Hong Kong business leader urges government to review regulations so city can remain competitive on world stage
- Chamber of Commerce CEO wants regulatory impact assessment done on cost of doing business in the city
Hong Kong General Chamber of Commerce wants the government to review the cumulative impact of regulations on business costs to maintain the city’s competitiveness as a global financial hub.
The chamber made the appeal as proposals to extend maternity leave and revise the way employers give severance payments has raised the spectre of higher operating costs for the city’s firms.
In an interview with the Post, Shirley Yuen, the chamber’s CEO, said having a means for the government to evaluate regulation proposals across industries was crucial to maintaining business confidence in Hong Kong.
Yuen said the government needed to look at the overall effects of regulations on the cost of doing business, and used labour regulations as an example. The “cumulative effect of these on business could be really huge”, she said.
The chamber boss was referring to the introduction of a minimum wage in 2011, the plan to extend maternity leave from 14 weeks, and the removal of the mechanism in the Mandatory Provident Fund that allowed bosses to use their portion of contributions to employees’ accounts to cover long service and severance payments.
“It’s really about the mindset – rather than just adding regulations, which may have very good reasons, let’s not forget about the possibility about cutting down or removing those regulations that are no longer fit for purpose,” Yuen said.
The chamber has recommended introducing a “regulatory impact assessment” framework similar to one adopted by many member countries of the international Organisation for Economic Co-operation and Development. These countries evaluate decisions to ensure the burden of complying with regulations does not outweigh the benefits.
“There are lessons to be learned from overseas,” the CEO said.
Yuen was speaking on the sidelines of the chamber’s conference on regulatory impact assessment on Thursday, when chairman Aron Harilela stressed the importance of having such a process in place.
“The chamber cares very much about how we are perceived internationally as a place to work and do business. The adoption of a systematic … regulatory process should be mission critical in making sure that Hong Kong lives up to its reputation as Asia’s world city,” Harilela said.
Meanwhile, Richard Wong Yue-chim, chairman of economics at the University of Hong Kong, said he disagreed with a report from the United States Congress that Beijing’s “encroachment” on the rule of law in Hong Kong could hurt international business confidence in the city,
He said the barriers to Hong Kong’s future success were outdated regulations that hamper industries from finance to real estate development, not a perceived erosion of freedom in the city.
“The rule of law in the jurisdiction of private business activities, that has not been eroded. The courts are functioning very well and this place has a lot of opportunities,” Wong said.
“The problem is that it is so difficult to get into business here. Labour is short, land is expensive, that’s the barrier … those are [part of] micro regulatory structure, not rule of law issues.”
Wong said in areas such as health care, real estate development, and a range of service industries outdated reforms needed to be evaluated and removed. And for emerging sectors such as e-commerce and new technologies, new regulations should not be so burdensome that innovators cannot afford to compete.
“It’s about removing barriers that make doing business expensive,” Wong said.