Wednesday, March 30, 2011

Decrepit Heritage - Law and Policy crumbling property rights

It was a welcome move to allow redevelopment at Mid-Levels 6 and 8 Kennedy Road, and not employ
the devious declaration of temporary monument status. The last time the AMO got it right is when
Bruce Lee’s former residence-turned-love-hotel was denied monument status because the building had
been altered for decades. The AMO rightly had to disappoint fans given the baseless heritage claims.

However, most of the heritage policy lacks coordination at all levels, and the Government’s approach
usually mimics the bad guys in Lee’s movies, who take what they want, when they want it, forcing
somebody’s hand.

Ho Tung villa was deemed heritage, but its historical allure was debunked as urban legend. The most
embarrassing and egregious case involved Jessville mansion, declared a proposed monument, and
less than a year later downgraded to a Grade 3 historical building after owners agreed to maintain the
building as a clubhouse.

This lack of accountability calls into question all halted redevelopments since Kin Yin Lei mansion.
When the AMO flip flops in less than a year on a graded monument to the lowest of heritage ratings,
legitimate doubts arise concerning heritage and if efforts to stop redevelopment are justified. Do
“heritage” buildings like King Yin Lei or Ho Tung Villa deserve the name?

King Yin Lei was graded within the same day its monument status was declared, which doesn’t speak
well of the grading process. Tthe declaration of monument status to halt redevelopment projects skews
a grading process which is already partial, and undermines AMOs credibility.

Secretary for Development Carrie Cheung’s description of the heritage policy as take “no action if
the enemy makes no move” diverts responsibility. Recall King Yin Lei, where twenty per cent of its
facade was ruined. Conservationists and media pointed fingers at the owner, but they had the right to
redevelop. It was AMOs responsibility to protect heritage, but the AMO had not even graded King Yin
Lei, indicating it held no heritage value.

The AMO didn’t need to wait for protests before offering King Yin Lei’s owner the land exchange. Had it
established a set of fair and clear guidelines, AMO wouldn’t have cost heritage the loss of the buildings
distinctive original features.

These desperate last minute attempts in crisis management are often cheered, but could cost Hong
Kong the early demoltion of possible heritage buildings that aren’t on a watch list. These “just in the nick
of time” actions always surprise owners with heritage demands, and create both real and opportunity
costs. The Ho Tung redevelopment, for example, was estimated at $3 bn. The AMO has said purchasing
heritage sites would be a "last resort", and therefore it is unfair to force owners to foot the entirety of
the heritage bill, exemplified by Jessville mansion’s clubhouse.

Privately owned heritage-worthy sites have been in the same state for decades, thus there is no well-
founded reason why, after years of government assessment that those sites which have not been
declared monuments should suddenly be protected as such. With seventy percent of identified heritage
buildings privately owned, and more ungraded and unnoticed - a number conservationists put in the
thousands, the need for overhaul is pressing.

If Hong Kong is increasingly deprived of historic landmarks, it won’t be to the fault of property owners, it
will be the AMOs. The AMO has repeatedly admitted problems with its policy but no changes have been
made, leaving the principal strategy to continue evading justifiable grading and infringing upon property
rights. If the public wants to keep its heritage, it needs to demand the heritage policy is renovated.

For starters, the AMO needs to stop using the monument status as a bargaining tool to stop
redevelopment, and should further clarify rules in its grading system. Economic incentives go a long way
in preserving heritage, but haven’t been fully utilized in Hong Kong.

The AMO doesn’t have pockets deep enough to buy every heritage property, and owners shouldn’t be
in a position where the older their building is, the less control they have over it. Public interest in the
use of heritage should be defended, but so too must the property rights of owners. Treating heritage
buildings as they were part of a knick knack collection should be discouraged as they often ignore
property rights – here, heritage itself needs defending, as not every beautiful or decades-old building
qualifies.

Middle ground can be found in jurisdictions that have balanced these interests with economic incentives
at play. Hong Kong’s heritage policy needs to ensure it doesn't employ a strategy which is dreamt
up out of thin air to control what someone does with their property, but has a real focus on maintaining
and promoting heritage.

