POLICY ADDRESS
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Chief executive’s policy address 2017

In final policy address, CY Leung touts economic development and warns against Hong Kong independence

Remarks are longest of chief executive’s five-year term and recall past campaign promises while addressing challenges city now faces

PUBLISHED : Wednesday, 18 January, 2017, 10:57am
UPDATED : Thursday, 19 January, 2017, 12:44pm

Hongkongers may have had only modest expectations about Leung Chun-ying’s swansong policy address. Any grand plans the city’s top official might have had for the city were likely abandoned after his surprise U-turn last month announcing he would not seek re-election in March.

Watch: CY Leung’s final policy address

In the end, Leung revisited some of his election promises. Here are some of the most significant moments before, during and after his remarks.


1.57pm – Civic Party opens fire

Civic Party leader Alvin Yeung Ngok-kiu criticises the chief executive for failing to address how is he going to mend the social and political divide that he “caused”.

Yeung’s party colleague Tanya Chan says it is wrong for the government to grant the West Kowloon Cultural District authority “the government-owned development rights of the hotel, office, residential portion” because it means the authority can launch those development projects without Legco oversight and approval.

Civic Party lawmaker Kwok Ka-ki accuses the chief executive of dishonesty.

“Leung lied when he said he delivered on almost all he promised in 2012,” he says. “On health care, housing and the city’s core values, Leung handed us a blank examination paper.”

Kwok says Leung’s successor must not be confined by the chief executive’s governance approach.

1.34pm – A word from the new financial secretary

Financial Secretary Paul Chan Mo-Po says Leung’s address includes measures that take care of different social classes and respond to the demands of different sectors.

“The government’s team and I are doing our utmost in preparing for the budget to be unveiled next month to coordinate and follow up on the measures rolled out in today’s address,” the former development minister says.

Carrie Lam says she and CY Leung are ‘totally different people’ in attempt to distance herself from outgoing chief executive

1.29pm – New chief secretary reacts

Chief Secretary Matthew Cheung Kin-chung says after Leung finishes that the policy address is “substantial and pragmatic”.

“It demonstrates the government’s vision and commitment over a wide spectrum of policy issues,” he says, ticking off retirement protection, climate change, land and housing, as well as youth development.

“It underlines the fact that we are not adopting a caretaker government’s approach,” the former welfare minister adds, referring to the five-plus months remaining in the administration’s term.

1.28pm – Finishing his swansong and longest address

The chief executive finishes his speech to a round of applause from the pro-establishment camp. The camp’s lawmakers stand as he exits the chamber, but the pan-democrats remain seated.

The valedictory nature of his remarks recalls those of his predecessor’s final policy address. Former chief executive Donald Tsang Yam-kuen on October 12, 2011, highlighted the importance of Hongkongers “believing in ourselves”.

“Throughout my years in public service, I have always believed in our people, in their rational and accommodating attitude,” Tsang said some eight months before his term ended in 2012.

“By safeguarding our core values wholeheartedly, we will be able to continue making unique contributions to our country and ensure the lasting success of ‘one country, two systems”. Hong Kong will then go from strength to strength and build a brighter future.”

From milk powder to tear gas: seven highs, lows and unfulfilled promises of Leung Chun-ying’s term so far

In terms of number of paragraphs, Leung’s policy address this year is the longest in his five-year tenure.

The previous record was last year’s address, which consisted of 13 chapters or 261 paragraphs.

Now Leung has read out more than 272 paragraphs.

Leung’s maiden address in 2013 and second address in 2014 were the shortest at 200 and 198 paragraphs, respectively.

1.22pm – Reiterating Hong Kong is part of China

In drawing his remarks to a close, Leung reiterates “we must clearly recognise that Hong Kong is an inalienable part of our country”.

“This is both a legal fact and an internationally recognised political reality, leaving no room whatsoever for Hong Kong to become independent or separate from the motherland in any manner,” he says.

This is both a legal fact and an internationally recognised political reality
CY Leung

While noting Hong Kong enjoys a high degree of autonomy, he stresses that “the autonomy is not absolute or arbitrary. Nor can it take any other form or be exercised to any other degree.”

“Amid international relations of great complexity, it is the obligation of each and every Hongkonger to safeguard our country’s sovereignty, security and territorial integrity,” he adds.

He claims “all commitments in my election manifesto have basically been implemented” and that he will continue making contributions to Hong Kong and the country.

“Hong Kong is my home. With my great affection for and commitment to this place, I shall continue to join hands with all seven million Hongkongers to make contributions to Hong Kong and our country,” he says.

