Set a Good Course of Recovery
Without our noticing it, more than two years have passed since Hong Kong completed its long journey to reunification with China. At first, both the Chief Executive and the people of Hong Kong were full of tremendous confidence and great ambitions and expected to turn over a new leaf in the history of Hong Kong.
But the road Hong Kong has travelled along since reunification is not a broad and smooth one. As the wheel of history turns, the political aura of Hong Kong has gradually faded. The lofty and ambitious remarks uttered by the Chief Executive at the time of reunification, though continually repeated from various angles, are not likely to provide people with great motivation anymore. What the people of Hong Kong need most is not another lofty, long-term policy address, or an economic positioning that maps out in exacting detail plans and resources for various sectors. Rather, what the people of Hong Kong need is a government that has a clear sense of direction and can take specific measures to show the way for the people - many of whom have lost some of their confidence in Hong Kong -- at a time when Hong Kong is travelling along a tortuous road in both political and economic terms.
A positive point about the government's political performance for the past two years has been the implementation of the unique formula of 'one country, two systems' and the maintenance of the political stability and 'high degree of autonomy' of Hong Kong. At the moment, however, there is still deeply-rooted tension beneath the apparently calm relationship between the executive and the legislature. Moreover, there has been no further development in the democratisation of the political structure. There is little way out, as far as the people of Hong Kong can see. But at least the government has adopted a realistic and pragmatic approach to immediate issues for the past two years. Therefore, in my response to the policy address this year, I am not going to dwell on the political performance of the government.
Economic performance used to be the strength of Hong Kong. But, for the past two years, Hong Kong's economic policy, which faithfully follows the principle of 'small government and discreet financial management', has proved to be ineffective and slow in reacting to a wave of challenges, including the Asian financial turmoil, and the keen competition arising from the further economic development in China and from the revolution in technology and globalisation.
Indeed the government has been confronted with many problems after reunification. Yet the government has been able to maintain political and economic stability and keep the trust of the central government of China and overseas investors. Considering its difficult situation, the government has not done a bad job. This Council should not expect that the government should be perfect in all areas, that every official could be instant experts, and that the Chief Executive should be the champion for every worthy cause. I believe that exaggerated and unrealistic political expectations will only create unnecessary pressure and indirectly encourage the government to cover up mistakes and claim credit for superficial success as a way of coping with constant criticisms.
I approach the matter from the angle of a legislator from a professional constituency. First, knowing that in the short run the government is unable to tackle too many problems, I prefer two 'distinctions' (that is, education and environment) to ten 'mere passes'. Second, although big moves like the two or three collaborative projects with big businesses can produce much immediate publicity, it will be more effective to actively support young entrepreneurs and boost the energy and enhance the competitiveness of small- and medium-sized enterprises (SME). Such a move will benefit more SME and the general public. It will also impress on the general public the government's sincere attempt to stand side by side with the people of Hong Kong in these difficult times. Third, many professionals have complained to me that society is now dominated by an atmosphere of finger-pointing and buck-passing. I believe that the government can help create an atmosphere of cooperation and perseverance only if it can avoid shielding its shortcomings, take on its responsibilities with real mentor and rise quickly to new challenges.
First I would like to talk about the two prominent points of the policy address, that is, education and environment. Hong Kong under British rule showed a lop-sided concern with 'hardware', such as infrastructural construction, political structure, legal system, and financial and economic structures. For a long time Hong Kong neglected the environment and was somewhat indifferent to long-term investments affecting the quality of life, including quality education, sports, culture and the landscape of the city. The Chief Executive's effort to change this situation shows clearly that after reunification the people of Hong Kong have become the master of their own house, and that the government's policy is predicated on the principles of 'sustainable development' and 'Hong Kong is our home'. Such an effort should be applauded by this Council.
It is understandable that some people think that these investments cannot produce immediate benefits. But such an opinion only reflects the negative feelings some people have about the government's failure to protect people's livelihood. This does not mean opposition to the policy on education and environment as such. Therefore the government should not hesitate to fully implement its policy on education and environment.
As regards economic planning, the government has made quite a number of moves that are beginning to get some results. But why can't people feel this? The government will do well to think about this.
On the surface, that the economy is beginning to bounce back is supported by statistical analysis. It seems that measures adopted by the government last year, including providing tax rebates, reducing rates and stabilising property prices, are gradually yielding results. Moreover, the government is not over anxious to immediately announce favourable news about the Disneyland and the Herbal Port. This shows that the government is still confident about the future and will not allow the policy address to disrupt arrangements for these long-term projects. This is a mature and correct political decision and should be supported by this Council.
