The two pieces of breaking news in September were the collapse of
Lehman Brothers and the melamine-tainted milk scandal in China.
On September
15, Wall Street bank Lehman Brothers filed for bankruptcy protection. Then Merrill Lynch sought refuge by selling
itself to Bank of America. Subsequently,
insurance giant AIG called for emergency funding from the Federal Reserve Bank
of New York. On September 28,
European bank giant Fortis was partially nationalized. This was followed by
the nationalization of the mortgage lender Bradford & Bingley in Britain
the next day.
These stunning series of global financial turmoil had great
influence on us. Apart from the
“free-fall” in the stock market, thousands of retail investors, many of whom
were ordinary citizens, were at the edge of losing their lifelong savings
through holding the so-called low risk “mini-bonds” issued by Lehman
Brothers. Another event showing the shaky
emotion of Hong Kong citizens was the bank run on September 24 after rumor was
spread via Internet and mobile phone messages about the financial
stability of a local bank.
Some citizens had query on the fundamental philosophy of saving and investment. There was growing
mistrust in banks and insurance companies. Could fund managers or investment banks look after our wealth better than
we did while investment banks like Lehman Brothers could go
bankrupt? How did “wealth managers”
in local banks be ensured to discharge their fiduciary duties when they lived on
commissions from selling “mini-bonds”? What
would people who joined
the bank run do with their lumps of cash? Could anyone say that he was wiser to invest
in “mini-bonds” than the conservatives who put their cash or gold bars in
moon-cake tins in the old days? Should
citizens be forced to invest through Mandatory Provident Fund Schemes? Should our newer generations be allowed to keep
money notes inside cookie tins? What
would be the impacts on the forthcoming Supplementary Healthcare Financing?
On September 11,
Mainland’s Sanlu brand of infant formula was found to be contaminated with
melamine. Chinese babies across the
country developed urinary problems, mainly stones in the urinary tracts after
consuming tainted milk powder. Screening
reviewed over thousands of babies being affected. There were young victims with renal stones
after consuming tainted milk powder for as short as two months. Then, many other brands of milk powder and
products with milk-derived ingredients were detected to contain melamine.
Melamine is an industrial chemical used
for the production of melamine resins. It
was postulated that melamine was added illegally to the milk products so as to
past the quality test for protein content after the milk was diluted with water
to increase profit. In this issue, we
have reports from the Association’s delegates who visited Guangzhou and
Jiangmen to study the conditions and the management of children suffering from renal
stones.
In Hong Kong, the Centre for Food Safety (CFS) was
closely monitoring the situation. Batches
of dairy product samples had been collected for melamine tests throughout the
weeks. Dreadfully, unsatisfactory
samples of dairy products (frozen confections, chocolates, milk beverages,
cakes etc) had been announced one after the other. Apart
from condemning the malpractice in China, this incident was an
illustration of the importance of food hygiene and food safety. Suddenly, a wild thought came across my mind. Would it be advisable for the Food and Health
Bureau to consider providing hygienic and healthy food to the public at minimal
cost with heavy subsidies from the government? Would this better guarantee the quality of food supplied to citizens? Should
public canteens be built to serve guaranteed and nutritious breakfast, lunch,
snacks and dinners to all Hong Kong citizens at perhaps two dollars per meal? No one would then be deprived of the
availability of quality and hygienic food.
Readers might immediately disagree with this suggestion, as foreseeable
harms would much outweigh foreseeable benefits. A large bureaucratic body needs to be created.
There would be high administration costs
for running this specific governing body. The operation costs, together with the subsidy
for food and running
costs, would place heavy burdens on taxpayers. There may also be an increase in wastage by
users due to the perceived minimal cost. Moreover, unfair competition may lead to a
gradual decline in the number of private restaurants. The most essential point is the
fact that the government’s public canteens will still encounter the same
problem of quality control and food safety as before. Hence, the only outcome is to replace free
market by a distorted monopolized market.
Then what do you think about a hospital authority that insists on
looking after nearly all kinds of health problems of the public at minimal
cost? You can read about the thoughts of
Dr. CHOI Kin, Dr. SHEA Tat Ming and Dr. SHIH Tai Cho on this problem from the interviews
in this issue: The 3 Ex.
(Source: HKMA News October 2008)
