Ordinary Gweilo

It's not big and it's not clever, it's just a Brit in Hong Kong writing (mainly) about Hong Kong

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  • Mad

    Today’s newspapers report a very strange story that is a direct result of what passes for housing policy in Hong Kong.

    The government appears ready to forgo nearly HK$800 million in lost revenue to get out of a controversial subsidised housing project in Hung Hom that the developers could either tear down and replace with a more lucrative development, or refurbish and sell at far higher prices.  The agreement, announced yesterday, appears to give New World Development and its new partner, Sun Hung Kai Properties, the potential for a profit margin as high as 40 per cent, market analysts say

    This is not a one-off.  The government has been left with several housing developments which had been built under the “private sector participation scheme” (PSPS). Although the scheme has been abolished, the government still had to buy the apartments from the developer and find something to do with them.  In this case they decided that the apartments were “too good” to be used for public rental, and that the simplest solution was to sell them back to the developers.

    Just to complete the madness, the developers are planning to pull down the newly-built apartments and replace them with something more upmarket.  Local residents seem to be happy about this, having never wanted “cheap housing” in their neighborhood, and resenting the fact that full harbour views would be available at such a low price.

    (more…)

  • Set a book free today

    I have read about this before, but someone sent me an email (that nearly got deleted as spam) about it, so I thought I’d mention it here. The concept of BookCrossing is that you “set a book free” by giving it to someone or just leaving it around where it might get picked up. Then, in theory, you can track the book as it travels around the world.

    It’s supposed to be a book you enjoyed, so I guess I better dispose of my copy of ‘Kowloon Tong’ by Paul Theroux some other way…

  • Assault with a deadly weapon

    Good stuff from Fumier about umbrellas. He points out that Hong Kong people can be very dangerous with an umbrella in their hand. I propose a new offence of “using an umbrella without due care and attention”, and I think I shall write to the government propoganda office and ask if they would consider making a short (but irritating and patronising) film about correct umbrella usage.

    As Fumier points out, one of the most baffling aspects of this is when it has stopped raining (or when there are just a few drops still falling) and people still insist on putting up their umbrellas. Yesterday I walked past someone doing this whilst walking along a covered walkway, just to prove that you really can never be too careful where water is concerned. Probably the sort of people who take heed of the government’s cold weather warnings and never go out without plenty of warm clothing.

  • It’s party time

    There’s an interesting piece in this week’s Spike magazine about McDonalds, and it mentions childrens birthday parties as one key part of their business model. Having attended no less than two birthday parties in McDonalds this weekend (both in the same branch, as it happens) I feel well qualified to comment on this subject.

    According to Cathy Holcombe (the Spike Business Editor), McDonalds charge HK$12 for each child that attends the party, on top of any food that is ordered. It’s no surprise that the staff are very keen to persuade everyone to order food and drink during the party, and since the host (rather than the guests) pay the bill, they don’t normally find it too difficult to get orders. The parents can throw a party without too much hassle or inconvenience, and even if your guests order fairly extravagantly the bill won’t be excessive. Plus your child gets a whole pile of presents!

    According to Spike, McDonalds hosted more than 17,000 parties in 2002, attended by more than 480,000 people. That’s 27 per party, but (based on my observations) that probably only includes the children, so we may well be talking about over a million people (or more likely, a rather smaller number attending multiple parties!).

    The economics of this are actually quite interesting. Each party lasts for an hour and a half, but the area is cleared in advance and people don’t always leave promptly. If those tables would otherwise be occupied by customers, they could be losing business because each table could be occupied by several groups over a two hour period. However, McDonalds may not lose many customers as a result of the parties because people may take the food elsewhere to eat, or wait for a table to become available. One other factor is that several staff are allocated to look after the guests, taking food orders (of course) and organizing silly games for the kids (but perhaps not a big factor give the wages they pay!).

    Alternatively, McDonalds may be making a long-term investment by holding the parties, and if they succeed in winning over young children then it could pay off handsomely over the longer term. My son certainly enjoyed the party, and was particularly happy to win a variety of small prizes, all heavily branded with McDonalds logos and product names. I think that the company can be fairly confident that he will be back again spending his pocket money and persuading his parents to dine at McDonalds.

  • Elvis Costello link

    Any Elvis Costello fans reading this might want to watch him here performing at the House of Blues in L.A.

  • Now I’m confused!

    This development in Oracle’s battle with PeopleSoft took me rather by surprise. Last year, Peoplesoft agreed to merge with (take over) J D Edwards, and Oracle then launched a hostile bid that seemed to be designed to frustrate this merger. Peoplesoft and JDE managed to re-structure their merger so that it could be completed more quickly and Oracle couldn’t block it.

    Then, rather surprisingly, Oracle raised its bid for Peoplesoft and said that they were still interested in the merged business. However, the offer was still low, and it was also referred to the US Department of Justice for their consideration. It therefore seemed likely to lapse, especially after Peoplesoft and JDE completed their merger.

    Now, however, Oracle has come back with an increased offer that finally seems attractive enough for Peoplesoft’s shareholders to give it serious consideration – if the DOJ and the EU authorities don’t block the deal.

    The board of Peoplesoft may still try to reject Oracle’s advances, but their shareholders could well see things differently. At the time of the original bid, Craig Conway, PeopleSoft’s chief executive, said that there were “no terms” on which he would do a deal with Oracle, which is understandable given his history with Larry Ellison but not something that a CEO of a public company should say. All public companies are owned by the shareholders, and all are theoretically for sale if the price is right. The management may not like it, and the employees may not like it, but it is up to the owners (i.e. the shareholders) to make the decision.

