK$35,000 a month (which puts you firmly among Hong Kong’s upper middle class), then your MPF savings would amount to HK$36,000 a year, or HK$1.4m over a 40 year working career. Real investment returns of 3% a year would give you around HK$4.6m – enough to last for about 17 years if you can live on 75% of your final salary. But since 2000, MPF investment returns have been negative for five of the 15 years. HK$500,000 of contributions since 2000 would have earned just HK$100,000.

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[SCMP Column] Economic role of women

August 22, 2016

Worldwide, the labour force participation rate for men is around 77%, says McKinsey. This compares with 50% for women. Eliminate the gap, and you get the US$28 trillion boost to the world economy.

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[SCMP Column] Building Blocks

August 20, 2016

An alarming aspect of recent political developments like Brexit and Trump – and Hong Kong’s Occupy movement no less – is the erosion of trust they imply. So too with controversy over registration requirements for Legco election candidates. It is only a small step from distrust in our ruling elites to distrust in the legal systems that they have designed. This is doubly true when the cost of access to the law is prohibitive for ordinary Hong Kong people. Access to legal protection has become a privilege of the wealthy Hong Kong elite – as a result of which trust in our rule of law is debased and undermined.

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[SCMP Column] Unwelcome Intruders

August 15, 2016

Procter & Gamble, the world’s biggest advertiser, spends 11% of its total annual revenues – approximately US$7.24bn – on advertising its washing powder, dypers and so on. If everyone else were like me, studiously avoiding adverts wherever and whenever they appear, then this would be money that is wholly wasted It could almost certainly be put to much better use.

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[SCMP Column] Crazy Strategy

August 13, 2016

It only took the opening up of the global iPhone supply chain to make them realise they were playing a manufacturing mug’s game. Foxcon’s 800,000-odd Mainland workers may boast a monopoly on the supply of millions of svelt new iPhones every year, but when officials discovered that China captured just US$7 of the US$500 value of an iPhone, locking hundreds of thousands of dormitory-based workers in permanent poverty, they quickly changed tack: they began asking “Where along the value chain are the high-value-adding activities, and how can we attract them?” Of course, most of these high-value-adding activities are services in one form or another, and so that is where efforts are being focused to enhance productivity, protect competitiveness, and generate jobs that add more value and pay better salaries. Their riposte to Trump would be simple: if you want those manufacturing jobs back, have them. Lock your manufacturing workers in low-wage poverty if you want. If you think that will make American great again, dream on.

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[SCMP Column] Unravelling the Myths

August 08, 2016

Significant and fast-growing as this economic relationship is, many myths confuse understanding of China’s economic relationship. Of course the first myth is that China and Chinese companies are “Johnny-come-latelies” in Africa. As my own China Daily memories confirm, China’s interest in building close economic ties with Africa was being forcefully pursued four decades ago. Not for nothing was a towering Mao Zedong so often depicted in paintings and ceramic tributes as a father to the world’s peoples, with men and women of all races clustered around him holding aloft Mao’s “Little Red Book”.

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[SCMP Column] Economics of Olympics

August 06, 2016

By these many measures, the Rio Olympics look set to be a disaster of reasonably epic proportions. Venues and the metro system are incomplete. The ocean is polluted. Zika haunts every nook and cranny. The country is buried in its worst recession for almost a century. And Dilma Roussef’s impeachment shows a country in political chaos. The doping scandals that are keeping so many Russian athletes away are not of Brazil’s making, but coming in the wake of corruption scandals in Fifa and doping scandals in other sports like cycling they have tainted the games. So many today question how many of the medals have been won on the back of chemical enhancement. From the shaming of sprinter Ben Johnson in the 1988 Seoul Olympics, doping scandals have become graver and graver. A widely-quoted study in Sports Medicine estimates that between 14 and 39% of athletes dope. Whatever the true number, the suspicion of winners tarnishes even the most awesome of performances. Whether it is the dominant teams coming from the US, Germany, Brazil, Germany or China (all with more than 400 competitors), or little teams like that from Hong Kong, which is just 37-strong, and has only ever won one medal, potential drug scandals hover not far away.

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[SCMP Column] City of extreme inequality

August 01, 2016

It is worth remembering the extremity of inequality in Hong Kong. According to economist Branko Milanovic in his recent book “Global Inequality”, for a household to sit among the 70 million households worldwide that occupy the “evil empire” – the “Top 1%” that have captured most of the economic gains achieved in the world economy over the past three decades – that household has to earn US$71,000 a year. That is about HK$46,000 a month. Take a quick look at Hong Kong’s household income statistics and you discover that over 23% of Hong Kong families have household incomes above that level. By comparison, just 12% of American families have household incomes above this level, and in Japan and Switzerland just 9%. That makes Hong Kong an extraordinarily lucky and privileged place for the richest quarter of the population.

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[SCMP Column] Welcome measures

July 30, 2016

China is not among the most grievous sinners. The IEA says China’s fossil fuel subsidies – mainly focused on oil and coal – have almost halved since 2008, from US$42 billion to around US$22 billion. This is far behind Saudi Arabia and Iran, which provide fossil fuel subsidies of US$69 billion or more, and even behind India and Russia, which in 2014 provided subsidies of more than US$40 billion.

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[SCMP Column] Grand football ambitions

July 25, 2016

To build local expertise, a clutch of Chinese billionaire business barons have gone aggressively overseas to acquire control of top clubs which will build knowledge of the the way the global football business works, and at the same time earn them a handsome profit. Suning Holdings has paid €270m for 18-time Italian champion Inter Milan, while Wanda Sports Holdings, controlled by Wang Jianlin, reputed to be China’s richest man, has bought a 20% stake in AC Milan. Which means the next “local-derby” between the two top Milan sides will be as much a Chinese contest as an Italian one.

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[SCMP Column] Growing risks

July 23, 2016

last year in the United States there were 372 mass shootings, killing 475 people and wounding nearly 2000. Of these, 64 were school shootings. Yet after just three terrorist atrocities in 18 months in France, a nation is in shock and a national witch hunt is under way to blame officials for failing to anticipate the Nice rampage.

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[SCMP Column] Bargaining for advantage

July 18, 2016

Unlike the International Court, which is funded by the UN, the PCA to this day earns its living on the fees paid by arguing parties, not unlike Hong Kong’s own Arbitration Centre. It is unclear who paid for its year-long South China Sea deliberations. Definitely the Chinese paid nothing since they objected to the process from the outset. If all costs were met by the Philippine Government, what can we say about the PCA’s independence?

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[SCMP Column] Turning the Tide

July 16, 2016

Back in 2003, some Chinese neighbours gathered a large mountain of leaves on the jetty in front of my house after an energy-sapping day of chopping overgrown trees. They then set light to the mountain, and wandered off leaving it smouldering into the sunset. Inevitably, the tide washed in, doused the fire, and swilled the loose par-burned leaves into the water. Today, 13 years later, those leaves still swill back and forth from the beach to the jetty. They have not decomposed. They have not gone anywhere. Lesson 1: once rubbish washes into your beach, it is going to stay there for far longer than you can dare to imagine. My village neighbours were not lacking energy, nor lacking concern to keep the village trim. But in spite of perhaps 150 years living on the sea-edge overlooking that beach, they had failed to recognize that waste dumped into the water stays in the water. It seems that still today they believe that the ocean is an infinitely huge dumping ground where lap sap can be swallowed and forgotten.

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[SCMP Column] Rebuild Case for Liberal Trade

July 11, 2016

Making things worse, in the recession since 2008 trade has stagnated and actually fallen since 2014. From trade growth averaging 16% a year between 2003 and 2008, it has slowed to annual growth of just 1.5% since 2010. Confidence in the benefits of free trade has been rocked. As manufacturing demand has fallen inside China, so raw material exporters worldwide have suffered sharp declines. At the same time China has begun to “domesticate” more high-value-added parts of global supply chains, so shortening the chains and reducing export opportunities for component makers along these supply chains.

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[SCMP Column] Language lessons

July 09, 2016

Whatever the pace of Britain’s decline as a global colonial power, there is one area where the sun still never sets on Britain’s hegemonic reach – the use of the English language.

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[SCMP Column] The Way to Equality

July 04, 2016

Hong Kong’s 10 richest men earn the equivalent of one third of Hong Kong’s GDP (compared with 3% in the US and the UK, and less than 2% in China). Hong Kong has historically been tolerant of such wealth disparities, but that tolerance has been sapped since the Asian Financial Crash in 1998. During this long and challenging two decades, a large part of Hong Kong’s families have felt nothing but uncertain employment prospects, sagging incomes, and no prospect of improvement in sight. The eccentric QE policies worldwide, which have brought interest rates to historic lows, have aggravated resentments by lifting asset markets – in particular property prices – into the unreachable stratosphere.

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[SCMP Column] Fragrant Success

July 02, 2016

By today, China’s perfume market seems as much to do with prestige and status as with any personal preference to smell nice over the day. Surveys suggest that just 1% of Chinese today use perfume – compared with around 60% in the US or the UK. Most sales are in a dozen or so first tier cities like Beijing, Shanghai or Chengdu, and over 70% of perfumes are bought as gifts, and 30% of the year’s business is concentrated on Valentines Day. Because they are bought as gifts, then brands and brand status are paramount – which is why two thirds of sales in the country are of foreign brands. The market leader by far is Chanel, whose Chance, Coco Madamoiselle and Chanel No 5 help to give the French group a 14% market share (similar to their dominant market share in Japan). Christian Dior captures 2% of the market and close behind are Lancome, and Calvin Klein.

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[SCMP Column] Ahead Lies Madness

June 27, 2016

As the Financial Times’s Martin Wolf noted two months ago: “Avoiding needless and costly risks is how adults differ from children.”  Last Thursday, British people voted as children, with a terrible temper tantrum, for which the price to be paid will be incalculable. Clearly the inchoate desire to hit someone, from a population that has felt patronized and manipulated by their political elites for too long, was irresistible. If Britain has left the EU in haste, it will now suffer the pain of separation at leisure.

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[SCMP Column] Soaring to New Heights

June 25, 2016

Supercell so far has just four products – or “titles” – Clash of Clans, Hay Day, Boom Beach and Clash Royale. But on the foundations of these four games it has in the world of mobile gaming, become a global leader. These are the elite of games, attracting millions of fans and gamers worldwide. They earned profits last year for Supercell’s 190 staff of Euros 848m on sales of Euros 2.1bn. Mobile apps like Clash of Clans may not yet rank alongside League of Legends in the universe of professional video gaming, but now as part of the Tencent stable of companies who knows where we will be within the next decade.

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[SCMP Column] Realities for Retirement

June 20, 2016

These simple demographics put a devastating time-bomb under just about any pension scheme in place anywhere in the world today, and underscore why so many state pension schemes worldwide are unsustainable and close to bankruptcy. A fictitious Jimmy, aged 40 today, would need to save 17% of his income every month to be able to retire at the age of 65 with a retirement income of 50% of his present salary (most people polled worldwide seem to agree that 50% is the minimum they would like to cope on in retirement, assuming they already own their own home). And our fictitious Jimmy has only one response to this savings news: dream on! He sees no realistic possibility of saving so much on a regular basis, without the help of Mark 6. If he chooses to work on until he is 77, then his savings rate could fall to 8%. Even that would be a challenge.

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[SCMP Column] Banking in Fear

June 18, 2016

Given the pressing importance of this problem, surely more parties need to get involved. In APEC, Finance Ministers last autumn called on the 21 APEC economies “to build capacity to address financial crimes, which threaten everyone’s economic and social well?being”. They called for a report “exploring ways to strengthen capacity in tackling tax crimes and other related crimes”. But beyond these fine words, our region’s officials have sat on their thumbs. Surely cooperation to share suspicious information is not too much to ask.

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[SCMP Column] Quiet Comfort from Peru

June 13, 2016

It would be difficult to find a better case study of democracy working as we all hope it could work. Despite dreadful domestic hardships in Peru triggered by the global recession, and huge falls in export earnings from Peru’s mainly-commodity economy, the electorate baulked at populist or protectionist “solutions”, and instead voted for a textbook technocrat who on paper is as well-qualified to run a country as anyone I recall. Kuczynski, who is already 77 years old, first came to South America with his Polish-German father, who ran a leper colony in the Amazon. He studied at Oxford and Princeton. He worked as an economist at the World Bank. He has previously served as Peru’s finance minister, mining minister and prime minister. His election campaign targeted the moderate political centre in Peru, promising economic growth and social investment.

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[SCMP Column] Code Matters

June 11, 2016

With delivery of letters being a declining global industry, some would argue that it will get easier, not more difficult, to deal with future volumes of postal traffic – and hence less important to introduce postal codes. The Universal Postal Union says that the global volume of letters fell 2.6% in 2014 – the latest year for which we have data – to 327.4 billion, with international traffic, which accounts for just 1% of all letter traffic, falling by over 6%. Pressures in Asia are also insignificant by comparison with the US and Europe, where 301 letters per capita are posted every year. The comparable number for Asia is less than 6 per year. The same picture emerges with parcel delivery. While parcel deliveries grew by 3% in 2014 to 7.38 billion, by far the majority of pressure is in the US and Europe, with 7.5 parcels delivered per capita per year – 100 times more than in Asia. So the comparatively massive volumes of letter and parcel traffic in Europe and the US mean that the case for postal codes there is clearly more powerful.

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[SCMP Column] Driving towards Driverless Cars

June 06, 2016

But higher ambitions are going to take years. Amend that: decades. Main barriers are going to be regulators and safety experts who insist that automated driving systems, once unleashed in our communities, will be no less safe than human drivers – which means bettering the current situation where a fatal crash occurs one in every 3.3 million hours of driving, and where crashes resulting in injury occur once every 64,000 hours of driving: “Reaching this level of reliability will require vastly more development than automation enthusiasts want to admit,” says Shladover.

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[SCMP Column] Unsung Advantage

June 04, 2016

Today, China is home to close to 200 million cars – over 5 million of them clogging the boulevards of Beijing. Only the US is home to more cars (around 260 million). Its auto industry is one of the largest in the world, making 24.5m vehicles a year (twice the total made in the US, and four times the output of German carmakers). More than 24 million vehicles were bought last year, compared with 17.5m in the US, 3.5m in Germany 2.3m in France. And that is just new vehicles. China’s car ownership is such a recent phenomenon that the second-hand car market (which accounts for two-thirds of the US car market for example) has barely begun to develop. Only in recent weeks has the Government lifted laws blocking the sale of second hand cars between provinces. China’s streets are set to become as aggressively gladiatorial as the worst in the world, with congestion matching Mexico City, Istanbul and Bangkok.

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[SCMP Column] Closed for Business

May 30, 2016

The reality seems to be that the recent global regulatory overkill defined by Dodd-Frank and other legislation in the US and elsewhere is forcing banks sheepishly to refuse accounts to even long-standing and trusted clients. Shellshocked by the US$200 billion in fines imposed on financial institutions since 2008, and the ongoing fear of regulatory witch hunts that might arise if you fail to “know your customer”, banks are finding the cost of achieving regulatory “comfort” too burdensome and onerous to achieve for all but the most globally established enterprises.

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[SCMP Column] Invasive Species

May 28, 2016

A study by the Royal Botanic Gardens at Kew near London found that thousands of plant species are today at risk of extinction from threats ranging from climate change, habitat loss, disease and invasive species. Conservationists have now logged around 5,000 invasive species around the world, and the global cost of tackling invasive species alone is estimated at nearly 5% of global GDP. The annual cost just to the United States economy is estimated at $120 billion a year, with over 100 million acres (an area roughly the size of California) suffering from invasive plant infestations, according to The Nature Conservancy.

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[SCMP Column] Pointless Trade Rhetoric

May 23, 2016

Trade has stagnated since 2011, and actually fallen since 2014. From trade growth averaging 16% a year between 2003 and 2008, it has slowed to annual growth of just 1.5% since 2010. Confidence in the benefits of free trade has been rocked as politicians across the world have wrestled with the awful consequences of the 2008 crash, and the recession that has followed. And putting to one side the bigoted and ill-informed rhetoric of aspiring leaders like Donald Trump, sympathy for protection against foreigners’ “unfair” trade practices has begun to take root.

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[SCMP Column] Costs of Migrantion

May 21, 2016

In APEC, we have begun to discuss the creation of an “international worker card” that would not only facilitate the movement of such workers to and from their overseas jobs, but would also embody standardized access to health insurance and maintenance of retirement benefits. Jokowi would serve us well by lending Indonesia’s support to this initiative. 

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[SCMP Column] Your digital afterlife

May 16, 2016

By 1995, the digital revolution was pretty much limited to music, videos and photos. By 2010 it had swallowed the print media, retailing, TV programming, travel and tourism services and the human resources profession. By last year, it was engulfing financial services, healthcare, education, the auto industry, and agriculture. It is now lapping at the door of two even more fundamental activities in our economies – accounting and legal services.

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[SCMP Column] Real Inequality

May 14, 2016

This leads Milanovic to some tough conclusions: the shift in economic power away from the rich west to Asia has been strong, and will continue; the economies of the west face decades of stagnation ahead, with their middle classes hurting the most; we see the emergence of a “global plutocracy” built around the interests of the “Top 1%”, which will compromise our democracies, and possibly trigger populist and “localist” backlashes. We can see this already in the US with Donald Trump, in the UK with the right wing call for exit from the European Union, and this week in the election of Davao Mayor Duterte as the Philippines’ new president. Our Occupy movement and youthful unrest are likely part of the same phenomenon.

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[SCMP Column] Costly Divorce

May 09, 2016

For the British debate, there is of course an unusual convergence of bad things at work: eight years of post-2008 recession have fuelled unemployment and job uncertainty at a time when migrant worker flows from poorer eastern European economies have run strong. The recent tragic refugee floods across Europe, with the UK being a preferred target destination, has aggravated prejudice and xenophobia. People also seem to forget that this in-or-out debate on the EU has raged for decades inside David Cameron’s conservative party, and is as much as anything else an ill-conceived attempt to settle this battle. It is of course not helpful that the Brussels apparatus is such an easy whipping boy. Its combination of bureaucratic bombast and French legal opacity makes it easy to be irritated and angry about the unaccountable ways in which it works.

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[SCMP Column]Tip of the Iceberg

May 07, 2016

China’s gamblers are expected soon to make China the world’s largest gambling market, overtaking the US. But numbers are patchy, unreliable, and almost certainly massive underestimates. What impact they will have in future is literally anyone’s guess. Richard Scudamore, chief executive of Britain’s Premier League, was talking about Leicester’s shock victory, but he could have been talking about China, when he said: “We have all become completely hopeless at predicting anything.. No-one saw this coming.” In Leicester this week, at least the snooker industry saw China coming.

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[SCMP Column] Spreading Pain

May 02, 2016

Steel is a sore subject in many parts of the world as recent recession, in particular a sharp cut back in steel consumption in China, has left most of the world’s steel manufacturers haemhorraging horribly. And as China was in the boom years the main driver for plump profits for the world’s steelmakers, so it is fair to acknowledge that in the downturn, China has played a large part in spreading pain.

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[SCMP Column] Resource Curse

April 30, 2016

If you want evidence of the “commodities curse”, look no further than Port Moresby, the raggle-taggle capital of Papua New Guinea.

Of course, the curse is not PNG’s problem alone – the global collapse in price of so many key commodities is creating wrenching challenges in economies ranging from Venezuela, Peru and Brazil to Mozambique, Indonesia and Russia – but PNG lays out the challenges in stark and basic terms.

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[SCMP Column] China: pollution beater

April 25, 2016

A recent study on China’s resource efficiency funded by the UN Environment Programme, the Commonwealth Scientific and Industrial Research Organisation in Australia, and the Chinese Academy of Sciences is frank about China’s responsibility for rising demand for, and pressure on, a wide range of natural resources over the past decade and a half, and summarises China’s  challenge well: “It is unrealistic to expect China to achieve the extremely high apparent resource efficiency levels of those countries which have transferred most of the materials and energy intensive production processes to external jurisdictions.

