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Hong Kong's chief proposes laws on monopolies, wages

Hong Kong Chief Executive Donald Tsang (曾蔭權) promoted proposals for antimonopoly and minimum-wage laws at a joint luncheon yesterday of the city's chambers of commerce.

"We need to guard against the situation where big companies, local or international, can corner the market, which can in turn lead to price-fixing and bid-rigging," Tsang said.

Hong Kong touts itself as being one of the world's freest economies, but many markets are dominated by huge conglomerates that effectively keep consumer and business prices fixed.

Tsang said a task force would look into whether competition law would give consumers and smaller businesses in the city a better deal.

"If small and medium-sized businesses feel they are being squeezed out or denied entry by bigger players, this will cause resentment and have a negative impact on our competitiveness and market diversity," Tsang said on RTHK radio on Sunday.

Tsang further said there is concern within the workforce and government that the fruits of economic recovery are not filtering down to unskilled workers.

Hong Kong doesn't have a minimum wage and regulates competition only in telecommunications. Tsang in his first policy address last week said the government may introduce antimonopoly and pay laws once committees studying the issues have reported.

"Donald Tsang is serious about many things, and is working on effectively what might seem to be small changes, but which add up to something significant," said Michael DeGolyer, a professor of international studies at Hong Kong Baptist University.

One of Tsang's aims is to get the business community to realize that businesses need to make contributions to the community to get concessions, DeGolyer said.

Tsang said that wages for low-skilled jobs haven't risen with the cost of living and the supply of unskilled labor is rising, creating pressure on wages to fall, which may eventually make unemployment and welfare more attractive than work.

As a result, employers will either have to pay higher wages or face higher taxes to pay for increased welfare, Tsang said.

Should employers not follow the government's minimum-wage guidelines voluntarily, he may legislate, he said.

For antimonopoly legislation, Tsang said he favors a system that neither increases regulatory burdens nor leads to a surge in litigation. He said there are many models of regulation worldwide. He didn't say which system he favors.

Tsang, picked to replace Tung Chee-Hwa (董建華) by a China-backed committee of 800 people, is trying to woo investment by improving standards of living and laying out a time frame for full democracy in the city of 6.9 million people.

Hong Kong's economy expanded at the fastest pace in almost two years in the second quarter, up 6.8 percent from a year earlier, as sea and air ports shipped more Chinese-made goods overseas.
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