HK Policy Address; personal thoughts from my understanding


08 Feb

I must admit its a long address and I am not conversant with all the areas that Carrie Lam’s address covered.  I am just giving my view on the address.

Full text can be found at https://www.policyaddress.gov.hk/2020/eng/p1.html

Key headings
Foreward Striving Ahead
Full Support of the Central Government
Upholding ‘One Country Two Systems'
Navigating through the Epidemic
New Impetus to the Economy
Increasing Housing and Land
Building a Liveable City
Continuously Improving People’s Livelihood
Nurturing Talents and Youth Development
Closing Remarks; Renewed Perseverance


My Summary
The key takeaway seems to be greater integration into China and away from the ‘One Country Two systems’ as had historically been understood and replaced by the 'One Country Two systems’ as interpreted by the National Peoples Congress. She suggests that in the past a lot of Hong Kong people and other countries did not understand or implement the system properly. It also states '“Hong Kong people administering Hong Kong” and a high degree of autonomy’. I think a good number of Hong Kong citizens will question what that means; especially as public servants have to pledge allegiance to Beijing to be able to keep their jobs.
Overall she has endorsed Beijing’s ambitions for Hong Kong; it is more about Beijing’s person in Hong Kong administering Hong Kong in line with the Central Governments will. The key is to understand and accept that.


Foreward Striving Ahead
Full Support of the Central Government
In her forward she referred to the recent acts that have impacted Hong Kong; unrest, covid and acts that have endangered national security.
Her stated aim 'is to look at ways to get Hong Kong out of the impasse and to restore people’s confidence as soon as possible.’ That for her is by ‘better integration into the overall national development.’ For a lot of Hong Kong people their confidence would be restored if they were given back their freedom of speech and being released from the oppression of the New National Security law.

A key part of the Central Government Support is the promotion of the Greater Bay Area, and Hong Kong’s contribution to that as an international financial centre, as an international aviation hub and it developing it into an innovation and technology hub with Shenzhen (“one zone, two parks”). That I think reflects Beijing’s influence in the address. This isn’t about Hong Kong’s ability to develop and adapt but about a command economy edict that these are the roles that Hong Kong will fulfil.

Hong Kong as International finance centre enhanced by deepening mutual access between mainland and Hong Kong. The 'gradual expansion of the scope of eligible securities under the mutual market access programmes, and agrees to accelerate the pace of the inclusion of pre-profit biotechnology companies listed in Hong Kong and stocks listed on the Mainland Sci-Tech Innovation Board meeting certain prescribed criteria in the scope of eligible securities under the programmes.’ The reference to the support of Beijing will be a concern to some if it means adoption of the mainland standards rather than the HK listing rules. Hong Kong needs to be able to distinguish itself from the mainland otherwise it risks being treated as a developing market like the mainland. It would appear that Beijing would like to ride on Hong Kong’s coat tails with regard to how its markets are seen by international investors but the worry will be that the reverse occurs and Hong Kong loses its status.

Hong Kong as an international aviation hub by co-operating with Zuhai, again endorsed by the Central Government; seems a strange item especially at a time when the outlook for air travel is so bad. Again it seems to suggest the blurring of the boarder between Hong Kong and China which will be a concern for some. It would suggest that the US action in removing Hong Kong’s special status was correct and that could have further implications for Hong Kong companies.

Hong Kong as an international innovation and technology (I&T) hub, it is questionable as to whether Hong Kong has the skills it is not something that springs to mind with regard to Hong Kong; it’s skills historically have been in commerce, trading and the raising of finance.

Upholding ‘One Country Two Systems’.
Sets out that The National People’s Congress is the highest organ of state power so it is the only body that can correctly interpret the Basic Law. Also that 'There is no conflict between an executive-led system and an independent Judiciary, since one of the Chief Executive’s duties is to uphold judicial independence which is protected under the Basic Law.’
It does note that there have been views that are divergent to these are because 'society’s inadequate understanding of the Constitution and the Basic Law and the fact that some people’s awareness of the “One Country” principle has yet to be enhanced.’ Additionally that some external forces have sought to undermine and mislead the public. So 'One of our urgent priorities is to restore HKSAR’s constitutional order and political system from chaos.’
It then justifies the new National Security Law and compliment Beijing on putting that law in place. She did say that ‘..as expressly provided in Article 4 of the National Security Law, the principle of respecting and protecting human rights will be upheld and the legitimate rights of Hong Kong people to exercise their freedom of speech, press, assembly, demonstration and procession, etc. will not be compromised in safeguarding national security.’ Some may question that. She went onto say that the administration would educate and enhance Hong Kong peoples understanding of the law.
It also covers Oath taking by Public Officers and the need for them and for anyone who wants to stand for election to swear allegiance to the HKSAR. It is interesting that the joining the civil service after 1 July 2020 have to sign a declaration and swear allegiance. For those serving civil servants how it is implement is yet to be decided. That does suggest there is a legal difficulty in back dating the requirement; which some are likely to highlight as a flaw in the argument for its implementation.
She did say that the rule of law was an essential part of Hong Kong’s success and sets out the key element being independence. Interestingly then is the implementation of a 10-year initiative “Vision 2030 for Rule of Law” which is to 'clarify misconceptions and misunderstanding,’.