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[SCMP Column]Monarch's lasting legacy

April 23, 2016

Like Kissinger or Carter, Elizabeth is also a living reminder of how in general terms the world has changed for the better – and of how so many of today’s terrible problems have all been tackled – and overcome – before. The damage wrought by the First World War as still strongly felt in the UK and across Europe. Times were hard and turbulent. As she was being born on that dull London day in 1926, so trade union militants launched a 10 day General Strike across the UK that led to the imposition of Martial Law. She was just three when the Great Depression engulfed the US and Europe’s economies. I wonder what parallels she might draw as we enter the 8th year of our “great recession”.

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[SCMP Column] What third runway? Hong Kong needs another airport

April 18, 2016

My sense is that Hong Kong’s air services negotiators will need to be endowed with magical powers of foresight to know how best to negotiate rights from Mainland cities to and from Hong Kong, and to best capture passenger flows onward to destinations worldwide. With close to 20 Mainland cities now handling 20 million passengers a year or more, surely only a magician can work out how to assign the burgeoning passenger services from these cities onto Hong Kong’s two runways. The question we need to ask is not whether we need a third or fourth runway. It is where do we put the next airport.

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[SCMP Column] Four amazing things I learned about China’s top leadership this week

April 16, 2016

Of course, as the former dean of Qinghua University’s Law faculty, it is reasonable to raise an eyebrow and say “Wang would say that, wouldn’t he”. He is almost certainly talking his own profession’s book to depict the coming three decades in China as being defined by the “Rule of Law”, since I am sure Beijing has other strategic priorities that might equally well describe the aspirations of the coming three decades.

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[SCMP Column] The Offshore Case

April 11, 2016

So let us focus on what should be focused on: the opacity that disguises the flight of corrupt money, the financing of terror, and illegal manoevres circumventing legal obligations. Expecting banks to “know your customer”, and enabling them to share information on suspect movements of money, would be helpful. Governments can also help here by making tax systems more simple. This might not be as glamorous as a peek into the lives of the super-rich, or of Putin’s favourite Cellist, but it would be a good start.

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[SCMP Column]Dumbing Down

April 09, 2016

But a successful democracy needs more than just well educated and well informed people. We have shockingly realized since the “great recession” engulfed us eight years ago that politicians need growth to get elected. No politician ever got elected promising “less bad” than his rival. Growth in an economy allows politicians to promise new and exciting goodies. It generates the wealth needed to invest in communities and to improve the amenities we value. Growth fundamentally underpins a mood of optimism that encourages cooperation and compromise.

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[SCMP Column] Smelling the Air

April 05, 2016

Get out on the street, and the reality most people are feeling is much more dispiriting than Ms Yellen’s statisticians are telling her. So instead of relying on data modeling, she and her counterparts around the world ought to be sending more people out onto the streets to “smell the air”.  As one anthropologist put it: “What we need is not just economic analysis but on-the-ground ethnographic analysis of how consumer perceptions of prices actually operate.”

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[SCMP Column] Confidence Crisis

April 02, 2016

So perhaps the Lee Bo mess was the result of some unapproved overzealous overreach on the part of local security personnel in Guangdong. If that was so, would it not be wonderful if Beijing officials could have the confidence and modesty to say as much? Clearing the fog would do much to restore badly damaged business confidence.

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[SCMP Column] Food for Thought

March 28, 2016

As food adulteration problems increase, and governments step in with increasingly strict regulations and increasingly clever technologies to detect adulteration, so it is clear that food fraud problems will never be stamped out. As soon as a new smart test is invented so some smart fraudster with a strong financial incentive will invent some way of circumventing it.

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[SCMP Column] Why Go Glum

March 26, 2016

Over the past four years, according to the OECD’s World Happiness Report, Hong Kong has tumbled from the 46th happiest place in the world to the 75th happiest. That makes us happier than Indonesians(79th), Filipinos(82nd) and Chinese (83rd), but significantly less happy than Singaporeans (22nd), Taiwanese (35th) and Japanese (53rd).

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[SCMP Column] Crowded Skies Add to Woes for Airports

March 21, 2016

For leading airlines like Cathay Pacific or Singapore Airlines the biggest challenge will not be to win agreement at home to add capacity in home airports – though we know from painful local experience this is hard enough – but to persuade other governments around the region to take seriously the challenge of finding sufficient slots for their aircraft to land.

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[SCMP Column]Harbour Matters

March 19, 2016

To see the harbour abused, degraded and neglected at the hands of uncoordinated piecemeal policymaking by successive administrations through the last decades of the 20th century was particularly painful and regrettable. It has been similarly painful to watch the glacial progress of efforts to regain planning control of the harbour, and with it progress in enabling ordinary Hong Kong folk to regain access to this shoreline that inspires our sense of community.

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[SCMP Column] Chilling Effect

March 14, 2016

But it would perhaps be complacent and naïve to imagine that Wang Qishan’s anti-graft drive might not at some point reach more deeply into Hong Kong. Given the sheer size of Mainland corporate and private investment in Hong Kong over the past 30 years, it is surely inconceivable that corrupt money has not found its way here. Perhaps we should ask the City University researchers to interview a few 14K triads in Hong Kong.

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[SCMP Column] Paying the Price

March 12, 2016

In short: as many women graduate with honours from Hong Kong universities as do men, but social and cultural attrition means that a decade later they are massively under-represented in the skilled areas of the economy. And even where women persist, they on average earn 17% less than their male counterparts for the same work. This discrimination is particularly apparent in the “STEM” area of the economy that is playing such a massive role in driving the digital economic revolution. Even a modest reversal of these imbalances is likely to drive massive rewards in future economic competitiveness.

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[SCMP Column]Aerial Torture

March 07, 2016

This might just make these long-haul journeys commercially viable: up to now, such long flights have been commercially disastrous. In 2004, Singapore airlines launched direct flights from Singapore to New York and Los Angeles. A year later, Thai Airways tried direct flights from Bangkok to Los Angeles, and American Airlines began flying from Chicago to Delhi. But by 2013 all of these services had been cancelled. Of course, soaring fuel prices did not help, but the economics proved impossible. In order to carry enough fuel for the journey, Singapore Airlines had to cut its passenger load from the normal 300 down to 170. Even making the flights business-class only could not make them pay.

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[SCMP Column]Signs of Life

March 05, 2016

In short, the reasons why companies and consumers are still unwilling to begin relaxing and spending seem very clear. Quite why so many economic policymakers don’t recognize or acknowledge these forces perplexes me. Whatever the reason, it seems much more adversity lies ahead before the patient on the emergency room table begins to show signs of sustainable life. 

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[SCMP Column] Banking on Change

February 29, 2016

Already it is clear that the “FinTech” revolution is being driven by two very different populations: radical new start-up disrupters who are using the potential of new technologies to develop fundamentally new ways of living our financial lives; and incumbent behemoths that have on the one hand recognized that unstoppable forces have been unleashed, and on the other have seen economies and efficiencies embedded in the new technologies that can save them big money, improve services to customers, and help them retain their hard-fought competitive leadership.

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[SCMP Column] Eyes Wide Shut

February 27, 2016

In Hong Kong, where “localist” xenophobes are railing against the Mainlanders in our midst, the seeming indifference of our administration to these rising pressures is a source of serious concern for our future competitiveness. A recent survey by the HK Institute of Human Resource Management reported that already today 90% of surveyed companies find it quite difficult or extremely difficult to find the right talent to fill vacancies. This must get worse. Shortages are most acute in logistics and transport services, IT, business and professional services, wholesale import and export trading, and restaurants and catering. Talk to most of these companies about their efforts to bring skilled people in from outside Hong Kong after local recruitment efforts have failed, and most boil with frustration at government reluctance to hear their cries for help.

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[SCMP Column] Keep on Pushing

February 22, 2016

Low birth rates mean that there will be fewer and fewer working people carrying the cost of supporting people in retirement. While we in Hong Kong (where we have about 15% of our population over the age of 65) are far better off demographically than a country like Japan, where today 26% of the population is over 65, and a shocking 38% will be over 65 by 2055, we are worse off in terms of retirement security because our official pension scheme – the MPF – is underfunded, and was only introduced in 2000. People retiring today have just 16 years of contributions – far too little to provide financial security through a retirement that might stretch for 30 years. And even in 2040 when people will be retiring with a longer lifetime of contributions, the amount saved will last most families for little more than 5 years.

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[SCMP Column] Milk for Life

February 20, 2016

China is of course hugely important for baby milk formula, accounting for sales worth $14.8bn in 2013 – three times bigger than the US market, and six times larger than Indonesia. Interestingly, Hong Kong has become the world’s fourth largest market for baby milk formula – not because of demand from Hong Kong mothers, but as a proxy for Mainland demand. Boosting China’s birth rate by 2m a year will only augment this huge demand.

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[SCMP Column] Life Goes On

February 15, 2016

Reflexivity may seem a big deal to George Soros and colleagues on the world’s equity markets, but in the bigger scheme of things, this is barely a bump in the night. Perspective is a wonderful thing.

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[SCMP Column] Weird Weather

February 13, 2016

As the US reported 10 different “weather and climate disaster events” in 2015, each costing US$1 billion or more in damage, the National Oceanic and Atmospheric Administration (NOAA) announced that 2015 was the warmest year on record – and that 15 out of the 16 warmest-ever years have occurred since 2000.

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[SCMP Column] Tourism Gold Mine

February 06, 2016

China’s capacity to transform the shape of international tourism is considerable. Hong Kong’s opportunity to benefit from this is clear. If we don’t benefit in the process, it will be our own fault.

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[SCMP Column] Tough Year for APEC

February 01, 2016

Peru is also keen to introduce us all formally to the Pacific Alliance, the new and significant trade block that includes Mexico, Colombia, Chile and Peru. For me, in a continent populated by “bad guys” like Venezuela, Brazil and Argentina, these are the “good guys” – committed liberalisers keen to build stronger links across the Pacific. While the Pacific Alliance is (sensitively) dominated by Mexico, which accounts for almost two thirds of its GDP, the Pacific Alliance as an integrated region of over 200m people would make the world’s 8th largest economy. China’s President Xi Jinping may not have included them in his “One Belt, One Road” vision (with 64 other economies embraced by One Belt One Road, I puzzle why not), but they deserve keen attention from our part of the world. And what Peru is kick-starting in 2016, Chile will continue in 2019 – when it in turn becomes chair of APEC.

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[SCMP Column] A New Pandemic

January 30, 2016

In all societies, including Hong Kong, there are people with cherished prejudices who do not want those prejudices ruffled. They constantly seek the anecdotes that support their prejudices and allow them to enter discussions with “Ah, but…” They are supporters of Donald Trump and subscribers to Fox News. They are voters for Marine Le Pen in France, and the Independence Party in the UK. They sit at both ends of the political spectrum, and the challenge facing our “fifth estate” is to stay above those prejudices, and to try to make sure the wider truths are heard. The challenge facing our politicians and leaders is to hear those wider truths, and adjust their prejudices accordingly.

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[SCMP Column] Putting the PR Spin into Trust

January 25, 2016

Oxfam shockingly calculates that the world’s 62 richest business leaders control as much wealth – about US$1.76 trillion – as the 3.6 billion people that count among the poorest half of the world. While the wealth of the top 1% has jumped by 44% in the past five years, the “wealth” of the poorest half of the world has shrunk by 41%. Of the wealth accrued since 2000, half has gone to the richest 1%, and just 1% has gone to the poorest in the world.

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[SCMP Column] Myanmar's hope

January 23, 2016

First, large numbers in the country’s military leadership retain kleptocratic control of many key industries and industrial franchises. Myanmar is one of the world’s most resource-rich countries – ranging from marine resources off its shores to minerals, rubies and jade, and to forests full of some of the best hardwood in the world – but much of this resource wealth today enriches the families of the military elite. Without “defector” amnesties and other comforting gestures, the potential for backlash remains.

Second, the military retain significant real power despite the electoral success of the National League for Democracy. For example, they automatically retain 25% of the seats in parliament, have reserved the power to run the security and home affairs ministries, and control the country’s “administrative spine” right down to township level. Even if The Lady’s party passionately wanted to sweep military-connected people out of office, the huge “technocratic deficit” that exists in a country that has been cut off from the outside world for most of the past half century would make this impossible. The country is going to remain chronically short of technocratically equipped people for decades to come.

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[SCMP Column] Time to count the winners in global commodity crash

January 18, 2016

So what do I make of all this? On balance, I think the panic about oil prices is overdone and that low prices will actually do us some good as we try to breathe life back into the global economy. But I think the gloom emanating from the commodity economy tells a darker story, suggesting a long haul ahead before we get any spring back in our step. The scale demands inside China driven by new cities, new airports, new mass transit systems, and 400 million or more emergent “middle class” consumers will in due course come to our rescue, but it will take time. Our year of the fire monkey might not quite be an outright disaster. But for most of us, it is unlikely to be fun either.

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[SCMP Column]Political Eclipse

January 16, 2016

CY’s legacy is not yet set in stone. Like Obama, he has been dogged by global recession, and against this recessionary backdrop has had to wrestle with the awesome centripetal forces of China’s awakening economy – but if he harbours hopes of staying in office to 2022, he must surely harbour hopes that his final years will see an economic upswing that will lift spirits, reduce the xenophobic partisanship of “localist” political forces, and leave him with a creditworthy legacy. That is perhaps why he devoted so much of his mind-numbing two-hour presentation to property, to Hong Kong’s role as the One Belt One Road “superconnector”, and on innovation.

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[SCMP Column] Dumping Grounds

January 11, 2016

When China joined the WTO in 2001, its understanding was that after 15 years of WTO membership (that is, the end of 2016) it would be allowed to “graduate” from non-market to market economy status. There have been recent indications from the European Union that they are agreeable. But guess who has thrown a spanner in the works? As a Financial Times article noted last week: “Beijing is an easy target in the crowded US presidential field.” A study by the Washington-based Economic Policy Institute concluded that giving China market economy status would result in a surge in Chinese exports, and a loss of 1.6 million jobs in the US: “China has extensively subsidized a range of industries and used currency manipulation to support production and exports, allowing it to accumulate widespread gluts of goods that it can export at discount prices.” Of course, the US’s plucky, honest and principled companies would expect nothing less from those conniving, untrustworthy foreign competitors. Always was it so.

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[SCMP Column] Saving for Old Age

January 09, 2016

The crude arithmetic is simple, but almost always terrifying. If you earn the average Hong Kong household income of HK$24,000 a month, and want to maintain that level of income after you retire, then your savings at retirement will need to be HK$24,000 times 12 months times 20 years – which comes to almost $5.8 million. That is a number that makes most families turn white: it means that you have to save HK$128,000 a year, or just under over HK$10,000 a month for the whole of your working life. What family do you know that earns HK$24,000 a month and can afford to save almost half of it?

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[SCMP Column] Light without Progress

January 04, 2016

The lesson for us in Hong Kong? That 30 years of perpetual haggling over constitutional architecture has disserved us horribly. Our politicians should not measure themselves in terms of progress towards “one man, one vote”, but in terms of improving our health care system, of giving security in old age to our elderly poor, of giving us access to affordable housing, or giving us clean air. Until we start measuring our political representatives – and our government officials – in terms of “performance legitimacy”, then we will get what we deserve – pretentious political posturing, and procrastination. If we want our “one country two systems” arrangement to live beyond 2047, we have to do better than this.


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[SCMP Column] No Consensus Please

January 02, 2016

Without really being sure, I have wondered whether the obsession with “consensus” has its roots in Confucian thought. Whether yes or no, the reality is that there is no place for consensus in politics. I repeat today what I said a year ago during that tracking exercise: “Modern complex societies are riddled with large and perfectly reasonable differences of opinion, and the very essence of democracy is to broker those differences… The concept of democracy is fundamentally founded on a recognition that there can never be consensus – and that to be held hostage to it can only cripple decision making and lead to political inertia.”

To make the tough decisions and compromises that political leaders have to make in the interests of our society, a leader – whether CY Leung, or Barak Obama, or Xi Jinping – has to roll up sleeves, arm-wrestle compromises with different interests, and broker plans that are in the interests of the majority. In a democracy driven by party politics, this messy process happens naturally: political parties build coalitions of support around a compromise policy document – a manifesto – and if they win an election based on that manifesto then two things naturally happen: the government has a mandate to act, even in the face of opposition; and the groups that signed on to the coalition of support that forged the manifesto are bound to lobby in support.

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[SCMP Column] Off Life Support

December 21, 2015

So as we edge into the Year of the Monkey, and drink toasts to the future, the main message is that several years of austerity and belt-tightening still lay ahead, even though we can more credibly today talk about “green shoots”. Patience and risk aversion may still be well advised. We are more than half way through our “lost decade”. And while China’s domestic restructuring is at present causing us all heartburn, on balance we remain lucky to live on China’s doorstep. As the global economy begins to rally back towards boisterous good health, there will be nowhere more exciting to be than in China, where a seismic digital revolution is taking place – but I think that is a story for another day.

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[SCMP Column] Cartel Conundrum

December 19, 2015

Perhaps the single most important conundrum for me is something the government has always stayed silent on: in a small city market like Hong Kong, how will you define the relevant market? No-one will ever be able to prove abuse of market power if in the first place you can’t define the market in which abuse has allegedly occurred. In a large country like the US or China, defining the market may be easy. But in Hong Kong, this is not so. For example, is Hactl or Cathay Pacific, which handle the huge majority of Hong Kong’s air cargo, capable of abusing local market power if their true competitors are in Singapore, Shenzhen and Guangzhou? Can Hong Kong’s port operators truly be tried for abuse of market power if their competitors are ports in Shenzhen and dispersed across the length of Asia. And could Hutchison Telephone or PCCW be credibly scrutinized for market dominant behaviour when Mainland mobile operators already hover over the local market with customer bases 100 times larger than our local “behemoths” could ever dream of? The work of our competition regulator is likely to be fascinatingly complicated by the increasing “fungibility” of the Hong Kong and Mainland markets.

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[SCMP Column] Time for Wimps to Lead

December 14, 2015

Since this discovery, China has moved hard and fast to build its services economy. Recent research driven by former WTO Chief Economist Patrick Low and a team in Hong Kong, along with researchers in APEC’s Policy Support Unit, has provided even more provocative food for thought. In researching over 40 manufacturing industry case studies, they have found consistently that even manufactured goods are mainly services. One fresh cherry exporter from Chile had 72 services embedded in its value chain. A Chilean wine exporter had 70. A Hong Kong watch exporter had 43. A Mexican company that made brake hose end fittings had 54 services in its value chain.

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[SCMP Column] The "Good Guys"of Pacific Alliance Mean Business

December 12, 2015

Just as we on the Pacific’s western shores have suddenly begun to realise that we need to know more about South America’s economies, so too have the Pacific Alliance partners begun to turn attention to Asia, and the potential for a “Puente Pacifico”, or Pacific Bridge – even though so few of us speak Spanish. For Mexico and Columbia, there is the “push” factor that they are anxious to reduce their reliance on the US as the dominant export market. But for all four, even though China’s demand for raw materials may have faltered for the time being, there is a rising awareness of, and interest in, China (and ASEAN) as significant future consumer markets. We should ensure the Asian end of the “Puente Pacifico” lands here in Hong Kong. If it lands elsewhere, we will be the losers.

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[SCMP Column]The Art of Innovation

December 07, 2015

Most business chambers – including most in Hong Kong I presume – would be arguing for tax breaks, subsidies and various cash incentives for bright-idea start-ups. But the data worldwide suggest that regardless of what tax breaks or subsidies you provide, 80-90% of start-ups fail. Therefore, lots of money goes down the drain. Many argue that this is an inevitable fact of life, and governments should shower water on a hundred flowers in confidence that a dozen or so will bloom. Measure the gains from the successful dozen they say.
These advocates have a case, and many governments follow that principle - though the rules they then set for how a bright entrepreneur, might qualify for support seem to baffle and frustrate even the keenest and most creative innovator. And there seems to be a very poor correlation between the amount of funding disbursed in a country, and the level of innovation. A Economist report claimed the best link with innovation was gross R&D spending: “Innovation-led “smart” growth has occurred mainly in countries with a big group of medium to large companies, and a small group of SMEs that is spun out from (them) or universities.”

