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Hong Kong - Beauty yields to the capitalist beast

In the end Hong Kong put its red-blooded capitalist instincts First, but for a long time it looked as if old friendships and the idea that nanny government really knows best might prevail. At issue was the award of licences for the new third generation (3G) mobile telephones. Sale of these has produced windfall gains for European governments, but for months the Hong Kong telecommunications regulator declared that it would run a "beauty contest" under which the government would assess bids and award licences for free, having decided which service suppliers would benefit the community best.

Then in October came the 180-degree turn.

Donald Tsang, Financial secretary, says the move will work three ways: "promoting development of the telecoms market, protecting consumers' interest and ensuring the maximum benefit to the economy." Another factor could be that the government, though sitting on foreign exchange reserves close to $90 billion, is feeling the pinch.

Hong Kong people have taken enthusiastically to mobile phones. There are more per head of population than anywhere except perhaps Nokia's Finland.

So when Hong Kong prepared for the 3G mobiles, which will provide easy links to the internet and e-commerce, it seemed a good opportunity for the government to fill its coffers.

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