One of the problems that exists is with the legislation directing AMO itself, along with a number of other offices that don't seem to have a clue how to coordinate with each other. But as long as the public allows AMO to remain as is, the heritage policy and the laws that guide it remain in a state of decay.

For more on this, visit Hong Kong: Sidestepping Property Rights in Preservation

Tracking the Minimum Wage

Minimum Wage in Hong Kong will cost far too many people their jobs and increase the real wage. But, this doesn't include the additional costs in administration or change in workflow. Lion Rock will track developments and also management fee increases, food costs, and employment data from several industries employing large amounts of minimum wage workers to measure the impact of the minimum wage. Feel free to send us tips when you hear of them.
Updates will appear here, and on LRIs website.


Date Details Source
3/30/11 Approx. 80 cleaners and back-up staff at Eastern Hospital are asked to switch contracts from a monthly to a daily basis and told lunch breaks and rest days are not included in pay. http://bit.ly/stnd80minwage
4/11/2011 Cleaning workers in old blocks fired or forced to work fewer hours. SCMP
4/11/2011 Rehiring of 200 security guards to reduce future long-service payments. SCMP
4/11/2011 Tour guides forced to work part-time so they are paid less in non-peak season. SCMP
4/11/2011 Chain store workers told not to have lunch in stores so the company does not have to pay meal breaks. SCMP
4/11/2011 Workers at a chain sign contracts giving them paid meal breaks but unpaid rest days. SCMP
4/11/2011 Half of the city's 180 internet cafes say they will be forced to close due to the minimum wage law and proposed rules barring them from operating in residential buildings and banning people under 16 after midnight. SCMP

  • Cleaning workers in old blocks fired or forced to work fewer hours. Security guards told to do their duties.
  • New City Property Management sacks, rehires 200 security guards to reduce future long-service payments.
  • Tour guides forced to work part-time so they are paid less in non-peak season.
  • Japan Home Centre chain workers told not to have lunch in stores so the company does not have to pay meal breaks. Workers say this is impractical due to limited manpower.
  • Half of the city's 180 internet cafes say they will be forced to close due to the minimum wage law and proposed rules barring them from operating in residential buildings and banning people under 16 after midnight.
  • Workers at the Tsui Wah restaurant chain sign contracts giving them paid meal breaks but unpaid rest days.

Monday, March 28, 2011

Agora I/O Conference

This past weekend, Agora I/O: The Agorist Unconference was broadcasted. Check it out.
 http://agora.io/etienne/ and for the back vids, http://agora.io/etienne/archives
"About Page" blurb:
"There are lots of conferences in the liberty world, but none operate according to the free market libertarian anarchist principles of agorism. Until now! Agora I/O is a new un conference where you'll find the greatest people, ideas and tools for advancing the stateless society. You don't want to miss this, and you don’t have to! Agora I/O is exclusively online, so you can participate from anywhere an internet signal reaches."

Speakers: James Babb, Cat Bleish, John Bush, Josh Carter, Gary Chartier, John
Connolly, James Cox, Michael W. Dean, David Derby, George Donnelly,
Zaira Dynia, Karen Emery, Pete Eyre, Nick Ford, Ian Freeman, Patri
Friedman, Carla Gericke, Thad Getterman, Allison Gibbs, Gil Guillory,
Eric Johnson, Debbie Harbeson, J. Kent Hastings, Ron Helwig, Scott
Horton, Steve Horwitz, Iloilo Jones, Tomasz Kaye, Angela Keaton, Neil
Kiernan, Peter G. Klein, Stacy Litz, Tarrin Lupo, Tennyson McCalla,
Kirk McNeil, Carlos Miller, Stefan Molyneux, Momma Ally, Carol Moore,
Corey Moore, Mookie Moss, Stephanie Murphy, Nina Paley, William
Pearson, Drew Phillips, Lawrence Reed, Pasha Roberts, Larken Rose,
Mary Ruwart, Michael Salvi, Nick Saorsa, Shane Sheid, Michael
Shanklin, Steve Scheetz, J. Neil Schulman, Sovereign Curtis, Brad
Spangler, Niki Staehle, Marc Stevens, Jason Talley, Mark Thomas, James
Tuttle, Alex Wied, Lance Weber, Jason Wohlfahrt, Darian Worden and
Jeffrey P. Zacher

Thursday, March 24, 2011

Lion Rock in 2011 Property Rights Index

"Now that the correlation between economic well-being and property rights has been established, it is imperative to continue improving property rights on a global level."
-Hernando de Soto









The 2011 International Property Rights Index (IPRI) is an international comparative study that measures the significance of both physical and intellectual property rights and their protection for economic well-being.