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[SCMP Column]Tip of the Melting Iceberg

December 05, 2015

With global commodity prices at their lowest levels for over a decade, almost without exception, many of you might dismiss my concern. Oil and coal prices, coffee and sugar prices, soya and wheat prices, are all down 50% to 70% from their post 2000 peaks. But I am not sanguine. The price collapse is a direct result of the global recession that began 7 years ago, and it may still be several years before the global economy begins to recover. But if we assume recovery will begin in earnest by 2020, with consumers in China and then later in India adding literally billions of people to our “stuff” consuming classes, then pressures on these resources will immediately soar. I am still betting that conflicts linked with competition for resources in increasingly short supply will create serious global conflicts long before we begin to pay any serious price for our failure adequately to address the climate challenge.

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[SCMP Column] Gucci Set is Here to Stay

November 30, 2015

On the back of this explosion, the world’s luxury goods industry has flocked into China. Brand names like Louis Vuitton, Chanel, Prada and Gucci have proliferated across China’s top cities. But paradoxically, in spite of explosive sales growth for most of the past decade, these China-based stores have struggled. This is because over 65% of the US$65 billion luxury goods bought by Chinese in 2014 were in fact bought outside China – either during overseas holidays (there were 120 million overseas visits by Chinese last year), or through a shadowy “daigou” network. These “daigou” are people who base in key cities like Paris or Milan, take orders for whatever the Chinese tai tai demands, and then mail the goods back to China below the radar of frustrated tax and customs officials. Fascinatingly, one response has been to go “virtual”, with some luxury goods companies foregoing the posh high-street shop, and focusing all efforts on selling on-line.

The canny Chinese habit of buying tax free overseas has for many years enormously benefited Hong Kong, which is of course normally the first overseas destination for China’s international travelers. But this Hong Kong windfall has faltered – not just because Hong Kong people have proven so xenophobically unwelcoming to Mainlanders in recent years, nor because bankers’ bonuses have withered as 325,000 banking jobs have been shed worldwide – but because so many of China’s increasingly sophisticated travelers are now choosing to do their shopping further afield – in South Korea and Japan, or directly in Europe. Bain predicts that luxury goods sales will contract in Hong Kong by 25% this year. And with this, jobs are being cut, and stores being closed – most recently Coach, TAG Heuer and Burberry.

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[SCMP Column] It's Time to Bridge the Gap

November 28, 2015

But without a Zhuhai bridge, Hong Kong has never been able to perform the same catalytic role for Zhongshan and Jiangmen. The drive from Hong Kong was too long for a factory boss to go and return in a single day. And the task of getting freight from the west Pearl River Delta either by small river vessels, or along traffic gnarled roads was troublesome and uncompetitive.

The bridge to Macau and Zhuhai can be transformative even today for the western PRD – if we can ever get our act together and built it. Cargos could be moved swiftly to the Hong Kong port, and the travel time from Hong Kong would be more than halved.

So why the procrastination? Undoubtedly the task of agreeing construction plans between at least three governments (Hong Kong, Macau and Zhuhai), and sometimes Guangzhou and Beijing too, was always going to be challenging. But the reality is that still today many in our administration have only a half-hearted interest in stronger integration with the Pearl River Delta, even though it is our natural market today and the richest and most dynamic part of a Guangdong economy that is about the size of Spain.

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[SCMP Column] Not Welcome Here

November 23, 2015

And the extent to which this has created wealth for those inside the banking sector can only be imagined. This thought occurred to me last week as I read that Barclays Bank faces new fines of around US$100m for electronic trading abuses – which follows a $485m fine paid in May to New York’s banking regulators for manipulation of forex spot trading. Moody’s says that bank litigation costs since the 2008 crash have reached almost US$219 billion – led by Bank of America which has paid out US$70 billion. As I read these numbers wide-eyed, I ask a single simple question: What on earth were the profits these institutions were sharing amongst themselves before 2008 if they are able now to afford to pay fines of US$219 billion, and still be in business? Financial rape and pillage comes to mind.

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[SCMP Column] World City? Not Any More

November 21, 2015

PwC’s 2015 “Building Better Cities” study*, released this week at the APEC meetings in Manila, should provide a powerful wake-up call for anyone in Hong Kong who cares for our future. This survey of the livability of 28 cities across the APEC region puts Hong Kong a drab 11th, with shocking ratings for culture and “social health”, health and welfare, and environmental sustainability. We might not be surprised to see Toronto and Vancouver up in the top two places, but it is irritating to see us lag behind Singapore (3rd), Tokyo (4th), Seoul (7th) and Osaka (10th).

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[SCMP Column] Meeting of Minds

November 16, 2015

For me, the most fascinating breakthrough here is the now-widespread recognition that service sector liberalization – in particular in finance, IT and logistics – is critical for competitiveness across all parts of our economies. Inefficient or expensive services destroy the competitiveness of manufacturers and service providers alike. Three years ago, there was an almost willful neglect of services in APEC liberalization discussions. Practical agreements on the behind-the-border liberalization or harmonization of standards and regulations may still be a long way off, but it is encouraging to see the leaders and top officials recognise how important services liberalization is for future competitiveness.

In deference to the fact that Peru will take over chairmanship of APEC in 2016, much attention is also likely to be given this week to the critical importance of strengthening links between Asia and the South American economies – in particular the four liberalizing economies grouped in the recently-formed Pacific Alliance – Mexico, Chile, Peru and Colombia.

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[SCMP Column] Hong Kong ignores food security at its own peril

November 14, 2015

While Hong Kong’s fleet is negligible, we nevertheless have a huge stake in the vitality of the South China Sea. Hong Kong is one of the most “food insecure” communities in the world. Over 90% of our foods are imported, and our obsession with seafoods is legendary. We may only have a population of 7.2 million people, but our appetite for fish, crabs and lobsters, and a wide range of shellfish makes us one of the world’s highest consumers of seafoods per capita, and the world’s 10 largest importer of marine products (much of the value of this is accounted for by sharks fin, but that is an embarrassment for another day).

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[SCMP Column] The Two-for-One Trauma

November 09, 2015

None is willing to admit the uncounted billions that have been gouged from the country’s families in the name of the policy, but the sums are self evidently enormous. While the fees charged to obtain permission to have the first child have been cancelled, still the hassle and documentation tasks have remained onerous and resented. And the punishments that are now called “Social Fostering Fees” can be eye-watering. Responses from 17 provinces revealed fees in 2012 totaling RMB16.5 billion for that year alone – with no information on how the money was used.  It was not uncommon for a family to be “fined” over RMB200,000 for the sin of bearing an unpermitted child. Famously, the film-maker Zhang Yimou was fined a total of RMB7.48 million for defiantly fathering four children.

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[SCMP Column] Changing the Guard

November 07, 2015

So we have entered a period when the US, above all others, needs to come gradually to terms with the need to share hegemonic power. No doubt Russia and India nurture (less plausible) hegemonic aspirations, but the serious challenge is to recognise the irreversible reality of China’s ascent, and to embrace it, rather than try to crush it.

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[SCMP Column] Hong Kong: a feisty city on ‘borrowed time’

November 02, 2015

Today, I have the rare opportunity to begin a new column for the SCMP. In broad terms it will aim to understand and describe the Hong Kong that has been home for over 30 years. It will explore the forces that are changing Hong Kong, both from the outside in, and from the inside out. – hence the name of the column.

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[SCMP Column] Pacific Trade Deal Welcome, Despite Geopolitical Baggage

October 08, 2015

Such US rhetoric makes me deeply queezy. As the Financial Times Trade Editor during the Uruguay Round of trade liberalization talks, I travelled the world for five years listening to Trade Ministers and local chambers of commerce making the same complaint: “If it were not for those pesky deceitful foreign businesses and manufacturers twisting and breaking the trade rules, our fine, upstanding exporters would perform much better in global markets.” Slipped into this rhetoric was always the call for “fair” trade – code for “our right to do protectionist things to frustrate the deceit and manipulation of those pesky foreigners”. On cue, Obama talked of the US negotiating “free and fair trade that would support our workers, our businesses and our economy as a whole.”

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[SCMP Column] China's painful restructuring couldn't come at a worse time

September 24, 2015

Over the past three decades, a pragmatic and fiercely reform-minded Chinese leadership have brought this huge and complex country from ignominious poverty to a nation of respectable middle income earners. This progress seems set to continue, albeit at a less frantic pace than we have seen since 1980. A Beijing teacher who in 1978 was bicycling to work and subsisting much of the year on cabbage today drives a car, WeChats on a smartphone and takes holidays every year to Japan and Thailand. Perhaps China’s greatest challenge at present is not to sustain indefinite growth, but to prepare its population to recognize that no booms can continue indefinitely. In the west we have tended to let the market lead that process, however brutal that sometimes can be. 


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[SCMP Column] Vision Critical in City Planning as Metropolises Set to Boom

September 10, 2015

Today, 55% of the world’s population lives in cities – and that population is growing by 1.4 million people a week. Already cities account for 80% of global GDP.

The developing world is home to most of these cities – China alone is in the process of building more than 40 new cities of more than 1m people between now and 2030, and developing-world cities are expected to account for 93% of all future urban growth. But more than 30% of our urban residents are currently living in slums. So planning cities right is a need that presses urgently on us.

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[SCMP Column] Why Blame China for the Funk over Global Economic Malaise?

August 27, 2015

In 2007 – the year of strongest global growth ahead of the 2008 crash – the US, with an economy of UD$14.48tr, and 1.78% growth, added UD$260bn to the global GDP (according to the IMF). Meanwhile, the EU, growing at 3.34%, on a GDP of US$17.67tr, added about UD$511bn. And China, with a smaller US$3.5tr economy but 14.2% growth added US$1.33tr to the global economy. Amazing how helpful to the world economy China’s heady GDP growth was. So the three together added US$2.1tr in value to global economic output.

Turn to 2014, seven years into the global recession, and the numbers tell a fascinating story: the US, with a GDP of US$17.4tr, and growth up to 2.39%, added US$375bn to the global economy. But the EU, flatlining at 1.4% growth, added just US$200bn. China’s growth had tumbled to 7.4%, but with a GDP valued by then at US$10.4tr, it added US$1.32tr to the global economy – steady as she goes from 2007. Of course, together, the three only added US$1.9tr – a headache compared with global growth of US$2.1tr in2007.

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[SCMP Column] Time to put in place ‘Earn, Learn, Return’ initiative in Hong Kong and Asia

August 12, 2015

ABAC’s first step into this issue was driven by business recognition that the international movement of workers is not a blight but a blessing. As Asia’s wealthy societies like Japan, Korea, Hong Kong and Singapore rapidly age, so skills shortages have become progressively more acute, intensifying our reliance on such international workers to keep the wheels of our own economies humming.

This is as true for the 350,000 relatively low-skilled home helpers in Hong Kong as it is for welders in the Middle East, or nurses and factory workers in Korea.

ELR aims to purge the blight that currently infects this critically important regional labour flow. It calls for employers – not workers – to pay the fees needed to get them their jobs. It calls for health and pension arrangements that provide continuity with the schemes they would have had if they had stayed working at home. It aims to ensure that workers can return home regularly to their families, to minimize the risk of family break-downs. And it calls for overseas working experience to be recognised and properly valued on return.

Such moves in combination would help to reduce the abuse that so often blights the lives of overseas workers in economies like Hong Kong – illegal underpayment, withholding of passports, insufferable working and living conditions. Other steps in Hong Kong would include allowing domestic helpers to live outside their employer’s home if they wish – a recommendation made by the judge in the Erwiana court case as she sentenced the employer to seven years in prison for her far-from-uncommon abuses.

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Information Technology Agreement - Ready to Sign

July 20, 2015

The US, China and the EU now are set to reach agreement on the long-delayed update on the range of the tarrif-free information and communications technology products. The breakthrough on the negotiation over the 1996 Information Technology Agreement (ITA) would make it the biggest tariff agreement under World Trade Organisation in 18 years. 

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[SCMP Column] Reshaping the World Order through ‘One Belt, One Road’

July 15, 2015

But three things seem to make the concept distinct. First, the inclusion of the vast and neglected region of “stans” – from Kazakhstan to Turkmenistan to Uzbekistan – and the convulsive Islamic states around Iran and Iraq, and north Africa. Second, the clear priority of infrastructure-building, whether roads and railways, or gas and oil pipelines. And third, attention willfully turned away from the United States.

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[SCMP Column] The top 10 fixes needed if Hong Kong is to be Asia’s world city

July 02, 2015

This might be a vain hope: too many legislators – shame on them – seem interested to focus on nothing except electoral “architecture”. It is to their eternal shame that they have so neglected the very real challenges that face Hong Kong people, like improved housing, better health care, improved care for the elderly, improved education…

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[SCMP Column]MERS - taking the fear and putting it in perspective

June 17, 2015

A true global pandemic is likely to cull millions – maybe hundreds of millions. For example the Black Death that raged across Europe between 1346 and 1353 killed an estimated 75 to 200 million people. The good news is that MERS is probably not “the one”.

And in the course of research it seems I have discovered something new, which I am calling SYPPS: the Six Year Pandemic Panic Syndrome. Exactly six years ago today, I was writing about panic over Swine Flu (H1N1); and six years before that trying to dampen hysteria over SARS.

Of course six years before that we had those graphic photos of mountains of chickens being disposed of in efforts to snuff out Avian Flu. Gosh, we have had a torrid time since Hong Kong reverted to Chinese sovereignty in 1997.

I know I should not jest over something as awful as a global pandemic – especially since I only recently stumbled upon, and disposed of, the large stock of Tamiflu pills that I panic bought in 2003. But it really does take a good pandemic panic to remind us of how badly we judge the life-threatening risks around us.

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[SCMP Column] Mainland Wife migration flow about to return?

June 04, 2015

My guess – and at this point it is only a guess – is that many tens of thousands of those women who have arrived in Hong Kong since 1995 through the one-way permit process will in the coming decade be strongly tempted to return to the PRD as the ties to Hong Kong loosen. The death of the husband will be key.

So too will the emergence of their children from the Hong Kong school system. The Hong Kong hospital system may still attract them to stay. So too might our rule of law and comparative absence of corruption.

But the desire to be close to ageing parents will be increasingly important. And as communities in the PRD become more prosperous, so Hong Kong’s comparative attractiveness will weaken.

If I am right, and we have reached a migratory tipping point, then a number of positive changes may occur. First, links between Hong Kong and the PRD will strengthen as families buy homes in the PRD while retaining rights to be in Hong Kong. Second, many who find it tough to get good jobs in Hong Kong will have a chance to find better careers. Pressure on Hong Kong’s welfare system will be reduced, as will housing pressures.

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[SCMP Column] China’s astute decision to abandon export processing by upgrading manufacturing base

May 20, 2015


Statistically, and in terms of Customs measurements, China was exporting items at $180 – which greatly boosted apparent export earnings. But most of this export value was accounted for by the import of high value components and services that had earlier been imported from countries like the US, Germany, Korea and Japan.

Since this discovery, China’s leaders have steadily raised minimum wages in the coastal export zones to where they are more than double today what they were in 2000. This has forced manufacturers out of this immiserating part of the value chain. They have had to boost productivity, raise value added, and move into higher technology areas, or they have withered.

From this discovery forward, China’s leaders have recognized that providing rich consumers in the West with low-cost consumer goods may have been right for the emergent 1980s, but by locking their own work force in low-wage poverty, they were throttling the growth of their own domestic consumer market, and were also building social discontent problems for themselves in the future. Since the early 2000s, and in particular since the crash of the global financial markets in 2008, they have recognized the logic and urgency of building their own consumer middle classes.

Hence the priorities of the China manufacture 2025 Plan, and the recognition that development of their services economy (to drive efficiency and productivity in their supply chains) has to play an essential part in building a competitive future manufacturing economy. We saw this very clearly in APEC last year in China’s fierce advocacy of services development.

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[SCMP Column] Great Games between China and the US is alive and well

May 11, 2015

But in the US and in China, the great game is being played out by more traditional rules: in the TPP the US is bringing together 11 allies, above all else Japan and excluding China, that alongside its economic agenda is intended to balance Pacific power in its favour, underpinned by its relationship with Japan.

And in China, President Xi’s visit to Russia, Kazakhstan and Belarus – alongside his recent visit to Pakistan and a visit by India’s prime minister to Beijing – marks China’s own efforts to rebalance power in Asia and the Pacific around its own interests and priorities.

Since the Ukraine conflict, Russia’s relations with the West have been strained.

Friends are in short supply. Out of invitations to 68 countries to stand alongside him to commemorate Russia’s Victory Day marking the 70th anniversary of the end of World War II, fewer than 30 world leaders have agreed to join. Japan, Israel, the US, France, Germany – and even North Korea’s Kim Jong-un – have given Putin the cold shoulder.

President Xi’s presence has huge diplomatic importance.

For China, alongside the raw diplomatic importance, Kazakhstan, Russia and Belarus are three anchors for their new Silk Road initiatives that look west towards parts of the world ignored by the West for almost a century.

Russia’s isolation has hurt Belarus and Kazakhstan economically, so the arm of China’s political and economic friendship has great attraction. For example, Belarus’s exports dropped 22.7 per cent in the first quarter of 2015 following the Ukraine conflict.

Meanwhile, China’s ties with this region long ignored by the West have grown steadily in recent years – driven strongly by China’s ever-growing need for natural resources as well as the need to stabilise potentially disruptive Islamic forces in China’s west.

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[SCMP Column] World's middle class set for sea change within 15 years

April 23, 2015

In short, whereas today Europe and North America dominate world middle class consumption, accounting for 64 per cent of a total of $21.3 trillion (a dominance that has stayed steady for most of the past 200 years), by 2030, that share will have fallen to 30 per cent of a total of nearly $56 trillion. The Asia-Pacific, driven by consumers in India and China, will have risen from 23 per cent of consumption today, to 59 per cent.

If these predictions are anywhere near accurate, and if I were CEO of a manufacturer based in Frankfurt or Birmingham or Dallas, the message is clear: build an Asian presence as soon as possible.

I had a surreal feeling absorbing all this data, because India’s economy seems as quagmired as ever, and because we are still obsessively anxious about faltering growth in the Chinese economy, and the dramatic impact of the anti-corruption campaign on luxury spending on the Mainland.

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[SCMP Column] Why is Jetstar so keen on becoming a Hong Kong airline

April 08, 2015

What is the prize that so powerfully motivates Jetstar – or its bankrollers, Qantas, China Eastern and Shun Tak - to bleed so heavily and for so long? For low-cost carriers like Jetstar, Hong Kong can offer only lean pickings. Competition is ferocious on almost all routes. Access to landing and take-off slots is a nightmare at any reasonable time of day. As a fast-turnaround, low-cost carrier Jetstar will have no capacity to capture cargo revenues, which so bolster the earnings of full-service competitors operating wide-bodied fleet through Hong Kong. Access to mainland cities (the holy grail for future airlines perhaps) is fraught with delays that take a savage toll on cost control.

In Asia as a whole, just Air Asia out of almost 20 low-cost carriers has in recent years reliably made money. Jetstar’s sister airlines in Japan, Vietnam and Singapore all appear to be struggling to keep their heads above water. And as the sorry plight of the now-bankrupt Oasis Airlines reminds us, the ferocious competition through the Hong Kong hub makes it one of the toughest hubs in the world through which to earn money.

So where is the logic to make all this pain worthwhile? Having sat through the tedium of the ATLA courtroom drama, with Jetstar and its Qantas lawyers pitching barristers against the arrayed objections of Cathay Pacific, Hongkong Express and Hong Kong Airlines, there seems only one thing: the right to sit alongside the Hong Kong government in its many air traffic negotiations, with the government negotiating on its behalf for air traffic rights to international destinations in Asia and further afield.

