A five-minute primer on an issue making headlines
Hong Kong no longer follows a policy of 'positive non-intervention', Chief Executive Donald Tsang Yam-kuen said at a gathering of officials and bigwigs last week. The comments piqued the interest of Canadian free-market think-tank the Fraser Institute, which says it will monitor whether this signals a change in economic policy. The Cato Institute also says it is concerned with the change of rhetoric, and that the more the government intervenes, the less free Hong Kong's economy will become.
What exactly is it?
The term is used to define an economic policy whereby business decisions are left to the private sector. The government will generally not intervene - through subsidies and direct provision of services, for example - and when it does, does so only in ways that will make the economy more efficient, effective and fair. With a few notable exceptions, including Hong Kong Disneyland and Cyberport, the policy is very much still the rule. Such intervention as takes place these days - in housing, land use, public utilities, and especially infrastructure (such as the Closer Economic Partnership Arrangement with the mainland) - is regarded as being within the bounds of positive non-intervention.
Who started this policy?
There has been some confusion over whether positive non-intervention was the brainchild of Hong Kong's fifth financial secretary, Sir John Cowperthwaite, or his successor, Sir Philip Haddon-Cave. Sir John believed that the government should concern itself with only minimal intervention on behalf of the most needy and keep its fingers out of business. It is said that when he was asked in 1945 for government help to speed the post-war economic revival, he found the economy was swiftly recovering without government intervention and took the lesson to heart.