In an interview earlier this month with Xinhua news agency, Leung Chun-ying said the Hong Kong government must shed its “positive non-interventionism” stance on economic matters and move to “an appropriately proactive approach”.
With a more hands-on role in big business decisions, the government can help Hong Kong serve as a “super-connector” when opportunities from the “one belt, one road” national strategy present themselves, Leung said.
As things stand, implementing the strategy appears to have become a pivotal task for the chief executive, who had pledged to put economy and livelihood issues on the top of his policy agenda.
Financial Secretary John Tsang Chun-wah also had a similar interview with Xinhua three weeks ahead of Leung’s. Now, in a bid to demonstrate Beijing’s support, forums loyal to the chief executive have been stressing that the Xinhua article about the Leung interview was almost twice in length compared to the Tsang interview.
What Leung and Tsang have said in their respective interviews invite some interesting comparison: Leung merely repeated Hong Kong’s role as a super-connector, a term that he contrived in his election manifesto, adding that he would consider setting up a designated task force to align Hong Kong with the strategy.
Tsang, meanwhile, noted that with its expertise in finance, trade, professional services and tourism, Hong Kong can serve as a fundraising platform for countries along the “one belt, one road”, as well as a capital management center for the Asian Infrastructure Investment Bank.
If the Xinhua interviews were indeed Beijing’s test for Leung and Tsang, readers can have their fair judgment about who has done better in the economic policy quiz.
Leung is not an expert in economy, and it won’t be some fatal shortcoming as long as he can admit this, give full play to other capable cabinet members and stick to the principle of meritocracy rather than allegiance or his own political benefits.
He should avoid the temptation to tweak economic policies with political intent, or substitute concrete actions with empty talk (like establishing some designated task forces).
Now, from what Leung has said in the interview, we have reasons to be worried.
Sure, it’s politically correct to declare that “positive non-interventionism”, a governance philosophy first put forth by Charles Philip Haddon-Cave, Financial Secretary of the colonial authorities from 1971 to 1981, must now be abandoned.
But, hasn’t Leung already made such a statement three years ago during his election campaign? Is he hinting that someone else has been holding him back from a more “proactive” role in economic affairs over these years?
His predecessor Donald Tsang Yam-kuen already made a shift in words as early as 2006 when he replaced “positive non-interventionism” with a new slogan “big market, small government”.
Indeed, all the territory’s financial chiefs since the handover, from Donald Tsang, Antony Leung Kam-chung and Henry Tang Ying-yen to the incumbent John Tsang, all chose to avoid stating “positive non-interventionism” in public but the fact is that they have all upheld the essence of it, which is, financial prudence to avoid structural deficit.
The real stress of Leung’s shift is this: “… an appropriately proactive approach to seek changes while reserving stability”, something that he first announced in his official blog two months after taking office.
At that time, Leung said his administration would “put in place measures one after another once they are ready”.
In the 2013 Policy Address, he gave his own definition as to what “an appropriately proactive approach” is: the government should refrain from intervention when the market is functioning efficiently, except to ensure a level playing field, but in cases of market failure, the government must take appropriate action to address the problem.
Then he gave examples of his “appropriately proactive governance” in economic affairs.
To address the housing shortage, Leung’s administration introduced and implemented the policy of “Hong Kong property for Hong Kong people” to give priority to the needs of local home buyers over non-local residents.
The government has also introduced the buyer’s stamp duty and, through administrative means, disallowed hospital delivery bookings for expectant mainland mothers with no ties to Hong Kong.
I will not discuss whether disallowing delivery bookings for non-local mothers fall in the category of economic affairs, but it’s plain that the “Hong Kong property for Hong Kong people” policy was rolled out on the spur of the moment. Before long, it was shelved indefinitely without any review or discussion, just as the way it was conceived.
Neither do I see any difference in Leung’s buyer’s stamp duty (and more subsequent speculation-busting measures as well) from similar polices in the colonial times, and as always, these measures have largely failed to deliver any solid results.
Such “appropriately proactive governance” is perhaps nothing more than lip service or hollow political motto as there is no consistent and objective criteria to gauge the appropriateness and proactiveness of Leung’s governance.
Looking back at how Leung has performed in the past three years, I can hardly find any convincing model of his “appropriately proactive governance”, but opposite cases are not hard to find: Leung broke established policies and refused to grant a free-to-air license to Hong Kong Television Network with rhetoric like avoiding over-competition.
The government also chose to stay safe by sticking to rules as seen in its rigid handling of the recent Uber controversies.
So, is John Tsang a major roadblock when Leung aims to be more proactive?
Judging from the Xinhua interview, apparently Leung believes so.
Think about Leung’s failed proposal of a deputy financial secretary, the fact that the Financial Services Development Council he established plays nothing more than a consultancy role, and Leung loyalists’ siege of Tsang’s conservative fiscal stance — all these events support the speculation that Leung is unhappy with Tsang.
It’s possible that Leung may seek to kick Tsang out or at least cripple his power to reduce him to nothing more than a mere figurehead.
If it is indeed the case, then a more proactive Leung may mean bad news, or even disaster, for Hong Kong’s economic well-being.
This article appeared in the Hong Kong Economic Journal on August 19.
Translation by Frank Chen
[Chinese version 中文版]
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