Hong Kong, the city once hailed by the godfather of monetarism, Milton Friedman, as the world's best example of a free-market economy, is looking at the biggest revamp in its economic philosophy to date.
It is no secret that Chief Executive Leung Chun-ying has his own views on the city's social and economic policy, but his attack yesterday on the golden principle of "positive non-interventionism" marks a clear break with the past.
"Markets fail" he told the Legislative Council as he spoke about the relationship between the government and markets in his keynote address yesterday. "The concept of positive non-interventionism adopted in the colonial days is obscure and contradictory. The notion of 'big market, small government' is also out of date."
Colonial era financial secretary John Cowperthwaite introduced the policy of positive non-interventionism - in which the government's role is restricted to creating the regulatory and physical infrastructure to allow markets to function - almost half a century ago. His successor Philip Haddon-Cave took it forward in the 1970s and became the guiding principle for the colonial era.
Leung's predecessor, Donald Tsang Yam-kuen, was also a firm believer in the power of the market, favouring the slogan "big market, small government" - despite the fact that he spent his entire career as a civil servant.
For example, Tsang described housing as a personal investment decision rather than a wider social problem and was reluctant to revive the Home Ownership Scheme for middle-class families despite growing social pressures.
But Leung, who made his name in the private sector as a surveyor, thinks differently.
"As the chief executive, I feel I am responsible to state clearly the governing philosophy, or else we can hardly justify what we do," Leung said yesterday. "What we need are prudent adjustments [in policy]."
In his speech, which was described as a "mini policy address", Leung said his government would take the initiative when necessary and outlined four serious, deep-rooted problems that his administration intended to solve; housing, poverty, the environment and the problems of elderly people.
"The housing problem is not only about ownership. It is also about quality of life," he said, noting that it would be his goal to improve quality of life in the long run. In the short and medium term, his government would aim to maintain the stability of property prices while increasing land and housing supply.
Other initiatives he pointed to included establishing a "poverty line", eliminating heavy-polluting vehicles and introducing an enhanced allowance for hard-up elderly people.
He believes the government can take a bigger role in boosting the city's economy - for example through the Closer Economic Partnership Arrangement (Cepa) with the mainland. "The discussion of the Cepa arrangements needs to be dealt with on a government level," he said.
Leung also highlighted the financial services and maritime industries as potential new drivers for the Hong Kong economy. He revealed that the task force set up to implement a new Financial Services Development Council, chaired by Executive Council member Laura Cha Shih May-lung, had already submitted its first report.
Lawmaker Frederick Fung Kin-kee, of the Association for Democracy and People's Livelihood, said Leung's administration had no choice but to take a bigger role to address the social and economic problems.
"Whether he can do it or not is another matter. I cannot see the political strength from top officials to implement controversial policies. They also lack the necessary public support," Fung said.
Ma Ngok, a political scientist at Chinese University, said few people still embraced the idea of a free market. "It is a myth to conclude that Hong Kong's success was solely a result of free-market economic policies."
WHAT HE SAID
ON NEW TOWN DEVELOPMENTS
Some people claim that the government's development plan for the northeast New Territories is an attempt to 'cede Hong Kong land to the mainlanders and sell out Hong Kong' and 'turn Hong Kong red'. We shouldn't underestimate the impact of the acts and views of this tiny group of people on the normal development of the relationship between Hong Kong and the mainland.
ON RELATIONS WITH BEIJING
Both the central government and I are very concerned about the relationship between the mainland and Hong Kong. As Hong Kong's chief executive, of course I will defend the city's interests.
ON THE PROPERTY MARKET
The measures the government unveiled earlier to stabilise the property market were just a beginning. We will introduce other measures at appropriate times to ensure steady development of the property market. I have some measures in my pocket and can announce new measures just by making a phone call.
Poverty is more than an issue of social justice. It is more of a political and economic issue. When there are a substantial proportion of people who do not get the benefit of economic growth, social stability will certainly be undermined.