Regina Ip

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

While acknowledging the city’s vulnerability to larger economic and geopolitical forces, the chief executive delivered a blueprint that draws on new thinking to try to rebalance Hong Kong’s economy away from its traditional reliance on tourism and finance

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A man sits by the waterfront looking across Victoria Harbor in Hong Kong on October 24. There is much Hong Kong can and should do to speed up restructuring and enhance its appeal to tourists, investors and global talent. Photo: Reuters

Regina Ip

Published: 5:30am, 29 Oct 2023Updated: 6:16am, 29 Oct 2023

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.

Tales of retreats need to be balanced against positive news. Prestigious international schools report that more students from Asian countries are enrolling, and there is no shortage of students from Hong Kong’s traditional partners.

The policy address shows welcome signs of waking up to new realities and discarding old ways of thinking.