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Legislator Holden Chow

2018-09-30
The trade war between US and China seems to escalate, and that raises grave concern among HK people. US President Mr. Donald Trump believes the trade war would end up with all goods to be manufactured in US again, and that’s the way to make America great again. Sounds like a tantalizing outcome, but with due respect, I think this is nothing more than sweet-talk to the Americans.

By imposing tariffs and hence raising cost of Chinese goods, Mr. Trump attempts to undermine the competitiveness of Chinese goods, and manufacturing base will as a result move back to the US. This is purely wishful thinking of the Trump administration.

Ford, one of the US leading car manufacturers, in light of the escalating of trump’s trade war, refused to import its latest model, Focus Active into the US market. Mr. Trump announced that such action would mean the return of Ford’s manufacturing base to US, save their tariffs. However, rather ironic, Ford clarified immediately that they would not manufacture the Focus Active model in US, seems like a slap in the face to Mr. Trump. The latest model has been manufactured in China for quite sometime. Even with tariffs being imposed upon Chinese goods, it still wouldn’t justify the return of manufacturing base to US, the cost is way too high there, jobs will not return to the states. But on the other hand, the Chinese government imposes tariffs on US goods too. Sales of US products in China would be affected.

And let’s not forget the upside of having globalized supply chain, over the past few decades, US products have been produced in China at very competitive cost, meaning that US consumers did enjoy goods at low cost. US consumers do have incentives to spend money on goods at attractive price, US companies are entitled to good profits, which benefits the US economy.

By offering cheap labour, despite the hidden price for China to pay, that is, the harm to the environment, China in return experienced take-off in her economy, and living standard within the country has been raised. US enjoys prosperity too. By and large, this is a win-win situation. Earlier on representatives from General Motor, another car giant, employing over 180000 employees worldwide, also gave a warning that the tariffs would lead to less profits for companies, a smaller General Motors, less investment and less jobs for the US.

No wonder why US economists blast Trump for his lack of basic understanding of international trade.

Notwithstanding that Trump so far has no intention to back down, China does not prefer a tit for tat move when dealing with trade war. China is still finding ways to settle the trade dispute.

As I have repeatedly pointed out, Hong Kong, will certainly be affected by the trade war. Small and medium size companies have grave concerns over their cash-flow management, the HKSAR government should carry out appropriate measures, for instance, facilitating companies in arranging short to medium term loans so that the cash-flow would remain intact, in order to survive the trade war.

Apart from the economy, I wish to discuss a bit on the latest court ruling. The court of final appeal recently ruled that the appeal against sentence over the 13 activists' violent protest on northeastern New territories development was allowed. That poses some controversy in the city. As a member of the legal profession, I ought to clarify some misunderstanding from the public. Criticism is drawn to the ruling that the court is too lenient towards the accused. But according to the news report, Justice Ma in the course of trial, indeed raised doubt as to whether the activists were truly remorseful, and they wrongly believed using violence was appropriate, and hence attempted to condone the violence. Justice Ma also rightly pointed out that with the violence involved in this case, storming the legco building, causing injuries to security guards, the accused should be behind bars for sure. The latest sentencing principle should not be applied to this case on a retrospective basis, but going forward, the new and tougher sentencing principle will be applied to cases involving violent protests. In short, the court does not condone violence, make no mistake about that.

Letter To Hong Kong

                                                               
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