Our next leader can reset the course of HK's growth
I recently read a report titled 'How to become a World City'. It was produced by HK Golden 50, one of Hong Kong's many think tanks, founded by a retired well-known fund manager who specialised in property analysis. The group believes that the best 50 years of Hong Kong's history lie ahead, provided our leaders make the right decisions now. With chief executive-elect Leung Chun-ying preparing to launch his administration, it makes particularly interesting reading.
The report starts by suggesting that Hong Kong is underachieving. Our average per capita income has lagged behind New York City's and London's. And this is not simply a reflection of the wealth gap; the authors show that those two cities' Gini coefficients, measuring wealth distribution, are similar to ours.
Singapore's nominal per capita gross domestic product grew an amazing 87per cent from 2000 to 2010, compared with Hong Kong's 25per cent. A lot of that is due to foreign exchange rates, but the researchers believe that immigration policy has also made a big difference. Singapore has attracted newcomers equivalent to 15per cent of its 2004 population, 75per cent of them young and college-educated. Hong Kong, at the same time, took in a roughly similar number - but mainly from the mainland, and only 7.9per cent of those of working age have post-secondary education.
This is a sensitive subject. Many of our immigrants come here to be reunited with families, and it is offensive to discuss their 'quality' as if they are livestock. It also raises the subject of race. Singapore is racially more mixed than Hong Kong, while many people here, according to a recent local survey, have shockingly racist attitudes towards South and Southeast Asians - who comprise much of Singapore's new talent.
The new chief executive needs to provide leadership on this issue. If we are to remain competitive, what sort of people, if any, do we need to attract and where should they come from? There will not be a consensus, but it must be possible to define what is in our overall interests; the report urges opening the door to more diverse sources of talent.
Such talent must want to come. It is a cliche to say that Hong Kong gets the infrastructure and institutions right but has not worked hard enough on its lifestyle software. This covers things like air pollution, availability of international education, shortfalls in medical capacity and the promotion of cosmopolitan arts and culture scenes. In this last area, we do quite well, but the others are real problems.
Again, the chief executive must stick his neck out and argue for change. We could have a much nicer city to live in if we spent money on it. The money is there - Leung is lucky to take over a government with very large reserves - but not everyone agrees it should be spent on things that traditionally were not necessities to business. He must insist that, today, clean air and plentiful medical services are as important as roads and bridges and rule of law.
Of all the areas examined by HK Golden 50, perhaps the most important is physical space. Fortunately, Leung's career involves this subject, and he is aware of the problems that our current land system can produce.
The report argues powerfully for measures to make residential and commercial accommodation cheaper to rent. It says this is not only necessary to attract and keep regional headquarters in Hong Kong, but for the whole economy. The report criticises 'insufficient space for shops, offices, hotels, homes ... long queues for housing and hospitals' and adds that, 'From multinationals to mom-and-pop shops, the lack of office and retail space is ... even forcing the closure of successful businesses and deters start-ups and entrepreneurship'.
Again, it is a cliche to say that government land, zoning, lease-price and other policies that keep space pricey or scarce are self-defeating. But it is true: they damage the economy and, indeed, society. Yet previous administrations have stuck with the old ways.
Over to C.Y. Leung.
Bernard Chan is a former member of the executive and legislative councils