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1. Group seeks to raise internal sales quota

2. Simple lines leave the deflation riddle unsolved

3. Professor's inner vision beats most obstacles

4. Fine wine and smelly cheese the best traps for dengue mosquitoes

5. SAR can finance delta bridge: Leung

1. Group seeks to raise internal sales quota
Eli Lau, The Standard 25 November 2002

A consortium of Cheung Kong (Holdings), New World Development and the Urban Renewal Authority looks set to become the first to offer more than 30 per cent of a development for internal sale following the government's removal of the restriction.

It is expected that the joint venture will be granted official approval this week to increase the number of Queen's Terrace flats reserved for internal sale.

The consortium revealed it had submitted an application to the government for the internal-sale restriction on the Sheung Wan project to be relaxed and would know the result this week.

The 30 per cent ceiling on the number of flats reserved for internal sale was imposed in the early 1990s, in a bid to curb rampant property speculation in the bubble market.

The government lifted the restriction as part of its nine-point package to revive the sluggish property market. Earlier this month, Secretary for Housing, Planning and Lands Michael Suen said the restriction ``was no longer serving the original purpose'' and should be cancelled.

The 1,148-unit Queen's Terrace development, at 1 Queen Street, Sheung Wan, will be the last large-scale residential development launched for sale on Hong Kong Island this year.

The joint-venture said it would announce the sale price as early as this week, and intended to sell the flats at a higher price than adjacent Hollywood Terrace, where flats sold at HK$3,400 to HK$3,500 per square foot.

The Queen's Terrace flats measure around 460 to 880 sq ft each. It is estimated the project could generate HK$2.8 billion if all flats are sold.

Separately, home buyers have snapped up more than 300 flats in the primary property market over the weekend.

This was about the same as the previous weekend, which also saw around 300 new flats bought.

Cheung Kong's Banyan Garden in Sheung Sha Wan recorded the most solid performance with 105 flats sold at an average price of HK$2,700 psf, market sources revealed.

About 50 Aegean Coast units in Tuen Mun, jointly developed by Sun Hung Kai Properties, Henderson Land Development and Luk Hoi Tung Companies, were also sold at around HK$2,400 to HK$2,600 psf.

2. Simple lines leave the deflation riddle unsolved
JAKE VAN DER KAMP, SCMP 23 November 2002

When will it ever end? The latest consumer price index report shows prices still dropping. We have now been in deflation since May 1998; how much further do we have to go?

It is a question that many economists looking at Hong Kong have asked and, as usual for economists, there is very little agreement between them. Why not add to the disagreement? Here we go.

Let us start from the assumption that the biggest governing factor is the currency link to the US dollar. This assumption says that there is open and free trade between the United States and Hong Kong and, if the exchange rate is fixed, then there should not be much difference between them in prices of consumer goods.

If there were, then clever traders would take advantage of the disparity and their arbitrage of these prices would bring inflation rates back into line.

It does not work quite as neatly as that and certainly not as quickly but it must clearly be an influence on prices in Hong Kong and the deflation we are now experiencing is evidence of it.

So let us go back to January 1984, three months after the peg to the US dollar was adopted and assume that prices then were pretty much at the same level in both the US and Hong Kong. We shall thus restate the CPI of each on a basis of January 1984 equals 100. What does the picture look like now?

The first chart shows you the answer. We still have a long way to go, years in fact, before our consumer prices come back in line with those in the US. If this chart tells the story and differences with US inflation are the most important determining factor of Hong Kong consumer prices, then tighten your belts. The end of deflation is not yet in sight.

But we have made one assumption here that needs further questioning.

We have assumed consumer prices were roughly the same in the two economies in January 1984.

Who says they were? We picked that date only because three months after the peg was adopted was a reasonable period to expect it to start settling in.

Let us pick another starting date instead, January 1980 let us say, because it was the start of a decade. This is still an arbitrary choice but then all dates are.

Let us also take into account the fact that the US dollar exchange rate at the end of that month was HK$4.86 and adjust our inflation index when making comparisons with US inflation, something we have not had to do since the peg was adopted.

The second chart shows you where we are relative to the US on this basis, almost back in line again. A few more months should do the trick and then there will be no reason for our prices to fall any longer. Deflation will be history by early next year.

Which of these two is the correct way of looking at the deflation picture? Unfortunately there is no hard and fast answer. This is a simplistic model and all it really tells us is to be careful of forecasts based on such things. We have too many of them.

Email Jake van der Kamp at jakeva@scmp.com.

3. Professor's inner vision beats most obstacles
SOPHIA YOW, SCMP 23 November 2002

Determined: Professor Stevenson Fung Hon-yuen commands the respect of secondary students visiting the University of Hong Kong. Picture by Oliver Tsang

Stevenson Fung Hon-yuen's office at the University of Hong Kong (HKU) is packed with babbling equipment. As a computer reads out e-mails, letters and other documents, the rest is able to report experiment readings - loudly.