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[SCMP Column] US needs to adapt to an engaged China

March 25, 2015

One reality is clear: China is emerging as an economic and diplomatic force more rapidly than is comfortable for many in the Asia-Pacific. Lacking any legacy debt to the regional power architecture created in the 1950s, Beijing’s efforts to create some new architecture that reflects its needs – like a Brics Bank, the maritime Silk Road, new credit-rating agencies, dilution of the dominance of US dollar-denominated global capital markets, and the China-Asean free-trade agreement (and beyond that the free-trade area of the Asia-Pacific) – makes reasonable sense.

US diplomacy would be better spent not boycotting such initiatives, but getting inside them and making sure they can mesh effectively with the massive global architecture already in place. I am sure that Lee Kuan Yew would say that someone in Washington is losing the plot.

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[SCMP Column] Polarising media just feeding prejudices

March 11, 2015

Hong Kong’s upheavals are uncomfortable, but they are not difficult to understand, and the causes of unrest are clear. Any youngster joining the Hong Kong workforce since 1998 has felt only stagnant earnings, job uncertainty, an absence of any bright light in the future, and home prices rising up into the unreachable stratosphere. By now, those youngsters will be in their mid-30s, and will be unable to paint any optimistic scenario for the decades ahead – for themselves, for their parents, or (if they have them) for their children.

Our task is not to punish and corral those at the heart of current protests, but to start building a strategy that restores a sense of purpose and hope. Most likely, our futures are going to be entwined with those of our Pearl River Delta neighbours, so the sooner we see them as neighbours and not enemies the better. The polarising media must meanwhile realise the harm they are inflicting on a community that remains still today among the most cohesive, cooperative and tolerant in the world.

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[Commentary] The AIIB: writing Asia's new rules

March 09, 2015

For those who see US opposition to the AIIB as part of a strategy to keep China from the diplomatic epicentre in Asia, there is seen to be a common motive in US efforts to complete the Trans-Pacific Partnership (TPP), which includes 12 Asia Pacific countries and leaves China out. But even clearer evidence has emerged in the 22-economy Trade in Services Agreement (TiSA) negotiations in Geneva. China initially stood aloof from these services liberalising negotiations, but has in the past year formally sought to join. The US is today the only TiSA participant  blocking China’s engagement, after an EU shift in March last year after Chinese President Xi Jinping’s high profile visit in Europe.

Given the lesson of the AIIB, the next big question is whether the US will stand firm to block its emerging rival in global trade talks or whether it will change its geopolitical strategy?

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[SCMP Column] Hong Kong has much to gain from a higher minimum wage

February 24, 2015

For Hong Kong too, the message should be clear. This is a high-price, high-cost economy which will never win a game based on low-wage competition. If a company depends on such low wages, it has no place in Hong Kong, and should migrate elsewhere. A higher minimum wage will do Walmart no harm. And it will do Hong Kong no harm. On the contrary, slightly more youngsters might then one day be able to afford their own home.

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[SCMP Column] Empowerment of women needs to start with basics

February 11, 2015

Recent debate inside Abac has made it clear to me that a further, critically important barrier to women’s full participation in the workforce is our failure to recognise the wide range of uniquely female health challenges and illnesses. Some of these unique challenges are sexual (breast cancer, cervical cancer and so on), some are hormonal (like thyroid complaints, where women are up to eight times more likely to suffer than men, and lupus, the auto-immune illness that strikes women 10 times more often than men). Some are linked with the simple medical threats linked with childbirth. Some, more tragically, are linked with what the World Bank calls “intimate partner violence” which leads to injuries, unwanted pregnancies, sexually transmitted infections, depression and other serious mental disorders.

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[SCMP Column] Denise of Dymocks may not signal end of books after all

January 27, 2015

So what a shock to learn that Mark Zuckerberg, Facebook founder and ultimate e-geek, has set up a book club, confesses a love of reading books, and promises to post two books a month for his Facebook followers to digest and debate. Sales of his first chosen book – Moises Naim’s The End of Power – have surged, with hard copies of his book sold out in days, and 180,000 Zuckerberg fans signing up to debate the book within a week.

And a further shock to learn that book sales have not collapsed as consultants were predicting until very recently. Consultancy PwC told us just two years ago that e-books would overtake physical books by 2015. Today, Deloitte says printed books still account for 80 per cent of sales by value. The leading UK bookstore Waterstones says sales of real books were up 5 per cent in December. In the US, sales of physical books rose 2.4 per cent last year to 635 million.

I’m confused. Am I really a dinosaur, or is the world really moving with me on this?

Data from Hong Kong would suggest I am not so extinct after all. Sales of new book titles in 2013 in the city were down 50 per cent from two years earlier to 4,000, but Hong Kong’s 77 libraries remain as busy as ever. Some 11.4 million books were on offer in our libraries at the end of 2014 – up 3 per cent from two years earlier, and book borrowers rose over the same period by 5 per cent to 4.2 million.

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[SCMP Column] Stop consulting, just do it!

January 13, 2015

In light of the sobering lessons of the recent months’ Occupy Central activity, our leaders’ interest in inequality and youth is telling. In nine years in office, Tung mentioned the word “inequality” just twice in his policy address. Tsang paid little more attention to the problem – except in 2011 when he used the word nine times as he wrung his hands about improving people’s well-being, reflected on the unaffordability of housing, and introduced his “My House Purchase” scheme.

In his three policy addresses, amounting to a total of more than 50,000 words, Leung has never used the word. If any lessons have been learned from the alienated youngsters at the heart of the Occupy demonstrations – and from the embarrassing influence-buying revelations of the Rafael Hui Si-yan corruption trial – then surely this must change, and fast.

Tung by and large ignored the issue of youth – except in his 1998 policy address when he used the word 18 times as he talked about raising education spending, committed the government to whole-day schooling for all, funded the introduction of information technology in schools, and established the Employee Retraining Board.


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[HKEJ Article] Real Value of APEC

November 17, 2014

There have been numerous other markers of progress over the course of the 80-odd days of meetings spanning 2014 that no outsider will notice or much care about, but which are significant nevertheless – making our supply chains more efficient; liberalizing our services economies; cooperating on development of the “blue economy” – shipping, fishing, seabed mining, coastal tourism and so on; running uncountable numbers of capacity building courses and best-practice learning workshops for officials to learn how to put these glamorous headline initiatives into practice.

As someone who spends almost three months a year in unglamorous APEC meetings in unglamorous cities across the region throughout the year, it is mildly irritating to be in Beijing and to recognize that for most people, the APEC party that has just come to an end, with its funny-dress photo-ops, will be regarded as the total sum of what APEC amounts to – an inconsequential talk-shop.

In truth, the real value of APEC sits elsewhere – in unsexy workshops where top officials learn from each other, and without the distraction of political theatre, help to train officials to implement the ambitious liberalization initiatives embodied in high-sounding “leaders’ declarations”. But this doesn’t make headlines. It does not get the pulse pumping in the way that putting Putin and Obama in the same room together does.

As Beijing’s Party comes to a close, attention now begins to turn to 2015, and an APEC year under Philippine leadership. Solid foundations have been laid by Beijing this year, and it is possible that Manila – with much more modest resources than China – will achieve more that we might expect from one of APEC’s less developed economies.

The Philippine “Motto” for the year ahead makes the direction of the year clear: “Forging Resilient, Inclusive Growth: A fair deal for all”. This is solidly the agenda of a developing, not a rich economy. For APEC, which from 2007 to 2012 was chaired by successive “developed” economies ranging from Australia and Singapore to Japan and the US, policy focus has now shifted to the concerns of our developing member economies. Starting from Indonesia’s leadership in 2013, chairmanship has passed to China and now the Philippines – and after the Philippines come Peru, Vietnam, Papua New Guinea and Chile. There will be added developing economy momentum during 2015 as ASEAN economies focus on completing their “ASEAN Economic Community” by the end of 2015.

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[SCMP Column] Give APEC credit - it's far more than just a talking shop

November 06, 2014

When China took over chairmanship of the Asia Pacific Economic Cooperation Grouping from Indonesia at the beginning of the year, it set an ambitious three-pronged agenda worthy of the landmark anniversaries being celebrated: regional economic integration; economic reform and innovative development; and building infrastructure and regional connectivity.

From the outset, the centerpiece of the first prong – regional economic integration – was in jeopardy. China decided it wanted its main deliverable to be an APEC commitment to a Free Trade Area for the Asia Pacific – FTAAP – that would by 2025 embody the iconic “Bogor Goals” of free and open trade and investment in the region. It was a brave thing to shoot for. The US and others negotiating the Trans-Pacific Partnership have been adamant that no regional initiative should be allowed to put the TPP in jeopardy. They have blocked and tackled from day one on the FTAAP plan. Beijing’s cold dry air has literally crackled with static electricity as China and the US have arm-wrestled over the FTAAP.

Even days before the leaders meet, it is unclear what will be agreed. US hopes that a TPP deal could be cut by the time of the APEC Party have come to nothing, and hopes are not high that the US will commit to any ambitious FTAAP until the TPP is sealed. Quite how face will be saved on this issue is not clear.


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[SCMP Column] Ignoring mental illness creates an economic burden for us all

October 23, 2014

The WHO measures the mental illness problem in terms of Disability-adjusted Life years, or “DALYs” – years lost due to suicides, other premature death, inability to work, or impaired productivity - and says that worldwide we lose 199 million DALYs every year. It is hard to get your head around such an awesome number, but the message is clear: it is big. They say an estimated 154 million people suffer mental illness worldwide, 100 million of these suffering from alcohol or drug abuse, and almost 900,000 commit suicide every year – almost double the number that are murdered, and three times the number that die in wars.

Here in Hong Kong, based on limited data, we know there are 190,000 patients currently being treated for varying degrees of mental illness, and an estimated one in seven suffer various levels of neurotic symptoms. Hong Kong’s suicide rate is twice that of New York or Singapore. There is a wide gap between demand for treatment and the supply, because of shortages of mental health professionals. We have an average 4.6 psychiatric specialists for every 100,000 people, compared with an average in high income countries of 8.6.

Dr Layard’s conclusions for the UK are highly relevant to us here in Hong Kong: depression and anxiety cause more misery in our society than all physical illness put together; this is unacceptable because effective remedies exist but are not used; these remedies are not expensive and would pay for themselves in terms of enhance workplace productivity; failure to give mental illness the attention it deserves is both grossly inefficient, and grossly unjust. More of us should have been running in last Sunday’s Rat Race.


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[SCMP Column] Why Xi's corruption purge may soon make its way here

October 09, 2014

So Xi’s anti-corruption purge seems barely to have started, with huge and unsettling ramifications for Hong Kong and our power elite. The Chinese Academy of Social Sciences estimates that more than 20,000 officials have fled China since 1995, taking with them over US$150 billion in spoils. Alongside legitimate overseas investment, these flows have made Chinese the biggest overseas investors in the US and Australian property markets, and have made Macau the world’s gambling Mecca. As the purge has become serious, no wonder the share prices of all of Macau’s casinos have slumped by between 27 and 40%. With the minimum price of a VIP casino chip set at HK$10,000, and RMB10,000 being the maximum a Chinese can legally bring out of the Mainland, it seems that Wang Qishan and the Central Discipline Inspection Commission need to do little more than put a video camera up on the VIP exits, and escort people to a nearby interview room!

But if Macau is set for a period of turbulence, so too must Hong Kong. The simple volume of Mainland money channeled through Hong Kong over the past three decades must surely mean that significant billions have corrupt origins. As Beijing is now forging links overseas to pursue corrupt funds channeled overseas, it is surely not insignificant that links are being built with our cherished ICAC, and with more than 40 other anti-corruption agencies around the world. If the ICAC has the mettle to handle the challenge, and whatever the outcome of the Raphael Hui courtroom case, this may be but the first of many inquiries to come.


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[SCMP Column] China needs urgent reality check on infrastructure needs

September 25, 2014

So we should be pleased that China recently hosted a major APEC Public Private Dialogue on promoting infrastructure investment through public-private partnerships (PPPs). After all, China is going to account for an awful lot of infrastructure investment.
But I came away schizophrenic – encouraged, but concerned. So many seemed to believe that challenges start and end with the supply of money. That is why China is proposing this Asia Infrastructure Investment Bank (AIIB) to supplement the infrastructure-building work being done by the World Bank and the Asian Development Bank.
Unfortunately, my own understanding after dozens of private sector discussions over the past year on the region’s infrastructure-building challenges is that even though the dollar numbers are awesome, money shortages are not the main blockage point: on the contrary, two key problems have to be addressed: first, projects need to be properly structured and “packaged” - and governments lack the expertise to construct large, long term infrastructure project proposals.


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David's Blog on SOM3 Beijing - Post 7

August 25, 2014

Summary of Key Issues in SOM3 Beijing
My blog reports were woefully inadequate over the last three weeks of Senior Official meetings in Beijing. Feeble as it may seem, the work pressure just to stay on top of the many important issues we were listening to, and contributing on, overwhelmed the need to write daily reports back. Here are some of the issues and initiatives that I failed to give proper attention to. Many we will need to follow up in ABAC:

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David's Blog on SOM3 Beijing - Post 6

August 20, 2014

APEC Transportation Working Group (TPTWG) meetings at the Hong Kong International Airport

From the milling corridors of SOM3 in Beijing, where my ABAC colleagues are preparing input for the final meetings of Senior Officials, I have flown back down to Hong Kong – not to put feet up in my locked-and-bolted home, but to camp out at the Hong Kong International Airport where officials are huddled for the APEC Transportation Working Group meetings.

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David's Blog on SOM3 Beijing - Post 5

August 18, 2014

China’s hosting Public Private Dialogue on promoting Infrastructure Investment through PPPs
We should be pleased that China agreed to host, under the auspices of the Investment Experts Group, a huge one-day Public Private Dialogue on promoting Infrastructure Investment through PPPs. After all, infrastructure development needs are acute – an estimated $50-60 trillion over the coming decade – and will need private sector engagement if sufficient funds are to be found. But I came away schizophrenic – encouraged, but concerned.

[ Read More ]

David's Blog on SOM3 Beijing - Post 4

August 16, 2014

New Forum Created: Public Private Partnership on Environmental Goods and Services (PPEGS)
Among several new fora created and inaugurated by APEC this week, the PPEGS may have an interesting role to play. But first, one has to wrestle with confusions over acronyms. This is not a PPFS or a PPSTI, or a PPWE. Let’s unscramble.
These last three are “Policy Partnerships” – on Food Security (PPFS), Science Technology and Innovation (PPSTI) and Women in the Economy (PPWE). But this new forum is a Public Private Partnership  – not a Policy Partnership - on Environmental Goods and Services. 

[ Read More ]

David's Blog on SOM3 Beijing - Post 3

August 15, 2014

APEC Business Travel Card
One of the first meetings out of the blocks in Beijing was the Business Mobility Group – home of all things to do with the APEC Business Travel Card. Mika Takahashi from ABAC Japan gave an update on our own ABAC positioning on the Card, but our key points are really not very different from those already made: we need cards to be processed more quickly; we need the cards to stay “alive” if and when our passports change; and we want the Cards to live for five years rather than the present three. In APEC terms, in-principle agreement to this extension is a big deal for business.

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David's Blog on SOM3 Beijing - Post 2

August 14, 2014

Food Security Issues in APEC

Note: This is a big week for Food Security issues in APEC, with an array of meetings from Thursday. But I am unable to attend them because of meeting conflicts. Instead, here are some thoughts on the issue that I contributed to the South China Morning Post today (August 14):

What do Mount Tambora and MH17 have in common? Since you probably don’t know anything about Mount Tambora, the question is a cruel one, but the answer is simple: they both offer big lessons on food security.

And food security is much on my mind at present, because of big APEC meetings on the subject up in Beijing this week, and some pretty serious anxieties on how business can engage most effectively to keep us on track to achieve food security in the region by 2020 – APEC’s declared aim since leaders met in Vladivostok two years ago.

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[SCMP Column] Issue of food security erupts on to agenda of APEC leaders

August 14, 2014

While food production is looking steady, and food consumption in the rich western economies is stable, China’s fast-rising appetite for more meat protein and processed foods is pushing global demand inexorably upwards. China’s wheat imports have jumped 50-fold since 1980, while pork consumption has jumped five-fold to 50m tonnes a year – half of world consumption, and six times more per capita than Americans consume.

The flip side of marvelous success in cutting the world’s under-nourished from over a billion to 840 million is that food consumption is rising sharply in the poor developing parts of the world. Along with this, land and water resources are under increasing stress, and environmental damage is immense.

The fact that APEC officials are dedicating serious attention to food security is commendable. But the fact that they have after two years still refused to define what they mean by “food security” is a source of concern. We are hoping there will not be another Mt Tambora, nor three volcanic winters, any time soon. But even without such a catastrophe, the challenges we face in providing the world’s 7 billion people with food security are more acute than many presume.


[ Read More ]

David's Blog on SOM3 Beijing- Post 1

August 11, 2014

Highlights on Beijing 

For a battle-hardened former journalist like me, it is hard to walk through the fortified portals of the Beijing Hotel, on Changan and on the north east corner of Tiananmen without some slightly querulous feelings. This classic of colonial Soviet architectural style is as close as any hotel – or set of hotels – can get to a mausoleum. It is barely changed from those far distant days of 1982 when I was here in Beijing to train journalists in the freshly-minted China Daily. Despite superficial facelifts and makeovers, it is as intimidating and un-navigable as ever, the grande dame of hotels from Mao’s hayday. The fusty carpet smells are unchanged. The air outside is as hazed as ever. You can tell I love Beijing!

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[SCMP Column] Economies at risk if root causes of sick workers are not tackled

July 17, 2014

A recent World Economic Forum study estimated that the six key contributors to premature death and poor health – cardiovascular disease, strokes, diabetes, respiratory illness, cancer and mental ill health – would cost the global economy $47 trillion in the two decades from 2010 to 2030. About one third of this would be due to mental ill-health, which is unmeasured in many economies.

Losses on this scale are not just a heavy burden on the sick, on companies, and on governments around the region – they are also large enough to bankrupt many of our region’s health care systems.

As our societies become steadily older, with the population over 65 expected to double by 2050, so this arithmetic will get steadily worse, with a dwindling workforce carrying the cost of funding care for the elderly in their societies. Japan faces the severest of these challenges, with about one third of its population expected to be over 65 by 2035. But none of the rest of us can be complacent because all of us are close behind.


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[SCMP Column] Constitutional crunch crimps HK competitiveness

July 03, 2014

In 2007 the Bauhinia Foundation asked Mike Enright and I to revisit the Hong Kong Advantage book 10 years on, to examine the competitive changes that had occurred. This we did, and the findings were generally positive, despite the unanticipated adversities arising from the 1998 Asian Financial crisis, the dot-com crash, and the SARS crisis of 2003. Against the odds – and the forebodings of many – Hong Kong remained robustly competitive, and Beijing interference remained laudably light-handed. 

But the Bauhinia Foundation asked us to add a chapter – on how political changes were affecting Hong Kong’s competitiveness. This we also did, but so politically sensitive was our chapter that the foundation chose not to release it.

I was irritable at the time, and I was equally irritable when I reread the chapter last week. So much of what we addressed remains untackled today, and must be tackled if the ugly political developments we are now witnessing are not to get worse.

“There has clearly been some erosion (in competitiveness),” we concluded in 2007: “The huge amount of political and administrative energy that has been diverted over the past decade into debate on constitutional reform has been an exhausting distraction and has often been counterproductive. It has diverted the administration from other practical issues in the community, making it tougher to dedicate time and attention to the factors and forces that will underpin Hong Kong’s future competitiveness.” Surely this is true in spades seven years later.


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[SCMP Column] Case of Tolerance

June 19, 2014

But more important, we should remember that emerging affluence across the Mainland and China’s steady integration with the rest of the world after many decades of isolation, are for most Hong Kong people the best thing that has happened to us in our lifetimes. China’s opening up has brought massive stimulus and huge benefits to the entire global economy – and nowhere have these benefits cascaded more prodigiously than here in Hong Kong. As China’s GDP has exploded 80-fold between 1978 and today, from US$188 billion to US$14.8 trillion, rising from less than 1% of global GDP to almost 16% today, no community has benefited more than Hong Kong. China’s exports – a mere US$21 billion in 1978 – have soared 200-fold to more than US$4 trillion, with much of this trade managed through Hong Kong.