    So what is happening here? Did Ellison really want to buy Peoplesoft all along, and if so then why did he pitch his offer so low? Is he doing this to get rid of a powerful competitor, or does Peoplesoft represent an opportunity for Oracle to grow its business? Or does Ellison expect the bid to be blocked by the DOJ next month and wants to cause more discomfort to Peoplesoft whilst he still has the chance?

  • We are what we eat

    Interesting post over at Madame Shutterfly.

    It’s fairly obvious that the problems with BSE, SARS and Avian Flu, and the concerns about farmed salmon, highlight a more general issue. The conditions in which animals and birds are reared and sold have changed for the worse over time, and the risk to consumers has increased.

    The fundamental problem is the desire for cheap food coupled with the need for companies to make profits. This creates relentless pressure on food producers to cut costs, which leads to animals being reared in small spaces, fed on all sorts of junk, and pumped full of drugs to prevent them getting ill.

    The second problem, I think, is that we now eat much more processed food and have little idea of what ingredients are used. Cheap sausages and pies, for example, contain so-called “meat” that is of very low quality, and all manner of artificial ingredients to try to make them taste OK.

    In Asia we seem to have a third problem – that the ‘industrial’ method of food production exists alongside semi-traditional styles of retailing. It is almost as if people are trying to persuade themselves that buying food in a market makes it more natural or wholesome. In fact, the opposite is true – because the food hasn’t really come direct from a traditional farm at all, and the animals are probably unhealthy – and handling them in a market just increases the risk.

    One thing I find interesting about the move away from traditonal farming methods is that it was partially motivated by concern about possible future food shortages. Thirty years ago it was widely believed that by the end of the century we would have a serious problem caused by the growing population of the planet. As with so many scares, this has proved to be unjustified, and worldwide there are actually far fewer people starving now than 30 years ago. Where it is a problem there are almost always specific local factors (usually corrupt or incompetent governments) rather than lack of land or water or anything more fundamental.

    We need to recognize that we are now wealthier and able to afford to enjoy a higher standard of living, and that part of that includes abandoning some of these notions of ‘cheap food’ and being prepared to pay a bit more for higher quality. In the UK there has been a reaction against intensive farming methods, and it is now much easier to buy higher quality meat, but obviously at a higher price.

    The problem in Hong Kong, unfortunately, is that the choice is often a stark one between cheap food from China or very expensive imported food (often with no guarantees about how it was produced). We need a middle-ground, of higher quality locally-produced food.

  • Tricky

    Here’s a cautionary tale about what can happen when rich businessmen start shuffling the pack.

    Li Ka Shing’s Hutchison Whampoa sold one company it owned (Hutchison Global Crossing) to another company it controls (Vanda) in return for new shares, and then sold the shares at a discount to the market price.

    This caused the share price of Vanda to jump from HK$1.11 to HK$1.52 after the first part of the deal was done, and then fall back to HK$1.05 after the shares were sold at a discount. Hutchison made a profit because the new shares were issued at HK$0.80 and sold at HK$0.90, but what about those investors who thought they were on to a good thing buying Vanda shares between HK$1.11 and HK$1.52?

    Riding on the coat tails of someone like Li Ka Shing is obviously a risky business.

  • No comment

    Fumier points out that Hemlock has now been posting his diary on-line for two years. For some reason, I had imagined that it was longer than that, but I’m not sure why. Like Fumier, I came across Hemlock on IceRed in the days when it was possible to have an intelligent debate there (didn’t happen often, but it wasn’t completely out of the question).

    Fumier describes Hemlock as “the grandfather of Hong Kong blogging”, which I think is slightly misleading. Perhaps he did inspire other people to start blogs, but not me – what I liked about other blogs was the way they linked to each other, which is not something that Hemlock does.

    BWG apparently started in 1998, long before Hemlock, and his site certainly looks more like a blog, but again it has very few links to other blogs.

    One more thing that these two sites have in common is that they don’t follow the standard blogging practice of allowing comments to be posted. I know that this is open to abuse, but it is also an excellent way of connecting up blogs, especially as current and aspiring bloggers post most of the comments (in part because they can advertise their sites) with Ron being one of the most active participants in this sport.

    Fumier says that he is considering dropping comments from his blog, but I think he has been talked out of it. He says he wants to retain an air of mystery, in which case one option is to allow comments but not to respond yourself.

    My biggest problem (he says, finally getting to the point he wanted to make) is that I can’t resist posting comments when I disagree with people. Most recently this has been about the BBC, but I also found time to point out to Simon that he had got it wrong about UN resolution 1441. Unfortunately, people aren’t as grateful as they should be when you point these things out, and some of them even carry on arguing.

    The stupid thing is that I know that the best plan is simply to avoid getting drawn into these debates. The active participants have almost certainly made up their minds already, and sadly there probably aren’t many other people following the discussion. I know from my own experience that the most disheartening thing that can happen is for a post to be ignored completely (no comments, no links, no emails), and so if I really disagree with someone it is probably best to say nothing. Unfortunately, I keep forgetting this and waste my time trying to convince people that the Licence Fee is not a tax or that UN Resolution 1441 didn’t authorize the US to invade Iraq. Stupid boy.

    UPDATE: It seems that this has been read as an attack on other bloggers, when actually it is not intended that way, and shouldn’t be taken too seriously. I think comments are a good thing, I want people to add comments to my blog, I will carry on adding comments to other blogs, and Ron has far more visitors than me. All these things are undoubtedly true. Also, irony doesn’t always work very well in a blog.

  • “It was one of those days you don’t want to happen”

    This is a rather odd story from the UK. An elderly man was apparently unaware that the brother with whom he shared his mobile home had died – until he went into his room and found a skeleton.

    Here is the report from the local paper.