1.20pm – Basic Law extolled

Leung stresses the importance of the Basic Law which, he says, “ensures Hong Kong’s prosperity and stability, and allows us to ride on the dual advantages of “one country” and “two systems” to accomplish new achievements and make further progress in social and economic developments”.

He cites CEPA and Shanghai-Hong Kong Stock Connect, adding that Hong Kong plays the role of a “super connector” and helps the mainland go global and attract foreign investment.

He says the government attaches great importance to Basic Law promotion and education. The Basic Law Promotion Steering Committee has been co-ordinating and overseeing the work, with special focuses on “schools”, “industrial, commercial and professional sectors”, civil service bodies and overseas promotion, he continues.

He says his administration has strengthened its efforts to promote the principles of “one country, two systems” and the Basic Law by organising seminars, talks and exhibitions.

1.15pm – At last a Chinese medicine hospital

The city will have its first Chinese medicine hospital wholly financed by the government on a reserved site in Tseung Kwan O. The Hospital Authority will identify a non-profit making organisation by tender to operate the hospital.

The planning is underway for a Government Chinese Medicines Testing Institute, which will employ “state-of-the-art technology” and scientific research to develop a set of internationally recognised references standards for Chinese medicine. A temporary one will be set up in Science Park within the first quarter of this year, managed by the Health Department.

1.12pm – Newborn babies

Leung announces the Health Department and the Hospital Authority plan to extend newborn screening for inborn errors of metabolism to all public hospitals with maternity wards in phases from the second half of 2017-18.

He says the pilot study for the neonatal screening test, implemented at two public hospitals since 2015, has proved effective. The test identifies inborn metabolic diseases such as phenylketonuria (PKU), which is caused by an enzyme deficiency that could turn some protein-rich food or sweeteners into poisons for young sufferers.

1.05pm – Something else new for West Kowloon

Leung unveils a new financial arrangement with the West Kowloon Cultural District Authority, effectively injecting more funds in the authority to build the cultural hub. The authority is to be granted “government-owned development rights of the hotel, office, residential portion” of the district.

“The authority may develop the hotel, office, residential facilities jointly with the private sector through open tender and a build-operate-transfer arrangement, and share rental revenue from such facilities to sustain the operation of the [West Kowloon Cultural District,” he says.

“This will dovetail with the financing arrangement for the development of the third batch of art and cultural and related facilities, particularly a world-class music centre, to offer opportunities for local as well as mainland and overseas music troupes and musicians to showcase their talent.”

Critics of Hong Kong Palace Museum on the attack as public consultation begins

1.02pm – In a surprise, HK$20 billion for sport

Leung announces a five-year spending plan to revamp the city’s sports facilities.

He says the government has decided to “significantly increase the provision of sports facilities, and will spend a total of $20 billion in the coming five years to launch 26 projects to develop new or improve existing sports and recreation facilities amounting to a total of 54”.

The projects include two sports grounds, nine football pitches, one sports centre, four swimming pool complexes, two lawn bowling greens, one cycling ground, four tennis courts, 11 outdoor basketball courts and 20 open spaces.

He says the government will conduct a technical feasibility study for another 15 sports and recreation facility projects to prepare for their implementation.

Another highlight: a plan to demolish the Wan Chai Sports Ground for “comprehensive” development in 2019. Apart from building convention and exhibition venues, the site will comprise “trendy and novel recreation and sports facilities”.

Leung also says the government will inject HK$1 billion into the Elite Athletes Development Fund.

1pm – Subsidies for self-financing undergraduate study

Leung says the government will increase the number of subsidised places for designated self-financing undergraduate programmes from about 1,000 per cohort to 3,000.

Current students of the designated programmes will also receive the subsidy from the 2018-2019 academic year.

It is expected that about 13,000 students will benefit from the scheme each academic year.

While last year around 25,000 students met the minimum requirements for admission to a university degree course, only 15,000 of them were able to actually land subsidised places in public universities, resulting in many resorting to exorbitantly priced, self-financing undergraduate programmes.

12.59pm – Championing science in school

Leung says the Education Bureau is prepared to provide each public sector secondary school with an extra one-off subsidy of HK$200,000 to facilitate the implementation of school-based programmes related to science, technology, education and mathematics (STEM) education.

Educators have pointed to a weak foundation of scientific knowledge among Hong Kong students after the city switched to the Diploma of Secondary Education system, which many said placed less focus on advanced mathematics and science subjects.

The latest Programme for International Student Assessment also showed Hong Kong students’ performance in science had dropped to a new low.

