Co-operation is not collusion
Chief Executive Tung Chee-hwa's policy address was, for the most part, measured and well thought out. The one glaring surprise, however, was his decision to discuss a matter that he called 'collusion between business and government', saying that the government was resolutely against it, and 'will strictly enforce our monitoring systems to eliminate any transfer of benefits'.
A charitable interpretation is that Mr Tung may have been prompted to comment on this to nip in the bud any controversy surrounding the West Kowloon cultural district, where the government plans to award the project to a single developer. But if so, his comments will backfire. The issue with the West Kowloon hub is not one of 'collusion', but of the most efficient way to provide Hong Kong with badly needed cultural infrastructure. Government inefficiencies deserve to be criticised, but these do not necessarily translate into collusion with the private sector.
By addressing the issue in such a manner, Mr Tung's statement begs the question: is the government admitting to having acted favourably towards certain businesses in Hong Kong? I do not believe it has acted in this way. Yet that is exactly how the remarks have been understood by many of the public. Furthermore, it adds fuel to charges by critics that there exists an unhealthy connection between government and selected tycoons in the city. Their favourite target is Cyberport, citing the award of the project as favouritism and its use of government land as a transfer of benefit. We can debate this. But at its heart, at the time of its conception, Cyberport was an attempt to quickly and most effectively jump-start Hong Kong as a major centre of the internet industry in Asia. As someone who is a businessman as well as a politician, someone whose family has conducted business in our city for many years, I can state with certainty that there is no systemic problem of government-business collusion in Hong Kong. In survey after survey, Hong Kong is considered one of the freest economies in the world. In part, our status is confirmed by the admirable level of transparency and the rule of law that define our city, and which, together, preclude the possibility of any unhealthy connection between business and government.
That said, there is certainly a good deal of co-operation between the private sector and government. But there is an important distinction here. Co-operation within a free-market system is not collusion. The private sector has interests - and certainly, the main one is profit - while the government has others. By co-operating, each side's goal is met: business fulfils its interest in profit, while the government gains for the good of the community with job creation, for example. Co-operation benefits a wide swathe of people; collusion, on the other hand, profits only a cabal of conspirators. A comparison between the lifestyle of the average Hong Kong resident and that of citizens in many parts of Asia should reveal that we enjoy healthy co-operation within a free-market system.
Indeed, if we consider the actual benefits that business enjoys from the government, Hong Kong lags behind many parts of Asia - and many parts of the world.
Many countries provide incentives to foreign investors in the form of tax holidays. We do not.
Instead, we attract foreign businesses and encourage those already here - whether local or foreign - to reinvest, through the imposition of few and low taxes, and by providing a clear lens on how government conducts itself. Businesses find Hong Kong attractive because of all the things that preclude the possibility of any unhealthy collusion that favours one party over another. We thrive because of the level playing field of our business environment.
Mr Tung was ill-advised to speak of collusion - a red herring - in his policy address. It would have been better for him to have concentrated on underlining Hong Kong's determination to maintain its free and fair business environment. This is what we have now, and this is what we will work to preserve.
James Tien Pei-chun is chairman of the Liberal Party
