CJAH Blog – for the week ending 10 July 2009

You would think that this would be a quiet time as in most years yet to my surprise it has proved to be full of different things.  The subjects that have struck me most have been a couple of briefings which members have given recently. The first of given by James Pearson of Black Swan gave an uncannily clear briefing on the global economic forces that are reaching us even here in Hong Kong.  I have to say that I found the well argued conclusions that he came to troubling. Whilst undoubtedly Government actions have begun to take effect globally in correcting some of the worst issues the tidal wave of new money be it from stimulus programmes or from the so called qualitative easing the impact will be the decline in the value of savings held in cash in banks at a time when interest rates were virtually zero. This coupled with the rise in the rate of global inflation over the coming years would produce challenges for all those who were approaching the end of their working lives.  ‘Hmm’ food for thought for many of us myself included!

The other briefing which Tim Peirson-Smith of Executive Counsel gave on the “Ten Mega Projects” which the Hong Kong Government announced in the Chief Executive’s Policy Address in 2008 and which will add up to a hefty HK$ 230 Billion in the seven projects, already costed. Looking ahead the Hong Kong Government assumption is that between 2010 and 2015 capital spending will rise from its annual prediction though rarely achieved of HK$29 Billion to HK$50 Billion.  This presents some really stiff challenges not only for government in getting the programme into action but also for the industry on marshalling the resources particularly the qualified and unqualified manpower to make it happen. The main conclusion to draw from all of this new work which comes after a period of relative inactivity is that there really is a need for us to have a long term vision of where Hong Kong is going as with all of this work which is entering the programme there is still much that needs to be done if Hong Kong is to retain its relevance in the new China.  Almost as important is the fact that we need not only in Hong Kong but also in the UK to enhance the image of construction to entice young graduates to enter the industry. The other interesting thing is that this was not introduced as a stimulus package whoever the CE got his timing right!

Finally I daresay that like me in spite of the heat you like me will be luxuriating in the clean air that comes at this time of the year when we feel the impact of the maritime winds that blow up here from the South West and clear away the pollution. The debate continues and I daresay will quicken as the Copenhagen conference comes closer.  The only point that I would make is that none of us stand to gain unless all governments come to an agreement that we cannot go as we have.  Closer to home the paradox is that a clear Pearl River Delta is a multiplier in terms of attractiveness to international investors not a negative and the same is true for Hong Kong.