But this Council does not share the government's blind faith in economic statistics. We should look well beyond the surface of statistical figures. If we measure statistics against reality, it will not be difficult to see that what seems to be a gradual economic recovery is caused by appreciation in value of assets and improved performances by only a few isolated big businesses in a few industries. At the same time, we notice that the great majority of SME are still in a very bad shape, struggling for survival.
For many years I have been urging the government, first, to set up an Enterprise Fund for young people and enlist the support of banks, professionals and public-spirited entrepreneurs to act as advisers to new enterprises, as a way of easing the unemployment of young people. Second, I have also been urging the government to follow the example of many highly developed countries and devise a policy to support small- and medium-sized enterprises. So far no response has come from the government. I am quite disappointed.
What form the backbone of our economy are young people who start their own businesses and SME that take roots. They do not leave or give up in an economic downturn. They are full of life when the economy shows signs of recovery. They fulfil functions that might not be fulfilled by international big names which the government attaches so much importance to. If the government only pays attention to big projects and neglects the foundation of the economy, it will create the impression that it is seeking far and wide for what lies close at hand and putting the cart before the horse.
I would also like to talk briefly about the operation of the Growth Enterprise Market (GEM). This is intended to offer hope to SME by the hundreds. But, judging from the current trend, this hope will also be dashed by a bureaucracy that is reluctant to shoulder responsibility for failure, afraid of sharp criticism, interested only in acquiring more supervisory powers and indifferent to elements of competitiveness.
Nowadays, the global trend is to reduce rapidly the operation cost, time and energy that market users spend to comply with the standards set by supervisory bodies. Inevitably there will be enterprises that fail or even fold. But if there are more enterprises that succeed, such a policy should be pursued by a government that is open-minded and bold in creating a true markets. What counts for a really free market with a potential for long-term development is a capital market that tests the judgement of investors and involves risks but also high returns, and not a financial market that caters for only a small number of large-sized international businesses.
What we can see now is that many Hong Kong SME with great potential would apply to become listed companies in Singapore, the USA and Australia rather than taking part in Hong Kong's GEM. The general feeling of many market participants is that the GEM is not attractive because it raises little fund, and is costly and the standards of supervision are not substantially lower than the main board of the Stock Exchange of Hong Kong. I hope that at this critical moment the government will take another look at the reasons behind the decision for businesses not to become listed companies in Hong Kong and review the competitiveness of the GEM in an international context.
The GEM is just one of the cases that have caused concern for professionals. The mutual trust between the government, in particular the supervisory bodies, and professionals has been gradually decreasing for the past two years. Many professionals feel that supervisory bodies, in the name of consumer rights, are constantly pressing for new laws that give them more powers and at the same time shifting the responsibilities to professionals who find themselves defenselessly pressed to the wall at the receiving end. Professionals are concerned about these moves as they change the mediatory role of professionals, narrow their scope of societal contribution and indirectly increase the cost of enterprises. As Hong Kong is experiencing an economic downturn, the government should work with the private sector to streamline structures and increase productivity. What should not happen is that a strong and powerful government abuses its powers, shirks its responsibilities, blames professional bodies for incompetence, buttresses its authority and seeks administrative convenience at the expense of competitiveness.
Not so long ago, the people of Hong Kong used to regard Singapore as a major rival. The two cities kept close watch on each other. Recently, Hong Kong has shifted attention to Shanghai as a target competitor. Now the Chief Executive positions Hong Kong with reference to such cosmopolitan cities as New York and London. The intention is good. But it is a long road and the practical difficulties should never be underestimated.
A first-class cosmopolitan city comes into being as the culmination of the historical, cultural, economic and political wisdom of the whole nation after hundreds of years' development. It takes more than the import of foreign capital, human resources and international investment for a city to acquire its own characteristics. Apart from becoming a paradise for foreign investors, Hong Kong must take into account its fundamental needs. Hong Kong's professionals and SME are the mainstay of its economy and human resources. If the government, in its ambitious plan for the future, is only interested in extending its powers and dealing directly with foreign big businesses and ignores the interests, roles and feelings of local middle classes, the distance between the government and the people of Hong Kong will only grow larger and larger. This is something that is happening and must be tackled.