LEGCO REPORT
February 2003 Issue

Policy Address sets right direction for Hong
Kong's future
The Hon James Tien, the Chamber's Legco Rep,
welcomes initiatives in this year's Policy Address, and urges the government to speed up
efforts to attract more talent and capital to help stimulate the economy
The first Policy Address in the second term of the Chief Executive, Tung
Chee-hwa, has aroused vastly different views among the community, and hot debates from
within the Legislative Council. However, some critics have taken to bickering over minor
points, and ignored the fact that the Policy Address sets out a clear direction for Hong
Kong.
Some people argue that the Policy Address lacks details and is even
"empty." I disagree. The presentation of the Policy Address reflects the
division of labour under the accountability system. This year, the Policy Address was
presented in a style similar to the U.S. President's State of the Union Address. Mr Tung
summarised the work of the government and outlined the main framework for policies, while
various HKSAR ministers later on presented the details of specific initiatives --
financial and tax measures, of course, will be announced by the Financial Secretary,
Antony Leung, in his Budget in early March.
Target Hong
Kong's needs
The Policy Address as a whole and can be divided into two parts.
Internally, it proposes consolidating Hong Kong's economic strengths, developing the four
pillars of our industries, eliminating the fiscal deficit and following the principle of
"big market, small government." Externally, it aims to forge closer economic
integration with the Mainland, especially the PRD, to maximise our complementary
competitive advantages.
All these points are critical for Hong Kong to prosper. If they are not
implemented, Hong Kong's competitiveness will be undermined.
There have also been criticisms that Hong Kong should not adopt a
"Backed by the Mainland" position. They believe that integration with the PRD
will eat away at Hong Kong's capital, jobs and talent. As a result, Hong Kong will lose
its competitiveness and economic advantages. I totally disagree with these suggestions
which seem to be out of touch with reality.
Hong Kong is going through its third economic restructuring. The shift of
manufacturing and some service industries to China is an irreversible trend, so is the
flow of people, goods and capital. In addition, global competition is increasingly
intense. If the SAR Government does not embrace this change and work with the Mainland
more closely, it will only hinder the transformation process and harm Hong Kong's future
prospects. As the Financial Secretary Anthony Leung said, the aim of greater integration
is to make use of economic activities north of the border to facilitate the united
development of both areas.
I am delighted that the SAR Government has committed itself to relaxing
restrictions to attract Mainland talent to complement the current policy on admission of
overseas talent. Abolishing sector-specific restrictions and allowing Mainlanders to come
with their families is a positive step, but more still needs to be done. Countries and
regions worldwide are now jockeying for talented people, including Mainland cities like
Shanghai and Shenzhen. As such, the SAR Government should do more to promote Hong Kong's
advantages among various Mainland cities to attract talent to work here.
Attract more
talent and capital
Mainlanders can currently apply for a two-way business visa for Hong Kong,
valid for up to three years. However, they are prohibited from establishing companies here
or holding the office of director, though there are no such restrictions on foreigners. I
believe that the SAR Government should lift these restrictions to facilitate capital flow
and drive the economy, and at the same time promote the principle of fair treatment.
The SAR Government has also indicated that it aims to encourage more
overseas investors to settle in Hong Kong, but no decision has been reached regarding
Mainlanders. I understand that allowing more Mainland investors to live in Hong Kong might
lead to the problem of foreign exchange run-off from the Mainland. However, this is a
problem that can be solved, and the SAR Government should continue discussions with the
Central Government to relax restrictions.
Again, I echo Mr Tung's comment in the Policy Address that the position
"Backed by the Mainland and Engaged Globally" is the right way to go for Hong
Kong.
Specific measures of the economic co-operation, of course, still need
further work from the SAR and Guangdong governments. I suggest that the SAR Government
invite the local business community to join in discussions with Mainland authorities.
Through expressing their opinions on some Mainland business initiatives, the business
sector has already maintained good dialogue with the Mainland authorities. Moreover, as
construction projects require private investment, the business sector's participation
should help speed up the negotiation process and remove any barriers.
If you have any comments or proposals on my views, please send them to
me directly at, Legislative Council Building, 8 Jackson Road, Central, Hong Kong. Or email
me at tpc@jamestien.com.
Tel. 2500 1013, Fax 2368 5292. |