Kwan Chiu

ExCo: Debt is a non-issue

Legislative Councillor Tong Ka-wah raised questions over the register of Executive Council (ExCo) members' interests at a Legislative Council (LegCo) session on Wednesday. Chief Secretary for Administration Carrie Lam answered his questions.

Tong's query was focused on whether ExCo members are required to register their personal debts and those owed by the businesses they own and, if not, whether relevant rules should be changed to make executive councillors' personal debts public knowledge. Lam said in reply that ExCo members are not required to register the debts they and their private companies owe at this moment; and there is no plan to amend relevant rules because the ExCo has everything it needs to prevent conflict of interest.

Without a doubt Tong asked those questions because of the recent resignation of ExCo member Cheung Chun-yuen over a business scandal involving his Hong Kong Mercantile Exchange, which attracted a lot of public attention. The focal questions here are whether the rules over the register of ExCo members' interests are adequate right now without debt-related information and if they are reasonable. It appears one should look at the matter from these two perspectives to answer the above questions: how relevant are ExCo members' private debts to their integrity; and whether amending the transparency rules will benefit the ExCo in terms of the members' caliber and performance.

For starters, borrowing money couldn't be more commonplace or routine in capitalist societies, where very few if any businesspeople spend nothing but "their own money". Therefore it is safe to say the amount and worth of debts have no meaningful bearing on a person's capabilities and character. Needless to say excessive indebtedness always raises eyebrows, but that is entirely another story. Besides, borrowing is a matter of privacy and a business secret. Both are protected by law in Hong Kong, where respecting privacy is one of the core values.

That is exactly why ExCo members should not be required to register their personal debts and those their private businesses owe, otherwise many capable business people and professionals would be reluctant to join the ExCo out of concern for their privacy and business security. It shouldn't be too hard to figure out if such invasion of privacy is good for Hong Kong society or the contrary.

The author is a current affairs commentator. This is an excerpted translation of her column published in Ta Kung Pao on June 6.

Housing market still risky

The result of tenders for the first two land lots for residential development under the Hong Kong Property for Hong Kong People (HKPHKP) plan was announced on Wednesday, with China Overseas Land and Investment winning both sites with a combined total of HK$4.54 billion, or HK$5,157 per square foot. The sum is near the maximum by market expectation and the future price of completed apartments is expected to top HK$10,000 per square foot.

The fact that the first batch of HKPHKP land lots were hotly contested and bought by a remarkable offer indicates demand for land and especially quality sites is quite high. However, the higher the property market rises the more risks it poses. People must not assume that housing prices will keep climbing as long as land prices go upward and should be very cautious about investing in properties now.

The two lots, both in Kai Tak, are rare quality sites in urban areas. Little wonder developers were so keen to grab them for prime land reserve. Bidding developers all agree the two Kai Tak sites' great market potential well justifies the mega winning offer. Interestingly another piece of land for housing development fetched far less although it is on a railway line and promises considerable market potential. It was sold for HK$1.3 billion, or just HK$2,876 per square foot.

Developer confidence is one thing but the reality another. Potential investors need to keep in mind the external economic environment remains dangerous, as the European Union is still wrestling with its debt crises while the US economy finds recovery maddeningly difficult. That means Hong Kong's foreign trade will continue to experience turbulence and may see its growth rate slide downward in the near future. Then there are market worries that the US Federal Reserve may decide to leave the financial market to its own means and interest rates may rise as a result. Much of the hot money circulating in Asia would flow back to the US when that happens and a property market nose dive is quite possible in Hong Kong. Those who jump onboard the property buying bandwagon now should be prepared to bail out lest their investments become negative assets when the housing market tumbles.

This is an excerpted translation of a Wen Wei Po editorial published on June 6.

(HK Edition 06/07/2013 page9)