The reality is that China’s extraordinary emergence is reshaping the global economy, and creating uncomfortable transformations for everyone, everywhere. Shock waves may be more powerful here, but they are no less significant in Europe or the US or Latin America as they reshape our world.

China’s tourism boom is but one manifestation of this – and this boom is just in its infancy. Our challenge is not to build a wall against it, but to channel it as fluently as we can. 


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[SCMP Column] Unfinished Business

June 05, 2014

As we move into year six of the “great recession”, with the economies of the US, Europe and Japan still spluttering unprettily along, two issues worry me most of all: the emergence of protectionist, anti-foreign political forces in many communities around the world; and the largely-invisible curse of youth unemployment.

Gone is the boisterous, flamboyant optimism and excess of the 1980s and 90s. In its place, we have either xenophobia and protectionism at worst, or at best a gloomy resignation to hard times stretching far over the horizon. The  Japanese have a fitting word for it: “Gambarimasu” - “We must struggle on”.

These trends can be seen most alarmingly across Europe, with unemployment rates among under-25 males stuck above 30% for most of the past six years, and with fascist, right wing parties rising to political significance in recent European parliamentary elections.
In theory, here in Hong Kong, things are not so bad. Unemployment rates are at historic lows, and the worst effects of the great recession are not evident – thanks largely to the lucky nearness of China’s fast-emerging economy.

But I fear problems in Hong Kong are much more troubling than bare data suggests. 

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Dodwell's blog on SOM2 Qingdao - Post 5

May 24, 2014

APEC Austerity

The really bad news out of Qingdao was how the financial squeeze since the global financial crash of 2008 has exerted a massive squeeze on APEC project funding. Out of almost 130 projects in search of funding, less than 30 were successful in attracting funds. The warning from Qingdao was that funding pressures are unlikely to lift any time soon. There is likely to be an increasing reliance on self-funded projects (where, in proposing a project, an economy agrees to provided necessary funding). Since APEC’s unique contribution is in its huge programme of capacity-building activity, and many of the projects in search of funding are workshops aimed at such capacity-building, then this funding squeeze is no small matter. [ Read More ]

Dodwell's blog on SOM2 Qingdao - Post 4

May 23, 2014

APEC Business Travel Card

I am currently in the process of applying for my third APEC Travel Card. The process is as painful as ever. More than a month after putting in my application, still not a single APEC economy has approved me. When I last applied three years ago, the process took three months, and even then I won approval from only 15 economies. I wonder how or whether processing has improved between 2011 and 2014. What was that in the last Business Mobility Group about member economies striving to clear applications within a week? Perhaps I was dreaming. [ Read More ]

Dodwell's blog on SOM2 Qingdao - Post 3

May 22, 2014


I intended today to move on from FTAAP and TPP antics to other Qingdao themes, but forgive me for a couple more thoughts.
First, since yesterday’s blog, I have seen the Trade Ministerial statement, and it is telling that specific references to a deadline for creating an FTAAP, and to a Feasibility Study, have been expunged. Setback for China here, though there is a commitment for officials to tie up a deal within 2014 – so China should still be able to claim a meaningful FTAAP “deliverable” under its 20-14 chairmanship. [ Read More ]

[SCMP Column] India's moment

May 22, 2014

In short, therefore, India’s economy remains a pygmy, but mismanagement and bureaucratic corruption have been so egregious that even modest improvements by a new Modi administration have the potential to make a massive difference. For the first time in 30 years I believe there is a chance the country may at last begin to move towards its potential.

An important litmus will remain my alma mater the Financial Times: if the Indian government at last allows it to publish and distribute inside India, then that will be an important sign of change in the wind. It is a tribute to Mr Modi that he has hoisted me out of 30 years of cynicism and pessimism to believe that at last things might change.

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Dodwell's blog on SOM2 Qingdao - Post 2

May 21, 2014

Contested pathways to a Free Trade Area of the Asia Pacific
When in Ningbo in February China tabled its concept note for a meeting on the margins of Qingdao SOM2 on how the various Asian regional integration initiatives might be used to build towards a Free Trade Area of the Asia Pacific, I had expected a saloon-bar fight to break out immediately. Surely the US would  never tolerate such an initiative, since it has always a) insisted that there is only one route to FTAAP, shaped by the Trans-Pacific Partnership (TPP), and b) would not welcome a Chinese move that stole momentum from the TPP process.

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Dodwell's blog on SOM2 Qingdao - Post 1

May 20, 2014

Meeting issues

Forgive the recent blog silence. A couple of issues have muddied the waters. First, since ABAC no longer has an Action Plan and Advocacy Working Group, of which Anthony Nightingale was chair and I the lead staffer, I no longer have “standing” to attend and report back on Senior Official meetings. I now attend, but really only out of habit and nosiness.

Second – and more material – terrible calendar clashes between our ABAC2 meetings in Santiago Chile, and the first ten days of Senior Official cluster meetings meant that none of us ABACers were able to get to Qingdao for the SOM2 cluster until close to the end of the cluster. Awkward and frustrating to have missed so much, and to be so rushed at the end of the cluster to catch up. It was also challenging for us to fly 30-35 hours back from Santiago to Qingdao without our brains being somewhat numbed.
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[SCMP Column] China's Tech leap forward

May 08, 2014

China still has a long way to go truly to “sorpasso” the US: GDP per capita is still barely one tenth of the US, and productivity barely a fifth of US productivity. China is still below Peru in terms of per capita incomes, and the purchasing power of GDP per capita places China 99th in world rankings. And of course, the coyness is also deeply embedded in Deng Xiaoping’s appeal to “hide your brightness, cherish obscurity”.

But for all the caveats and cautionary words, this “sorpasso” is genuinely a big deal. Already China is the world’s leading trading power. Less comfortably, it is the world’s biggest emitter of CO2, and the leading consumer of a host of raw materials. And it is emerging from a century of ignominy and poverty at warp speed.

Nowhere is this clearer than in the internet and telecoms areas, where stunning developments must be sending shudders through Silicon Valley’s internet community. Unfettered by the legacy telecoms technologies dependent on copper wire, the Chinese have adopted social media on a scale that very few outside the country appear to recognize. Today over 700 million Chinese own a mobile phone – and according to fascinating KPMG research, 78% of these are smartphones (compared with 47% in Germany and 40% in the US).

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[SCMP Column] Politics is the deal

April 24, 2014

Two months ago I flew down to Singapore to give a presentation titled: “Are FTAs history?” There was a particular mischievous pleasure in taking this to a Singapore audience, where the government, more than any in Asia, has invested massively in securing Free Trade Agreements (a total of 38 at present counting).

The message was simple, and persuasive: today in Asia, around 80% of all trade is in intermediate goods that are progressing along long and complex supply chains that embrace a dozen or more economies. Negotiating bilateral trade agreements that secure preferential tariffs for the export of finished goods from one economy to a second economy is, without much exaggeration, a total waste of time. It gave me great pleasure telling off Singapore officials for wasting so many thousands of hours, and so many millions of taxpayer dollars, negotiating deals that were useless and would never be used.

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[SCMP Column] Running out of options

April 10, 2014

Can Shenzhen airport and the other PRD airports ride in like white knights to save the day for Hong Kong’s increasingly congested Chek Lap Kok airport? As environmental lobbyists continue to grab at any available straw to block construction of a third runway at the airport, it has often been claimed that the PRD airports can fly in to Hong Kong’s rescue.

These lobbyists are not wrong to force the Hong Kong government to turn over every possible stone to discover an alternative to building a third runway. It will be horribly expensive and the construction period will inevitably result in inconveniences and dislocations.

But I can say with confidence now that they will find exactly what I found when I went through the same stone-turning exercise three years ago: The frustrating but consistent finding of the study I published in June 2011* was that we have no choice but to press ahead as speedily as possible with a third runway. From as early as 2016 we face increasingly severe airport congestion whatever temporary palliatives are discovered. The longer the delay, the more severe will be the diversion of business activity to other regional competitor hubs.

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Dodwell's blog on SOM1 Ningbo - Post 7

February 27, 2014
APEC officials seem at last to have got excited about services. It would be nice to think that this is a result of ABAC’s persistent nagging over the ubiquity of services in all parts of our economies, and the importance of efficiently delivered services in enhancing productivity and improving competitiveness. But we may have an inflated idea of our influence. Clearly important was the unexpected entry into the fray of Chatib Basri, Indonesia’s Finance Minister, in Surabaya last year, when he chided local industrialists that they would for ever be uncompetitive and vulnerable to outside competitors as long as they paid over the odds for services – in particular telecoms, financial services and logistics costs. Chatib Basri is a powerful and influential ally in an economy that has traditionally been highly suspicious about opening up its services economy.
  [ Read More ]

[SCMP Column] The Card to Travel

February 27, 2014

The APEC Business Travel Card (ABTC) is perhaps the one reliable thing that any business person knows about APEC, and one of a tiny number of achievements over APEC’s 25 year life that really do seem to have made a difference. It took the APEC Business Advisory Council many years to get APEC officials to buy into the idea that regular business travelers should be given high speed access through immigration queues, and easier visa access to the region’s economies.

 For those that have the card (and there are fewer than 500,000 in active use at the moment) it is up there with the gold Marco Polo card that gives you access to Cathay Pacific executive lounges.

But for all the passionate support the card gets, most conversations are animated by complaints and grim stories of travel adversity and angst.


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Dodwell's blog on SOM1 Ningbo - Post 6

February 26, 2014
Ningbo has not been only about services, supply chains and services in supply chains…. There have been some interesting developments too on the health agenda that was “mainstreamed” early last year by Indonesia, only to peter out for unclear reasons. A year ago, ABAC too was finding it hard to accept the health issue as a priority, but in recent months, driven by keen attention from our US colleagues, we are at last taking the issue seriously. The importance of the health issue for business is of course self evident: literally billions of productive working hours are lost or impaired every year through ill health – whether it is contagious illness like dengi fever or malaria, or a non-communicable illness like heart disease, diabetes or simple obesity. Better late than never that we engage. [ Read More ]

Dodwell's blog on SOM1 Ningbo - Post 5

February 25, 2014
Our Chinese APEC chair has the most surprising talent for springing surprises. Today, for example, as we meandered to the close of a rather content-light Market Access Group, the Malaysian MAG chair passed over to the Chinese official present for the final agenda item – Date of next meeting. Hardly climactic material. Most of us were half listening as we packed our papers away. But then I could hardly believe my ears: “The next MAG will be in September at a date we have yet to finalise during SOM3. We will tell you the place when we know it.”
With chair’s permission, I flicked on the microphone: “Do you mean you don’t know whether the meeting is in Harbin or not? Or that you don’t know the hotel?” [ Read More ]

Dodwell's blog on SOM1 Ningbo - Post 4

February 24, 2014
Given that the Government-Business Dialogue on Food Security in Ningbo yesterday was China’s opening statement as PPFS 2014 Chair, under the leadership of the State Administration of Grain, there probably should have been no surprise when we were carpet bombed by a full day of 10 minute presentations on every aspect of China’s impressive grain industry.
Of course, grain was not the only issue tabled, but a dialogue it was not. Perhaps understandable given China’s need to set a clear direction for the year clearly had to show allegiance to the largest and probably most complex component of its vast food economy.
All was not lost however. As always, the real business gets done over food. The many mealtime conversations with Chinese officials, Chinese businessmen, and other participants from APEC economies, showed a level of willingness and flexibility to share and contribute that was refreshing, given the difficult birth that PPFS has historically endured. [ Read More ]

Dodwell's blog on SOM1 Ningbo - Post 3

February 20, 2014
After a day of singleminded focus on the Business Mobility Group and our cherished APEC Business Travel Card, Mika and I have now split across different working groups – Mika on Emergency Preparedness, Customs and E-Commerce, and I on the Human Resources Group – a monster of a gathering that comes together only once a year, has three substantial working groups, and takes four days to plough through its agenda. Meanwhile, outside the cosy confines of the Shangri-la, Ningbo disappeared in swirls of sleet and snow. No snow settled, but anyone putting a nose out into the open air recoiled from clear evidence of an enduring winter. I keep reminding myself of Moscow in March 2012 to remind myself not to be a wimp.
One fascinating question arises out of the Human Resources Meeting: When is a Ministerial not a Ministerial? At iSOM in Beijing in December, our Beijing hosts very thoroughly listed all of the year’s ministerial, dates and locations. And I faithfully passed them on – all nine of them. Well it now turns out that Human Resources Ministers are meeting too – in September. I asked our Chinese hosts why this Ministerial had not been mentioned in the iSOM briefing, and was given a beguiling answer: the iSOM list only included the Ministerials being held in China. It so happens the Human Resources Ministerial will be in Danang in Vietnam. So now I am wondering whether there are further Ministerials out there that I am currently ignorant of, simply because they are intended to take place outside China. [ Read More ]

Dodwell's blog on SOM1 Ningbo - Post 2

February 18, 2014
Monday was the Business Mobility Group and the day of the APEC Business Travel Card – and we were tantalizingly close to that rare APEC phenomenon – a truly newsworthy development. We got within a hair’s breadth and winning full and formal endorsement to extend the life of the ABTC to five years. Even now, it is possible in the coming week or so that we might wrestle to closure on this breakthrough. Between 20 approving economies and success was just one bureaucratic and procrastinating economy. No names mentioned. They know who they are.
Despite the tantalizing frustration of failing to get closure on extension of the life of the ABTC, there was a second quieter but very significant success – agreement that a change in passport, with the inevitable changes in passport number, date of issue and date of expiry, would no longer kill the ABTC. For those economies lacking the technology to manage this, our officials agreed there would be investment in capacity building.
[ Read More ]

Dodwell's blog on SOM1 Ningbo - Post 1

February 17, 2014

At last we have descended into the steel grey middle earth chill of Ningbo – home for the coming two weeks of the first set of APEC Senior Official meetings under China’s chairmanship.
The city, just south of Shanghai on China’s Pacific coast in Zhejiang, one of China’s richest provinces, and through 7000 years one of China’s most open and worldly centres, is still sufficiently locked in winter to be austerely monochrome. I’ve braved the cold to jog along the Fenghua river, and am pleased to say that the pollution that normally greets visitors to most Chinese cities is mercifully absent. But the air is grey, and the river is a wintry brown, and this lends a cheerless air.

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[SCMP Column] Food of Gods

February 13, 2014

In short, therefore, our love affair with chocolate is under threat. Just as China’s 1.3 billion population come into enough money to become basic consumers, and begin to develop the west’s sweet tooth and learn our romantic customs, so the world’s crop looks like it is under threat. Prices have whipped and sawed - from a 32-year peak of US$3,520 per tonne in 2010 down to US$2,200 in 2011, and back up close to record highs again today

Add to this volatility in cocoa prices a similar volatility in sugar prices – sugar and cocoa being the most important ingredients in chocolate and many naughty Valentine desserts – and the scene looks set for an expensive Valentine’s Day. Worldwide, there are many good and worthy arguments that can be made for improving food security. Here is a romantic one.

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[SCMP Column] China Syndrome

January 30, 2014

Of course Hong Kong businesses are anxious to learn all they can about China. Obviously, for Hong Kong businesses, China’s chairmanship of APEC is a big deal. Not only is 2014 the 25th anniversary year of APEC, and the 20th anniversary of the “Bogor Declaration” that in 1994 famously and ambitiously set a target for free and open trade and investment in the Asia Pacific by 2020 - even more important, Beijing clearly intends to use its year of APEC chairmanship to give substance to the economic reform programme that was tantalizingly sketched out in the “Decision” of the Third Party Plenum in November last year.

But there is a story behind Hong Kong’s obsession with developments in China that troubles me, and gives me sleepless nights over our future competitiveness.

I have always argued that if Hong Kong was able to survive – and thrive – when China was closed to the world, then surely it should prosper even more as China opens and reengages with the global economy. But today I am no longer so sure. The “China vortex” has now become so powerful an influence on Hong Kong – and is set to become steadily so much more powerful in the years to come – that the very internationalness that has underpinned our value in past decades is being put in jeopardy.


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[SCMP Column] Betting on that extra mile

January 16, 2014

I and other fans of the Hong Kong economy have often reminded nay-sayers that anyone who has ever bet against Hong Kong has lost. For the past 35 years, we have been right. But the nay-sayers are still around, and are still willing to bet against Hong Kong. I went last night to my first Happy Valley race night of the year of the horse. I was still betting on Hong Kong. And I won. I am not taking it for granted that I will always win, and our government would be well advised to do the same.


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Dodwell in SOM3 Medan - Post 12

July 08, 2013


Keeping the best for last. Services liberalization is close to Hong Kong’s heart, and so the presentations in Medan to the Group on Services and the CTI on our ABAC Services agenda – in particular the headway made in Surabaya in our “Services Dialogues” – were deeply gratifying.

Since the Surabaya Dialogues, which allowed ABAC and PECC together to table for APEC officials the reasons why we believe services liberalization is so fundamental to our region’s future competitiveness, recent research from the OECD and the WTO has made steadily clearer how high a price economies pay for denying their manufacturers access to competitively priced services – in particular logistics and communications services.


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Dodwell in SOM3 Medan - Post 11

July 06, 2013

After the “mid-life crisis” of the Investment Experts Group in Surabaya in April, ABAC was tasked to facilitate a workshop in Medan with the broad theme “Whither the IEG”.

Since we had no formal ABAC meeting between Surabaya and Medan, it was in technical terms impossible for ABAC to comply – even though investment related issues have emerged to be as important today as they have ever been for us, and for APEC in general.

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Dodwell in SOM3 Medan - Post 10

July 05, 2013

In freezing Moscow in March last year, APEC launched a grand experiment in private sector-public sector collaboration. The aim was to bring business thinking – and discipline – to the APEC table more effectively than in the past. The new-born infant was the “Policy Partnership” – specifically the Policy Partnership on Food Security (PPFS).

15 months later, we have three policy partnerships, including the Policy Partnership on Science Technology and Innovation (PPSTI) and the Policy Partnership on Women in the Economy (PPWE). I would not be surprised if new “PPs” are being fledged.


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Dodwell in SOM3 Medan - Post 9

July 04, 2013

As I fly out of Medan, I depart with a nagging guilt. I normally try to provide readers with a prompt and comprehensive report-back on all key discussions taking place during the SOM cluster meetings. This time I have been remiss, and a number of key summaries need still to be written. I have several lame excuses: logistics in Medan, with meetings spread across four different hotels in a traffic jammed city, made coverage of all meetings almost impossible; the Medan menu was also massive. I’m told there were more meetings in San Francisco in 2011, and I’m told that my estimate of 82 meetings is slightly exaggerated by some duplications. But either way, covering more than 70 diverse meetings has been deeply challenging.


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Dodwell in SOM3 Medan - Post 8

July 03, 2013

There was cause for celebration today for the team that has slogged patiently over the past four months to win APEC officials' backing for ABAC’s proposals for wider adoption of Global Data Standards. Our proposals have at last won broad endorsement.

We are now tasked to work with APEC officials to build a programme of voluntary capacity-building, drawing on the many economy-level examples and experiences. This will be focused on the many identified chokepoints along the supply chain, and will form a foundation stone for cutting costs along the supply chain. APEC officials are tasked to cut 10% out of supply chain costs by 2015.


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Dodwell in SOM3 Medan - Post 7

July 01, 2013

Back in 2011, our Marshall School report revealed that 77% of interviewees saw inconsistent standards and regulations across economies as a significant barrier to trade. In the same year the pacific Economic Cooperation Council (PECC) survey cited regulatory impediments in overseas markets as the second biggest challenge to doing business in the region.

