Last Thursday, Greek police stormed the Acropolis where protesters had barricaded themselves in to demand unpaid wages. In the United States, unemployment is still high, bank repossessions and home foreclosures have reached record levels, and the government is printing yet more money to try to reverse its economic woes.
Considering what other parts of the world are going through, Hongkongers should have been happy to hear Chief Executive Donald Tsang Yam-kuen report, in his penultimate policy address, that our economy grew by 7.2 per cent and is expected to grow a further 5 to 6 per cent this year. Our unemployment rate, meanwhile, is down to 4.2 per cent, the lowest since January last year. With all the foreign capital storming our gates, Hong Kong remains a place to make money.
And yet, the fact that the world has found Hong Kong to be the ideal place to bet its money is a double-edged sword: the reason the Hang Seng Index is going through the roof is the same reason our property prices are at skyscraper levels.
I hate to burst bubbles but there is only so much a government can do; our fundamental strengths make us vulnerable to market manipulation. The current chief executive - the same man who was gutsy enough to fight off currency speculators while he was financial secretary - is not going to introduce a sequel to his predecessor's disastrous answer to bringing property values down - by providing 85,000 new flats a year. The government-induced crash and burn of the property market turned homeowners' lifetime savings into negative equity; it wasn't exactly the formula for sound leadership.
What the government can do is send signals, and only time can tell whether the signals are effective. In this sense, Tsang is still the man he was in 1997. Then, the government intervention in stock and futures markets sent strong signals for speculators to back off.
Let's for the moment leave aside the debate on whether the new rent-to-buy scheme is better than the suspended Home Ownership Scheme, and look for the signals in Tsang's policy address. We find he has fired a number of flares, beginning with residential land supply. Admitting that the government has played a role in driving up prices by restricting supply, the chief executive is effectively saying that the government can and will correct the problem.