A greying Hong Kong must grow more nimble to survive

Carrie Lam says to meet the collective challenge of an ageing population, Hong Kong must pull together to groom a workforce that is not only bigger, but also fitter and more diversified

PUBLISHED : Friday, 25 October, 2013, 2:05am
UPDATED : Friday, 25 October, 2013, 2:05am

Yesterday the Steering Committee on Population Policy started a four-month public engagement exercise to collate views on Hong Kong's population policy. It seeks to bring the city up to date on the population challenges we face, deepen public understanding about the issues involved, and seek community consensus on broad policy strategies to manage the challenges.

The latest projections show that our population will age faster than previously expected. By 2041, almost one in three of Hong Kong's population will be aged 65 or above. Life expectancy at birth will increase to 84.4 years for men and 90.8 years for women.

Our labour force will peak at 3.71 million in 2018 and start to decline. The labour force participation rate will drop from 58.8 per cent last year to 49.5 per cent in 2041.

Our total fertility rate, despite an encouraging uptick from the trough of 0.9 children per woman in 2003 to 1.3 last year, will remain low. Taken together, the higher life expectancy and low birth rate will mean an upward trend in our total dependency ratio, from the current 355 dependent persons for every 1,000 working-age persons to 712 per 1,000 by 2041.

The government is very alive to these demographic challenges. Two reports, released respectively in 2003 and 2012, have highlighted some issues of concern and recommended measures to tackle part of the problem.

I encourage all Hong Kong people to think in terms of real longer-term benefits for this city

This year, the Working Group on Long-Term Fiscal Planning was set up to explore ways to make more comprehensive planning for public finances to cope with a range of challenges, including an ageing population. The Commission on Poverty is looking into how we may improve our retirement protection arrangements, while plans for meeting people's housing needs are set out in the Long-Term Housing Strategy.

For its part, the Steering Committee on Population Policy considers that a sustainable population policy should seek to promote economic and social progress and aim at finding a balance between creation of economic wealth, equal opportunities for all and better quality living. To this end, it proposes five policy strategies.

First, we should expand the labour force by drawing more people into the labour market. Female homemakers and early retirees are among our key target groups. We could also provide more job opportunities for young people, while helping new arrivals from the mainland, persons with disabilities and members of ethnic minorities to join the job market. Gainful employment is also conducive to their social integration.

Second, we should enhance the quality of the labour force by improving education and training and minimising skills mismatch, to ensure our young people have the right skills needed by our economy. We should widen our economic base and encourage businesses to move up the value chain and increase job diversity. We should also revive the promotion of vocational education as an alternative route to a career.

Third, we should align our talent admission regime with our broader economic development strategy, and target specific groups of talent who can facilitate Hong Kong's development in key industries, while taking a more active approach to market Hong Kong as a place of opportunities for global talent. We should also bring home Hong Kong people living or studying abroad or on the mainland. Further, we need to consider a more effective system of hiring foreign workers without jeopardising the interests of local workers.

Fourth, we should foster an environment that supports people's aspirations to form and raise families, though the government should not interfere with their childbearing decisions.

Fifth, we should gear up the community to embrace the positive opportunities of an ageing society, as future generations of the elderly will be better educated, healthier and financially more independent. These include building an age-friendly environment, promoting active ageing and developing the "silver hair" market.

In the consultation document, you will find open-ended questions to facilitate discussion of how these policy directions, if supported, can be put into practice.

Of course, some of these population issues have already attracted some debate. Our stance is clear on three topical issues of public concern.

One, a population cap is undesirable. Hong Kong needs population growth to cope with a rapidly ageing population. This is especially relevant when our annual average population growth, which has been declining steadily since the 1950s, is now at a low level of 0.6 per cent. A population cap would only compound, not resolve, the challenges we face.

Two, the one-way permit scheme should be preserved. The scheme, designed primarily for family reunion, has a firm constitutional basis. When cross-boundary marriages are making up 35 per cent of our locally registered marriages, there is clearly a continued need for an orderly arrival of spouses and children of Hong Kong people for family reunion via the scheme. About 48 per cent of the working-age new arrivals are economically active. With proper training and support services, more of them can provide relief to our tight labour market.

Three, children born to mainland women whose spouses are not Hong Kong permanent residents are not a solution to our demographic challenge. Instead, the birth of some 200,000 such children in Hong Kong prior to the implementation of the "zero delivery quota" policy has presented some transient, multifaceted problems. For example, it has exacerbated the demand for kindergarten and Primary One school places in the northern New Territories. This calls for enhanced planning and preparation in order to ensure that the needs of local residents are being taken care of.

A well-educated, hard-working, flexible and enterprising workforce has always been one of Hong Kong's greatest strengths. But we can only hope to remain ahead of the game if we can nurture our home-grown talent as well as attract the best and the brightest from around the globe. We should strive to be the most sophisticated and efficient platform for the world to do business with the mainland and for Chinese enterprises to be connected with the world.

A less outward-looking or less international Hong Kong will cost us our economic vitality. And only if we remain competitive will we create the financial ability needed to deal with our social challenges. This should form a core consideration of our population policy.

There is no lack of contentious issues in the consultation document. We advocate rational discussion on these issues to seek common ground.

I encourage all Hong Kong people to think in terms of real longer-term benefits for this city, in the interests of our future generations. Public views received will form the basis for the steering committee to formulate an actionable agenda covering short- and long-term measures. Please share with us your thoughts on or before February 23 next year.

Carrie Lam Cheng Yuet-ngor is Hong Kong's chief secretary