In short, we in the business community have been anxious for a very long time to see officials in the region move towards harmonization of regulatory standards. For companies operating along long and complex supply chains, regulatory “friction” in each economy along a production chain can accumulate to add massive extra costs to production. The incentive to reduce or minimize such cumulative costs can mean economies are “bypassed” by such companies, who today account for a very large share of total trade. The result: that country’s export potential is stunted.


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Dodwell in SOM3 Medan - Post 6

June 29, 2013

For the first time ever, ABAC presented at the Mining Task Force this week. They wanted to know about ABAC, and so the priority was to provide an ABAC 101 introduction to what we are trying to achieve. Tougher was to identify issues of priority to ABAC that would concern the Mining Task Force – though several emerged after a little digging: first was the recognition that mining companies are less miners than they are managers of extremely long and complex supply chains: they are profitable depending less on the price of the mineral coming out of the ground than they are on the efficiency with which they can transport the mineral to destination consumers around the world. So discovery number one, they have keen interest in eliminating chokepoints in the supply chain.


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Dodwell in SOM3 Medan - Post 5

June 28, 2013

Alongside the massive Food Security Meetings, the first week of the APEC SOM cluster was dominated by another giant affair – the annual gathering of the Human Resources Development Working Group. On top of the main working group were workshops, and deliberations by its four sub-groups – a three dimensional labyrinth of meetings.

ABAC was interested for one reason above all others: a chance to get a first glimpse of the web-based Skills mapping Tool which is due for completion at the end of the year. You might remember that ABAC sponsored this initiative in 2011 as a first step to rebuild regional momentum behind the need to tackle serious and costly problems linked with regional labour mobility.

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Dodwell in SOM3 Medan - Post 4

June 27, 2013

ABAC was tasked this week to update on our concerns about the APEC Business Travel Card with the Business Mobility group (BMG). Even though our position has not in any significant way moved since we met in Jakarta in January, this was not an opportunity to be missed – in particular because of the survey on business attitudes to the ABTC currently under way with ABAC Japan.


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Dodwell in SOM3 Medan - Post 3

June 26, 2013

The Ocean Fisheries Working Group focuses on shipping, marine mining and marine tourism and environmental protection as well as fisheries management, but the group devotes a huge share of its agenda to food-related issues. Slightly alarming, then, that when it opened at the weekend, its members seemed genuinely unaware of the intense fisheries-related agenda of the PPFS’s Working Group 2. Nor that the PPFS has been vested with the authority to provide strategic oversight to all food-related initiatives in APEC.


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Dodwell in SOM3 Medan - Post 2

June 25, 2013

At last, after 18 fractious months, the Policy Partnership on Food Security is through the starting gate. To the intense relief of those who began to call for an APEC Food Security body more than a decade ago, we now have an Action Plan, a Road Map, Vision and Mission statements – and fairly firm commitments that private sector voices will play a significant role.

It took three days of fairly intense behind the scenes negotiation between Saturday and Monday to get final agreement on a Roadmap to the goal of food security by 2020. From a Niigata Declaration – which provides the Action Plan”, comprising a laundry list of 62 action items – we have now got a Roadmap of just three pages. It plausibly passes muster as “strategic, result oriented, and comprehensive”, but there will be many in the APEC business community who say this still lacks the discipline of a corporate plan, with concrete and measureable objectives, timetables, milestones, and metrics by which progress is measured.

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Dodwell in SOM3 Medan - Post 1

June 24, 2013

After five visits to Indonesia’s teeming cities over six months, I am becoming acclimatized to traffic bedlam. Medan, the capital of North Sumatra and Indonesia’s third largest city, is no exception – which has been the source of extraordinary challenges, because our hosts have chosen to split the Senior Official meetings across four different hotels. The result: many amenities are quadruplicated (if there is such a word), and most delegates are spending large chunks of every day playing dodgems through swarms of motorbikes to get from hotel room to meeting venue.


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Dodwell in SFO Manado - Post 3

May 28, 2013

While JC Parrenas’ ABAC presentation on the APFF was my main reason for flying to Manado, for the Senior Finance Officials, this was “Any Other Business”. Despite the temptations around the thunderstorms of the coral reefs and the national reserves teeming with  wildlife, they waded through a heavy agenda that ranged from Trade Finance and debate on the state of the global economy, to disaster risk management, finance for the region’s unbanked poor,  and infrastructure investment.


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Dodwell in SFO Manado - Post 2

May 27, 2013

In the densely packed Senior Finance Officials’ agenda in Manado, the main reason for me being there was to listen to the ABAC “report back” from the Sydney Asia Pacific Financial Forum (APFF) meeting, provided by JC Parrenas from ABAC Japan. The report back was necessarily tentative, since ABAC’s full menu of insights and recommendations will not be fully discussed and agreed until ABAC3 in Kyoto in July, but it was comprehensive nevertheless.


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Dodwell in SFO Manado - Post 1

May 26, 2013

There were a number of very good reasons for this journey outside safe and familiar territory: mainly, I had been unable to attend the Sydney Asia Pacific Finance Forum (APFF) that ABAC organized with the Australian Treasury (because of the Surabaya SOM2 cluster), and wanted to hear ABAC colleagues summarise outcomes and next steps – and to gauge senior finance officials’ views.


But then there were two other very good reasons: first, Indonesia has encouraged much talk of closer links between the “SOM track” and the “SFOM” track, as the trade/commerce meetings and finance official meetings are contrasted, and I have a strong sense that financial system reform, and  investment liberalization and facilitation are going to be high priorities for China during its 2014 leadership of APEC.

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Dodwell in 2013 SOM2 Surabaya - Post 14

April 22, 2013

While I was flying out from Surabaya over the weekend in search of a day of rest before work resumed in Hong Kong, APEC Trade Ministers and their senior officials toiled on through the weekend, haggling the Ministerial Statement and – perhaps surprisingly – a separate long statement in support of the WTO and multilateralism.

After all of the talk over the past two weeks on regional trade agreements – the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP) and the newly-cooked Pacific Alliance embracing the liberalizing economies of central and south America – the reassertion of concern to complete the Doha Round, and to reaffirm the importance of multilateralism, came out of left field.

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Dodwell in 2013 SOM2 Surabaya - Post 13

April 21, 2013

As our APEC sherpas girded their loins midweek for the Senior Officials Meeting, and the weekend’s Trade Minister meeting, so our ABAC focus turned to Services, and the two Dialogues that had been in preparation for two full months.

First, on Wednesday, was our ABAC-SOM Dialogue on Services, jointly arranged with PECC. The prime aim here was to inject the services liberalization imperative to the heart of APEC discussion, emphasizing as we did a year ago how services are pivotal to the efficient and competitive delivery of manufactured goods, just as they are important in their own right as a lubricant for trade and investment.


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Dodwell in 2013 SOM2 Surabaya - Post 12

April 19, 2013

It was Yuri Thamrin, Indonesia’s SOM convenor who reminded us this week that APEC’s new Executive Director, Dr Alan Bollard, is a man of many parts. And I am not simply talking about Alan Bollard’s extraordinary range of carefully understated but very artistic lapel pins he sports daily to liven the staid suits we are compelled to wear.

As if governorship of the Reserve Bank of New Zealand, and now leadership of APEC were not accomplishments enough, Yuri Thamrin alerted us that the self-effacing Dr Bollard is also an accomplished author. His first novel, “The Rough Mechanical: the man who could” is just published. Reviewers in New Zealand at least have been snooty and dismissive, I understand – saying he should stick to the economic books that he has authored in the past – his assessment of the 2008 global financial meltdown, “Crisis”, was published in March last year, and has apparently received much more enthusiastic attention.


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Dodwell in 2013 SOM2 Surabaya - Post 11

April 18, 2013


After the long and patiently synchronised sequence of meetings up to the CTI at the weekend, Monday and Tuesday provided a chance to explore themes close to Indonesia’s heart – Monday a workshop on Infrastructure Development and Investment, and Tuesday on Connectivity.

Of course, both themes had threaded through many of the discussions of last week, but here was a chance to step back and explore the issues, and perhaps most important to explore how we in APEC might develop initiatives in these areas that could provide our Indonesian hosts with some deliverables for Bali.


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Dodwell in 2013 SOM2 Surabaya - Post 10

April 17, 2013

Since ABAC is not a “Friend of the Chair” in terms of APEC’s “Friends of the Chair” (FotC) discussions, the pivotal day (last Friday) devoted to an FotC examination of how APEC officials should manage their supply chain connectivity agenda, and in particular ABAC’s call for adoption of a regional approach to adoption of GlobalData Standards (GDS), had us trying to peek through the keyhole from outside the door.

Happily, there was a comprehensive report-back in CTI by APEC Hong Kong China, which is chairing the “Supply Chain Connectivity” issue. Even more happily, the discussion appears to have moved things constructively forward from the faltering start we had in SOM1 in Jakarta. This is in spite of an embarrassing short-circuit arising from the administrative accident that our ABAC proposal on GDS had been sent to our APEC officials under an ABAC New Zealand letterhead. This seemed to give them the idea that the proposal was a New Zealand proposal to ABAC, and that it would be submitted to CTI once ABAC approved it. Two times I had to clarify, painstakingly: Yes, this is an ABAC proposal, fully endorsed in the ABAC Plenary in Singapore. Yes, this was a complete accident, and the proposal should have been sent to them under a full ABAC letterhead. Mea culpa, mea culpa… Slaps on the wrist all round… But in the end officials agreed to accept that this was a proposal that had been empowered by the whole ABAC plenary. Phew.

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Dodwell in 2013 SOM2 Surabaya - Post 9

April 16, 2013

Committee on Trade and Investment (CTI) meetings seem to be reaching epic proportions. They are a test to the stamina of even the hardiest government officials. It is astonishing how chair John Larkin paces patiently through a tricky and detailed agenda that only with good fortune squeezes into two days. There is an almost tantric calm around him as he unhurriedly waits, listens, summarises. For us, the most important discussion focused on supply chain connectivity, and in particular our Global Data Standards initiative. I will devote my next blog to this. But beside this, the agenda was rich.

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Dodwell in 2013 SOM2 Surabaya - Post 8

April 14, 2013

The Investment Experts Group’s (IEG) “accidental hero”, the blunt speaking convenor John Kitchen, flew back home to Australia on Saturday a happy man – mission accomplished. The mid-life crisis of the IEG was given careful attention by colleagues in CTI, with the decision to cut meetings from three to two a year. Potential successors as Convenor have also come forward. And we in ABAC have been put on the hook, tasked to organize a half-day workshop at IEG3 in Medan in June on “Setting the Agenda” – providing a business view of what we would like our Investment Experts to do. Looks like yet another task for our Regional Economic Integration Working Group, but a valuable one – to reexamine the structure of our business relationship with this important group of APEC officials, to clarify how the important investment-related work of APEC is divided between the Trade officials’ track (SOM), and that of the Senior Financial Officials (SFOM). Our Indonesian chair of APEC keeps telling us they are trying to bring Senior officials and Senior Financial Officials together, perhaps in Medan, to explore the synergies between their two tracks of work – but no firm outcomes yet.


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Dodwell in 2013 SOM2 Surabaya - Post 7

April 13, 2013

Having been incarcerated in the Marriott meeting rooms for an entire week, a gang of us managed on Saturday to break away to taste the city streets. Every day, we have walked forlornly into meetings past flamboyantly-dressed Surabaya Tourism people who have been tantalizing with a raft of city tour options. The most exotic is an overnight trek up Mt Bromo to see the sun rise over the lava moonscape of Surabaya’s majestic active volcano. Of course for all of us that have to work every day, we know we will never manage this, but it is tantalizing nevertheless.


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Dodwell in 2013 SOM2 Surabaya - Post 6

April 12, 2013

Friday’s Group on Services meeting was as rich as the early Market Access Group had been barren. Apart from an eccentric and untypical bureaucratic eruption by our US officials blocking progress on an initiative to facilitate cross border education services, the meeting was popping with fresh and interesting initiatives. Quite why the US got itself into such a tangle on education services remained unclear right through the weekend, as blocking and tackling continued into the CTI agenda, but it was unusual and bemusing to see virtually every other APEC member give the US a bad time.


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Dodwell in 2013 SOM2 Surabaya - Post 5

April 11, 2013

I walked into the third and final morning of the inaugural Policy Partnership on Science, Technology and Innovation five minutes late – and already up on the screens was the proposed PPSTI Vision Statement – all long words and lots of colours – the clear victim of editing by committee. Forty minutes, and heaven knows how many taxpayer-funded executive working hours later the final, final was agreed and was brought back into monochrome black. As a former journalist, the process of editing by committee was painful to watch, as a Chinese official called for a comma here, and New Zealand and US officials jousted over whether a future perfect tense (“will have been”) should be used rather than a simple future tense, and another called for the cooperation between “government, academics and private sector” to become cooperation between “government, academic and private sector stakeholders”. Can someone tell me the difference between an academic and an academic stakeholder?


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Dodwell in 2013 SOM2 Surabaya - Post 4

April 11, 2013

When is a “policy partnership” not a policy partnership? When out of a meeting of around 80 people, just three at the table are representing business, then it is difficult to see where “partnership” – or any material form of business input – exists.


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Dodwell in 2013 SOM2 Surabaya - Post 3

April 10, 2013

I walked yesterday into an Investment Experts Group riven with angst. I had expected simply to deliver our now-routine ABAC presentation on the investment-related discussions of ABAC2 which confirmed an apparently ever-rising interest in investment-related issues at the heart of our trade and investment liberalization and facilitation agenda.


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Dodwell in 2013 SOM2 Surabaya - Post 2

April 09, 2013

Through Sunday and Monday, APEC’s Counter-Terrorism Task Force monopolised the APEC action. From my memory, this is normally highly technical and inevitably a bit insensitive to our ABAC trade and investment liberalization priorities, given their own focus on security.

But I found some surprises. First, the US provided an excellent presentation on securing the supply chain which would deserve some attention at our next ABAC meeting in Kyoto. Second, the US also summarized progress in the Travel Facilitation Initiative, which gave more information than we have seen before, and suggested quite encouraging progress.


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Dodwell in 2013 SOM2 Surabaya - Post 1

April 08, 2013

The contrast between Surabaya and Singapore’s Marina Bay Sands – where ABAC just held its second meeting of the year - could hardly be starker. With its three gigantic curvaceous towers topped with the world’s largest bathtub, the “MBS” is parked in lonely splendour on land only claimed by newly-planted botanical gardens, teeming with tourists taking subterranean journeys into Singapore’s largest casino.

Surabaya by contrast feels like it has emerged organically over the centuries, a sprawling jumble of battered single-storey shanties that spread as far as you can see. Like Ho Chi Minh city or Hanoi, this is a city teeming with motorcycles and it is a death defying challenge to cross the road to the tantalizing local restaurants steaming invitingly opposite the Marriott Hotel.


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Dodwell in 2013 SOM1 Jakarta - Post 9

February 05, 2013

Monday saw us bright and bushytailed to kick off the day’s CTI agenda with the services presentation – which was pretty much a rerun of the presentation given two days earlier at the Group on Services. Again this seemed to go down well, with high interest in ABAC’s 2013 agenda – the decision to focus the Marshall School this year on obstacles to foreign investment, our continuing call for an “experts group” to drive the services liberalization agenda, the priority need to understand the implications of the new OECD-WTO work on global trade balances as reflected once you break down where value is actually added – and perhaps most important, our interest in holding a Public Private Dialogue during SOM2 in Surubaya. There seems to be keen interest in the Dialogue, with calls for us now to come up with the over the coming few days.

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Dodwell in 2013 SOM1 Jakarta - Post 8

February 04, 2013

It was Sunday and all normal people were at rest – including our local ABAC team. That left us travelling sherpas traipsing back and forth along the underground tunnel that links the Marriott and Ritz Carlton Hotels to hold the fort through the first day of an absolutely huge CTI agenda.


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Dodwell in 2013 SOM1 Jakarta - Post 7

February 03, 2013

Saturday had our resources divided hard between the Economic Committee, where we were summarizing the ABAC1 meeting in Manila, and the Services Group, where I was tasked to present on ABAC’s services agenda. Needlesstosay, our services agenda aligns extremely well with that of the Group on Services, and there seems to be strong support for us preparing a Symposium or joint workshop at GOS2 in Surubaya in April on services – we need to move speedily to define the exact theme.


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Dodwell in 2013 SOM1 Jakarta - Post 6

February 02, 2013

Yesterday I was in “emergency response” mode: Pak Amin was tied up at the Economic Committee presenting his summary of our ABAC1 in Manila, but his Indonesian government colleagues were insistent: please can you have someone participate in our “Emergency Response Travel Facilitation Policy Dialogue” which someone must for sure be calling the ERTFPD. Of course, with the Great Japanese Earthquake and Tsunami, the Christchurch earthquake, and the US’s Hurricane Katrina to anchor the discussion, there was a great deal of sobering experience to get teeth into.

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Dodwell in 2013 SOM1 Jakarta - Post 5

February 01, 2013

We strove to listen in to discussions at the Economic Committee, the Market Access Group, and the Investment Experts Group. As John Larkin, the new CTI Chair, has been addressing all of these working groups, it has been gratifying to hear him talk forcefully of the need to converge discussions on services liberalization with those on investment liberalization (of course including foreign investment liberalization).


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Dodwell in 2013 SOM1 Jakarta - Post 4

January 30, 2013

At short notice, an informal meeting of the PPSTI Informal Working Group – formed to plan the launch of the PPSTI - was convened on the margins of a large APEC science meeting – the APEC Research and Technology (ART) Programme – that was being held not cosily up alongside the SOM cluster meetings at the comfortable Ritz Carlton, but across town in the long and functional wifi-less corridors of the LIPI Building – the Indonesian Institute of Science.


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Dodwell in 2013 SOM1 Jakarta - Post 3

January 28, 2013

Monday in Jakarta was a day of workshops: Intellectual Property protection; Anti-Corruption; Customs; and my own pick – a Business Mobility Group workshop on improving the APEC Business Travel Card.


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Dodwell in 2013 SOM1 Jakarta - Post 2

January 27, 2013

After all the stress and discord of PPFS on Friday, it was warming to see peace break out on Saturday, as members got down to agreeing Working Group agendas, and setting their timetables to deliver into PPFS2 planned for Medan in July. As if in empathy, the skies cleared, and we actually saw blue sky outside.

Despite the haggling over Food Security working groups on Friday, with pressure to reduce them to three, we find we still have four working groups – though their names and responsibilities have been altered.


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Dodwell in 2013 SOM1 Jakarta - Post 1

January 25, 2013

After an unusual four month gap in APEC and ABAC activity, the APEC 2013 show is back on the road. After four days at the year’s first APEC Business Advisory Council meeting in Manila, where the region’s business leaders combed through their priority concerns for the year ahead, I flew on Thursday to Jakarta for the year’s first APEC Senior Official cluster. Between now and February 7, discussions driven by Indonesia as APEC chair will range from Chemicals and Illegal logging, to investment liberalization and facilitating business travel.


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Dodwell introducing 2013 APEC

December 21, 2012

On January 1, one of APEC’s founding members – Indonesia – formally takes over from relative neophyte Russia as APEC Chair and host. What better time to review the achievements of the past year and to look forward to what can be expected in 2013? [ Read More ]

Dodwell in iSOM Jakarta - Post 7

December 08, 2012


Indonesia’s iSOM agenda was mostly familiar and expected – but a few issues came out of the blue from an ABAC point of view. Perhaps the most interesting of these was the intention focus on health issues as part of APEC’s “inclusiveness” agenda. As far as I am aware, health issues have attracted negligible attention in ABAC over the past five years, but this may be about to change – and that is probably for the good.

Our Indonesian hosts plan to focus on two health related issues in particular: health financing; and the damaging impact on economic productivity of a poor health environment. Both of these should be of keen interest to ABAC.