The Lion Rock Institute’s Research Associate, Nicole Alpert, authors one of the case studies featured in the report, “Hong Kong: Sidestepping Property Rights in Preservation,” and details the current raggle-taggle heritage strategy:
In essence, a proposed monument allows the government to hold private property hostage, regardless of heritage value, eventually forcing private sector participation in the charade that is heritage conservation.
 The Index focuses on three areas: Legal and Political Environment (LP), Physical Property Rights (PPR), and Intellectual Property Rights (IPR) in order to incorporate and grasp the important aspects related to property rights protection.

Hong Kong's Rank
World Rank: 13 Regional Rank: 4
IPRI in Hong Kong rose to its highest level since the index began, indicating an interest in improvement and that more can be done. Judicial Independence rose 0.4 points, making up for declines in the three other variables. Protection of Physical Property and Registering Property both saw modest gains.
The increase in Copyright Piracy was reflected in the improving professional opinions about Hong Kong’s protection of intellectual property. The result is a 0.8 increase in IPR. Germany ties Hong Kong in its World Rank.

Monday, March 21, 2011

Interesting US and UK news in the past few days:

Local Liberty Dollar 'architect' Bernard von NotHaus convicted
The former head of an Evansville-based company that tried to introduce a currency that competed with the U.S. dollar has been found guilty of federal charges in the US.

UK home buyers offered cash splash to enter market
Echoing the housing boom in the run up to the credit crisis, first-home buyers in parts of Britain are offered deposits of as much as 70,000 pounds ($113,000) to help them get on the property ladder. All a little strange considering budget cuts and the recent crisis.

Saturday, March 12, 2011

41.8% of reduction in jobs since 2006 in US due to min wage increases

Political Calculations this week takes a look at the US Federal minimum wage and job losses among those making that and below. They reason that, given the employment figures below:

2006: avg employed members of the civilian labor force: 144,427,000
2010: avg employed members of the civilian labor force: 139,064,000 (5,363,000 less)
...in percentage terms of the change in total employment level from 2006 to 2010, jobs affected by the federal minimum wage hikes of 2007, 2008 and 2009 account for 41.8% of the total reduction in jobs seen since 2006.

Thursday, March 10, 2011

Lion Rock Newsletter


Lion Rock's Newsletter

The budget has been announced on Feb 23. Many members of the Legislative Council were very dissatisfied, as well as Hong Kong Residences. Because of the reaction, an amendment was announced last week. The Lion Rock Institute welcome the Tax Refund, but not the $6000 handout to every adult Hong Konger, even the details has yet been confirmed. This will surely destroy the principle of financial management of Hong Kong Government. Also an awful precedent to Hong Kong, benefit to those who complain the most!

During the protest on Mar 6th. There was a young boy, asking for handout to the children too, in front of the camera. The Lion Rock Institute is very worried that the society has forget about the founding principle of Hong Kong, more to those who work harder (多勞多得). We hope that this young boy, is only an exceptional case in thousands of Hong Kong Children.Link

There's more - click here to read the web version

Monday, March 7, 2011

Healthcare fail...Foot slimming operation for designer shoes...

The strange places healthcare can go wrong.

Lust For Designer Heels Drives Woman To Get Unnecessary Foot-Slimming Operation
At age 20 Hannah Bailey got a painful,$8,000 foot operation paid for by Britain's Ntaional Health Service because she was in excruciating pain — if you count the psychological trauma of not being able to fit into designer shoes as "pain," which no sane person would. The Daily Mail reports that Bailey, who is now 23, recently admitted that she lied to her doctor to get a free operation.

