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Hong Kong
By Liana Cafolla
Hong Kong’s new Chief Executive, C.Y. Leung, gave his first policy address on January 16, announcing as his priority plans to increase land supply through rezoning and land reclamation to resolve the territory’s critical housing shortage, as well as measures to clean up the environment and counter growing pollution. Leung’s short tenure has been riddled with calls for him to step down following allegations that he lied to the public about illegal building projects at his home. He has been fighting off attempts by the Legislative Council, Hong Kong’s parliament, for an inquiry into alleged serious dereliction of duty. The city’s financial outlook is challenging, according to Financial Secretary John Tsang Chun-wah. The combination of battered economies
in Europe, the continuing poor outlook in the U.S. and Japan and the risk of higher inflation and asset bubbles caused by inflows of “hot money” — capital coming into Hong Kong from investors attracted by the potential
for higher yields — will all affect Hong Kong’s growth in 2013, he said. “Overall, I expect 2013 to be a year full of challenges — we cannot be too optimistic about our growth, and unemployment and inflation are facing
the risk of going up,” said Tsang.
Expectations of improved growth in the Mainland and lower gold
prices were seen as the reasons for a big surge in November in China’s imports of gold from Hong Kong. According to figures from the Census and Statistics Department, Hong Kong exports of gold to the Mainland were up 91 percent in November from the previous month to 90.763 tons of gold. Jewelry retailers said sales during Christmas 2012 were largely positive. “We had a lot of orders for jewelry and large-size diamonds over Christmas,” said Rendy Ng of Bee’s Diamonds, a Hong Kong wholesaler. “We have been very busy since the start of the new year and hope this
will continue.”
Tiancheng International held its first jewelry auction in November 2011 and has held two additional jewelry auctions since then. The house, which also holds artwork and jadeite sales, attracts buyers from both the trade and private, with privates more numerous and most buyers from Asia. Tiancheng aims to carve out a unique niche for itself, based on selling more jewelry by designers, such as Wallace Chan, for which it says it sees growing demand. “We are not trying to compete with other auction houses. We are a young company and we have a direction of trying to introduce more high-end jadeite and diamonds to the market,” said Ellen Sin, jewelry department head. Diamonds and colored stones are an important part of the sales, Sin said. “In the most recent sale, we sold a 41.40-carat yellowish brown emerald-cut diamond. We have a clientele for that.” Colored diamonds are becoming more popular with Chinese buyers. “Before, they only bought white diamonds, but now they tend to buy
more colored diamonds — yellow, pink and other colors besides white,” noted Sin. Tiancheng’s next jewelry sale will be held in May.
Territorial tensions between Japan and China continued to escalate
over the East China Sea islands known as the Diaoyu in China and the Senkakus in Japan. Both countries have new leaders, following this year’s once-in-a-decade leadership change in China and recent elections in Japan. Neither leader — both of whom are seen as more hard-line than their predecessors — shows any sign of wanting to play down this dispute,
with both sides sending aircraft to the islands to monitor the other
side’s activities. Japan’s Prime Minister Shinzo Abe started the new year off in a controversial manner by singing the national anthem, which is seen as a symbol of the country’s imperialistic and military past. He reiterated his country’s declaration of ownership over the islands. China sent two
J-10 fighter jets to the area to monitor the activities of Japanese military planes and Japan sent two F-15 fighter jets plus a surveillance aircraft to monitor the movements of a Chinese cargo aircraft. “Regarding Senkaku, there is no change to my position to resolutely protect this water and territory. There is no room for negotiation on this,” said Abe, as reported in the South China Morning Post. A spokesman from China’s Ministry of National Defence said Japan was to blame for rising tensions. “Aircraft from Japan’s Self-Defence Forces have intensified their surveillance activities against China, and expanded the area of their scope, disturbing the normal patrols and training of Chinese civilian and military aircraft. This is the root cause of maritime and airspace security problems facing the two countries,” the spokesman said. The ongoing dispute, now in its fifth month, has damaged the relationship between China and Japan and had a devastating impact on trade between them. Japan’s biggest carmakers reported heavy losses in China in 2012 as a result. Nissan’s sales in China fell 5.3 percent in 2012, Toyota sales declined 4.9 percent and Honda’s sales were down 3.1 percent.Article from the Rapaport Magazine - February 2013. To subscribe click here.
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