Interesting article about the issues HK’s next Chief Executive will need to tackle

In the run up to Hong Kong’s 2012 election for the Chief Executive of the Special Administrative Region, here is a discussion of what he, or she, would need to face.

The editorial is nicely written and carries a clear-cut setting of context.  It is authored by Thomas Chan, the current Head of the China Business Centre of Hong Kong Polytechnic University.

The tasks facing the next
Hong Kong Chief Executive

[reference: ‘China Daily’ newspaper; topic section: ‘HK Views’;
13 May 2011 –
report by Thomas Chan,
Head of the China Business Centre,
Hong Kong Polytechnic University]

Hong Kong skyline
Picture from the news website
China Digital’s article
China Reins in Hong Kong’s Democracy Hopes” (June 2007)

The “battle” for the post of Chief Executive in next year’s election has become a red hot issue. Before anyone has actually stepped forward to declare his candidacy, it would be impossible to make a good guess about who has the best chance of heading the SAR Government for the next 5 years commencing in 2012.

It probably would be more profitable to examine the major tasks the new Chief Executive will face, and that examination may reveal the potential candidate best able to undertake them.

The primary task is to show the people of Hong Kong the direction of development of the local economy and society.

This will inevitably show the people of Hong Kong’s position as it addressed the steady resurgence of the country in the 21st century. What is evident is that Hong Kong will integrate with the Pearl River Delta (PRD) region and spearhead the formation of a world class metropolitan region with Guangzhou.

The Pearl River Delta Region, PRC

Picture sourced from the article “China’s Labour Shortage 2010” dated 23 Feb 2010, located in the
Money Game section of the website Business

As the nation’s 12th Five-Year Plan has shown clearly, in the coming decade competition between cities will be replaced by competition among city clusters, or metropolitan regions, even within the country itself.

The proximity of Hong Kong to cities in the PRD region offers either direct competition with the Guangzhou-led PRD metropolitan area or cooperation with it.

Without the PRD region, Hong Kong may still be able to compete with Singapore, but it could never match the great resourcefulness of the Great Shanghai, or the Yangtze Delta region, which is expanding to include not just Shanghai, but also Jiangsu, Zhejiang and even Anhui.


 The Pearl River Delta

Picture sourced from the article “IT Industry Polluting China” dated 23 June 2010, located in the website Be Informed

The second task: once integrated with the Guangzhou-led PRD region, Hong Kong must organize a division of labour with Guangzhou as well as Shenzhen and other cities in the region.

The 12th Five-Year Plan for Guangdong and for the nation as a whole, have emphasized that metropolitan regions will be service-dominated with industries relocating to the periphery.  Hong Kong, Guangzhou and Shenzhen will become the three major service centres of the region.

Hong Kong clearly stands out as the centre for the regional financial system, since its position as a major international financial centre is already acknowledged by the national government. In that regard, Hong Kong and Shanghai share similar stature. Thus, the financial role of Hong Kong should apply to interior (regional) integration as well as to provide external linkage with the global system.

As a world city, Hong Kong should bring globalized service to the PRD region. Finance is just one of the FIRE, advanced global services of finance, insurance and real estate. This broad area should also include many different kinds of consultancy and industries. It should embrace more sophisticated consumption of quality goods and services.

Hong Kong should be more than the City of London for the PRD region. It should instead be the London of Southeast England holding leadership in many globalized, knowledge and innovation intensive industries and services.

The regional integration will therefore demand a general upgrading of the Hong Kong economy and society with heavy investments in human and social/cultural capital.

For example, in setting out their 12th Five-Year Plan the nation and the province of Guangdong have set the target of R&D expenditure in GDP at 2.2 percent and 2.3 percent respectively over the next 5 years.

The current percentage in Hong Kong is a poor 0.7-0.8 percent. To catch up with the national and Guangdong averages and to attain regional leadership, Hong Kong needs to spend more than triple its present level. A science and technology policy or a knowledge/innovation policy is also essential to coordinate the overall efforts of both the public and private sectors.