12.58pm – Compulsory education?

In a move anticipated to generate strong opposition from the pan-democratic camp, Leung announces the Education Bureau will provide a one-off grant of about $125 million to support teaching efforts for Chinese history and traditional Chinese culture.

Make Chinese history compulsory to end Hong Kong youngsters’ identity crisis, says CPPCC Standing Committee member Annie Wu

The pro-Beijing camp has been calling for more Chinese history subjects to be made compulsory at senior secondary levels and an independent subject at all schools for junior secondary levels after a local independence movement grew traction among the city’s secondary and university students.

But many pan-democrats have spoken out against such a curriculum change, claiming it is an attempt at “brainwashing” and tantamount to a “new national education”.

In the same vein, Leung says the bureau will strengthen Basic Law education and further promote the city’s mini-constitution by continuously developing learning and teaching materials, providing teacher training, and conducting exchange programmes with mainland students and teachers.

12.53pm – Standard working hours

Leung speaks generally and briefly about standard working hours, despite the labour sector pressing him hard in the past to deliver on his 2012 election promise.

“The Standard Working Hours Committee will submit its report to the government by the end of this month before its term expires,” he says. “The government will take full account of the report of the committee and the views of various sectors of the community, and strive to map out within the term of the current government the working hours policy direction that suits Hong Kong’s socioeconomic situation.”

12.45pm – Enhancing retirement protection

Leung announces he will “progressively abolish” the offset mechanism under the Mandatory Provident Fund system.

Under the so-called offset mechanism, employers are allowed to use their portion of contributions to the MPF to offset the severance or long-service payments due an employee. Under the law, a company that fires a worker with more than five years of service must pay a long-service fee equal to the number of years of service multiplied by two-thirds of the employee’s monthly income up to HK$15,000 for each year, or a maximum of HK$390,000.

When Leung ran for chief executive in 2012, his election manifesto stated he would seek to “progressively reduce the proportion of accrued benefits attributed to employer’s contribution in the MPF account that can be applied by the employer to offset long-service or severance payments.

In this policy address, he says the abolition will have “no retrospective effect”. And, to reduce the financial burden of employers after the offset mechanism is abolished, the government is considering lowering the amount employers are required to pay: from two-thirds of the worker’s monthly pay to half of that.

The government will also bear a part of the cost in the 10 years after the abolition’s implementation date.

Leung says the government will discuss the matter with business and labour sectors in the coming three months. He hopes the government can finalise the proposal by the end of his term.

[A universal retirement protections scheme] would dilute the support available to those in need
CY Leung

Yet he is holding firm on not providing a universal retirement protection scheme that would give a flat-rate payment without any means test for elderly, despite calls to do just that. He says such a scheme would “dilute the support available to those in need”.

Instead, elderly persons with greater financial needs would be eligible for a higher allowance. Elderly single individuals aged 65 or above with assets not exceeding HK$144,000, or elderly couples with assets not exceeding HK$218,000, would receive HK$3,435 a month as part of the Old Age Living Allowance. That would be one third higher than the existing rate.

From February 1, the government will also relax the asset limits from HK$225,000 to HK$329,000 for elderly single persons and up to HK$499,000 for elderly couples. The plan is to allow more people to receive the allowance. Some 500,000 senior citizens are expected to benefit from these two measures.

Employers step up fight to prevent reform of Hong Kong pension fund

12:43pm – On children with special needs

Leung says the government will waive the service fees of special child care centres and provide a non-means-tested training subsidy for children on the waiting lists for these centres.

Parents are currently charged HK$354 a month per child for these centres, which provide special training and care for moderately and severely disabled children aged two to six, to facilitate their growth and development, helping them prepare for primary education.

He says the government will also provide an additional grant for schools for children with a severe intellectual disability, schools for children with physical disability and schools for children with visual impairment as well as intellectual disabilities to enhance care for 24- hour, ventilator-dependent students.

12.35pm – The address resumes

12.24pm – A 10-minute break

Legco president Andrew Leung calls for a 10-minute break.

12.16pm – Same as it ever was?

The first five chapters of Leung’s policy address exactly follow the chronology of his address a year ago: introduction, the economy, the Belt and Road Initiative, innovation and technology, and housing and land.

His sixth chapter this year touches on environmental protection; last year it dealt with poverty alleviation, elderly care and support for the disadvantaged.

12.05pm – Cleaner energy pledged

Leung says the government will gradually replace coal-fired power plants with “cleaner energy” by 2030. In negotiating the new Scheme of Control Agreements regulatory framework with the city’s two power companies, the authorities will “study how to further promote energy saving and renewable energy (RE) generation”.