Thursday, March 3, 2011

US v HK


The US House passed emergency short-term legislation which cuts spending by US$4 billion (HK$31.2 billion), which will be followed with another bill to set spending levels through end of the current budget year. Meantime, the Hong Kong Government, on the recent HK$6000 return to perm residents 18+ exceeds the initial HK$24 billion cost projection, and now amounts to HK$40 billion (US5.1 billion).

Hong Kong, no doubt, is in an enviable position. In 2008, Hong Kong's fiscal savings to GDP was over 50 percent, and this year, it's over 70%. Normally, the suggested level is 30 - 50 % GDP, but we're going for teacher's pet. Let's break down all the billions.

Capital Investment Fund  - HK$516.7 billion
Exchange Fund - HK$592.2 billion,
Statutory Bodies - HK$76.6 billion
Loan Fund  - HK$18.5 billion
SFC - HK$6.7 billion
More to be added later - yes - there's still more.

But for all of that, the city still inherits the Fed's fiscal policy, inappropriate for local conditions. The Hong Kong dollar is pegged to the USD which continues to hold less of a likeness to the Hong Kong economy. The weak USD and QE fuels Hong Kong's inflaton and property prices, as does investments coming in from China.

Tsang warned of the tightening of both these leaky faucets when he was defending his previous budget (not the new budget a la populistemode). Although Tsang alluded to protecting residents from inflation by not releasing cash, he made an about turn one week later. Let's see what the fallout will be (not speaking of  the Government's opinion ratings and the changes in society to Government's already weak stance).

Whatever it is, it should not amount to much. The most expansionary budget in years, these handouts will hardly affect Hong Kong's inflation, which as mentioned above, is not based on internal factors. Food prices will continue to go up, other jurisdictions CPIs will continue to trend that way, and a strong yuan and weak USD are the main causes of Hong Kong's inflationary pressure. Estimates are that at least half of the handout will be saved anyway.

Even though economists are saying its nothing more than a drop in the bucket, these handouts are like little drops of poison in the way they are changing residents expectations. More on this later...

Wednesday, March 2, 2011

How do you spend $6000?

People are already talking about how to spend the handout. There's no going back now, handouts have become the norm and will be expected...What can the Gov do now but keep on giving? If the politicians just held out a bit longer, perhaps the public could have got a bit more given how spineless this is looking. The massive redistribution of wealth will be covered later, but you have to be amazed at how quickly this turn around was!

Are they so worried about protests? And, how long will 6K make Hong Kong people happy for, before they start noticing the same problems getting worse? By the looks of today's facebook and twitter posts, people are very happy and have forgotten how ill-conceived this has been from the very beginning.

All focus on happiness on future prospects and spending so far (until the technicalities of dishing out the 6K is met) except for the small group of non-residents who I hear are thinking about staging protests until they get $6K too.
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Some want to take vacations, and already there are some groups dedicated to charity, http://www.facebook.com/home.php#!/home.php?sk=group_193789920643573&notif_t=group_added_to_group 

(LRI wants to add you can also donate it to the Institute - now there's a thought )


Hat Tip - get back up and running

Thanks for those who asked us to keep blogging, and also for the heads up on the integration not showing up, but we are now up and running smoothly. If there was ever a market to rejoice in for having too many choices, it would be the internet. Lion Rock has brought back the infamous blog - with the most read article having been on controversial tobacco taxes - you can also look forward to continued commentary on the state of Hong Kong affairs, the economy, and of course, liberty.

Watch this space...and always feel free to comment.

MPF back tracked

John Tsang just announced the administration will withdraw the plan to inject HK$6000 into MPF accounts. Instead, the Government has decided it will just hand it out to permanent residents aged 18 or above. More on this later...

Also, in what is a vast improvement for families, the Government announced that salaries tax reductions would be up to 75% for the coming year. The Hon Fin Sec Tsang made these announcements after meeting with awmakers this morning. With public support and opinion polls low, legislators had enough weight to threaten voting against the budget unless aspects were changed.