Hemlock's Diary
25-31 May, 2008
Mon, 26 May
Breakfast with delectable Administrative Officer Winky Ip at the historic Yuet Yuen restaurant, where time has stood still since the invention of Formica table tops.  We are discussing last week’s exciting, key milestone in the development of Hong Kong’s political appointment system – the
naming of eight Undersecretaries.  She sneers at the cronyistic selection process, and snickers at the revelation that Greg So, the token member of the patriotic, pro-Beijing DAB, holds a Canadian passport. 

“That one whose gorgeous picture you keep putting on your stupid diary,” she hisses.  “I’ve got news for you.  One, I’ve met her.  That’s a
very flattering portrait.  Two, check her bio.  She’s older than you.  Three, she reels off all that ‘Hong Kong needs Shenzhen’ stuff you hate.”
“With its condition, Hong Kong, on its own, finds it very hard to become a world-level financial center,” Julia Leung Fung-yee, executive director (external) of the Hong Kong Monetary Authority, said during a meeting in Hong Kong with Tang Jie, vice director of the Standing Committee of the Shenzhen Municipal People’s Congress.  “Only if it enters into an alliance with the mainland, can it achieve its goal with a combined scale and efficiency.”
Winky reserves her most acidic Civil Service-issue condescension for the new deputy ministers’ greatest possible shortcoming.

“Most of them have no real administrative experience!” 

Not if they were child-sacrificing, goat-molesting Satanists who cheated on their taxes could she think of a more heinous disqualification for the job.  I point out to her that as political appointees they are supposed to be part of the policy-making – or at least policy-selling – caste.  They need qualities like vision and leadership, but not management skills.  That’s what the civil servants are for.

This touches a slightly raw nerve, and it is only my boyish charm that saves me from having a bowl of fish congee tipped over my head.  The Government is headed up by a pure bureaucrat – Chief Executive Sir Donald Tsang and his sidekicks like Michael Suen, for whom the process is the output.  The most cataclysmic despoiling of public finances, services or space is acceptable and to be defended at all costs provided the correct procedures were followed. 

Our officials can’t tell detractors that the new appointees don’t need pen-pushing expertise, because it’s their only talent.  Did they not spread the word during the 2007 quasi-election for Chief Executive that pro-democracy contender Alan Leong was unfit for office because he lacked administrative experience?  Have they not convinced the more suggestible portions of society that pro-democrats generally are incapable of exercising power because of their unfamiliarity with the workings of the world’s most highly paid and gifted wielders of taxpayer-funded paperclips?  It is a vicious and misleading smear.  Every thinking person knows the pro-democrats are unacceptable as governors because they are repetitive, strategy-less, economically illiterate buffoons.

Tue, 27 May
The mood on the Mid-Levels Escalator this morning is one of relief and joy as Hong Kong’s mild-mannered and industrious tax-payers learn that the usual verminous multitudes of strangers will be
avoiding their city in August. 

One reason is Beijing’s recent, mysterious policy barring many foreigners from applying for Mainland visas here, which has much the same effect as a Tourism Board campaign entitled ‘Hong Kong, Why Bother?’  Another is that Mainlanders, who account for 98 million visitors a month, are showing a curious lack of interest in our extremely important contribution to the Olympic extravaganza hype-fest – the compelling equestrian ‘eventing’ event that will be held in exotic Shatin.  It can’t be every day that Shanghainese get the opportunity to watch a buck-toothed, real or imaginary British princess displaying her talent for sitting on a horse that walks backwards, yet they seem more interested in collecting money for earthquake victims.

With Tien’s promotional geniuses at the Big Lychee Tourism Board mounting a desperate-sounding Hong Kong Rainy Season Temptations push, it looks like the best news since SARS – a few weeks free of the crowds, buses, and air pollution generated by the city’s second (or is it third?) most parasitical industry.
On a sadder note, who can fail to feel a pang of sympathy for venerable South China Morning Post business reporter Enoch Yiu?  The doyenne of shoe-shining journos suffered a tragic embarrassment last week when she wrote that Carlson Tong Ka-shing served six years on the Stock Exchange listing committee, and something evil called an ‘editing process’ came along and changed the words to say it had been six years in prison. 

