A proposed new anti-monopoly law has been greeted with skepticism by both free-marketeers and pro-regulators who claim Hong Kong's status as a world trading hub is being put at risk.
Essentially, the law is designed to prevent price gouging and protect consumers and Hong Kong's budding entrepreneurs from overlording cartels.
However, backers of the competition law argue the proposal doesn't go far enough to rein in market-dominant companies, while detractors claim legislation would distort Hong Kong's fam-ously laissez-faire economy.
The government, which recently launched a three-month public consultation on its proposals, says it wants a law that will prevent price-fixing and the creation of domineering cartels that push smaller companies to the sidelines of Hong Kong's economy.
"Hong Kong enterprises have always thrived in a competitive environment. It is important for our economy and for our competitiveness that our competition policy is effective and in step with the times," Secretary for Economic Development and Labor Stephen Ip (葉澍) said.
Despite Hong Kong's claims to being the freest economy in the world, there have been growing grumblings, and they are getting louder, that laissez-faire economic policy has not benefited everyone.
"The free market functions well when there are sufficient participants and nobody has cornered the market," said David Webb, a board member of the Hong Kong Stock Exchange.
"But that economic efficiency breaks down when you reach boundary conditions and there emerges a dominant player or cartel," Webb said.
The government hails its free flows of capital, low taxes, minimal government intervention and free port status with no tariffs as reasons for overseas investors to put their capital here.
But analysts complain the point has been overplayed and that large companies have been able to edge smaller overseas competitors out of the market.
Such claims have been leveled at the retail, oil and construction industries, although the government has only investigated the petroleum market, where it found no price-fixing.
"There is a need for a law that will give statutory powers for investigation and powers to sanc-tion," said Webb, citing a recent court case in which a group of companies were found to have acted as a cartel, stinging the government for millions of dollars in a contract to supply steel doors for public housing.
"The court could not prosecute the companies because there was no competition law for them to have fallen foul of," Webb said.
The government's response to the criticism came in June last year when a Competition Policy Review Committee concluded that anti-trust laws were necessary.
Webb, however, said the latest consultation proposal falls short of the panel's recommendation.
"If they had no problem with the recommendation, they wouldn't be having a consultation now," he said. "It's simply an excuse to drop the whole affair. It gives them a scapegoat -- the public -- for not pursuing a competition policy."
Free-marketeers have equally condemned the proposal, saying competition laws would provide the government with too much power to interfere in the market and to arbitrarily punish companies it wants to keep in line.
"This proposal was put together by bureaucrats for bureaucrats," said Andrew Work, executive director of the Lion Rock Institute, a free market think tank.
His comments were a veiled slight at Chief Executive Donald Tsang (
He was recently stung by Nobel laureate Milton Friedman, who lambasted Tsang for declaring in September that the age of "positive non-intervention" had ended.
Friedman said Tsang had declared "the death of the policy on which the territory's prosperity was built."
"Positive non-intervention" was a term coined during the territory's colonial past when governments only intervened for the overall good of the economy.
Alongside touted competition laws are a proposed goods and services tax and a minimum wage policy which have added to fears that Hong Kong is shifting away from a blueprint that many believe has delivered it great wealth.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft