International -- Readers Report
China Needs Less Corruption and More Education (int'l edition)
China's wealth gap will indeed hamper its further development--it's becoming clearer and clearer ("China's wealth gap," Asian Edition Cover Story, May 8). I agree that we are not expecting fast results, although the Chinese government executed a series of favorable policies. The Chinese government should pay more attention to at least two things: eliminating corruption and implementing universal education.
For a long time, a large amount of money, either from the central government or from donors, has been going into local officials' pockets. No capital means no development. If the Chinese government does not take action to eliminate corruption, then whatever policies it adopts to support these areas will be of no use.
Another problem is the low quality of the local people. In many western areas, especially some villages, almost nobody accepted education. They view education as useless, and they cannot afford the expenses. As a result, poverty is inevitable. Under those circumstances, carrying out universal education should be the first step.
In short, if China wants to develop quickly, balancing the gap between eastern and western areas, eliminating corruption and establishing universal education are the most important goals.
BeijingReturn to top
Japanese Business Has Really Turned the Corner (int'l edition)
Many Japanese now feel that the decade-long stagnation has finally hit bottom ("Don't look now, but a new Japan is taking shape," Economic Viewpoint, May 29). Japan will soon start showing the positive signs of recovery, owing to intensive restructuring measures taken by business leaders.
Faced with a malfunctioning system, these leaders rethought the traditional Japanese system and decided to shift to the globally accepted basics, such as slimming down the work force, emphasizing return on investment rather than market share, and forming strategic alliances instead of keiretsu networks.
Helped by the new strategy, the private sector has gained impetus and vigor lately. But to our regret, in the government sector, the pace of deregulation and restructuring is dragging, facing tough resistance from the bureaucracy. There are still quite a few loss-making public corporations (Tokushu Hoojin) financed by taxpayers' money and postal savings that have been left intact.
I am hopeful that deregulation and administrative reform will be implemented that keeps pace with the private-sector reforms.
Nishinomiya, JapanReturn to top
A Hong Kong Exchange Fires Back (int'l edition)
I was disappointed with "This bourse knows how to bend rules" (Finance, May 29). There are many who support Growth Enterprise Market (GEM) and what we are doing. Why not report about that?
On the issue of waivers, the guidelines issued by the Securities and Futures Commission (SFC) and ourselves (that means they're endorsed by the SFC) in effect changed the rules to the Waiver Level. The waivers were an earlier move to retain good companies. These guideline levels are actually more stringent than those for Nasdaq. Singapore, for example, is much more flexible in such rules. Besides, we need to be competitive, otherwise Nasdaq would take all the good companies.
GEM follows a disclosure-based regime. Investors should invest with their eyes open. This philosophy is what most jurisdictions are moving towards. We will punish misrepresentation severely. Even so, the waiver issues are not regulatory issues: They are marketing issues. That's why Nasdaq does not bother to have any restrictions on these issues--such as a lock-up period, share option schemes, or track record. All they need is proper disclosure.
You also did not mention how decisions are made at our Listing Committee. It is composed of 23 people of good standing from the legal, accounting, investment banking, and business communities. We deliberate on all issues long and hard. Saying we don't know about regulatory integrity is an insult. Most of us take up this duty as a community service: We are not paid. Our mission is to build the exchange in the interest of the investing public and the greater interest of Hong Kong.
Your last paragraph is particularly insulting. I never wanted the job. I had turned it down for five years because I felt there was not a sufficient number of candidates to list. But with the technology boost and the mushrooming of private China enterprises, I thought Hong Kong would have a role to play in becoming the premier capital-formation center for the greater China region.
Chairman, Listing Committee
Growth Enterprise Market
Hong KongReturn to top