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Dodwell in iSOM Jakarta - Post 6

December 08, 2012

One of Indonesia's three key priorities for 2013 is "sustainable and inclusive growth". So a big chunk of Thursday's iSOM Syposium was devoted to the topic. On behalf of business and ABAC, Steven Lee, Alternate Member from Taiwan, gave a well received presentation on "Inclusive Growth", which I thought would be worth circulating to members - and in particular to our SDWG members who are likely to be pressed over the course of 2013 to come forward with concrete business sector contributions to this agenda. I won't woffle on separately about it - the short powerpoint and supporting notes speak for themselves. Regard "inclusiveness" firmly on our agenda.


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Dodwell in iSOM Jakarta - Post 3

December 07, 2012

The 2013 APEC logo unveiled by Indonesia’s foreign minister Dr Marty Natalegawa today – a strong bamboo tree bending resiliently to the force of the wind. Twenty one bamboo fronds representing the 21 APEC members. Strong deep blue background representing the ocean, and – in Indonesian culture – wisdom. APEC in yellow, representing the sun. A dedicated website for APEC Indonesia 2013 has also been launched today.

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Dodwell in iSOM Jakarta - Post 4

December 07, 2012

Indonesia’s foreign minister Dr Marty Natalegawa set the tone for the day when he opened the APEC iSOM in Jakarta: “Get the Bogor Goals done!” He also set the tone for Indonesia’s hospitality by deciding that his welcome to APEC officials should not be at the JW Marriott ballroom where all of the other iSOM discussions were being held, but at the Gedung Pancasila, the historic Foreign Ministry building that was the site of the signing of Indonesia’s independence constitution in 1945. The setting was impeccable: a fine old colonial building set in soft green lawns with flame of the forest trees in flower all around.

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Dodwell in iSOM Jakarta - Post 5

December 07, 2012

After bludgeoning our way painfully through Jakarta’s teeming streets to meet with the Indonesian Foreign Minister at the historic Gedung Pancasila, the APEC bus cavalcade finally got back to the JW Marriott, home of all of the iSOM discussions, in time to start the day’s meetings at 10.00. The task ahead: to review in detail the three priorities for 2013 laid out in the Symposium the day before – getting the Bogor Goals done; sustainable and inclusive growth; and improving connectivity. Over the next four hours and in three separate sessions, these three priority areas were laid out and debated in detail in three separate sessions.


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Dodwell in iSOM Jakarta - Post 2

December 06, 2012

ASEAN, Indonesia can naturally look to melding some of the initiatives that have proven successful in ASEAN with development plans for the wider APEC region. Equally unsurprising was the priority being given to sustainable and inclusive growth: Indonesia shares rising international concern about how much of the “growth” of the past two decades has benefited a tiny proportion of the region’s population, widening the rich-poor divide in virtually every economy in the region.

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Dodwell in iSOM Jakarta - Post 1

December 05, 2012

This week the curtain falls on a Russian year of APEC Chairmanship. Senior officials gather in Jakarta on Thursday and Friday to pass the baton to Indonesia, review achievements of the past year, and to debate Indonesia’s thoughts on priorities for 2013. No offence to our Russian friends, but it will be nice to exchange the refrigerated charms of Moscow and St Petersburg for the familiar steamy sprawl of Jakarta.

Because the Vladivostok APEC Leaders’ meeting fell so early this year, in deference to Siberia’s gripping winters, we have had an unusual pause in activity. But inevitably, the region’s challenges have not gone away, and in certain respects they have deepened: the threat of global recession remains as acute as ever, as does the danger of backsliding into protection. Since the Vladivostok meetings, conflicts over islands in the South China Sea have tested strong regional relationships, and elections in the US, China and (next week) Japan throw political uncertainties into the mix. But those APEC members involved in ASEAN have had positive meetings in recent weeks, so it is our hope and expectation that the collegial and collaborative mood that characterizes APEC activity holds firm.

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APEC ASPIREs to make a difference

September 14, 2012

In Vladivostok last week at the APEC Leaders’ Meeting, Professor Chiu was the star of a very special party – winner of the US$25,000 APEC Science Prize for Innovation, Research and Education (ASPIRE) Prize.

Professor Chiu is a discrete and unassuming chemical pathology professor at the Chinese University of Hong Kong’s Morningside College, but her prize provides a valuable illustration of a hidden talent that Hong Kong has in science and innovation – in spite of general views that Hong Kong has little to boast about in science and R&D.

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Dodwell in APEC China CEO Summit at Beijing - Post 1

June 07, 2012

Refreshed from three shimmering days in the bazaar they call Istanbul, I flew Wednesday into Beijing on the last leg of a three week APEC odyssey – now for the China CEO Summit.

If China’s Vice Premier Hui Liangyu took pride of place at the inaugural China CEO Summit as it began this morning (Thursday), the charisma sat with Kevin Rudd, the former Australian Prime Minister, who had the audience swooning with his ability and willingness to flip back and forth from Mandarin to English in his Keynote role at the two-day meeting. His analysis of the future of the Asia-Pacific region, as seen from the vantage point of Australia’s “creative middle power security”, was also acute for his mainly-Chinese audience. For  ABAC, his compliments for APEC were kindly taken (this was, after all, an APEC Summit): “If APEC had not existed, I wonder what would have happened in the region over the past 20 years,” he commented, recalling the traumatic decades that only came to an end in the mid-70s with the end of the Vietnam War.


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Dodwell in SOM 2 Meetings at Kazan - Post 9

June 05, 2012

My sense is that ABAC Members will need to identify a number of key priority initiatives to formulate and take forward from our ABAC3 meeting in Ho Chi Minh City in mid-July. We might also do well to encourage next year’s Indonesian hosts to kick off the year early –  bringing forward the “iSOM” meeting normally held each December to prepare priorities for 2013, and perhaps even by arranging a “mini-cluster” of meetings around the “iSOM”. They might also think about pulling the first APEC senior officials cluster forward into January. I wonder whether Chinese New Year would allow that?


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Dodwell in SOM 2 Meetings at Kazan - Post 8

June 03, 2012

After a week of robust, and sometimes short-tempered debate in the newly-formed Policy Partnership on Food Security, the week’s work ended well with a substantive Ministerial Meeting, and a “Kazan Declaration” that embodies many of ABAC’s concerns and priorities, and will shape policies aimed at future food security for many years to come.

Tony Nowell, Chair of ABAC’s Regional Economic Integration Working Group and a long-time passionate advocate of governments and the private sector working together on food security, was able to report to Food Ministers a substantive menu of tasks that we need to roll up sleeves on straight away. For ABAC, that will mean discussions and decisions from our Sustainable Development Working Group in Ho Chi Minh in a month’s time.


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Dodwell in SOM 2 Meetings at Kazan - Post 7

June 02, 2012

Over the course of the past week, four APEC committees have asked me to present to them on what ABAC has been up to – the Market Access Group, the Investment Experts Group, the Economic Committee, and the Committee on Trade and Investment. This gave a timely opportunity to report back on the outcomes of the year’s second ABAC meeting in Kuala Lumpur, which finished just a week ago (seems a lifetime ago after a week running around Kazan!).


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Dodwell in SOM 2 Meetings at Kazan - Post 6

June 01, 2012


Through the early part of this week our long-standing staffer from ABAC Japan, Omamu Kamikawa, Japan kept lonely vigil at the APEC Business Mobility Group (BMG). It seems he has been faithfully attending the BMG, and speaking on ABAC’s behalf, for years.

The BMG folks are all about managing people across borders – visas and that kind of stuff. Much of their work is dull and technical, but what has made it important for ABAC, and justifiable for Kamikawa-san, is that BMG is home of discussion on the much-loved APEC Travel Card. While we always talk glowingly of the Travel Card as one of APEC’s iconic successes, truth is that we have been troubled by developments in the past couple of years, and Kamikawa-san has been our voice on these issues. It still takes months to get a card with a critical mass of APEC economies signed up; and many business travelers have found it increasingly difficult to qualify for a card. Many immigration departments don’t like the additional work involved. We are calling for quicker approval and issuance, and we are keen to see a five year card replace the current three year card. We are keen to see arrangements put in place that mean your card stays valid even if you have to change your passport. In short,  Kamikawa-san presses our case every SOM. Important, thankless work.


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Dodwell in SOM 2 Meetings at Kazan - Post 5

May 30, 2012

Wednesday’s inaugural Policy Partnership on Food Security (PPFS) could so easily have become a fiasco. The baldest of agendas meant that most participants arrived without any clear knowledge of what was going to be discussed or how. Conspiratorial huddles on the margins of the meeting created a highly charged and combative air as the meeting began. Some wanted to plunge straight into discussion of projects. Others wanted to work on defining long term strategic objectives and a framework for achieving them.

The Russian Chair, Sergey Aleksashenko, had his hands full managing this unprecedented amalgam of government officials and business leaders. Stress levels were high in part because of high expectations. As one member noted: “We can make such a big difference in so many peoples’ lives.” As the Chairman noted in a letter circulated immediately after the boisterous meeting:  “All of us became participants of an experiment – political leaders of the APEC economies (for the first time) decided to listen to the opinion of the business community.”


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Dodwell in SOM 2 Meetings at Kazan - Post 4

May 29, 2012

After several days of discussion here in Kazan on the importance of services in all of our economies, and the need for – and value of – services liberalization, there was some dismay on Monday to discover that the draft statement of Ministers Responsible for Trade (MRT) made the vaguest passing reference to services and services liberalization, and similarly little reference to investment liberalization. As a result, some urgent informal advocacy was cranked up to press our Trade Ministers to pay services and investment a little more attention.

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Dodwell in SOM 2 Meetings at Kazan - Post 3

May 28, 2012

A fresh wave of conference folks swept in on Monday – clearly not the usual APEC people – all headed for the inaugural meeting on food security – the Policy Partnership on Food Security that ABAC has fought for more than a decade to create. No sooner had they arrived than they swept away, to visit a massive Tatarstan dairy herd. For me, one dairy herd looks very like another, and as a non-meat-eater I don’t feel keenly motivated to spend a day with a bunch of Russian cows, so I gave the field trip a miss, and instead knuckled down to a very productive Investment Experts Group.

Apart from providing the group with a comprehensive report back from our Kuala Lumpur meeting, there was a solid review of the IFAP – the Investment Facilitation Action Plan – which is also very close to ABAC’s heart. We were able to reiterate our support for this programme, and for the need for metrics that measure progress on the various plans. So it was gratifying to learn that the Policy Support Unit is planning an audit that should be ready by the end of the year.


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Dodwell in SOM 2 Meetings at Kazan - Post 1

May 27, 2012

Everyone seems to have their own exotic stories of how they flew into Kazan, the capital of Tatarstan and - for three weeks - home to the second huge cluster of APEC Senior Officials meetings. Despite the difficulties in getting to Kazan from our ABAC2 in Kuala Lumpur, ABAC has arrived in moderate force – a total of four Members, and a solid crowd of staffers like myself.


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Dodwell in SOM 2 Meetings at Kazan - Post 2

May 27, 2012

The weekend in Kazan was devoted to supply chains and services liberalization, with workshops organized by the Group on Services that offered us rich opportunities to further ABAC’s agenda for the liberalization of services. ABAC members Anthony Nightingale from Hong Kong and Tony Nowell from New Zealand spoke jointly on “The Governance of Services” at a Pacific Economic Cooperation Council (PECC) on Saturday.

This was followed on Sunday by a Trade Policy Dialogue orchestrated by APEC Singapore on Facilitating Global Supply Chains – an excellent opportunity for Tony Nowell to recount ABAC’s efforts over the past two years on identifying choke points in the supply chain, and to outline the work being done this year by the Marshall School research team from the University of Southern California on chokepoints in services supply chains. The Workshop included excellent  presentations both from business and from public bodies like the WTO, Jetro and the OECD. Our sense at the end of the day was that while there is a long way to go, ABAC’s efforts to get officials to pay more policy attention to liberalizing trade and investment in services are beginning to bear some fruit.


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Dodwell in CTI Meetings at Singapore - Post 6

April 05, 2012

With four other highly competent staffers in situ for the April 4-5 Innovation and Trade  Conference, I decided to cut from Singapore at the end of the CTI meeting on Tuesday, and fly home to Hong Kong to squeeze a couple of days work ahead of the Easter break. It seems there are so many inconclusive ends from the CTI that a huge amount of work looks necessary between here and Kazan. The shortening of this year’s APEC sequence is really creating significant pressures. They will be severe for ABAC too, since the ABAC 2 in Kuala Lumpur overlaps with the first five days of Kazan – meaning that we will miss the first stages, and then have a mad scramble to feed into the meetings of the last 10 days. A large number of ABAC members and staffers will be poring over maps and flight schedules to work out how best to get from KL to Kazan as quickly as possible after the end of APEC2 on May 25.

Early departure after the CTI did not mean the blog had to die. The following is an edited (day 1) summary from NCAPEC’s David Boman from the Innovation and Trade Conference on Wednesday.


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Dodwell in CTI Meetings at Singapore - Post 5

April 02, 2012

While Singapore’s business centre quietened out over the weekend for all sensible people to take a break, APEC’s Group on Services officials trudged loyally into the vast empty spaces of the Sands Expo and Convention Centre. The area was not entirely desolate – there were some Singaporeans sidling into the glitzy Sands Casino next door – but the earnest business areas populated by APEC were pretty lonely places. 

In spite of – or maybe even because of – the isolation, a remarkably interesting and substantial agenda was pursued. I reckon there were at least five areas of interest to the business community.


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Dodwell in CTI Meetings at Singapore - Post 4

April 02, 2012

Sunday promised to be another richly instructive day: a morning focused on supply chain connectivity, and in the afternoon a key “Friends of the Chair” discussion on compilation of an APEC list of Environmental Goods and Services. Instead, it proved frustrating and unproductive.

First, the hugely technical supply chain connectivity discussion swept high over my head. The meeting was undoubtedly valuable and productive for those technocrats working on how, in practical terms, to squeeze 10% of costs out of the region’s supply chains. But to a lay business person, it was as tedious and tortuous as it was worthy and necessary. Some meetings we can safely miss and leave to our officials.

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Dodwell in CTI Meetings at Singapore - Post 3

March 31, 2012

If you think an “environmental good” is hard to define, then wait until you start to wrestle with “environmental services”. In the austere and arcane world of trade policy, few issues are as fascinating – or frustrating – as environmental goods and services. So we attended Friday’s full day workshop on environmental services with some trepidation. The workshop had been organized by China as part of a capacity-building initiative, but a clear majority of presentations came from Americans – and most were fascinating.

Profound insight number one: in environmental services, the market does not work. There is no natural demand for them. As Dale Andrews, head of the OECD’s Environment Division noted: “Who would purchase, for example, sewage or air cleaning services out of sheer altruism?” In effect, regulations (for which read Government officials responding to public opinion) determine the market. This means that Government officials by necessity play an extraordinarily significant role in determining the size and nature of trade in environmental services.


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Dodwell in CTI Meetings at Singapore - Post 2

March 31, 2012

Friday’s Market Access Group discussion seemed a rather flaccid affair. There was clearly great enthusiasm for the two workshops of the previous day – one driven by Caterpillar on “Remanufactured Goods”, and the second on updating the Information Technology Agreement (ITA), which was originally drafted in 1995 – but it proved hard to sustain the animation into the full MAG meeting.

On “Reman”, it is perplexing to hear the same demands today that were heard in Washington a year ago for clearer definitions of what we mean by a “remanufactured good”. Are so many people really so obtuse that after at least three comprehensive debates on the issue, they still don’t understand, or are some quiet political games being played? A visit to Caterpillar’s massive and impressive regional remanufacturing centre in Singapore clearly “wowed” every participant, and one can only hope this helped to move the discussion forward towards some form of concrete conclusion.

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Dodwell in CTI Meetings at Singapore - Post 1

March 28, 2012

The contrast with the Moscow APEC Senior Officials meeting in February could not be starker: from 25-30 degrees below zero, to a sweltering 25-30 degrees above; from the tight, dark streets around the Moskva River to the green and humid open spaces around the Sands Casino resort on land reclaimed along Singapore’s sheltered coastline; from Moscow’s Crowne Plaza, the “grand dame” of western hotels in the former soviet capital, to the vast unused spaces of the spanking-new Sands Expo and Convention Centre.

The scale of the APEC Committee on Trade and Investment cluster (CTI2) is also noticeably more modest than the full Senior Officials Meeting in Moscow – a mere 7 committees or working groups meeting, compared with the 30-or-more in February.


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Hong Kong and the fine art of LIN-kage

March 02, 2012

Mr Greg So, our cherished Secretary for Commerce and Economic Development, sees Hong Kong as Asia’s “point guard”: “Hong Kong can facilitate movement of goods and components in the region, and help enhance participation by small and medium enterprises in regional and global production chains.”

As Mr So’s metaphor sunk in, a light went off inside me. He is absolutely right. Hong Kong is indeed the quintessential “point guard”. By comparison with other economies, Hong Kong is, like Jeremy Lin, comparatively small. But we are quintessentially a team player: if the economies along a product’s value chain can be imagined as a team, then Hong Kong’s clear role and expertise is to manage the chain, make sure the team is pulling together effectively, and to make sure each team player is in the right place, and is doing what he does best. Hong Kong’s role is to have a clear understanding of the comparative strengths of each member of “the team”, and our value-added derives from helping them play to those strengths. Their success is our success. To baudlerise Greg So’s quote: “Hong Kong’s responsibility is getting all the players (read “economies”) playing for the name on the front of the jersey, not the one on the back.”  Nevertheless, Jeremy Lin’s No 17 shirt has been soaring in value.


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Dodwell in SOM1 Moscow - Post 11

February 19, 2012

Focus on my return to Hong Kong is now very much on the ABAC meetings, which start on Tuesday with a big SME Summit on Entrepreneurship, and then shift into the three days of formal ABAC meetings. A high point will be the meeting between ABAC members and Senior APEC Officials, most of them flying in directly from Moscow. This dialogue with Senior officials happens just once a year, and is significant both for Senior Officials to brief the region’s business leaders on APEC priorities for the year ahead, and for the opportunity it provides for ABAC members to drive home our own business priorities for the year.

There will inevitably be much discussion based on the SOM just finished in Moscow. I raced away to Moscow’s Domodedovo airport on Saturday morning with the full SOM still in progress, shortly after our ABAC Chair, Ziyavudin Magomedov, presented ABAC’s 2012 work plan to Senior Officials. He made a perfectly workman-like presentation hampered only by the fact that ABAC has yet to meet this year, and so has not yet finalized its 2012 workplan.


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Dodwell in SOM1 Moscow - Post 10

February 18, 2012

The final day before Senior Officials meet in earnest, was devoted to two “Friends of the Chair” discussions – on Food Security, and on Innovation – two of Russia’s four priorities for 2012.

The Food Security issue has now been very well “cooked” – first with the PPFS Management Council almost two weeks ago, and then with an extended discussion at Thursday’s “SEC-COW” meeting on the logistics of getting members appointed and in harness. The Friends of the Chair discussion involved our Russian colleagues tabling a total of 20 specific proposals to be driven forward in the coming months – and in particular up to the Food Security Ministerial planned for the end of May in the Tatar capital of Kazan. With the exception of “post harvest loss”, or food waste, where there seems to be fairly universal agreement that progress should be made, my own sense was that there is an understandable but inappropriate sense of haste.

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Dodwell in SOM1 Moscow - Post 9

February 16, 2012

One of APEC’s most improbable acronyms - SCE-COW – produced an unexpectedly fertile opportunity for inputs from ABAC on Thursday. SCE-COW stands for Steering Committee on EcoTech – Committee of the Whole. I must be frank – I walked into the huge meeting room wondering what on earth I was going to learn in this “COW”.

Much was procedural and dull but a Russian presentation on plans for pursuing the Food Security priority allowed a robust discussion of arrangements for the newly-created Policy Partnership on Food Security.  

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Dodwell in SOM1 Moscow - Post 8

February 15, 2012

At 30 minutes notice on Tuesday afternoon I was marched down to the Economic Committee (EC), where I was told I was on the Agenda to present on ABAC’s 2012 priorities. Woops. No-one had told me. So I begged time, and appeared on Wednesday morning at 9.30 with powerpoint in hand. Heaven knows whether I covered everything I should cover on ABAC’s behalf, but I did my best. Going forward, the Economic Committee says it wants to hear more from us.

