One of Hong Kong's most cherished traditions, the close working relationship
between government and big business, is coming under increased public scrutiny.
The dominance by big business in various key economic sectors, particularly
property, banking, transportation, telecommunications, energy and utilities, has
long been criticized by some politicians and economists for thwarting
competition in what is supposed to be one of the freest economies in the world.
The issue was thrust into the limelight again in a recent business conference
where Bernard Charnwut Chan, a member of the policy-making executive council,
said in a speech that "collusion" between businesses and (government) officials
would remain an "unsolved, deep-rooted contradiction in Hong Kong" for most
people would object to the alternative of paying higher taxes.
He was apparently referring to the government's long-standing policy of
financing its capital expenditure with proceeds from land sales. This policy has
required the government to work closely with the large property developers who
buy and develop the government lands for sale to the public.
In reply, Chief Secretary Rafael Hui Si-yan said that if the partnership
between government and business was considered "collusion," and sharing
resources "a transfer of interest," it would be difficult for all to build a
"harmonious" society together.
Indeed, the majority of people in Hong Kong have come to accept the
"partnership" between government and business as a necessary evil that played a
key role within the peculiar social, economic and political context of the
territory's colonial past. After 1997, this partnership, together with other
elements that have made Hong Kong such a success, has been largely retained
under the "one country, two systems" guiding principle.
But some economists have noted that such a "partnership" can lead to abuse of
collusion if it is not prescribed and constrained by a specific legal framework,
except for the various schemes of control that apply to the utilities companies
and the public transport operators. These "schemes" indirectly set a limit on
charges and empower the government to supervise the operations of the franchised
operators.
But there are no such provisions that allow the government, or the public, to
seek redress against unfair competition or collusive price fixing by the
dominant players in other economic sectors. Such an omission seems particularly
galling to the public when some of these dominant players are seen to be working
closely in co-operation with the government.
Many of the public complaints about what is perceived as "collusion" have
been sparked by the high property prices in Hong Kong. This is the area where
alleged "collusion" is seen to have done the greatest harm to public interests.
The government has reiterated time and again that it has never pursued a
so-called "high land price" policy. But the perceived arrogance of some major
property developers hasn't helped dispel the public's suspicion of impropriety.
Property developers made the shrillest noise in blaming the government for
contributing to the massive correction of property prices that was widely known
to be triggered by the Asian financial crisis of 1997.
To ensure the widest public support for such a
partnership, perhaps the government should try harder in convincing businesses
and the general public of the urgency of introducing laws that can provide a
legal framework for independent review of transactions that are alleged to be
collusive.
Email: jamesleung@chinadaily.com.cn
(China Daily 02/14/2006 page4)
