Unforeseen Consequences

There is a Law of Unforeseen Consequences and one of our universities had better start to teach a course in it soon.

Some of our Ministers could certainly benefit from studying the subject, and the sooner the better.

It has always been the case that no person or institution, however worthy or careful, can be expected to anticipate the full effect of every decision made or action taken.

Nor does the underlying motive seem to count for much. A charitable or other worthy act is just as likely to go off course as a bank robbery or kidnapping.

Case studies are all the rage so in preparation for the new MBA let us take as a prime example of the genre the recent efforts to control (read "stop") what is now known as parallel goods trading.

Everyone involved seems to have lost sight of what the actual problem was (or is) so that the various measures now being introduced or amended are actually addressing deficiencies in earlier decisions rather than the root cause, with the result that the collateral damage to innocent parties has become greater than the effectiveness against the original situation.

The basic problem concerned infant formula milk powder. Some people were buying up lots of it from shops in Sheung Shui (closest train stop to the border) then carrying it in to Shenzhen for resale at a profit.

The consequences were a distorted market (hence higher prices) for those products in Sheung Shui stores, and in extreme cases even unavailability to local mothers wishing to feed their babies. A side effect also was the disturbance to train passengers of persons carrying large quantities of goods with them.

If the surge in demand for quality milk powder is mainly north of the border, then the obvious thing to do is for the companies concerned to deliver it directly to that market. If that is not practicable or effective (because of the possibility of counterfeit products being sold in genuine or genuine-looking tins. Admittedly the mainland does not have a good track record in this area) then the sale point in Hong Kong should be as close as possible to the border.

What we need is a giant milk powder warehouse immediately adjacent to Lo Wu Station.

That would immediately eliminate the problem of disturbance to rail passengers because the couriers, whether mainlanders or locals, would just walk back and forth across the bridge all day.

Removing extraneous demand from Sheung Shui would enable the local market to revert to the former equilibrium.

Instead of this common sense arrangement we have a plethora of controls which are causing havoc, and more are being mooted.

Controlling purchases within, and train boarding at, Sheung Shui simply pushed the problem out to other stops along the line.

Introducing controls on size and /or weight of luggage has caused disruption to bona fide cross-border travellers and even ordinary messengers within Hong Kong.

When the issue first came into the public arena, it was presented as wicked outsiders coming to our city to misbehave. In fact, legitimate trading is what Hong Kong is famous for and is acceptable – even welcome – behaviour. Every day thousands of business people arrive at our airport for precisely that purpose. We even have a statutory body called the Trade Development Council to encourage them to come. Why are we suddenly saying this is illegal?

Moreover it turns out that the majority of the traders are local residents making an honest buck.

We set out to stop outsiders raiding out stocks of an important commodity. We ended up treating honest people as criminals and obstructing local messengers from going about their lawful business.

That’s what happens when you treat the symptoms rather than the disease.