Both the EC agenda and the CTI agenda are gigantic affairs. Documents are compendious – books’-worth of reading, if anyone had the time to be that conscientious. And with so much turf to cover, discussions can be totally sleep-making.  The challenge here is that in the midst of the ponderous, technical detail, some little gems fall out – and it’s hard to make sure you are awake when they drop.

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Dodwell in SOM1 Moscow - Post 7

February 14, 2012

In Honolulu last November, APEC leaders gave instructions for officials to draw up a clear list of Environmental Goods and Services that would carry tariffs of 5% or less. So ABAC officials have dedicated themselves to a fascinating but inconclusive debate over the goods that would qualify to sit on an EGS list. It took an APEC official from Indonesia to remind all that APEC first tried to draw up an EGS list in 1995. Sobering thought. Experts from the World Bank, General Electric, Environmental Business International, Beijing Normal University and the International Center for Trade and Sustainable Development reminded us of how complicated it is simply to define an “environmental good”.

ABAC’s own Takeshi Hajiro from ABAC Japan presented views from Japanese business – and very sensibly called for officials to build a larger list, which should include (for example) environmentally-friendly vehicles and energy-efficient electrical appliances. Let’s see if our officials can rise to the challenge. Drawing up an EGS list remains one of 2012’s key priorities, so for APEC’s Senior Officials, the pressure is on.


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Dodwell in SOM1 Moscow - Post 6

February 13, 2012

Competitiveness, how we are progressing on liberalization, and the “dashboard” measuring APEC member economy progress towards achieving the Bogor Goals of free and open trade and investment were the focus of the APEC Committee on Trade and Industry (CTI) and the Economic Committee (EC) which both began their long sequences of meetings in Moscow on Sunday.

While the Economic Committee focused on the “Ease of Doing Business” indicators devoted to the metrics measuring how our member economies are progressing in their liberalization efforts, the CTI was host to long, technical presentations from the World Bank, the IFC, the World Economic Forum and APEC’s own Policy Support Unit, on how they build their global country rankings on competitiveness. There was even a presentation from the Turku School of Economics in Finland on competitiveness in the Logistics Sector, based on an assumption that competitiveness in this sector is a good proxy for broader trade competitiveness.


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Dodwell in SOM1 Moscow - Post 5

February 12, 2012


While most of you lucky people have been capturing a bit of family and relaxation time over the weekend, the APEC circus has continued to roll. It is one of the fine traditions of APEC Senior Official meetings that they continue to meet right through weekends. Sensible, really, when hotel rooms cost US$300 a night, and every day away from home is an additional cost to the taxpayer. Doubly sensible when it is -20 degrees outside, with every incentive to stay huddled in the warmth of the hotel!

The weekend’s meetings were particularly important for ABAC: we were able to present to the Investment Experts Group on the “Investing for Growth” report (full report) prepared over last summer by NC APEC in the US; and we were able to contribute to a special workshop on “Regulatory Coherence” based on a substantial report brought together by ABAC New Zealand and NC APEC which described the practical damage and cost to business of regulatory “divergence” in three sectors – dairy, electronics and off-road transport.


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Dodwell in SOM1 Moscow - Post 4

February 11, 2012

This weekend, ABAC brought trade negotiators for both goods and services together in Moscow for a rare joint meeting. The aim was to demonstrate that liberalizing services trade is just as important for boosting trade and competitiveness in goods as it is for services.

ABAC proposed to trade negotiators back in the San Francisco SOM3 last year that officials from the two important trade policy groups – one dealing with services, the other with goods (“the stuff you can drop on your foot” as one Market Access Group (MAG) official put it) – could valuably meet together to examine embedded and embodied services. It had been a clear conclusion from the Services liberalization report championed by ABAC Hong Kong China and ABAC Philippines through summer last year, and endorsed by leaders in Hawaii last November, that the long-standing neglect of services trade and investment liberalization was hurting the export competitiveness of goods producers – in particular high value-adding ones, and goods produced along long transnational supply chains.

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Dodwell in SOM1 Moscow - Post 3

February 09, 2012
  Over five days of meetings for APEC’s Human Resources Development Working Group – the biggest human resources meeting since Washington in March last year -  the need for closer links with business has been a constant theme. I think business needs to take note, and examine how we can link with them in tackling some of the labour market challenges that are likely to intensify over the coming decade.

But for now, ABAC’s priority for the business community has been a major Skills Mapping initiative, which was launched in September 2010 in Beijing at APEC’s first Human Resources Ministerial in nine years. There have been times over the past year when it seemed the initiative would flounder, but now, under the meticulous stewardship of Australia, there is rising confidence that the project will get the go ahead. We will know in a couple of days, when APEC’s Budget Management Committee finalizes the projects that will get APEC funding in the year ahead.
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Dodwell in SOM1 Moscow - Post 2

February 06, 2012

Monday in Moscow was dedicated to ABAC’s favourite subject – the APEC Business Travel Card (ABTC). The Business Mobility Group, which has nurtured the development of the ABTC for more than a decade, had a meaty 17-item agenda dominated by issues of long-standing interest to APEC’s business community: extending the ABTC validity period from 3 to 5 years; shortening and simplifying the time needed to process ABTC renewals; coverage of the ABTC beyond the APEC region; and development of a “trusted traveller” scheme to build on the ABTC.


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Dodwell in SOM1 Moscow - Post 1

February 05, 2012

Russia’s welcome to the first Senior APEC Officials meetings of 2012 has been warm, but Moscow has not. Arriving in the bleak morning darkness with officials cheerfully telling us to wrap up because it is -21 degrees outside, one could only recall with fond affection the balmy Hawaiian weather that welcomed us to the APEC leaders meeting in November last year.

For many outside observers, APEC starts and ends with just one event – the  APEC Leaders Meeting every November, with its associated APEC CEO Forum. But for those of inside the process the Leaders Meeting is the culmination of a huge amount of work that starts every February with the Senior Officials Meetings. I say meetings, because these SOMs are actually “clusters” of anything up to 60 separate meetings on issues ranging from Foreign Investment and Customs Regimes to Human Resources Development and Services Liberalisation. These Senior Official “clusters” usually occur four times a year and this first – in Moscow – is important in setting the 2012 agenda for many of the region’s officials.

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Russia joins the party

December 17, 2011


Russia is celebrating accession to the World Trade Organisation (WTO) after a marathon 18-year negotiation – longer, even, than China’s 16-year marathon.

There was a neat symmetry in Russia joining the WTO almost exactly 10 years after China joined – and the symmetry begs comparisons. Were Russia’s terms of accession tougher than China’s? How significant a liberalizing effect has WTO membership had for China 10 years on – and what might this imply for Russia’s economic development in the decade ahead?


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Getting Stuff Done in Hawaii

November 18, 2011


Lots of journalists – and a lot of business leaders too – tend to be dismissive. They see APEC as just another “hot air-fest” – an opportunity for high profile posturing to election-focused domestic audiences, and grand-sounding declarations that melt to nothing once they are carefully scrutinized. I suppose the TPP – or the Trans-Pacific Partnership – would be counted as one of these.

But I think they are wrong. After a year of heavy engagement in the APEC Business Advisory Council (ABAC) and a week camped in Honolulu meeting rooms looking forlornly out on surfers and Japanese honeymooners making more appropriate use of Waikiki beach, I believe some very important things are happening both in APEC, and in particular around the TPP.

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The Air Passenger paper trail

November 04, 2011

I spend much time at APEC meetings across Asia listening to people talking about the imperative of “regulatory convergence” – the politically correct term is in fact “regulatory coherence”. Why not start on something simple like converging the immigration forms, health and customs forms and – better still – using the data stored electronically to save us having to fill out paper forms in the first place? I wonder how many millions of sheets of paper would be saved in the process.

At our next set of APEC meetings in Hawaii next week, there will be earnest an interesting discussion on an “APEC Travel Facilitation Initiative” that will aim to “improve the overall travel experience for passengers”. They are talking about building “trusted traveler” programmes to speed and simplify immigration procedures, and to improve security screening. Why can’t they just start by clearing up the crazy paper trail?

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Five stages of grief

October 08, 2011

I have consistently been in the “Dr Doom” camp over the past six years or more. It’s just that I find it hard to accept that it has taken until now for so many who should know better to recognise the seismic upheavals that occurred in 2008 – the consequences of which have been clear to see for the past three years. The paradoxical result of all this is that for the first time in several years, I find myself more optimistic than the market, and convinced that stocks are now stupidly oversold – in the Asian region at least. Yes, the US economy is teetering on the brink of an aggressive and painful recession in spite of trillions of dollars of QE stimulus. Yes, Europe’s economies are staring into an abyss, with Greece now almost certain to default on its debts within weeks, possibly having to be manoevered out of the Eurozone, and several more significant European nations facing significant and painful structural adjustments – job losses, welfare service cuts, and so on. But what’s new?? This has been glaringly clear for a year or more. How can it be that stock market investors and analysts have only now stumbled on the discovery, and dived in panic for the exits? 

I suspect it all comes down to Kubler Ross’s “Five stages of Grief” – devised for understanding how individuals cope with bereavement after the loss of someone dearly loved. Stage 1 is Numbness and Denial – an incapacity to acknowledge the dreadful event that has just occurred. 

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The search for jobs

September 23, 2011

Whether or not the doom-mongers are right that economic growth has stalled, and we are slipping relentlessly down into the New Great Depression, for most of the world’s politicians – and Obama in particular – the nightmares are about jobs.

President Obama acknowledged this formally two weeks ago with his US$450 billion “American Jobs Act”, which aims to cut unemployment to 8% by creating 1.9 million jobs. In Spain, where youngsters calling themselves “los indignados” – the “indignants” – have mounted street protests in face of youth unemployment stretching past 40%, and in the UK, where violence, riots and looting recently shocked the nation, the nightmare is the same. In crisis-striken Greece, where unemployment has passed 20% and must undoubtedly rise as government cuts ever further into spending, riots and street demonstrations have become almost routine. This is not a setting in which politicians get reelected. And if the “Arab Spring” is any guide, it is setting where even well engtrenched governments can be overturned – witness Egypt and Tunisia, and perhaps more to come.

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Peru, poverty and some lessons for Hong Kong

September 09, 2011

Yes, I could write about the crisis rolling on in Europe, or the traumatic reliving of “9-11”, but these all seem a very long way away in Peru, where I have spent the past two weeks attending meetings of the APEC Business Advisory Council (ABAC).

Yes, Peru, like Hong Kong, is a member of APEC, the group of 21 Asia-Pacific economies – a sharp reminder of the reach of this forum, which has seen its importance explode since the crash in the global markets in 2008, and the floundering of the Doha Round of trade liberalization talks.

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Typhoon Season for World Markets

August 12, 2011

Whether or not we are finally at the bottom of what is now formally being acknowledged as “the Great Recession” is hard to tell. After the shocking losses of the past week, I know many in the markets who are praying so. But perhaps most important, the events of the past week may finally mark the end of “policy fudge”.

If that is so, then this is a time to celebrate – not that the globe’s problems have been solved, because of course they have not, but that Governments are at last poised to deal with the core problems – cleaning up banks’ balance sheets, dealing with millions of underwater mortgages, reining in on unsustainable public services, and – yes – raising taxes, no matter what the Tea Party says.

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Welcoming Russia to Asia?

July 29, 2011

About this time next year the Russian tall ship Nadezhda will sail grandly into Hong Kong as part of a 300-day tour of the Asia Pacific Economic Cooperation (APEC) economies. The voyage is intended to tell the world that Russia is keenly engaged in Asia. It coincides with a year of Russian chairmanship of APEC which begins in four months time. It is perhaps not an accident that Nadezhda, in English, means “hope”.

Because for sure, Russia’s engagement with Asia remains more “hope” than substance for most of the region’s economies. Nowhere is this better illustrated than in the 68bn cubic metre Siberian gas deal that China and Russia have now been negotiating inconclusively for several years. Russia and China had been expected to sign an agreement on this in June during Hu Jintao’s visit to Moscow, but even now, haggling over the price of gas continues to hold up a deal.

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Days of Reckoning in the Global Economy

July 01, 2011

You remember all of that rubbish back in 2009 about “green shoots” appearing to mark the beginning of the end of the global market crash? I recall dismissing this premature optimism, and saying instead that we had perhaps reached the end of the beginning. But I now realize I was wrong – only now are we reaching the end of the beginning. In fact, when our grandchildren look back at this horrid period, it may be this very week that is recalled as the watershed point from which the crisis was at last honestly faced, enabling the start of decisive remedial action.

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Down but Not Out in the PRD Economy

June 03, 2011

Funny how little things catch your attention… but there it was, right in the middle of an SCMP article: “Sources close to the Hong Kong Economic and Trade Office in Guangdong said the number of Hong Kong factories (in the Pearl River Delta) dwindled to about 35,000 at the end of last year… from a 2007 peak of 80,000”.

Pardon? The number of Hong Kong factories in the PRD has genuinely more than halved in the past four years? Yes, I know Hong Kong’s manufacturers have seen bad times in the recent past as the PRD governments have begun to favour high-value adding, non-pollutive industry, at the same time lifting labour costs – but so bad? And if the claim is true – and sourced to Hong Kong’s official Government presence in Guangzhou, why shouldn’t it? – why is this story not shouting at us from the front page?

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Big Sky Dreaming

May 20, 2011

For the past two weeks, I have been buried in the snow-clad mountains of Big Sky Montana, huddled with a thousand or so government officials from the 21-member APEC region discussing trade liberalization. For light relief, I decided to take a peak at the state of the residential property market in this affluent community of 1,400 homes at the heart of one the US’s largest and most exclusive ski resorts.

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Doha Round Miracles Needed

May 07, 2011

In April 1982 Britain’s immensely unpopular Prime Minister, Margaret Thatcher, declared war on Argentina, which had grasped control of the Falkland Islands, a remote and inconsequential island outpost with a population of a few hundred, and a few sheep. With much patriotic theatre, she sent Britain’s navy nearly 13,000 kilometres to fight off the upstart Argentine invaders. Within three months, the Argentine navy had been routed, Britain’s naval forces returned to Britain as heroes, and Mrs Thatcher had transformed her political future.  Before the invasion, everyone predicted that her Government would be kicked out. After the invasion, she emerged the heroic guardian of her nation, and comfortably won elections held less than 12 months later. Mrs Thatcher with one inspired and audacious move transformed her political future, proving that political miracles can happen.

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Sendai's Supply Chain Stress Test

April 01, 2011

Two weeks after Japan’s catastrophic earthquake and tsunami, the task of measuring the grim consequences has only just begun. Even now, the bleak images of physical devastation in the coastal towns in north east Japan defy imagination. Clearly it is going to take many patient years – and hundreds of billions of dollars – to bring local peoples’ lives back to any kind of normality.

Equally appalling, the scale of the nuclear disaster seems to grow by the day. We are still far from guessing what the ultimate consequences will be – both inside Japan and around the world.

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Keeping the Trade Bicycle Moving Forward

December 17, 2010

The DDA is dead. Long live KORUS, the TPP and the FTAAP – so say APEC and the G20, between the lines, at least. And if you manage to wade your way through this “acronym soup”, there is actually something quite important here. I promise.

Outside the logistics industry, the world of international trade negotiation is as impenetrably acronym-laden as any I know. Some perhaps think this insiders’ code language is cool. I must confess I find it impossible – especially in those notoriously sleepy conference sessions that happen straight after lunch.

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What a Waste

September 04, 2010

I was in Chongqing. It was July. And it was very hot. Having asked to look at some of the city’s food export operations, officials compliantly led me into a factory in a drab suburb where hundreds of women spent their days handling pigs intestines. Literally millions of them. Sichuan slaughters over 300 million pigs a year, and the intestines from most of them ended up here.

With unsmiling efficiency, the intestines were flushed clean, wrapped into bundles of 12 intestines at a time, smothered in salt, and laid carefully in vast ceramic urns. Once full, each urn was trundled deep underground, to be stored until summer passed, and temperatures fell. At that point, the urns were raised back to the surface, put on boats down the Yangze to Wuhan, then on trains to Beijing. From Beijing they transferred to the long, slow train to Russia and into Europe. These urns of salted intestines provided sausage casings for a very large share of Europe’s sausages.

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When Growth is Not Growth

July 30, 2010

After wrestling through four conferences on “Knowledge-based growth” in the past three months, I am at the end of my tether. Not only have I come to the conclusion that most people who use the phrase “knowledge-based” don’t in fact know what they are talking about (or are simply lobbying for more government funding for company or university R&D budgets), but that most are clueless too about “growth”.

I will come to the “knowledge-based” stiff in a minute, but first “growth”. Surely you have to be brain-dead not to notice that the large proportion of the “growth” that the world’s rich western economies boasted over the 15 years to September 2008 disappeared in a puff of smoke in the wake of Lehman Brothers’ collapse. We had been counting the illusory gains of property and stock market bubbles and debt-funded leverage. All of a sudden, most European economies – and most of the complacent citizens living in them – found the growth had gone, and they were no longer as wealthy or economically prepared for retirement as they thought they were. The same happened in Hong Kong of course, as property prices crashed in the Asian Financial Crisis in 1998.

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The PRD’s Fleeing Manufacturers – Not

July 16, 2010

In the wake of the “Foxconn crisis”, media tell us that manufacturers are fleeing the Pearl River Delta in their thousands in search of cheaper production locations in Vietnam, Indonesia or Cambodia. They say that the jump in labour costs, combined with likely appreciation of the RMB, are undermining the region’s hard earned competitive advantage. What utter nonsense.

Let me start with a prediction: the Pearl River Delta will remain Asia’s largest and most competitive export manufacturing base for the next two decades and beyond. Some companies will establish manufacturing operations in places like Vietnam and Cambodia, but these will be hedging strategies linked with precautionary diversification, and will do nothing to dilute the powerful competitive advantage of manufacturing in the PRD. Some low value activity, focused mainly in garments and footwear, may be transferred on a larger scale, but this is manufacturing that the PRD can do without.

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Decoupling – Just in Time

May 21, 2010

Is it only me that is puzzled? Asia’s economies are supposed to be heavily dependent on the export markets of Europe and the United States – that’s what the old argument about decoupling is all about. So how is it that as debts mount in Europe and the US, with government spending being cut, taxes raised, consumers cutting back, and unemployment still moving in the wrong direction that Asia’s economies continue to bound forward?

I suppose the simplest – and most plausible – answer is that the impact of contraction in Europe and the US has yet to hit us. After all, the US Government’s various stimulus initiatives have yet to expire, and so may still be buoying the consumer market. A group of US department store chains including Macy’s and JC Penny, accounting for about 3,000 stores and annual sales of about US$70 billion, said last week that sales in the early part of this year were tentatively up from the gloom of spring 2009. 

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Greece and Boiling Frogs

May 07, 2010

In recent weeks, I have thought a lot about the old Chinese story about boiling frogs. You will recall the story says that if you throw a frog into boiling water, it will leap out in shock. But if you drop the frog into cold water, then slowly boil the water, the frog dies without ever recognizing the danger.

For me, Europe’s economies have for many years been frogs originally dropped in cold water. European friends have smiled smugly and dismissively as outsiders like me have talked about the impossible unsustainability of Europe’s complacent, comfortable lifestyles. As the water has crept closer and closer to boiling point, so Europeans have continued to lounge, oblivious to the imminent threat of death.

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America’s Obsession with Exchange Rates – Seeing the Trees, Ignoring the Wood

April 09, 2010

A good friend, weary of my persistent pessimism about the state of the global economy, insisted last week that we should all now be at least “cautiously optimistic” about the prospects for recovery. No, I said – everyone is “prematurely cautiously optimistic”.

This is all very perplexing. I see myself as a happy, positive, optimistic person. Even some of my friends accept this to be so. Why am I so weighed down by the forebodings ahead, when so many others are full of talk of “green shoots”, a consumer rebound, and resurgent exports?

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