Leung endorses proactive approach to boosting growth

Leung abandons the 'small government' style of his predecessor on economic development

PUBLISHED : Thursday, 17 January, 2013, 12:00am
UPDATED : Thursday, 17 January, 2013, 8:15am

In a departure from his predecessor's small-government style, Chief Executive Leung Chun-ying said yesterday he had been taking an "appropriately proactive" approach to boosting economic growth.

In his policy address, Leung also vowed to push for greater economic integration with the mainland and disclosed that a government-appointed commission would study removing education and medicine from the six industries named by Donald Tsang Yam-kuen as key areas for development.

"To promote economic development, the government must be appropriately proactive," Leung said, echoing his election platform. "In cases of market failure, the government must take appropriate action to address the problem." In Tsang's seven-year rule, the government stressed a "big market, small government" policy.

Leung said the administration had acted "in a proactive manner" in the past six months, citing the policy of "Hong Kong property for Hong Kong people" to give priority to the needs of local homebuyers over non-locals.

"We must deepen and expand our industries," Leung said.

A government source explained that the administration would "act as a facilitator and enabler in the market", adding that the approach should not affect foreign investors' confidence.

Leung said the soon-to-be-established Economic Development Commission would review whether to keep education and medicine among the industries that the previous government focused on promoting.

"Our medical sector is facing a manpower shortage, and the public is divided as to whether education services should be regarded as an industry. The need to meet local demand also clashes with the need to promote the growth of these two industries," Leung said.

The six "new pillars" Tsang aired in the 2009-10 policy address were education; medical; testing and certification services; environmental industries; innovation and technology; and cultural and creative industries.

To strengthen cross-border economic ties, Leung also proposed setting up an economic and trade office in Wuhan in addition to existing offices in Beijing, Guangdong, Shanghai and Chengdu .

He also said the government was exploring the possibility of liaison offices in other cities.

Delivering on an election promise, the chief executive announced he had reached consensus with the Ministry of Commerce on strengthening the Closer Economic Partnership Arrangement (Cepa) by setting up a joint working group.

The mainland side of the group would be led by the Ministry of Commerce, joined by ministries and municipal governments, while the Hong Kong side would be led by the Trade and Industry Department.

Edward Chow Kwong-fai, deputy chairman of the Business and Professionals Federation of Hong Kong, said the government should intervene in the market when needed.

"Each government needs to protect the interests of the local public. When strong interest in local property from overseas buyers is affecting local buyers, the government has to intervene," Chow said.

He said the Cepa working group was a good idea, but it would not work if it resulted only in empty talk. Chow agreed with the removal of education and medicine from the key industries list. "Many mainlanders already study here while many mainlanders have used local medical facilities. The government should now let the market run and need not promote these sectors any more to overseas markets," he said.

Institute of Certified Public Accountants president Susanna Chiu agreed with the government being "appropriately proactive" in promoting economic development.

But she disagreed with abandoning the promotion of education as an industry, saying the government should continue to attract well-known overseas colleges to set up in Hong Kong.



Dorothy Ho, 35, assistant shipping manager in Sham Shui Po: It would be helpful to set a poverty line, to know who needs help. It is also good to know that more public housing flats will be built and new Home Ownership Scheme flats will be out for pre-sale next year. The government at least is implementing concrete housing polices, unlike the previous one.

Edward So, 50, clerk, Wan Chai: Putting more effort to develop or promote new industries can provide more job opportunities for our youngsters and make our economy more diverse, which is good.

Joe Ng, 50, clerk, Sham Shui Po: To use the land reserved for the My Home Purchase Scheme to build Home Ownership Scheme flats is a good way to provide more, cheaper choices for middle-class people. But we have to wait and see whether the policy of increasing land supply is effective in tackling the high property prices.

Peter Lai, 43, clerk, Wan Chai: It is disappointing that there's no content on how to advance our constitutional development. There's also no immediate help for grass-roots families. Why not give out a one-off cash hand-out?

Yuen Yip-sang, 64, unemployed, Sham Shui Po: It won't help at all. The supply of at least 100,000 public housing flats from 2018 is still not enough. So many people are waiting for the flats. The supply has to be as many as 150,000 to meet the demand.

Serena Law, 40, property agent, Wan Chai: There's no tax rebate. The household income cap for buying a Home Ownership Scheme flat is only HK$40,000. How can we buy a flat, pay tax and raise children all at the same time? The policies cannot help the middle class.

Hui Yiu-wai, 40, teacher, Sham Shui Po: Relaunching the Home Ownership Scheme will help the middle-class but the household income limit is so low. Imagine you have a family of four and you have to pay for food, transport, children's tuition and other things on top of repaying your mortgage. How stressful is that on your family finances?

Fanny Lau, 30, property agent, Wan Chai: If there's free kindergarten education for children, it helps relieve the burden on families with small children. Education is important and it is the responsibility of the government to be willing to spend more money on it.

Jacqueline Choi, 38, textile worker, Sham Shui Po: I don't think a poverty line is needed. Why should we put a label on poor people? It is more effective to provide more education opportunities to the children of poor families for them to climb up the social ladder instead of just giving them money.

Cora Sit, 35, export worker, Wan Chai: I think the household income cap for applying for Home Ownership Scheme flats is acceptable, since if it is higher there will be too many applications and the ones who really needed cheaper housing may not get what they need.