Good Evening Bill/WA, <<Could you clarifiy the relationship between Hong Kong and the mainland, re:
1. " By contrast, the mainland has a major presence in Hong Kong with the Bank of China (Hong Kong) being the second largest bank in the territory.">>
The three banks with the largest retail presence in HK are The Hong Kong and Shanghai Banking Corp (“HSBC”) (HK.5 baby.boom.com.hk , and quote.bloomberg.com ), Bank of China Hong Kong (“BoC HK”) HK.2388 baby.boom.com.hk ) , and the Standard & Chartered Bank (UK based). These three banks print and issue the HK currency under regulation from the Hong Kong Monetary Authority (“HKMA”, or sort of HK central bank). For every 7.8 HK$ printed, 1 US$ sits in bank vault or an equivalent digital bits sits on some computer somewhere. Bank of China Hong Kong is part of the Bank of China system worldwide and in China, but is the only branch that is publicly listed. The plan is to have BoC HK eventually buy up the better branches in China (they have done two already) and is thus a way to play the post-WTO China banking frenzy, along with HSBC, which has a mainland RMB banking license and has just bought 10% of a large mainland insurance company.
<<2. "Bilateral trade between Hong Kong and mainland China climbed from HKD501 billion in 1991 to HKD1,228 billion in 2001, while cross-boundary passengers increased by 180% to over 56 million during the same period.">>
The bilateral trade consists of HK’s mainland based factories turning out goodies for the world, and shipping in raw materials for many factories in China. The trade affects service and logistic jobs in HK. The passengers consist of folks working in HK or mainland and living in Mainland or HK, and of tourists. Many Hong Kong folks have second families on the mainland. There are whole towns populated by mistresses and second wives. Ancient Chinese tradition:0)
Message 17791962
"July 25th, 2002
Meantime, across the border, events are becoming more dire, as, I surmise, mistress price is deflating along with the economy on this ex-Money Rock and still-Freedom Mountain ..."
Bottom line, if China does well, Hong Kong has hope, else Hong Kong is toast.
<<3. "As the Hong Kong dollar is freely convertible into other currencies and there is no capital control in Hong Kong,">>
Money Rock HK and Freedom Mountain Kowloon’s government is very small, does little besides keeping public security, property rights, contract law, and public utilities (water, roads, postal, hospital only, as all other services are private, including tunnels, airport, subways and such) in working order.
HK does not charge tax for (are you ready?) capital gains, dividend (Li Kai Shing, richest HK person, has salary of USD 1, and dividends of USD 600 mm), interest, or offshore sourced income (i.e. factory in China, HQ in HK, markets outside of HK). There is a small property tax, and a 15.5% personal income tax on HK-based salary income only above USD 20k per annum.
HK has no capital control and one is free to store one’s capital in most currencies and paper gold at most banks, can convert at anytime to any other traded currencies, and there are no reporting obligations by banks to busy-bodies.
<<Just how independent is Hong Kong from the mainland?>>
HK is quite independent from the mainland, except for defense and foreign policy, practically meaning we cannot recognize Taiwan as an independent country and cannot wage war against the Philippines, and we cannot receive US warships R&R w/o Beijing permission:0)
<<Do you personally still maintain the same "freewheeling" exercise of investing the way "you" want. In short, how has the change affected you, if any?>>
No change whatsoever in way of exercise, so far so good.
<<US$14.00/hr. Must be living like a king, eh?>> depends on the number of hours worked, but yes, he is without a doubt having a ball:
Message 17959989
September 6th, 2002
"(a) spanking new foreign invested workshops equipped with the absolute latest machines turning out goods rated by all as the best and cheapest in their portfolio of globally dispersed factories,
(b) spanking new domestic entrepreneur invested workshops equipped with second-hand equipment turning out goodies of every kind,
(c) local USD multi-millionaire entrepreneurs who started out as factory hands only 10 years ago,
(d) automobiles starting to be exported,
(e) girls in bars who could convert Mormons,
(f) neatly arranged industrial development zones taking in new workers from the countryside,
(g) beautifully built education zones, one aggregating 76 universities, housing 400,000 students, studying science, technology, education, law, and medicine, each paying USD 1,500 tuition per year,
(h) Japanese trading companies staffing up for yet another wave of Japanese plant relocations,
(i) hundreds of thousands of Taiwanese working in Taiwan businesses, eating in Taiwan restaurants, watching Taiwan movies, and studying in Taiwan schools, but near Shanghai,
(j) tens of thousands of Hong Kong folks transplanted permanently to the mainland,
(k) young Americans unwilling to return home after graduation,
(l) ancient city walls and antique houses being renovated,
(m) old factories being cleared from the cities and grass and trees being planted, aiming to cover 20-30% of cities,
(n) viewed plans for three magnetic levitation rail lines, and
(o) I saw in the news that 10 Chinese pharmaceutical companies have lodged legal case against Pfizer to invalidate its patent on Viagra in China, and if PFE does not defend itself or loses, their patent will mean naught in China ...
We randomly talked to one humble peasant standing on a dike ladling manure into the irrigation ditch and asked about his life, and concluded that his is a hard life, but he is looking forward to his grand daughter having a better life.
We did not find the evil empire, at least not in China. Others may have better luck, elsewhere, and later. Americans seem forever destined to try to find things: evil empires, canned mass death, wandering Osama, poppy fields, and Elvis."
Chugs, Jay |
