Every year or so a bunch of Hong Kong loonies patriots get in a boat, sail out to the disputed Diaoyu islands, get seen off by the Japanese Coast Guard and come back to a "heroes' welcome". Warning, hyperbole ahead:

Hong Kong activists, who survived a clash with Japanese Coast Guard vessels last week in their bid to reclaim sovereignty over the disputed Diaoyu islands, are to petition Beijing to demand that legal action be taken against Tokyo for "attacking a Chinese boat in Chinese waters."

"The Japanese actually tried to murder us while we were on the high seas," said David Ko Wah-bing, a member of the protest crew who returned to the SAR Monday to a heroes' welcome after their unsuccessful mission. "This is the first time I've actually experienced someone trying to take my life."

Besides initiating legal action, the activists said Beijing must demand an apology from Japan.

The Action Committee for Defending the Diaoyu islands declared the expedition an "absolute success." Although the activists were unable to plant a flag on the islands, committee member Ku Kwai-yiu said they had nevertheless made the relevant governments take note of the issue.

Lawmaker Leung Kwok-hung accused the Taiwanese government of "playing dirty tricks."

Leung, along with five Chinese American citizens and a Taiwanese legislator, had hoped to join the protest vessel from Taiwan, but the Bao Diao II was denied permission to enter Taiwanese waters.

On a completely different note, we're also told that large parts of Hong Kong could one day be submerged thanks to global warming. Has anyone noticed a downward trend in harbour-front property to reflect this? And the British report hasn't reckoned on Hong Kong's solution to any water problem: just reclaim it. If there's no harbour, nothing can get submerged and the government has a whole chunk of new property to sell. Thank you, global warming.

I for one was pleased to see the release of Sir Nicholas Stern's report on global warming and greenhouse gas emissions. I have been a convert to the concept of the linkage between greenhouse gas emissions and global warming for some time, but I would like to pose a question to those head-in-the-sand, in-denial ostriches who are not (in spite of overwhelming evidence to the contrary, and an unprecedented, almost complete consensus in the scientific community).

Do you buy insurance? If you buy fire insurance, what do you think the chances are of a catastrophic fire destroying your home? To make my point more specific, even if you think that it is not a cast-iron certainty that we will end up having to give up 20% of our present GDP per year due to climate change, at what percentage of risk are you willing to pay out say 1% per year in environmental damage control 'premiums'? Particularly when every scientist that isn't a crackpot is willing to say that climate change is happening, and that the repercussions are likely to be completely disastrous. Even if you only think there is a 10% chance of disastrous climate change, it would be completely rational for you to support staving off potential environmental apocalypse.

Especially when every indicator points to that percentage being well over 50%. This is not a bet any insurance company would be willing to take on. Will you still sniff at the writing on the wall and say it's not happening?

It seems that in this hour of fear, when the last remaining Marxist-Leninist autocracy has gotten the bomb, that we may want to revisit the history books to see the justifications the last time such a state exploded one. This link I found illuminating and puts the geopolitics against America into perspective.

I think of course there are differences between China and North Korea in their motivations for getting the bomb - but perhaps what has changed more in the last 42 years is the United States. From a country that grimly accepted the possibility of apocalyptic nuclear disaster during the Cold War, the US would certainly not entertain any such cataclysm being a potential scenario resulting from escalation with North Korea, probably not even if it did not take place in its own country.

Does the phrase 'paper tiger', written by a Maoist hand in 1964 with reference to the deterrent power of the US nuclear arsenal still have relevance today, when North Korea is prepared to suffer losses of its people and the US is not? I wonder.

I Can't Believe it's China!

So says the market today, punting up this gargantuan bank (the Industrial and Commercial Bank of China) that was insolvent two years ago. But everything's fixed now, the bad loans are gone thanks to China sticking in state capital and carving out Y85 billion in bad loans.

They now apparently have 'sophisticated' risk controls in place and would never loan money to dodgy companies. This is the new China!

Seriously, I know the prospectus has all the ifs and buts, but these things should come with cigarrette package health warnings...but hey, if you're in the shares, enjoy, and good luck.

My apologies for not filling in for Simon of late, I too have been travelling a fair bit.

I am in fact just back from Thailand, and where I found people in great spirits despite (or more correctly, because of) the military coup. As I was departing on Thai Airways at the new Suvarnabhumi (pronounced Sue-wanna-poom) Airport, (the cab ride to Sukhumvit area should be under Bt 300)I found myself sitting next to a large rabble of mainland tourists. I found myself frequently embarrassed by the behavior of these johnny-come-lately Ugly Americans in one of the most hospitable foreign countries in the world - the less said about specifics the better. I did note though that all of them were wearing stickers that had the initials 'C.I.Q.'. Might this be a bit of Thai humor?

Eschewing more uncharitable acronym explanations, my money was on "Curious Inability to Queue'...

I'll be travelling the next two weeks so site updates from me are likely to be infrequent. With some luck my co-bloggers may chime in...otherwise send me an email if you'd like to have a go blogging in this space.

