Hong Kong’s time-honored “positive non-interventionism” in economic administration has been declared “outdated” by Leung Chun-ying, with the chief executive telling Xinhua news agency recently that he wants a more proactive way forward.
“Positive non-interventionism” was first spearheaded by John James Cowperthwaite and Charles Philip Haddon-Cave, two financial secretaries that served the city in succession between 1961 and 1981 during the British colonial era.
Cowperthwaite was of the view that the government should keep its nose out of the market and private businesses, while the word “positive” was added later by Haddon-Cave in the 1970s.
The pair’s self-constraint, quasi-laissez-faire stance was indeed a striking departure from the then prevailing theories about “a big government” as characterized in British economist John Maynard Keynes’ studies.
“Positive non-interventionism” was welcomed by the private sector and has since been hailed as the vital bedrock that ushered in Hong Kong’s freewheeling economic advancement. The philosophy is also favored by the global academia, including Nobel economics laureate Milton Friedman.
After the handover, Beijing gave its nod to the continued adherence to the policy, and many saw it as a part of China’s pledge of no changes for 50 years.
As Deng Xiaoping’s famous quote goes, it doesn’t matter whether a cat is white or black as long as it catches mice. Thus, it’s irrelevant if a policy is “outdated” or not as long as it can still deliver concrete effect if implemented appropriately and pragmatically.
Hongkongers’ common fear of an autocratic government stems from the fear of unpredictable, flippant changes to policies that could erode the business environment.
Leung’s style of work is exactly of that kind.
In his Xinhua interview, Leung also spared a lot of time to talk about issues related to Beijing’s “one belt, one road” strategy. But one can’t help feeling that his words were largely empty talk, when compared to Financial Secretary John Tsang Chun-wah’s remarks during another Xinhua interview prior to Leung’s.
And, what Leung has said specifically may be a far cry from the actual truth. For instance, he noted that “Singapore envies Hong Kong very much for having business magnates like Li Ka-shing”, ignoring the comments of Lee Kuan Yew on Li and other Hong Kong tycoons.
In his memoirs the Lion City’s late founding father noted that he had deep reservations towards those entrepreneurs who capitalize on the realty sector.
Li’s conglomerate was unable to create a single hit product that could be sold worldwide, and his business empire was just built on “following the trends to enter the most profitable sectors rather than foresight or innovation”, it was suggested.
Lee’s remarks on Li can hardly be viewed as a compliment.
The glib-tongued Leung is known for his techniques of sophistry and word games, and now we have another proof.
Leung also talked about the “headquarters economy” in Hong Kong, yet the example he cited was rather whimsical: “Related Hong Kong enterprises can use their experiences gained in operating farms and animal husbandries in the mainland to explore opportunities elsewhere in other countries, and, as long as their head offices are still in Hong Kong, local economy will continue to benefit from the trend to go global”.
Forgive my ignorance, I have racked my brains but still fail to think of any successful farm operator from Hong Kong that is poised to make a foray into the international agricultural market.
As a financial hub, the focus of our efforts should center on the city’s real expertise, like professional services and business and trade connections, but Leung is now encouraging Hong Kong entrepreneurs to expand into agriculture and farming, a sector that the local business sector is unfamiliar with, let alone commanding any real experience or advantage.
If it is the way how Leung wants to be more proactive in economy, then it doesn’t bode well for the city’s prospects.
Outsiders may no longer think that Hong Kong can keep its free and open society intact under a new master, even if the government says that it will continue to maintain minimum intervention.
As Leung still remains vague with his “appropriately proactive approach”, Hongkongers must stay vigilant to monitor what exactly he is after.
Will his administration, with all its wheeling and dealing, grab a leading role in the economy and give less play to the market? If that happens, it will mean a sweeping inversion of Hong Kong’s established system as we know it.
This article is adapted from two columns that appeared in the Hong Kong Economic Journal on August 12 and 20.
Translation by Frank Chen
[Chinese version 中文版 1, 2]
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