At rapid growth rates of 6% and 11% in Hong Kong and China, respectively, the (one country, two systems) governments are leaving some behind. Donald Tsang, the Chief Executive of Hong Kong, announced plans to invest some HK$200 billion in improving infrastructure. That way, he probably believes, the Gini coefficient would be lowered significantly (that is my own personal thoughts on his thoughts).
Over on the mainland front, gwailos find themselves discriminated against, especially when it comes to working and doing business in Guangdong. This defensive measure, funny enough, was enacted because "many foreigners" were found to be involved in crime.
Keynesianism and xenophobia are on the rise in China.
Mr. Tsang's statement comes at a time when the shareholders of MTR Corporation Limited (HKG:0066), the largest underground mass transit railway system in Hong Kong (the largest in the Pearl Delta region for that matter), approved a merger with KCRC Corp., the largest above-ground mass transit railway system. To conclude: everything that is run on tracks in Hong Kong, except (off the top of my head) the Peak tram and the HK Island trams, will become one enormous monopoly. Hint hint: MTR a good buy? Or too good to be true?
Therefore, on one hand we have a huge entity (that is MTR) and another huge institution (that is the government). I can imagine the future of Hong Kong infrastructure without any FDR-like comment by Tsang. Instead, what Hong Kong needs are private contractors to restore any efficiencies that was once there. Maybe that way we can really improve the laissez-faire economy and create marketable jobs. Moreover, as we are in the 21st Century, it is only appropriate if "helping the poor" mean tweaking the interest rate (a tad difficult for Hong Kong's case; Tsang should try invigorating domestic demand and cutting taxes instead). Public finance recalls a bygone era.
Now we get to the case in Guangdong. Ironically, this place used to be Canton and foreigners have had the upper hand since the Opium War. Perhaps not anymore (maybe it started as a retaliation by Hu Jintao against George W. Bush pulling on his Valentino suit). It seems harsh from first look, but when one realizes that all developed nations require foreign nations to apply for work permits anyway, it then seems like a move that China should have enforced since the beginning.
However, what I find even more interesting is the quote: "An estimated 10,000 foreigners are living in Guangdong, many of them financially insecure and involved in crime, such as drug trafficking, fraud and theft." That suggests that only a few of the estimated 10,000 foreigners are financially secured and involved in legitimate jobs. Now I finally understand why my Caucasian friends were so eager to relocate to China.
Do you agree?
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