It is quite a close case. In Hong Kong we said we would like to go high tech, value added, but what has been the result? In terms of launching changes our major resistance has been coming from ourselves, which is a very good contrast to the Koreans who said they would support it to the end. In Hong Kong, we say we support changes as long as we don't have to make any sacrifice and change on our own.

Five to ten years ago, Hong Kong folks going to China were considered big spenders, valued customers, and even superior. Now, Hong Kong folks are called "kong-tan" (Hong Kong bumpkin). Why is that? I think there have been a lot of improvements in China, but Hong Kong has remained stuck in the same place. If other people are improving but you are standing still, sooner or later they will catch you up and pass you by. That is where Hong Kong is right now, because its change management has been far from successful. I always remember something which Premier Zhu Rong Ji said: "You talk a lot, but you can't make a decision. Eventually you make a decision, but you never execute it." This is a wonderful statement coming out of China about change management in Hong Kong.

Change management involves everyone, but the major people issue of Hong Kong is "inertia." The lack of vision, lack of commitment and too many voices without focus and accountability allows the inertia process to happen. That is why when other people have been moving miles, Hong Kong has only moved inches. We are not determined to make things happen and change.

This is an example of inertia. We recognise that Hong Kong must transform itself into a high-tech and high-value added economy but we have no solid action plans to deal with the low-skilled workers. We are running out of ideas, but fortunately we are not at the end of the deadlock.

There are a couple of ideas running around. I have been proposing a massive talent redeployment programme, but counting on the government alone to provide those changes will be ineffective. We should encourage the private sector to get into this area with innovative ideas. For example, the richest lady in Japan has been running a very successful initiative. She has been massively re-deploying talent to become a contingency workforce, with proper and timely skill-building programmes for specific employers of specific industries. Being able to keep these 310,000 "members" of the scheme employed through various projects over different periods of time depends on the needs of specific customers. Some stores in Japan require extra sales staff for Christmas but have no interest to hire more staff. These "members," after being trained, have been able to meet the specific requirements as skilful salesmen for that specific environment. So by the time a company requires some contingency workforce for peak periods, these schemes can right away provide a very meaningful one to two months' employment. This is a good scheme combining market oriented skill building of the left-out workforce and the continued temporary employment engagement of this group of people.

Is that something we should start doing? I am not saying this is a solution to the unemployment situation, but I am saying that it is time to try something different, to think out of the box and to think more pragmatically.

The wages bill for companies, I think, is actually going down, but whether it is going down at the speed and as far as we want is a different story. One of the fundamental problems with globalisation is that it neutralises costs. In the U.S., over the last 10 to 20 years, wages have hardly gone up. A lot of companies have moved their operations offshore so that they can produce more cheaply, or if Mexico, for example starts to get expensive, they move to China; if China gets expensive they move to Vietnam. So companies have a choice.

Similarly, that is why some Hong Kong people go to work in China. They cannot earn as much as in Hong Kong, but they are excited to work there because they know there are more opportunities for business in developing their career. They can survive on a lower salary in a lower cost of living environment and they are happy to do that. So both companies and people go where they can get the maximum benefit.

This is not the time to debate about this and keep the status quo. Let's be honest with ourselves and recognise our strengths and weaknesses. If we don't allow talent in to drive the economy forward and create jobs, those people who worry about losing their job won't even be in a job, because all the businesses, opportunities and talent will be willing to uproot their local presence for other options.

The majority of folks in Hong Kong, the ones who recognise the need for change, unfortunately, are the silent group. As such, we may see the need for certain changes, but we do not have sufficient public voices to make changes happen.

Look at Guangzhou and Shenzhen. If you give them five years how far will they go? Hong Kong is still fortunate compared to Singapore because of its strong China connection. However, in five years time, when China has advanced further, the role that Hong Kong can provide will be marginally less. Last week I was in Singapore. When I turned on the TV news in the evening, most of the time there were reports and sharing of how Singapore and Singaporean companies are gaining ground in China. These are actions, not hollow words, and action speaks for itself. How much more time can we have without out-of-box thinking and action and changes?

There are still a lot of good things in Hong Kong. Management here is first class. Our managers are extremely global. Outside of Japan, which region is doing well in attracting foreign investment and presence of MNCs, as well as talent? -- Hong Kong. They all believe in Hong Kong, and that is why we have so many multinational companies setting up their regional headquarters here. They are all interested in the China market, but only a few of them are actually moving into China. That is why the next five years is so important to Hong Kong. Our attractiveness to them has to be continuously nurtured, not status quo.