Navigating through the Epidemic
Looks at the measures being taken to try and achieve zero infection.

New Impetus to the Economy
Sets out about leveraging the links with the mainland, especially the Greater Bay Area, and investing in IT with the government taking the role as facilitator. The strength of banking and adaptability of Hong Kong to the opening up of the mainland markets and mutual access. It mentions developing Hong Kong as a centre for Private equity, Wealth Management, REITs, Family offices. The key here is that they all require confidence in the rule of law. The uncertainty associated with the new National Security Law undermines the confidence required; especially the risk that falling foul of the new law can lead to the confiscation of assets. Investors, especially family offices want to know that their assets are not subject to such risk.
It outlines the proposals for HK Airport, the development of IT in HK, Smart City, links with Shenzhen and the mainland. Belt and Road Initiative, RCEP, GBA, support for the tourism industry. But all in general terms rather than specifics
A specific was the Abolishing Doubled Ad Valorem Stamp Duty on Non-residential Property; which is unlikely to have a significant impact especially in the light of the down turn in demand for commercial property in Hong Kong.
It also mentions 5G, creative industries, art tech, legal, agriculture and fisheries but again few specifics.
Rebuilding Local and Overseas Confidence; acknowledges that there has been loss of confidence but says there has been unreasonable criticism. It intends to clarify the misunderstanding and it will roll out large scale publicity and promotions to the world. That could be difficult.

Increasing Housing and Land
Notes the importance of the issue but offers nothing radically new just tweaks to the existing system. Still says that there is a shortage of land in Hong Kong which is simply not the case does not propose any new measures to force the developers to seed up developments. Outlines the Lantau Vision.

Building a Liveable City and
Continuously Improving People’s Livelihood

Not areas of policy I have any expertise in but there looks to be very little new or specific.

Nurturing Talents and Youth Development
Interesting here is the emphasis on 'strengthening education on the Constitution and the Basic Law are the fundamentals for fostering their sense of national identity and awareness of national security.’
Specifically mentions Liberal Studies to 'focus on rectifying the previous deviation from the subject’s objectives, and reinstating it as the platform to help students establish a sound foundation of knowledge, make connection between the knowledge across different subjects, develop critical thinking skills, analyse contemporary issues in a rational manner and learn about the development of our nation, the Constitution, the Basic Law, the rule of law and so forth.’
It doesn’t mention being able to question those issue but merely to learn about them.
Exam questions to be improved and no more ‘wrong questions’ in the exam.
Also looks at the quality of teachers key being 'safeguarding “One Country, Two Systems”.’ It does not mention educating students to be able to learn and question

Closing Remarks: Renewed Perseverance
'As long as we stay true to our aspiration in implementing “One Country, Two Systems”, safeguard national sovereignty, security and development interests, maintain our confidence in Hong Kong, refrain from politicising matters, maintain communication in a rational manner and seek common ground while putting aside differences, we will surely be able to deal with the problems that arise in the course of implementing “One Country, Two Systems” and address some deep-seated conflicts in Hong Kong.’
A great statement but considering her administration refused to communicate with the public over the the initial protests or the national security law; it is a statement that seems hollow.
The final words were 'In the coming year, the HKSAR Government will double its efforts to put the epidemic under control, revive the economy, restore social order, rebuild Hong Kong’s international reputation and people’s confidence in the Government, with a view to relaunching Hong Kong.’

Good ambitions but rebuilding Hong Kong’s reputation and peoples confidence under the new security law, I think will be impossible. What investors will be wondering is what the relaunched Hong Kong will embody.

Overall she has endorsed Beijing’s ambitions for Hong Kong and rather than '“Hong Kong people administering Hong Kong” and a high degree of autonomy’ it is once again more about Beijing’s person in Hong Kong administering Hong Kong in line with the Central Governments will. The key is to understand and accept that. It is unlikely that Biden even in collaboration with other nations will be able to roll back the changes that President Xi has put in place.

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