Hong Kong’s new chief executive, John Lee, said his administration will prioritize increasing competitiveness and attracting foreign talent at a time when the island loses importance to rival Asian cities such as Singapore. The word “talent” alone, by the way, was used almost 60 times by the leader in a nearly three-hour speech on Wednesday (19).
Lee also reinforced the island’s allegiance to mainland China in the speech, stressing the need to increase national security — and thus echoing Xi Jinping’s words at the Chinese Communist Party Congress in Beijing earlier this week.
Some governments in the West see a paradox between these two goals. They consider that Hong Kong’s demotion from the position of number one financial hub in Asia is due to the erosion of rights and freedoms in the territory in recent years, which would have damaged the business environment and exacerbated the “brain drain”.
Lee, who took over the leadership of Hong Kong this year, was a key player in taking a hard line on cracking down on the region’s pro-democracy movement, having served as security chief from 2017 to 2021.
With limited financial management experience, he will face several challenges to revive Hong Kong’s growth — the island’s economy shrank by 1.3% in the second quarter of this year compared to the same period in 2021.
The administrative region has still been abandoned by more than 200,000 Hong Kong people and foreigners in the last two years alone, affected by the restriction of political freedoms and China’s strict pandemic control policy.
Lee announced a series of measures to re-attract residents to the island. One of them is the issuance of two-year residency visas for individuals with salaries of more than US$318,000, or who have graduated from one of the top 100 universities in the world and have at least three years of experience in the labor market.
“In addition to actively cultivating and retaining local talent, the government will also proactively seek global talent,” said the leader.
He further stated that the regime would invest the equivalent of US$3.8 billion in local currency in a “co-investment fund” to attract companies. He added that the stock exchange intends to revise its rules to facilitate the entry of high-tech initiatives next year.
Hong Kong lifted the mandatory quarantine for all visitors last month after strictly following China’s Covid zero policy throughout the pandemic. The tourism and gastronomy sectors have been deeply affected by the prolonged lockdowns and the closing of the border with the mainland, which is vital for the economy. Lee said he continues to negotiate the resumption of cross-border transit with Chinese authorities.
As for the real estate market — one of the thorniest problems on the island, which has one of the most expensive square meters in the world — Lee promised to provide enough land to build 72,000 residential units over the next five years. The supply of affordable housing will also increase by 50% over the same period, with the conversion of more than half of the city’s underutilized semi-industrial locations.
The chief executive did not announce the easing of the property price freeze measures implemented over the past decade, however. The lack of mention of the issue has disappointed the housing market, which has seen its prices drop by around 10% this year.
Finally, the proposed laws to increase national security on the island seek to further control the internet, regulating areas such as cybersecurity, crowdfunding activities and controlling false information. Lee did not release a timetable for carrying out those plans.
Returned to Beijing 25 years ago after spending a century and a half under British rule, the city has seen a surge in repression of political dissent recently. In 2019, before the protests that paralyzed the Chinese administrative region, there were only 26 people arrested for political reasons. Today, there are 1,163, according to the Hong Kong Democracy Council (HKDC), an entity formed by expatriates based in Washington, United States.
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