Enoch’s mission in life is to interview every mega-millionaire Big Boss in Hong Kong and ask them a predictable set of searching questions…
EY How do you account for your amazing success?
BB Hard work/integrity/two hours’ sleep a night/yoghurt
EY Can you give us some examples of brilliant investments you have made?
BB The first hundred thousand I inherited at age 5 went into property now worth 50 million
EY Would you like to say something or drop a name to show how patriotic you are?
BB Yes
EY Do you consider yourself rich or poor?
BB Oh, just average.

What hidden hand caused the bizarre, decidedly non-random re-wording?  My theory is that God did it.  So incensed was He after reading an excruciatingly sycophantic interview with haggard Stock Exchange Chairman Ronald Arculli just after shareholder activist David Webb stalked off the bourse’s board, the Almighty did something He hardly ever does and just lost His patience.  As He might do again if He reads down to the end of Enoch’s apology and sees her toe-sucking list of Carlson Tong’s badges of rank – membership of the HK Institute of CPAs, Justice of the Peace, etc.  Mammon’s false idols, all.

Wed, 28 May
Hong Kong’s fratricidal corporate soap opera du jour reaches a denouement as the Sun Hung Kai Properties board replaces Walter Kwok with his 79-year-old widowed mother as Chairman and his two younger brothers as co-chief executive.  Walter, having exhausted legal appeals, is currently reduced to issuing grouchy press statements.  Unlike a fictional drama or an embarrassing marital feud in the sports or entertainment world, this is a conflict we can literally buy into.  Indeed, many members of Hong Kong’s work force probably own a stake in this publicly listed company via their MPF retirement savings, much of which are invested in Hang Seng Index tracker funds.  SHKP, with a market capitalization of around 22 percent of HSBC, is a big firm. 

How come, in a developed economy in this day and age, the board of a major public company can become the vehicle for such extreme sibling squabbling and the public washing of dirty laundry?  In the US or UK, most of the great family-owned firms passed into the hands of professional managers several generations ago.  Market regulators and investors frown upon family control of listed companies – the former because of conflicts of interest, the latter because founders’ brilliance seems to be carried in recessive genes, and their offspring are often clueless and incompetent at business. 

But in the US or UK they have competition.  Members of Hong Kong’s property cartel wouldn’t last five minutes if they were transplanted into a modern capitalist economy where players have to outperform one another to survive.  Here, with Government blessing, they take it in turns to win land auctions and to sell their developments into a deliberately under-supplied market. 

The profit margins are stupendous, though minority investors tend to see thin dividends.  Developers do little actual work, buying in most of the design, construction, materials, and other goods and services they need – typically from high-charging, privately held entities connected to the same family that runs the developer.  Hapless buyers of the products are no better off, getting maybe 70 percent of the space they were promised and a tacky development of marble-clad junk with minimal guarantee against shoddy work.  Not only does the Hong Kong Government give its total blessing to this, the whole system would appear to be endorsed – for all we know required as part of the post-1997 arrangement – by the Central People’s Government in Beijing.

SHKP’s share price has pretty much performed in line with the property sector’s average on a one- or three-month basis.  You could put a chimpanzee in charge of a Hong Kong property giant, and you would never know the difference.

Walter is
suing for libel.  Pull up a chair and grab some popcorn.
Thurs, 29 May
A sudden outbreak of democracy hits Hong Kong as the Legislative Council votes on the exciting Food and Drugs (Composition and Labelling) (Amendment: Requirements for Nutrition Labelling and Nutrition Claim) Regulation 2008.  In essence, labels on packaged, processed quasi-food products will have to reveal how much fat, sodium, carbohydrate, fibre and other nutrients the junk contains. 

Under pressure from the food traders and their countries’ consulates, with the Liberal Party inevitably at the fore, the Government agreed to exempt products claiming to be ‘low fat, ‘low sugar’, etc that sold in low volumes.  Although ‘healthier’, according to the industry, such goods are often crammed with deadly amounts of other substances.  The technical name dieticians use for these items is ‘crap that gwailos eat’, and the administration gave way at least partly because of the hundreds of mad, screaming Western housewives that the food lobby roped into its campaign.  Along with expat families petrified that their low-fat poly vinyl mayonnaise would be taken from the shelves, hordes of screeching mothers whose little ones suffer from mysterious Anglo-only allergies joined the fray.  Hong Kong University’s slightly wacky vegetarian and anti-corporate Professor Richard Fielding slapped them down…
Apparently to no avail.  Preferring a quiet life, our dashing Chief Executive Donald Tsang shrugged and made a U-turn and ordered the Democratic Alliance for the Blah Blah of Hong Kong to vote accordingly in the Council, which they naturally did.  Not enough of them turned up, however, and the pro-democrats successfully voted the exemption down.  A range of nasty cookies, chips, cereals, orange gooey stuff in jars and other items essential to the sustenance of white-skinned life will now, in theory, become unavailable.  To hear some of the more mouth-frothing Western women tell it, their families will have no choice but to leave our shores for Sichuan, or at least buy this stuff over the Internet.  Or maybe – the horror – they will have to go the market and buy fresh produce!

