Hong Kong's four pillars should be foundation for growth
Financial Secretary John Tsang Chun-wah has reminded us that the city's four conventional pillar industries of finance, trade, tourism and professional services remain our economic backbone. He warned against neglecting them while "blindly" pursuing diversification to drive growth. It is not clear why he should be worried, since there is little evidence of much effort to develop other industries. Perhaps he is shaping expectations of the new government ahead of the chief executive's policy address later this month and his own budget.
In any case he has revealed a difference in thinking from that of his old boss, Donald Tsang Yam-kuen. The former chief executive devoted a large part of his 2009 policy address to the recommendation by the Task Force on Economic Challenges that six new pillar industries should form a broader base for growth and help weather economic headwinds. They were education, medical services, testing and certification, innovation and technology, environmental industries and cultural and creative industries. At that time, the global financial crisis was focusing minds on economic strategy.
The financial secretary's remarks, on his official blog, are also at odds with his new boss Leung Chun-ying's line during his election campaign, in which he stressed diversification and developing technology-based industries to enhance the competitiveness and growth of Hong Kong's other industries.
John Tsang said, rightly, that the four conventional pillars still had an edge, and that diversification should not obstruct efforts to consolidate that advantage. However, economists criticised him for displaying a lack of vision, with one saying we had to find new drivers for the economy in the long term.
So far the city has risen to such challenges on its own, for example, when it took the loss of its manufacturing pillar in its stride. However, he and his critics both have a point. There is no question, as the financial secretary said, that a new industry takes a long time to nurture and develop. But we trust the government will provide a positive environment for it, in the spirit of the time-honoured philosophy that the market leads, the government facilitates. Our traditional strengths provide a sound basis for investment in a more services-oriented economy, as Donald Tsang envisaged with his six new pillars.
The rule of law also gives us an edge - key to confidence in the city - that must be safeguarded if it is to broaden its base for growth by becoming a hub for innovation and technology.