He notes that an interdepartmental committee chaired by former chief secretary Carrie Lam Cheng Yuet-ngor submitted a report to combat climate change. The plan is to reduce carbon intensity in Hong Kong from the 2005 level by between 65 and 70 per cent by 2030.

“I have accepted these recommendations,” Leung says.

11.50am – Developing country parks?

Leung says country parks are a precious asset but stops short of saying whether they could be used for housing, as some of his supporters have suggested. He only notes a need to strike the right balance between development and conservation.

This issue matters to the well-being of our next generation and warrants serious deliberation
CY Leung

He says government is preparing to designate 500 hectares of Robin’s Nest in the New Territories as a new country park as well as establishing the 37-hectare Long Valley Nature Park as part of the Kwu Tung North and Fanling development plan.

At the same time, he says the city should also consider allocating a small proportion of land on the periphery of country parks with relatively low ecological and public enjoyment value for purposes other than real estate development, such as public housing and non-profit-making elderly homes.

“This issue matters to the well-being of our next generation and warrants serious deliberation of its pros and cons by society,” he says.

11.45am – Housing a “tough nut to crack”

Leung warns the city’s unabating public housing shortage will remain “a tough nut to crack” if the community and government do not work together to expedite identifying land for building flats.

He highlights that although the projected supply of 94,000 private flats in the next four years would reach a 12-year record high, the supply of public housing would still lag behind its 10-year target of 280,000 by about 44,000 flats.

[Housing challenges] boil down to land use, which is not a technical issue, but a conceptual one
CY Leung

On increasing land supply, Leung says the government has rezoned almost half of 190 potential housing sites. He adds an extra 25 additional housing sites have been identified, capable of producing over 60,000 units, as the Post reported last week. He reveals that over 80 per cent of the sites would be allocated for public housing between 2019 to 2024.

Other short, medium and long-term programmes to increase land supply:

- Relaxing development intensity to provide additional supply of flats;

- Furthering two planning and engineering studies for Kai Tak development;

- Allowing the Urban Renewal Authority to enhance efficiency of existing land use redevelopment potential of Yau Ma Tei and Mong Kok in Kowloon; and

- Beginning implementation of large-scale projects in new development areas and new town extensions, with a focus on Kwu Tung North, Fanling North, Tung Chung, Hung Shui Kiu and Yuen Long South in the New Territories.

In closing his section on housing policy, Leung says the city’s housing challenges “boil down to land use, which is not a technical issue, but a conceptual one”. He urges the public to “dare to think out of the box and re-examine land use planning” for the benefit of the city’s next generation.

11.40am – Building a smarter city with HK$500 million

Leung highlights the need to develop Hong Kong into a smart city by using technology to improve the city’s development and management, with a study on how the environment, health care and transport in different areas across the city can be improved by technology. The study is to be completed by the middle of this year.

Following a campaign last year to ramp up Wi-Fi connections in the city, the number of free Wi-Fi hot spots is estimated to almost double to 34,000 by 2019 from its current tally of 18,400.

He also announces the government will launch a HK$500 million Innovation and Technology Fund for Better Living by mid-year to subsidise innovation and technology projects.

11.30am – Innovation and technology spotlighted

Leung says innovation and technology are important for economic and social development. He says IT development has significantly improved in the city over the past year after the establishment of the Innovation and Technology Bureau. Among the highlights he cites: the Massachusetts Institute of Technology setting up its first overseas innovation node in Hong Kong, and the Alibaba Group launching a HK$1 billion Hong Kong entrepreneurs fund [note: Alibaba Group is the owner of the South China Morning Post].

He says the number of start-ups in Hong Kong grew to nearly 2,000 last year – up some 25 per cent up from 2015.

To promote re-industrialisaiton, the government is preparing to build a data technology hub and an advanced manufacturing centre in Tseung Kwan O Industrial Estate. They are expected to be completed in three to five years.

11.29am – One Belt, One Road initiatives beefed up

Leung this year again speaks at length on President Xi Jinping’s pet development project, after setting up a dedicated office in the city last year to work out the grand plan.

Leung says the government has reviewed the work of the Belt and Road Office,and “considers it necessary to beef up the office’s establishment and resources including the creation of directorate posts and other permanent posts to ensure it can take forward the work under the Initiative more effectively and on a long-term basis”.