China Rising

Picture from the article “China’s R&D Spending more than Double Korea’s” located in the website The Next Silicon which contains news of ‘global innovation news and views’

The third task: a world city should be a city for creating social harmony and inclusive growth. Hong Kong is not a socialist society, but with its advanced level of development, it should match other advanced societies with an equitable social policy to reduce poverty and social deprivation of the lower income groups, including the elderly who are also poor.

The colonial heritage has given Hong Kong a good foundation and framework for social welfare. The problem with Hong Kong at present has been a policy reversal since the Handover in 1997.

This was caused by the ideological turn of the two administrations. Given the huge reserves the government has, and the importance of social capital for the development of a knowledge/ innovation economy and society, another turn in social and welfare policies will be necessary. It will also enhance social cohesion and trust in the government that will render an effective governance possible for the new administration.

The fourth task: political reform is always necessary for any government to change.

Political reform however does not mean total negation of the existing structure, or a complete transplantation of a foreign one. There are only minor reforms to be undertaken by the local government and legislature: operational procedures and regulation for the two direct elections, abolition of appointment system for the district level councils, and probably a rethinking and restructuring of their local political and other functions.

These are important as they will tell the local population the commitment of the new administration to democracy and public political participation and their willingness to correct the mistakes made by the previous administration.

There is still some time before the election next March. Let’s see who has the courage and wisdom to challenge these fundamental issues and put forth workable solutions.

Nerd smile  My thoughts

About Hong Kong’s research and development (R&D) expenditure:

“The current percentage in Hong Kong is a poor 0.7-0.8 per cent.
To catch up with the national and Guangdong averages
(of 2.2 per cent and 2.3 per cent respectively)
and to attain regional leadership,
Hong Kong needs to spend more than triple its present level.”

As with any such small geographical region, it seems too much to expect such high R&D expenditure in HK.  In the whole scheme of R&D, it is also way too early to make decisive, constructive and well-informed decisions about such long-term issues as to where to place funding of R&D projects.

HK’s R&D sector would need to be succinct and concise to avoid fruitless wastage of the island’s (very) limited resources.  It doesn’t have the luxury of mainland Chinese regions of being able to nurture vast, broad-based, sweeping and voluminous R&D.

Hong Kong’s resources, like it’s land and population, are comparatively limited; but what it lacks in quantity it can make up for in specialist quality.

Effectively, Hong Kong will need to be very selective about its chosen areas of R&D.  There isn’t any point for Hong Kong to deploy large R&D budgets when the areas to be explored have yet to be decided upon in a well-informed and intelligent manner.  Which industries/ areas are to be researched and in which direction?

The United Kingdom had a period of massive brain drain, during which its brilliance left for the United States to support and develop the US’s large R&D structure and expenditure.

The US, like mainland China, is more able to cultivate and support a wider range of R&D.  Whereas the UK must be more selective, basing its use of R&D resources in the context of the US, just as Hong Kong could derive its R&D choices within the context of mainland China’s wider-ranging R&D areas.

However, Hong Kong would need to be certain it is serving its own purposes and its decisions are relevant to itself rather than merely obeying the mainland or even only covering R&D areas rejected, or not served, by the mainland.

In other words, Hong Kong should not become complacent of its position, stature and decision-making along the often confusing, uncharted and difficult-to-exit long road of research and development.

The road of research and development is where only the audacious dare to make U-turns: it is where street names chop and change according to laboratory chiefs, house numbers are rare and forks in the road are un-signposted, not to mention there are no guides since it is unexplored, pioneering territory.

Granted, some areas of research are worth covering in more than a few countries to allow the comparison of notes, but there are also many research areas where duplication of effort is just wasteful.

Both sides (China and Hong Kong) should benefit from an exchange – a secondment of brains – because some of the American located UK-brains returned home to England more able and more experienced to set up a decidedly more succinct R&D sector within the UK.  Such returning UK-brains would be more well-informed to choose more relevant areas of research in the context of what has already gone on in the American sectors.

Maybe Hong Kong can find some comfort in this and take greater advantage of the vast resources of its neighbouring Motherland…


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