The Liberal Party’s James Tien is now seething with anger and humiliation – for the first time ever, his shallow little gang of lawmakers have failed to force the Government to put their supporters’ profits ahead of the well-being of the citizens of Hong Kong.  The mentally challenged Tien is now muttering about how Secretary of Health York Chow, whose Bureau was in charge of arm-twisting legislators, should resign (his people did seem a bit lackadaisical about the whole thing).  Supposedly, this is a significant defeat for the whole concept of ‘executive-led government’, but the Chinese-language press barely reports the story.  

Will the public interest also prevail in the latest battle in the unceasing war against golf – Asia’s most serious mental illness, along with
koro, or shrinking penis syndrome, to which it is of course closely related.  A temporary driving range used by a small number of inadequates wearing silly clothes and buying whatever Tiger Woods tells them is to be replaced by a public park the whole population can enjoy.  This is the sort of thing James Tien, before he lost his corporatist mojo, used to be able to fix in his sleep.
Fri, 30 May
A storm of wailing and gnashing of teeth breaks out in a thimble-size teacup over the issue of
Undersecretaries’ passports.  Five of the eight deputy ministers appointed to form Hong Kong’s second tier of chauffeur-driven politicians have foreign citizenship – the inevitable Canadian (two), the barely more original British (two) and the relatively exotic American (one).  Left to its own devices, this unremarkable titbit need not have gone any further than a bit of sniggering about what losers the other three were.  Instead, thanks to much effort and creativity, the Government has managed to turn it into a crisis.

It would have been fairly easy to slap down any uppity pro-democrats who tried to make trouble by querying appointees’ citizenships, patriotism and fitness for office.  Loads of people, from pro-democrats to DAB members’ spouses to civil servants to top Beijing officials’ kids, have foreign papers.  Centuries of despotism, starvation and mayhem have taught all but the most starry-eyed or obtuse Chinese people to take right of abode elsewhere if the chance comes along.  There is no shame in it.  The Basic Law makes it clear that only the top layer of our officials must not have barbarian nationality.  (In theory, since dual citizenship is not allowed, the innumerable Hongkongers who use PRC ID to visit the Mainland but a foreign passport for international travel should be stripped of their Chinese status, but Beijing cheerfully turns a blind eye.)
However, the first Undersecretary to be found to have a foreign passport was poor Greg So.  The DAB’s hopes one day to inherit the natural right to run Hong Kong from tycoon-backed civil servants rest to no small extent on this patriotic but presentable, loyal but cosmopolitan wonder-boy.  Less well-manicured, greasier-haired, jealous, mean-spirited – and of course starry-eyed and obtuse – members of the pro-Beijing camp were among the first to huff about his maple leaf-clad documentation.  This he acquired by virtue of spending his teens and 20s in the Great White North, like hundreds of thousands of Hongkongers of his generation, embodying his parents’ upwardly mobile, lower-middle-class dream by obtaining a low-budget but nonetheless precious non-local education and patina. 

Officials could have defended his undeniable right to the passport.  It was a symbol of the divide most of them straddle – with children at Stanford, a house in London, parents in Sydney, and a deep commitment to loving Hong Kong and loving the motherland.  Faced with the wrath of gruesome patriots, however, the Government panicked and went into full damage-limitation, fire-fighting, react-to-events mode, expertly led by bumbling Constitutional Affairs Minister Stephen Lam, whose obvious need for all the help he can get is one of the best advertisements the new deputy minister scheme could wish for.  As more detractors piled in, officials decided to put Greg
on a pedestal to perform a manly public shredding of his passport and a reflective admission of lack of political sensitivity.

Donald does not hire people for their willingness to take a defiant, individual stand, and the chances of one of these new faces demanding his rights – like Reagan’s Secretary of State George Shultz when he refused to take a urine test – are slim. So the scene is now set for all the Undersecretaries holding overseas papers to sacrifice their ultimate insurance policies.
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