Next to his desktop sits a Braille code typewriter. It is a must in preparation for lectures, because the professor of physics, who is blind, relies on the code to tell if he is showing the correct projector slide.

It is also important for him to be on his own for at least 15 minutes before each lecture so that he can go over what he has to say for the next 45 minutes.

But recently, Fung faced a harsh remark. "Over the years the course evaluation has been very good. But last year there was one who said, 'I simply do not like a blind teacher'," he said.

Fung regards this as symptomatic of a change in attitude in the broader community; a regression to times when there was little recognition of the needs and aspirations of the disabled, let alone acceptance of their ability to make a contribution to society as a whole.

He has lost much of his eyesight to retinitus pigmentosa, a disease that gradually destroyed his retina since the age of seven. But it has not prevented him from functioning fully as an academic.

While his condition may require some adjustment on the part of students, he prepares lectures using electronic equipment fitted with audio output and teaches in ways that do not differ very much from sighted lecturers.

Fung is heading a research team at HKU focusing on semi-conductors. His contribution was recognised in 1996 with the award of Doctor of Science from Oxford University, its highest academic degree and the first such award for a blind person.

That was not the first time Fung made history. In 1974 he became the first blind science student at Oxford University, where he went on to obtain his master's and doctorate degrees.

When news of his admission to Oxford reached Hong Kong, policies were pushed through to create more opportunities for the disabled. Integrated education, which enables the visually impaired to study in mainstream schools, was introduced in the second half of the 1970s.

Coming from a poor family, the eldest of 10, and growing up with limited educational opportunities for the blind, Fung has driven himself to success. "It was built in in my personality that if I can't get something, I'll become even more interested. The loss of eyesight affects every aspect in life. I have to do two things. One is to look for technical support as solutions. Two, I have to remain confident," he said.

Indeed, Fung's early experience with formal education at Li Sing Primary School could have crushed anyone weaker. "I fought quite a lot. Academically I did extremely badly. There were 42 people in class, I came 42nd, every year for six years. When I graduated I did not know the 26 letters of the alphabet."

The developing eye disease was behind the poor results. An eye hospital had diagnosed short sightedness. His teachers put his poor performance down to mere laziness. Schoolmates bullied him, provoking fights.

There was a sign of a scientist in the making, however. In Primary Six he scored full marks in a mathematics exam by using a magnifying glass. He scored zero in all other subjects.

A second eye examination declared him legally blind. It was difficult news for a 12-year-old. For the next two years he repeated Primary Six at Ebenezer School for the Blind. "I wasn't that depressed really. I went hiking, cycling. I did basically anything but academic work."

At the end of the second repeat, Fung's interest in science drove him back to his studies. He graduated from Ebenezer at Form Three as first in class.

Form Three was the highest level of education available for the blind. As a top student he was put in an 18-month programme to become a phone operator, the best job for the visually impaired then. His parents were thrilled. Fung was not but he took a job at the Preventive Service (now Hong Kong Customs).

For two years he worked during the day and by night studied his way through the O-level and A-level syllabuses, borrowing from the Royal National Institute for the Blind (RNIB), a library in London. The self-taught student was rewarded with seven As in his O-levels and two Bs in the A-level as a self-taught student.

Knowing he could advance his scientific studies, Fung went to Worcester College for the Blind in the UK, recommended by the RNIB. It was a difficult decision. His meagre savings could support him for only a year. Friends and parents said he was mad.

But he secured the Hong Kong and Shanghai Bank Donovan Bansen Trust in the second year. Upon being accepted by Oxford, he was also granted the university's Open Scholarship.

Teaching and studying were experiments for both parties. The department was proactive. The technical support staff modified equipment to make it work for Fung, such as fixing audio output devices to detectors and making circuits larger so that they could be felt by hand.

A team of volunteers was gathered to read out the textbooks on to cassette tapes and proof-read Fung's essays. Since electronic calculators did not speak at the time, he managed calculations using abacus and a set of conventional mathematics tables. "I had to work three times as hard to attain the same thing. That was when I picked up the habit of drinking coffee," Fung said.

When Fung decided to pursue a master's degree, Oxford staff wrote to Hewlett-Packard asking for technical details of calculators so that they could adapt the equipment for him. A month later, a calculator fitted with audio output arrived via courier, made by HP especially for him.

The time at Oxford was memorable. Fung says disabled but talented students should not hesitate from applying. "It is a top university with a long history of catering for the disabled. In the arts stream they have had disabled students for about 300 years. The culture and attitude are very encouraging and good for the disabled," he says.

Since 1996 Fung has been a member of the Equal Opportunities Commission (EOC). He notes that education opportunities for the disabled have improved greatly since he was a student, but employment prospects remain bleak.

An EOC study in 1999 estimated between 20 and 50 per cent of those with disabilities remained unemployed. Figures from the Census and Statistics Bureau in 2000 showed about half of the 700,000 disabled people in Hong Kong were unable to find work.

