There is so much material in this year’s policy address that is worth discussing in depth, it is difficult to know where to begin. There is enough for at least five separate columns so choosing which one to go with first has been a real struggle.
One theme that emerges is the resolve for the government to play a much more proactive and direct role in development of the economy. For example the proposal to create a Hong Kong Investment Corporation Limited to invest in strategic industries and to attract and support businesses to grow here. This is a major departure from past practice and a step in the direction of the Singapore model of guided development. Similarly with the much more targeted efforts to attract individual companies. Instead of just explaining Hong Kong’s advantages and helping those companies which express interest, which has been the traditional philosophy implemented by InvestHK, we will in future pursue specific companies and offer tailor-made support packages a la EDB.
Proactively luring family offices and supporting efforts to re-industrialise are other examples.
Revival of the idea of an official think tank, under the revised name of Chief Executive’s Policy Unit, is worth exploring. Introduction of the “red team” concept, so that proposals are thoroughly challenged and tested internally to iron out kinks before implementation, is exciting too.
The decision to set up a dedicated department to take forward development of the Northern Metropolis is a clear signal that this will be the major focus for the next decade. The Lantau Tomorrow idea is still breathing, but under the revised name of Kau Yi Chau Artificial Islands, and with much less prominence.
There is recognition that Hong Kong will need talented individuals to implement all these ambitious plans. In addition to nurturing and retaining our home-grown resources we need to put out the welcome mat for the best and the brightest from the rest of the world. One word of warning here: nobody from outside China will come to consider or explore opportunities in Hong Kong while we maintain our existing Covid control measures. Repeated testing, having to register and prove vaccination status on entry to many premises including government buildings, and maintaining masking mandates even outdoors, all of these serve as deterrents. The government position, that we are making progress towards elimination and the situation is much better than before, impresses local audiences but cuts no ice with outsiders. We must get back to making Hong Kong a place people want to come to see for themselves on their own initiative, then we can focus our energies on making it attractive for them to stay.
All these are interesting and worthy topics for follow up, but in the end I have settled on the plan to consider lowering the threshold for facilitating redevelopment of older buildings. The suggestion in the policy address is that the trigger for permitting forced sale, which had been 90 per cent when the scheme was first introduced in 1999 and cut to 80 under the previous administration, should be further reduced to 70 for buildings over 50 years old. The idea is also floated of a further lowering to 60 per cent for buildings over 70 years old.
My fellow columnist Alice Wu touched on the issue in these pages recently on the grounds it paid no attention to the condition of the building, only its age. I completely agree with her, this is an absurd proposition. My interest is two-fold: I own an apartment in a well-maintained block of flats fast approaching its 60th birthday and I plan to still be living in it at its 70th. And by chance I was the subject officer for these matters way back in the 1980s dealing specifically with compensation. At that time the suggestion was that an owner being forced out should get the value of a second hand seven-year-old flat of similar size in the same area. I argued that it should be the value of a new flat. (I had just bought my first flat in Hong Kong and suddenly saw things from a different perspective!).
There is an argument for allowing developers to trigger a forced sale in some circumstances, for example cases where a few owners could not be found as they had emigrated or died, ownership was being disputed etc. The issue is where to draw the line so as not to give either party an unfair advantage in negotiations.
Take the theoretical example of an old block with (say) 40 flats on a site capable of holding 100. Developers and owners approach the subject from completely different perspectives. Developers see a major profit opportunity, owners see the loss of their homes. One views the existing property as a concrete box to be acquired and demolished as cheaply as possible, the other the largest single family investment and the centre of family life. The location was chosen because it is attractive and convenient for work. The children go to local schools, the family shops in nearby markets and so on. Perhaps relatives live close. For all these reasons, the family may not wish to move at all because of the disruption.
The developer, probably using agents so as to hide his intentions, will seek to buy up flats close to market price. He will find willing buyers among those who wish to move for personal reasons, perhaps to a smaller (or larger) apartment, perhaps to emigrate. If he can’t reach agreement with 20 per cent of the owners on this basis, then he needs to re-think compensation. We should not lightly change the balance of advantage between the parties or we risk social unrest.
Having given chief executive John Lee Ka-chiu grade B for his first 100 days performance, I feel I can do no less this time on the grounds of comprehensiveness and creativity alone. Depending on how some of the of the issues are pursued, there is scope for the grade to be adjusted. I have tried here to illustrate some of the pitfalls.