For some reason the great and good feel they need to be able to summarise Hong Kong's economic model in a trite, meaningless phrase. "Positive non-internventionism", "Big market, small government", "Laissez faire", "Hong Kong Disneyland". Hong Kong's economic model is, in reality, a mixture of low direct taxation combined with a set of cartels that collude with the government, a reasonably well-established and free court system (as least as it applies to commerce) and a currency board with fiscal reserves that works because the city is still basically a trading centre who's commerce is largely denominated in US dollars.

But now I'm really getting confused. The other day a geography professor was annoyed at a Nobel prize winning economist's views on why Hong Kong has been so successful. Yesterday a Chinese Communist was telling off Victor Sit (the geography professor) and the Hong Kong government for being too interventionist and not laissez-faire enough:

A senior economist and bureaucrat in Beijing has penned a blistering condemnation of the Hong Kong government in a local Chinese-language newspaper, denouncing the administration for inserting itself into the free market and relying too heavily on the mainland for economic handouts since the 1997 Asian financial crisis.
"Relations between the Hong Kong government and central authorities are not based on market principles, but more upon the desire for greater interests and handouts," wrote Yi Xianrong, a director at the Institute of Finance and Banking of the high-level Chinese Academy of Social Sciences...he called on Hong Kong to hold on to its laissez-faire principles in the process, arguing that those principles had served as a guiding example for the mainland's own dramatic liberalization and development over the past three decades.

It's not easy being a Hong Kong newspaper or a pundit says Michael DeGolyer, managing to fill a page in The Standard with why he's going nothing to write about. But he's right. Usually the pages of the English language press in this town are an odd assortment of wire stories, local pieces of limited interest but that proves they are "Hong Kong" papers and bits on China that are typically cobbled together from the mainland press and a week or two late, with the occasional geniune piece of reporting or journalism that stands out simply by being geniune.

But yesterday is meant to be the one day of the year the newspapers can devote pages of coverage to The Don's Policy Address, which this year managed to say even less than usual - no mean feat. What's puzzling is this is the last chance for The Don before he runs for re-election next year, which is essentially guaranteed to happen. The beauty of not being a democracy is there was no need to sell-out to the masses with such trifles as a minimum wage law.

But that still leaves one question. While I understand the editors at The Standard were especially busy yesterday, it doesn't mean it is worth duplicating a story on page A4 in the "In Brief" section saying China Southern Airlines may get money from Airbus, only to repeat essentially the same piece in the "In Brief" section on page A8. Still, it fills the space.

In one corner we have Milton Friedman, Nobel prize winner and founder of the Chicago school of economics. On the other, National People's Congress member and geography professor Victor Sit Fung-shuen. What could bring these two together? Donald Tsang's replacing of "positive non-interventionism" with "small government, big market". Friedman responded with an editorial in the WSJ titled Hong Kong Wrong where he laments the end of John Coperthwaite's policy of benign neglect and the rise of a more activist government, even though The Don was simply stating what has been happening in practice for years. In response Professor Sit has told Milton he just doesn't understand the Big Lychee:

Instead of Friedman's vision for Hong Kong as a free-market city on a hill, NPC delegate Victor Sit Fung- shuen said Tuesday, its success requires the opposite approach: a dose of Singapore-style government intervention.

"Even though Mr Friedman has won a Nobel Prize in economics, he has never understood Hong Kong," Sit wrote in a combative letter to the local media...
But Sit said Tsang is right to throw away that philosophy, calling a stronger government hand the only way forward for the development of the high-tech, legal, scientific and financial sectors.

Sit, a local delegate to the NPC in Beijing since 1993, as well as a professor at Hong Kong University's School of Geography, argued that Hong Kong needs to lure more rising stars out of the private sector and into the government, and put them to work drafting innovative policies that will sustain Hong Kong's prosperity...When asked who is qualified to prescribe economic philosophies for Hong Kong, Sit said there are many experts available. "There are quite a lot of names - but not Friedman."

"How many bad ideas can you put together in one place?" asked Work, chief executive of The Lion Rock Institute, a local free-market think-tank. "It's really surprising that anyone from Hong Kong would suggest we throw away the legacy of freedom that built us, and mimic the policies that have created one of the most repressed countries in Asia," he said...[but] Sit may have the ear of the chief executive too. He said he had spoken with Tsang "more than once" about a more proactive government approach. "I think he understands me," Sit said.

Should Professor Sit seriously think Singapore is worth emulating, it would be worth him spending 10 minutes reading the famous Why Singapore is a Pathetic Place by Hemlock, which could now add the FEER banning and repression of dissent during the recent World Bank/IMF meeting. Mind you, that website is probably illegal in Singapore. Pathetic.

The SCMP was busy on the weekend telling the world how Hong Kong was the safest city in the world, based on some UN report that clearly takes into account the influence of having the best organised crime organisations in the world. But curiously today they bury an interesting bit in the News Briefs section:

Seventy-six per cent of Hong Kong firms said they had lost business in the past five years because a competitor had paid a bribe - making the city the worst-affected place for bribery of seven places in a survey of senior businesspeople. The International Attitudes to Corruption Report, conducted by consultancy Control Risks and law firm Simmons and Simmons, was released yesterday.