Promise of change needs delivering on
- By Zou Hanru
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E-mail China Daily, June 5, 2012
Hong Kong will have a change of government in less than four weeks. On July 1, 57-year-old Leung Chun-ying will take over from Donald Tsang Yam-kuen as the chief executive of the Hong Kong Special Administrative Region.
Leung emerged victorious in March, after a bitterly contested election. His victory is owed in no small measure to his campaign promise to bring change to the city of 7 million people, many of whom have grown increasingly displeased with the current governance philosophy of "big market, small government".
Nowhere are the effects of that wild exuberance for the free, virtually unregulated market more in evidence than in the escalating price of housing; one of the nagging issues that has fueled public discontent. The rising price of housing is making life very difficult for the city's residents. Hong Kong's average house price now stands at HK$3.15 million ($405,899), which is 12.60 times the average annual household income. Markets in which the average house price is 5.1 times the average household income are considered unaffordable.
Working people in Hong Kong, despite toiling the longest hours among most of the world's developed economies, struggle to muster the resources to buy a home in the city. For the majority of those that do buy a house, their life's dream is to scrape up enough money to pay off mortgages, hopefully before their retirement.
Home ownership is an impossible dream for the poor and disenfranchised. This sizeable portion of Hong Kong's population is dependent on government housing projects for accommodation. Public housing is always in short supply, the average waiting time for public housing is three years, but with HK$710 billion stashed away in fiscal reserves the government has the resources to construct more.
Meanwhile, young working adults don't have the time or the means to contemplate home ownership. They are preoccupied with ever-rising rents and moving up the pay scale. Fewer young adults have the desire to get married and have children. It's a trend that bodes ill for a city whose population is aging fast while recording one of the lowest population growth rates in the world.
Entering the election well aware of the community's call for change, Leung unveiled a platform that promised, among other things, to increase land supply, build more public housing and make new units available to young adults under the age of 35.
Leung, the former convenor of the Executive Council, which serves effectively as Hong Kong's cabinet, also pledged to address the city's growing wealth gap, restructure the economy and improve the city's overall competitiveness. But it's his housing policy that struck a chord with the general public and ultimately won him the election.
The change-minded leader-in-waiting is working hard to put together a team of like-minded principal officials to assist him in delivering his campaign promises.
While Leung's housing policy may have won him public support, it has also earned him his share of enemies. Nonetheless those who oppose his ideas know better than to incur public ire by finding fault with his popular housing policy. Instead, opponents charge that his pursuit of a more proactive government role constitutes an unwelcome departure from the doctrine of "big market, small government", which they claim is the recipe for Hong Kong's success story.
One of the central tenets of the small-government doctrine is to give full play to the market's role of allocating resources by encouraging entrepreneurship and competition. The policy played its due part in the shaping and advancement of Hong Kong's economy today.
The rules of market competition, however, are expressly designed to reward the few, leaving the many in need of public services in one form or another, which include but are not limited to public housing. These average folks are the nuts and bolts of this gigantic machine we call Hong Kong.
Altruistic intentions rarely motivate decisions made in corporate boardrooms. The provision of public services is an obligatory duty of government, to be supplemented by charitable organizations. The size of government, therefore, is dictated by the demand for public services. As this demand is growing rapidly, it's probably time for Hong Kong to have a bigger government. It can certainly afford to do so.
The author is deputy editor-in-chief of China Daily Hong Kong Edition. E-mail: zouhr@chinadailyhk.com
