Is Hong Kong finally ending its love affair with ‘big market, small government’? Analysts ask if it is ready to make the right bets for the economy
- Observers say move as set out in city leader’s recent policy address is long overdue and seen as following in Singapore’s well-trodden path
- They warn however that results may take decades to yield, with the shift possibly ‘too little, too late’
The new embrace of interventionist strategies for the economy as set out in the policy address of Hong Kong’s leader this week signals the end of a long-held “big market, small government” stance, according to observers who welcome it as a “long overdue” move to inject new stimulus into a Covid-battered economy.
They said it was also important to take such action, seen by many as following in Singapore’s well-trodden path, given the trend towards deglobalisation that would hamper the easy movement of capital and labour with countries more vigilant about protecting their own economic interests.
But they warned that results could take “decades” to yield, the analysts added. Success would require Chief Executive John Lee Ka-chiu to have a precise, visionary industry policy to diversify Hong Kong’s economy for long-term developmental needs.
“Hong Kong is already among the last advanced economies to deviate from the ‘small government’ strategy that proved a failure in the 1990s. The lack of long-term planning and crisis management are also an outcome of upholding a strong faith in non-interventionism,” Heiwai Tang, an economic professor at the University of Hong Kong (HKU), told the Post.
“Under the current trend towards deglobalisation and disrupted supply chains, doing nothing is certainly not a solution.”
He was commenting on the city leader’s array of aggressive investment-led strategies unveiled in his maiden policy address, which included establishing a local version of Temasek, Singapore’s state investment firm, named Hong Kong Investment Corporation Limited (HKIC).
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Breaking down Hong Kong chief executive John Lee's policy address
It aims to promote the development of industries and the economy by consolidating existing funds, including the Hong Kong Growth Portfolio, the GBA Investment Fund and the Strategic Tech Fund established under the Future Fund.
