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Even in Hong Kong, free markets need a guiding hand

Ranked the world's freest economy and characterised by "big market, small government", an increasing number believes our government should be more hand-on with economic policy

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Hong Kong chief executive says the government's "laissez-faire" approach is outdated, but Liberal Party chairman Felix Chung Kwok-pan warns that "severe" intervention would mean "Hong Kong would no longer be Hong Kong". Photo: Felix Wong

Hong Kong is the darling of conservative think tanks to whom government intervention in the economy is anathema.

They rank the city the world's freest economy, characterised by the catchphrase "big market, small government".

The sentiment is not shared by an increasing number who believe our government's hands-off economic policy needs updating. They say markets fail, and cite as evidence unaffordable housing, growing poverty and the plight of the elderly.

One of them is Chief Executive Leung Chun-ying.

He has sought to move on from the divisive debate on electoral reform with proposals for a bigger government role in the economy, which also is controversial. He chose an interview with Xinhua to restate an interventionist philosophy flagged during his 2012 election campaign, when he dismissed "positive non-intervention" as outdated.

This is a term coined by a colonial financial secretary in the 1970s for restricting government to creating regulatory and physical infrastructure that would allow markets to function efficiently.

Few would disagree that the concept has helped the city prosper beyond imagining at the time, but for whatever reason it also has failed to prevent unforeseen social inequity.

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