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New Rules Needed for Hong Kong's "Big Market, Small Government" Concept
(Letter to the Editor The Standard, Hong Kong)
By Kam-tim Siu
December 1, 2008


The mainland is not alone anymore in its state and macroeconomic controls, as seen by the buying of financial institutions by the United States and European countries. It is a controversial issue politically. Macro controls in China are used to control citizens as a whole. The administration, however, repeatedly declares its strong belief in non-interference.

 

In Hong Kong, there is more and more public discontent over the government's not-sufficiently wise comments on the financial crisis. Financial Secretary John Tsang Chun-wah said: "I hope the public has the psychological preparation for possible outcomes of the global crisis." US officials, on the other hand, actively commented and acted on assistance to investment banks, including imposing regulations on senior executives' pay packages.

 

In Hong Kong, CITIC Pacific is facing huge loses on foreign exchange transactions, which were described by accounting professionals as inappropriate regarding accounting standards. Investors have also seen its stock plummet more than 50 percent. The heated response from politicians to the CITIC Pacific case has added pressure on the administration over supervision.

 

It is high time for the government to re-orientate its traditional, if not conservative, "big market, small government" concept, and to implement contingency plans on the many problems of the crisis. Hong Kong is involved in all kinds of global financial activities. People have taken loses on mini-bonds, accumulators and corporate involvement in so-called financial investments.

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Dr. Kam-tim Siu got an MSc from London School of Economics and Political Science, UK, and a PhD in Business Administration from Bulacan State University, Philippines. He is currently doing research in Hong Kong position in the Global Political Economy, covering Hong Kong's global competitiveness, sustainable development and the relationship between Hong Kong's administration and economic development.
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