Hong Kong's Chamber of Horrors

Hong Kong's gradual slide from small business haven to the smothering embrace of a bureaucrat-tycoon alliance continues. It is evident in small things as well as large ones.

First, a small but all too representative one. The new Chairman of the Hong Kong General Chamber of Commerce is to be the current head of a government-linked so-called think-tank, the Bauhinia Foundation and an appointed member of various government boards and authorities.

Yet the General Chamber is supposed to represent the interests of a broad cross-section of business, big and small, local and foreign. To do its job properly it needs both business expertise and a willingness to be outspoken in promoting business interests in general, if necessary being highly critical of the government and its bureaucracy. And it should represent the interests of the vast majority of businesses which are victims, not supporters, of the property oligopoly, which now also owns most of the transport and energy utilities, to which the government kowtows.

The new chairman of the Chamber is to be Anthony Wu Ting-yuk, who in addition to being head of the Bauhinia Foundation, a source of government propaganda dressed up as research, is chairman of the Hospital Authority, the agency which overseas public hospitals, and on panels such as the Commission on Strategic Development, a typical supposedly independent body that is actually stuffed with yes-men.

Wu is an accountant by training and was once chairman of the regional operation of Ernst & Young. But number-crunching skills and race-horse ownership do not necessarily make a good businessman. And since retiring from Ernst & Young, Wu's career has been as a dutiful servant of government and member of rubber-stamp boards and “patriotic” shoe-shining bodies such as the Chinese People's Political Consultative Conference.

Meanwhile the man in day to day charge of the chamber is a former bureaucrat, Alex Fong, with 20 years experience in the civil service and none in the private sector before becoming chief executive of the chamber in 2006. He may be a competent administrator but the bureaucrat mindset and sympathies are hard to erase.

The domination of the chamber by business interests with close ties to the government is further illustrated by other leading members. The retiring chairman is Andrew Brandler, a former banker who runs China Light & Power, the government-regulated power monopoly and Hong Kong's chief air polluter. Its vice-chairmen are representatives of the other big monopoly businesses which stifle Hong Kong: Victor Li, son of Hong Kong's richest man Li Ka-shing of Cheung Kong – which also controls the other power monopoly, HK Electric; CK Chow, who heads the government controlled Mass Transit Railway Corp. which is as much a property developer as railway operator, and He Guangbei of the Bank of China (Hong Kong)

[The power companies in Hong Kong do not compete with each other. They have separate territories. In spite of the much touted independence, they are also protected against mainland competition. As for Chow (who has conveniently dropped his British knighthood) he was appointed to the MTR in 2003 despite having just been forced out of Anglo-Australian group Brambles which lost millions under his management.]

A different example of government tentacles is provided by the soon to be published draft of a Competition Law. This has been 15 years in the making as tycoons and other vested interests have fought against anything which would open up sectored they control to competition and outlaw the sleazy practices which have enabled them to create absurdly profitable oligopolies in areas from supermarkets to fuel distribution.

It remains to be seen how much of this draft legislation actually makes it onto the statute books through a legislature stuffed with representatives of the business groups which would suffer most from more competition.

But already there is one gaping hole in it. It is expected to exclude most government bodies, many of which are engaged in trading activities. Reportedly there are some 500 of such entities, itself an illustration of how Hong Kong is edging ever closer to the Singapore model of government and bureaucrat dominance of key sectors. Chambers of Commerce which ought to be in the front line of opposition to this trend have been co-opted by cozy deals and favorable treatment also on the mainland in return for “patriotic” gestures.

Meanwhile the myriad of small businesses which still provide Hong Kong with its dynamism despite the taxes they pay to the rentiers close to the government -- the property tycoons, the power companies, the bank cartel and the finance sector racket known as the Mandatory Provident Fund – are left without representation.