Hong Kong's Chief Executive John Lee delivers his first policy address on October 19, 2022, highlighting the need to improve local governance, enhance the city's competitiveness as an international business hub. Photo: VCG

Hong Kong's Chief Executive John Lee delivered his first policy address on Wednesday, highlighting the need to improve local governance, enhance the city's competitiveness as an international business hub, attract more talented professionals and fix social and economic woes, as the city embarks on a new journey under One Country, Two Systems. Officials and observers believe that a major advantage is that the city is being backed by the mainland, with broader markets and tremendous development opportunities, which will help it outpace other international business hubs such as Singapore in the long term. 

In a nearly three-hour address at the Legislative Council in Hong Kong, Lee first said that amid the COVID-19 outbreak and a worsening global economic outlook, Hong Kong has been seeing growing challenges, however, under One Country, Two Systems, there are more opportunities as the city has the unique advantage of being backed by the country and connecting the world. National key strategic plans such as the 14th Five-Year Plan (2021-25), the Greater Bay Area (GBA) construction and the Belt and Road Initiative all provide opportunities to Hong Kong, he said. 

The 91-page policy address incorporates seven sections, beginning with "build a solid foundation for security while upholding the principle and leveraging the advantages of One Country, Two Systems." Some of the major highlights include new measures to attract investment and talented professionals, for example, by easing visa restrictions for certain categories of workers and setting up a new government investment company to consolidate different investment funds as well as building 30,000 new basic public housing and increasing overall housing production by about 50 percent in the next five years. 

Lee said President Xi Jinping's earlier visit to the Hong Kong Special Administrative Region (HKSAR) and his speech there were the blueprint for his policy address. He noted that the city is now at the critical stage of transitioning from chaos to order and prosperity and he will lead the governing team to work on the city's growth plan.

Highlights of the policy address 

Some new measures appeared to be beyond the expectation of lawmakers. Lawrence Tang Fei, a lawmaker who is also the vice-chairman of the Hong Kong Federation of Education Workers, told the Global Times on Wednesday that some are innovative plans such as building new rail links and making use of the islands, and regarding restructuring the local governing team, setting about 110 key performance indicators (KPIs) for civil servants is also an unprecedented move. 

"The biggest characteristic of the policy address is combining long- and short-term issues, including long-term planning and some urgent issues that need to be fixed now," he said. 

Lee's first policy address is a vivid reflection of the historic convergence of a new stage for Hong Kong's development and a new journey of national development, showing that Hong Kong will surely achieve greater and better development in working together with the country, the spokesperson of the Hong Kong and Macao Affairs Office of the State Council said on Wednesday. 

We believe that the new HKSAR government will faithfully fulfill its pledges, constantly improve its governance system, improve governance capacity and enhance governance efficiency to create a better life for the people of Hong Kong, the spokesperson said. 

The policy address laid out a series of targeted measures to improve housing, healthcare and education in response to local residents' concerns, which underscores the HKSAR government's responsibilities, said a spokesperson of the central government's liaison office in Hong Kong on Wednesday. 

The policy address touches more practical issues than political ones, not only because Lee holds a practical attitude and whose governance is result driven, but also the new electoral reform which is based on the principle that only patriots can govern Hong Kong fixed the city's political dilemmas, Tian Feilong, a legal expert at Beihang University in Beijing, told the Global Times on Wednesday. "What the HKSAR government needs to do now is unite society and work on some deep-seated problems, serving the city and the country." 

Other highlights include Hong Kong's collaboration and integration with the motherland to ensure smooth interactions, and infrastructure projects such as proposed metro railway and development plans for the New Territories with more detailed blueprints, Chu Kar-kin, a veteran affairs commentator and a member of the Chinese Association of Hong Kong and Macao Studies, told the Global Times on Wednesday. 

"Land and housing policies are delivered with practical and innovative ideas, with a hope to improve and solve the packed and crowded living conditions," he said. "We are also impressed by the innovation sector policies and the human capital policies. These help to narrate Hong Kong's direction in the next decades.

Hong Kong vs. Singapore 

Since the social turmoil in 2019 and the COVID-19 outbreak that has lasted for nearly three years, Hong Kong has seen an outflow of labor, and some Western media outlets and observers claimed that Singapore has outpaced Hong Kong as Asia's top financial center and will continue overtaking the Chinese city in the future. 

George Yeo, former Singaporean minister of foreign affairs, told Hong Kong newspaper Ming Pao in a recent interview that Singapore can benefit for the next 5-10 years from the outflow of Hong Kong's capital, enterprises and talents. 

After Lee unveiled new incentives to attract global talents, Bloomberg made a comparison between the policies of Hong Kong and those in Singapore, citing industry insiders saying that the new policy is more aggressive than Singapore's talent policy. 

"We can't only rely on favorable policies to attract talented people. Hong Kong has one huge advantage that Singapore does not have, which is that it is backed by the mainland. Those talents in Hong Kong also eye a huge Chinese market," Tang said. 

The new investment company the HKSAR government plans to set up, according to Lee's policy address, reminds some of Temasek, a Singaporean government-led investment firm. Reporters asked during a press conference on Wednesday afternoon whether the new company will be like Temasek to incubate more unicorns and assume their own responsibility on profits and losses. 

"Hong Kong has the decisive advantages that Singapore does not have," Tian said. It has the institutional advantage of One country, Two systems, the advantage of relying on the huge size of China's market, and the strategic advantage of China's Belt and Road Initiative as well as the development of new globalization.

The outflow of talents is actually a short-term phenomenon, which has been affected by global political factors, the pandemic and social turmoil in the past, Tian noted. As long as there is support from One Country, Two Systems, the city will continue to connect to the world's markets while integrating into the Greater Bay Area, and the return of talents will be in line with the law of the market economy.