Opinion | John Lee’s 2023 policy address shows Hong Kong is waking up to new realities

On October 25, Chief Executive John Lee Ka-chiu delivered his second policy address with continuing emphasis on the economy and a wide gamut of measures to improve livelihood, from land and housing to support for women, the elderly and ethnic minority groups.

Before the announcement, the markets had expected reductions in stamp duties on stock and property transactions. The measures that were unveiled – reducing the stock transaction stamp duty to 0.1 per cent, shortening the applicable period of the special stamp duty to two years, halving the new residential stamp duty and buyer’s stamp duty and suspending stamp duty for new arrivals – failed to give the markets an immediate boost.

But the longer-term impact on business sentiment should not be underestimated. The evaporation of wealth stemming from the downturn of the stock and property markets has dampened consumption. For a city with a narrow economic structure and is heavily reliant on consumption, the diminution of wealth across the board spells trouble for this engine of growth.

Lee faces strong geopolitical headwinds. There appears to be a campaign in foreign media to talk down China and Hong Kong’s prospects while playing up corporate departures and an imagined collapse. After seismic changes in our lifestyle and business patterns after the Covid-19 pandemic, some reshuffling of the deck is inevitable.