Mainland Chinese Spending Less in Hong Kong

Here is an interesting article in the Wall Street Journal's 5/30/12 issue regarding the slowing China economy and its effect on Hong Kong.

Randy Lynch, Kipling & Clark

The Wall Street Journal

 A Hong Kong Craze Cools
By Te-Ping Chen & Jason Chow

The flood of mainland Chinese shoppers coming to Hong Kong to snap up luxury goods, expensive homes, art and wine is slowing.

Earlier this month, the usual flocks of mainland tourists that fill the city during Golden Week, a Chinese holiday period, were conspicuously smaller.  Likewise, interest in local art auctions and real estate among mainland consumers flagged in the latest quarter.

In recent years, the number of mainland tourists crossing the border to shop and see sights in Hong Kong has ballooned to more than 23 million a year- quadruple the city's population.  They have given rise to blocks of glittering storefronts filled with luxury retailers eager to cater to such visitors.

Shifting economic winds are affecting the trend, though.  Growth on the mainland is easing, credit is getting tighter and more people are worried about the global economy.  Some Chinese tourists, meanwhile, are simply going elsewhere.

Still, it can be a painful shift.  Last week Tiffany & Co., citing softening growth in China, among other factors, said its net sales would grow 7% to 8% this year, down from a previously expected 10%.  The jewelry retailer, which has 19 stores in mainland China and 10 in Hong Kong, said same-store Asian-Pacific sales rose 10% in the year's first three months, compared with 26% during the same period last year.

Overall growth in visits from mainland tourists to Hong Kong has been "decelerating quite sharply" in recent months, says Credit Suisse analyst Gabriel Chan.  The number of Hong Kong-bound mainland Chinese visitors in the first quarter rose 17% from a year earlier, USB says.

It isn't all a reflection of the economy.  Nine years after mainland China first began granting individual visas for mainland Chinese to visit the city, Hong Kong is no longer such an exotic destination.  "Instead of going to Hong Kong to shop four times a year, why not save money and go to Korea or Japan once?" Mr. Chan says.

In Hong Kong's turbocharged real-estate market, where Chinese have increasingly bought up the most expensive properties, their share of sales of new offerings fell to 37% of the market in the first quarter from 38% in last year's fourth quarter, according to Midland Holdings, a real-estate agency.  For sales of previously owned homes, 8.4% of the total in dollar terms were purchases by Chinese mainland buyers, falling from 15.6%.

Tower Power in Tokyo!

source: reuters

We are most excited about the newly-opened Tokyo Skytree, the world's tallest free-standing tower at 634 meters/2092 feet. According to Kenji Hall of Monocle, on a clear day, from the highest observation point inside the structure (451.2 meters above street level) you may actually see the curvature of the earth - quite amazing! Similar to Japan's world class Shinkansen (bullet train) transport system and auto industry, Tokyo Skytree is testimony to the Japanese meticulous attention to quality and precision in every detail. 

Building and planning for the tower took more than seven years under the guiding light of sculptor Kiichi Sumikawa and noteworthy architect Tadao Ando. In order to plan for earthquakes and typhoons, the construction team set up weather balloons to measure wind speeds and used sophisticated computer simulation software. Based on Sumikawa's suggestions, they even borrowed design elements from Japan's 1400 year-old five-tiered wooden pagodas. It looks like the preparations paid off when the magnitude 9 earthquake that struck off Japan's Pacific coast on 3/11/11 caused no damage to the nearly finished tower.

- Randy Lynch, Kipling & Clark

Thailand's Lese-Majeste Laws

Thailand's criminal code includes "lese-majeste" provisions stating that the king shall be enthroned in a position of reverence and worship. No person shall expose the king of any sort of accusation in action. Although many in Thailand feel its "lese-majeste" laws are archaic and anachronistic, the laws are still bring enforced, as evidenced in the following article from The Economist, 5/12/12.

Randy Lynch, Kipling & Clark

The Economist

An inconvenient death

A sad story of bad law, absurd sentences and political expediency

 HIS only crime, allegedly, was to send four text messages to a government official about Thailand’s royal family. But they were deemed by a court to be offensive to the monarchy, and under the country’s strict and oppressive lèse-majesté laws Ampon Tangnoppakul was sentenced, in November, to 20 years in prison. The whole case, and especially the wildly inappropriate sentence, sparked an outcry, both in Thailand and abroad. Mr Ampon, a hitherto blameless and unrevolutionary 61-year-old, became known as “Uncle SMS”. He denied all charges, claiming that he did not even know how to send a text message.

On May 8th Mr Ampon died in a Bangkok prison hospital. He had been unwell, but the exact cause of his death has still to be determined. It has provoked renewed concern over the increasingly harsh application of the lèse-majesté laws, enshrined in Thailand’s criminal code and a newer Computer Crime Act. “Red shirt” activists, supporters of a former prime minister, Thaksin Shinawatra, who was deposed in a coup engineered by royalist generals in 2006, protested and delivered funeral wreaths to the hospital.

 Some red shirts also express growing frustration on this issue with the present government, headed by Mr Thaksin’s younger sister, Yingluck Shinawatra. Red shirts helped her Pheu Thai party to a landslide victory in a general election last July, and were hoping to see the new government tone down, or even repeal, the lèse-majesté laws.

After all, as they see it these laws in the past have been used mainly against Thaksin supporters for partisan political purposes, including to snuff out opposition to the coup against Mr Thaksin. Indeed, before 2006 the lèse-majestélaws were used sparingly. Since then, however, the number of convictions has shot up, and the sentences have got harsher. Critics argue that these laws are not only anachronistic, but also widely abused. Designed to prevent insults against the monarchy, they are now used to curb freedom of speech in general, and to prevent criticism even of the royal bureaucracy and the constitution.

Ms Yingluck, however, has barely objected. She appears to want to appease the royal bureaucracy, embodied in the figure of General Prem Tinsulanonda, the head of the privy council, so as to smooth the way for the return to Thailand of her elder brother by the end of the year. Mr Thaksin has been living in self-imposed exile in order to avoid a prison term for corruption in his homeland. Meanwhile, Mr Ampon has died a lonely death in a prison hospital, and the country’s reputation is tarnished.