The government considers it necessary to beef up the [Belt and Road] office’s establishment and resources
CY Leung

The all-encompassing new initiatives, covering economic development and education include:

- Organising with the Trade Development Council another Belt and Road Summit in September;

- Taking part in the Belt and Road Forum for International Co-operation in Beijing in May, the highest level forum so far;

- Providing more professional services for regions along the Belt and Road. The MTR Academy is in discussions with the rail operators of several countries, and the Hong Kong International Aviation Academy signed an agreement last month with the National School of Civil Aviation of France to jointly nurture aviation professionals for Hong Kong and the region;

- Consider relaxing visa requirements for nationals of those countries for employment, study and visit e.g. Belarus and Cambodia;

- Updating school curricula, encouraging students to take up foreign languages and increasing the quotas to 5,600 for students’ mainland exchange programmes along the Silk Road this year; and

- Making available two Belt and Road scholarships funded by private donations for students from Malaysia and Thailand

11.28am – City skyline paints a picture

The theme for this year’s policy address is a picture of Hong Kong’s skyline. No slogan accompanies it.

In past years, the theme was a collage of images representing different policy areas.

Last year, the policy address theme was “Innovate for the economy, improve livelihood, foster harmony, share prosperity”.

11.25am – Free trade agreement looming

Leung says the government is negotiating a free trade agreement with Asean (Association of Southeast Asian Nations). He says it is also planning to set up economic trade offices in five countries: India, Mexico, Russia, South Africa, and the United Arab Emirates.

The aim is to take the total number of economic trade offices to 18.

On the mainland, where there are already five representative offices, the government plans to set up liaison units in Tianjin, Zhejiang, Guangxi, and Shaanxi by the middle of the year.

11.18am – Banking news

The chief executive reveals Hong Kong as been invited to be a member of the Asia Infrastructure Investment Bank. He says his administration hopes to sort out details by the middle of the year.

11.13am – A note against Hong Kong independence

Leung offers a broad overview of what he has done in various policy areas including land supply, environmental protection and welfare.

This is not the first time he has chosen to speak against Hong Kong independence in his introduction.

After describing the city as an important “super-conductor” as China takes a leading role in the global economy, Leung declares: “Hong Kong is an inalienable part of our country. There is absolutely no room for independence or any form of separation.”

“Under ‘one country, two systems’, every one of us has the obligation to fully comply with the Basic Law and safeguard national sovereignty, security and territorial integrity.”

11.10am – Not a debate, so proceed

After the break, Legislative Council president Andrew Leung Kwan-yuen rules the policy address is not a “debate” in nature and thus denies the lawmaker’s motion to adjourn.

“Long Hair” Leung Kwok-hung walks out of the chamber, chanting “Leung Chun-ying, liar!”

The chief executive proceeds to speak.

11.01am – An unprecedented interruption

Legco president Andrew Leung calls for a break in the meeting after “Long Hair” Leung Kwok-hung’s surprise request that he wants to table a motion to adjourn the meeting, which could effectively prevent the chief executive from delivering his address.

The motion marks the first such request ahead of a Hong Kong chief executive’s policy address.

11am – CY Leung enters Legco

Leung arrives. A brief interruption by lawmaker “Long Hair” Leung Kwok-hung, who offers a motion without notice to adjourn the meeting.

“CY Leung is a liar!” he shouts as he holds up a prop showing the image of a monkey.

Legco president Andrew Leung Kwan-yuen asks the lawmaker to sit down, but he does not comply.

Looking reluctant, the president then suspends the meeting to address the request.

10.45am – ‘Hell money’ offered

Protesters from the pan-democratic parties League of Social Democrats and People Power throw “hell money” at Leung’s car as it pulls up to Legco.

10.35am – Pro-establishment figures in protest area

Lawmakers and members of the pro-establishment Democratic Alliance for the Betterment and Progress of Hong Kong gather outside Legco to urge Leung to adopt a series of policies before his term ends on June 30.

They chant: “Help maintain old buildings! Improve our education system! Protect consumer rights! Build a Chinese medicine hospital!”

DAB chairwoman Starry Lee Wai-king says she expects the policy address to be “proactive”.

10.25am – More people gather outside Legco

A group of lawmakers and members of the Federation of Trade Unions are also gathering outside the city’s legislative building.

They call on Leung to improve the city’s retirement protection system as soon as possible, and increase the “fruit money” payment amount to elderly individuals, among other demands.

10.20am - Protesters assemble

Outside Legco, the Alliance for Universal Pension is calling for Leung to deliver on his promise of improving retirement protection.

They hold up placards bearing Leung’s face superimposed on a monkey, accusing him of “lying” when he said a universal retirement protection was “worth doing” five years ago.