Hong Kong survived the constitutional reform saga last year, moving one firmer step towards universal suffrage, but the polity remains as divided as ever. Critics point to institutional disconnect, soaring distrust in the government and the failure of the administration to secure legislative support for its policies.
The city is embroiled in a vicious cycle where there is no winner. It is increasingly difficult to square the system of 'government by bureaucracy' - inherited from British rule but modified by the ministerial system of political appointment introduced in 2002 - with the reality of growing party politics and political mobilisation.
Functional representation was first introduced by the colonial government and subsequently built into the Basic Law; it has now become a kind of 'original sin' for favouring business and professional elites, and feeds into public suspicions about government-business collusion.
The government is at fault from the outset, because of the democratic deficit. Add in institutional incompatibilities, and the executive-legislative disintegration, and you have the ideal ground for a policy impasse. Political trust is low on all counts, with all governance institutions - except possibly the judiciary - suffering from the cynicism that is growing day by day. Distrust breeds a blame game in politics, which doesn't help solve problems.
Facing worldwide economic fluctuations and the challenge of global competitiveness, the belief in the 'Hong Kong miracle' has largely evaporated. Old social and policy assumptions no longer hold true; instead there is widespread disarray among the public.
Our fragile society, cemented together largely by economic success in the past, is becoming increasingly fragmented. Such a crisis of social cohesion reinforces the crisis of governability.
Hong Kong dreads being marginalised despite its still exemplary achievements in coping well with the recent global financial crisis, securing economic growth, keeping unemployment relatively low, and accumulating enviable levels of fiscal and foreign exchange surplus, much to the envy of its competitors. Hong Kong still ranks alongside New York and London as a global financial centre.
Meanwhile, while people complain about the undue power of property developers, there has been limited discussion about, and the will to act on, restructuring and diversifying Hong Kong's economy.
The administration of Donald Tsang Yam-kuen has responded to some of the community's livelihood concerns, supporting a statutory minimum wage and a competition law, and providing various monetary relief measures over the years. The overall governance performance has been highly rated internationally (for example, according to World Bank indicators). Yet such a performance has not won the government credibility with its people.
Arguably, the problem of political distrust is not unique to Hong Kong, but is a common syndrome that is increasingly troubling governments and politicians alike in many countries, including Japan and Britain. For example, The Economist recently lamented that Britain was so embroiled in corrosive cynicism that 'British distrust for politicians is peculiarly dangerous'.
What makes the Hong Kong case more worrying is not just the general distrust and cynicism, but the deeper structural crisis that comes from a lack of political integration and social cohesion. This continuing erosion of institutional capacity may ultimately make the city ungovernable.
The stability and affluence of the city have for too long rested only on its economy. It is time that our leaders and powers-that-be pay more attention to our politics and society. There seems little likelihood that this and the next administration could turn things around to regain political trust, due to the fundamental constitutional defects, and the lack of a cross-party consensus to pursue a steady political reform agenda.
However, it will surely help if 'society' features more prominently in government policymaking and implementation. Instead of harping on the conventional 'small government, big market' slogan, why not go for 'small government, big society', and tap into the capacity of civil society to fill the widening gap in our system of governance in the absence of political democracy?
This was what former governor Murray MacLehose did in the 1970s through community building.
Anthony Cheung Bing-leung is an executive councillor and founder of SynergyNet, a policy think tank