June 02, 2005

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Poachers turned gamekeepers

Hong Kong has no competition law. The business scene is dominated by tycoons in cosy cartels with a compliant Government*. With that in mind, today's SCMP:

Christopher Cheng Wai-chee, a clothing and real estate tycoon, has been appointed to head a committee that will review Hong Kong's competition policies.
This is no reflection on Mr Cheng's abilities. But it seems strange to put a tycoon in charge of such a review. Or it would anywhere else but Hong Kong, the tycoon's paradise.

* For proof, try Michael Suen's folding under pressure from property developers in today's SCMP:

Property developers will not face new regulations to prevent them from selling most of their flats through internal sales, the housing chief said yesterday. Michael Suen Ming-yeung told legislators the property market was still vulnerable and "it is essential to let it grow healthily".
The same property market that has doubled since SARS. The only vulnerability is rising interest rates and developers' profits.
While urging legislators to be patient to wait for developers' self-regulation to take effect, he also reminded the public not to make hasty decisions on property purchases. Price lists are often not released before internal sales, depriving potential buyers of key market information.
For example a record price for the Arch penthouse was announced, but it was only discovered later the same buyer got discounts on 3 other apartments purchased in the same development. This smoke and mirrors approach naturally emphasises the high prices and obscures the discounts. That way the developer hopes to set a benchmark price for the development to sell the other apartments.

The Government hasn't seen fit to deal with it.

posted by Simon on 06.02.05 at 10:04 AM in the




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