“Why local business vanish (II)” – “If” the pandemic is over, how can local businesses survive?
BeWater(03 May)Please share the latest new case.
Since the pandemic is slowing in Hong Kong recently, the government eases the rules of public gathering. Some industries, such as catering and retails, started to recover their essential operation. However, the economy is quiet, and the world is still in the shadow of the pandemic. Hong Kong’s economy is still stagnant. Many companies are cutting businesses cost by offering no paid leave, paid cut and layoff. Some companies closed down and the situation hasn’t been over yet. In this critical timing, we also need to think about how local business will be after the pandemic.
“The incident of New World First Ferry Services Limited: Alarm in the economy under epidemic.”
At the beginning of this month, Chu Kong Shipping Enterprise (Holding) Co. announced to take over more than 60% shareholding of New World First Ferry Services Limited which is under New World Development. After completion of the acquisition, New World First Ferry Services Limited will become an indirect wholly-owned subsidiary of Chu Kong Shipping Enterprise (Holding) Co. which belongs to Guangdong Province Navigation Group. The government of Guangdong Province directly manages Guangdong Province Navigation Group. In other words, the meaning of this acquisition is to sell the Hong Kong company to Communist Party of China (CCP) Chaebol. CCP has more control in local transportation, and it speeds up CCP capital invading in Hong Kong.
Managing New World First Ferry Services Limited is a “thankless” task because the fare of across the Harbour service is low, the margin is thin, and source of customers is limited. The room for improvement is little. In early 2000, Star Ferry was the primary operator of ferry services. Because of operation difficulties, Star Ferry sold its exclusive franchise to New World First Ferry Services Limited and gave up the market across the Harbour service. At the beginning of 90s, Star Ferry appeared operation difficulties. In the document of provisional Legislative Council Panel on Transport, Star Ferry was a severe loss since 1994. Only two routes in the exclusive franchise made money. Rest of them (13 routes) was loss. And even so, Hong Kong government still granted the four development licenses in the Central Reclamation over the terminal. Star Ferry improved the loss by making a profit in the real estate project. It was not a sustainable solution and was the hidden risk of ferry industry declining.
In the epidemic, people stayed at home and reduced activities. Fragile ferry industry across the Harbour service was suffered again. Anti-epidemic government subsidies were short term solutions by offering fuel subsidies to licensed ferry operators, regular maintenance fee and insurance subsidies. There is no solution to the root cause. New World First Ferry Services Limited has no hope, and they could stop loss by selling the company. “New World First Ferry Services Limited Incident” can be the alarm of the economy under epidemic. Carrier Lam internationally or otherwise to cooperate “mutual destruction”. Local businesses sit and await their fate. CCP chaebol takes advantage of taking over local companies in Hong Kong.
“After pandemic, it is stagnant.”
Many public assets were sold by the government under the concept of “neoliberalism” before the transfer of sovereignty. Under the principle of “Big Market, Small Government”, government detach public asset by deregulation, liberalization and privatization.
Some leading cooperation like Link Real Estate Investment Trust (REIT) and MTR became oligopoly under privatization. They became monopolies, and their powers are even above government like monsters. Even worse, CCP chaebol continues to take over different companies in different ways during privatization. HongKongers have to depend on the CCP Chaebol in daily life gradually.
Besides public utilities, other industries are also recession during the epidemic. CCP Chaebol is targeting local businesses and buy them at a low price. The merging is in a large scale and CCP capital intrudes Hong Kong market. If this situation continues, Hong Kong’s economy and market are difficult to recover after epidemic because CCP cooperation will be holding part of assets (such as New World First Ferry Services Limited). Hongkongers lose the dominance of the local economy. It is hopeless.
After pandemic, it is stagnant. After two round offering of “Anti-epidemic fund”, the government provide limited subsidies in different industries. It is neither a short term solution nor a permanent cure. Government has no intention to help local businesses for development planning after the epidemic. In the storm of international politic conflict, Hong Kong’s economy is full risk in either advancing or retreating. Hongkongers have to stay strong and support local business by our own. It is the only way to confront the recession after a pandemic. The most important is not to let CCP Chaebol take advantage.
“To be continued.”
Source: Chung-Tai Cheng
#ChungTaiCheng #HongKong #ChinaInfluence #China #Economy