Enhancing the overall sustainable competitiveness of Hong Kong  (2013/5/29)

Deputy President, over a long period time, Hong Kong has stayed competitive by relying on the well-established financial system, the training of talents, the implementation of simple tax regime and the construction of infrastructure facilities. Meanwhile, by upholding the rule of law, integrity and freedom of speech, Hong Kong has an incomparable edge over all Mainland cities. They are the core values which keep Hong Kong prosperous.

However, every coin has a flip side. While Hong Kong enjoys a high degree of freedom of speech, and people are allowed to express themselves and fight for their rights, they tend to care about their own will more than the actual situation. Consequently, our society has to waste energy on endless political arguments. Some policies and infrastructural projects are embroiled, even if they are worth carrying out. Let us take Hong Kong's Express Rail Link project as an example. It took as long as five years for the Government to succeed in obtaining its funding approval. The estimated cost had hence mounted. In 2008, the estimated cost was only $39.5 billion. Yet, because of a series of controversies, the funding approval was held back until 2010. The project cost then rose to $66.9 billion, among which $10.6 billion were incurred by the delay in construction works. As we all know, before the commencement of any major infrastructural project, the Government must spend time on assessing the effectiveness of the project and studying its impacts on residents and environment in detail. It is no cause for criticism. However, if people with political motives argue for the sake of argument, or even provoke conflicts to increase government expenditure, it will be unacceptable. At the end of the day, it is always the people of Hong Kong who "foot the bill".

Another example is the project of North East New Territories (NENT) New Development Areas (NDAs). Its consultation has started since 2008, but we have not heard much opposition until last year. It is labelled as a move to "sell out Hong Kong" by building "a backyard for Shenzhen" or "a city for rich doubly non-permanent residents of Hong Kong" in the NDAs. In fact, the NENT NDAs are same as other new towns like Kwun Tong, Tsuen Wan, Sha Tin, Tseung Kwan O and Tin Shui Wai. Their main purpose is to solve the housing problem of our increased population. Nevertheless, the NDAs are now being unfairly labelled. Some people even call for a withdrawal of the entire development project. They have simply ignored the overall interests of Hong Kong. As NENT is close to various major ports, its development can be part of the tourism development plan. By developing tourist attractions and shopping areas in NENT, we can divert pedestrian flow from other hot tourist spots and create more business opportunities for the six industries with competitive edge.

Deputy President, Shenzhen and Macao, our neighbouring cities, are now developing their economy at full speed. While we are arguing about the NENT, Qianhai in Shenzhen and Hengqin in Zhuhai are building up silently. We must think about this question seriously: Once Qianhai and Hengqin are put into use and the Hong Kong-Zhuhai-Macao Bridge is completed in 2016, do we still have any competitive advantages over our neighbouring cities?

I agree that we should allow Hong Kong to have different voices so that the Government can absorb views from different sectors to enhance its governance and avoid taking a wrong step. However, it does not mean that our society can withstand endless political conflicts for extended period. It will just waste our time. I hope people from all walks of life and my colleagues in the Council can take an objective perspective, let go of our divided views, build up mutual trust, work together to capitalize on the rapid economic growth of the Mainland, and strive to enhance the market competitiveness of Hong Kong.

The Chinese University of Hong Kong announced its latest opinion poll results in May. According to the results, 59.7% of Hong Kong people agreed that the Government should further promote our economic integration with the Mainland; and 64.2% of people agreed that there should be more cultural exchanges with the Mainland. Among the public, there is already a shared view that Hong Kong should have more co-operation with the Mainland in economic and cultural spheres. Hong Kong, being an international city, should act as a bridge to link up the Mainland with the international community. While it is important for Hong Kong to maintain our uniqueness, we should optimize our nearby resources to achieve a win-win situation.

Deputy President, last week, Mr Martin LIAO earnestly reminded us that Hong Kong must avoid excessive welfarism if it wished to maintain its competitiveness. Indeed, I feel the same way. In countries which practise welfarism, wealth is redistributed through a big government and high tax rates. The most successful welfare states in the world are the Nordic countries. They share the common features of having a vast territory, a small population, low housing costs and high tax rates. Hong Kong has none of these features. As for countries like the United Kingdom and Greece, the political parties formulated a lot of high welfare policies to gain votes. Their tax rates are thus very high, and they now have to struggle with the problems so caused. In early 2011, the British Government increased the value-added tax from 17.5% to 20% to meet its huge expenditure. In April this year, it started the largest social welfare reform in the United Kingdom in decades to simplify the complicated welfare system and encourage its people to work instead of enjoying welfare benefits.

While a good welfare system can bring a government with stability and benefit the people, a bad welfare system will pose risks to economic development. It is something beyond doubt. In my view, the Government should not only build a good welfare safety net but also create job opportunities and encourage the grassroots to make money and increase their income. The Government should not give up its sound fiscal policy to win a round of applause. Only when the Government is financially sound can it have resources to support different industries to enhance their market competitiveness.

Deputy President, I so submit.