"There are few employers willing to hire disabled people. Many visually disabled university graduates cannot find suitable jobs. More needs to be done to raise awareness," Fung said.

4. Fine wine and smelly cheese the best traps for dengue mosquitoes
BOWMAN, Sunday Morning Post 24 November 2002

Hong Kong’s battle to eradicate dengue fever could soon be helped by the discovery of a weak spot in the armour of mosquitoes – their passion for fine food and drink.

An American researcher at the United States Department of Agriculture has found that the breed of mosquitoes responsible for spreading dengue fever, the aedes aegypti, are attracted to blue-vein cheese and full-bodied red wine.

Dr. Dan Kline’s research is being followed up by insect specialists in Australia’s tropical far north, which ahs had recent outbreaks of dengue fever, in the hope that traps using gourmet mosquito snacks can reduce the need for chemical sprays.

Hong Kong’s health authorities say they will look into the US and Australian research, and consider using such traps if they proved effective and cost-efficient.
The link between cheese and dengue-carrying mosquitoes was found when the Americans observed that these insects, along with the anopheles gambiae responsible for spreading malaria in Africa, tended to bite people’s feet and ankles. On a hunch that it was the odour of feet that was attracting them, they put a slice of cheese in a tank of mosquitoes and watched them pounce.

After trying many different varieties, Dr Kline found that the most popular item on the mosquito buffet was blue-vein cheese.

Dr. Scoot Ritchie, a research entomologist at the Tropical Public Health Unit in Queensland, Australia, plans to build on this research and is seeking funding to investigate the taste preferences of dengue-carrying mosquitoes.

He said Dr Kline, a former colleague, had said the mosquitoes were also attracted to rich red wines. “What we’re interested in doing is looking at a variety of different chemicals that could be attractive to the mosquitoes and use these to lure them to a booby trap,” Dr. Ritchie said.

“It’s more a lure-and-ill approach rather than a broadcast approach, but it’s not saying there’s not going to be any room for spraying.”

Dr. Ritchie said it was unlikely that miniature wine bars stocked with cheesy nibbles would be set up to attract biters.

“We would be more likely to find the active ingredient in the cheese and use that rather than the cheese itself. And there’s going to be other things that are attractive to the mosquitoes, so it may be a combination of things that we use,” he said.

“They’ll have some sort of lure, maybe three or four different chemicals, then maybe an insecticide in it or maybe some glue, so they’d get stuck.”

In Hong Kong, where 20 people have contracted dengue fever locally recently, officials said they were open to suggestions.

A spokesman for the Health, Welfare and food Bureau said the most effective way to control mosquitoes was to eliminate potential breeding places, such as blocked drains and other places where water could stagnate.

He said the controlled use of World Health Organisation-recommanded pesticides was the “second lien of defence”.

5. SAR can finance delta bridge: Leung
MAY SIN-MI HON, Sunday Morning Post 24 November 2002

The Hong Kong government will have the resources to finance a proposed bridge linking Macau and Zhuhai if required, Finance Secretary Anthony Leung Kam-chung said yesterday.

Mr. Leung was responding to questions after delivering a speech at a luncheon in Amsterdam hosted by the Netherlands-Hong Kong Society. It was the first stop of his nine-day tour of Europe.

Mr. Leung said the SAR government was keen to pursue the bridge project and a feasibility study was due to be completed by the end of the year.

Chief Executive Tung chee-hwa has said that Premier Zhu rongji’s visit to Hong Kong last week would boost the chances of an early go-ahead for the project.

Although private firms in Hong Kong have expressed an interest, Mr. Leung said the SAR government may still have to fund the project.

“Even if the Hong Kong SAR Government has to finance it, rest assured that we do have the money,” Mr Leung said.

“While we are suffering from a very large fiscal deficit right now, we still have more than $300 billion of fiscal reserves – and they are there to provide the financing for worthy infrastructure projects, just like the bridge.”

Mr Leung was also adamant there was no plan to change the dollar peg.

“One of the reason why the peg remains and people are confident about the Hong Kong dollar is that it has no changed in the last 19 years,” he said.

“Whatever changes we make to it, people will say that since you can change once, you can change twice – and then there will be additional pressures from time to time on the Hong Kong dollar. So we just maintain our position.”

Mr Leung said Hong Kong had a competitive advantage over Shanghai as a financial centre because investors were confident in the SAR’s regulatory and supervisory mechanisms. He said any financial centre needed to have a convertible currency.

Although Hong Kong exported less than 50 per cent of the mainland’s freight, Mr Leung said it handled more in absolute terms as China’s trade grew at a fast pace. He said cross-border cargo flow with the mainland would be speeded up.

He said other areas of cross border co-operation being explored included and alliance with Shenzhen airport, which provides frequent domestic flights; talk to put in place a Closer Economic Partnership Arrangement; allowing Hong Kong banks to conduct business in yuan and allowing mainland residents to invest in Hong Kong’s capital markets.

Mr. Leung’s next stop on his tour is London.