Policy address lacks blueprint for growth

A snap poll conducted after Chief Executive Carrie Lam Yuet-ngor delivered her 2020 Policy Address last week showed that only 19 percent of respondents were satisfied with it while 64 percent were dissatisfied, leading to an average rating is 27.2 marks, a new low since the snap surveys began in 1999.

Lam's ratings, meanwhile plunged to 26.8 marks, the survey from the Hong Kong Public Opinion Research Institute showed.

International rating agency Fitch said the Policy Address emphasized further integration between Hong Kong and the mainland.

However, the agency warned that downward rating pressure could emerge if, during the process of integration, Hong Kong's high degree of autonomy over key macro-institutional features such as its independently managed currency, fiscal framework, and financial regulation were to be eroded.

So, what was the problem with the Policy Address? Why were people from all walks of life generally negative about the address, despite Lam's optimism.

A Policy Address is very similar to an annual Business Plan. It should include a vision statement, an action plan, an executive summary, a target market, market analysis, a sales and marketing strategy, and so on.

Of course, it should also include policies for the livelihoods the people, but as the well-being of citizens is like the rights and interests of a company's shareholders, the difference is not huge.

Because, if a company's Business Plan does not take care of the rights and interests of shareholders, the plan will be opposed by the shareholders. And if the company is listed, the rating agencies will definitely have something to say about it.

Therefore, the biggest reason why citizens and rating agencies are questioning the Policy Address is because it fails to bring new opportunities to the table, especially since it was delayed for a month and comes at a time when Hong Kong is battling though one of its darkest periods, after been rocked by large-scale social unrest and the coronavirus pandemic.

Therefore, it was only natural for both citizens and rating agencies to expect more from the government, but the address neither solves Hong Kong's problems nor is there any clear blueprint for development.

Even though Lam stressed that the central government is fully committed to the development of Hong Kong - citing the Airport Authority's investment in Zhuhai Airport and the quota-free scheme for Hong Kong private cars traveling to Guangdong via the Hong Kong-Zhuhai-Macao Bridge - she did not go into detail on how these policies would promote the Hong Kong's economic development.

There was also little mention about consolidating Hong Kong's role as an international financial hub.

What puzzled people most, however, is if Hong Kong is a "subsidiary company" of China, the subsidiary "employees" and "shareholders" are now dissatisfied with their "director." At the same time, in the face of fiscal pressures, the subsidiary is likely to continue losing money in the future.

The "director" is now asking the parent for aid and if the parent really wants to help, then it should inject capital and new business into the subsidiary to support its development.

When the SARS epidemic stuck Hong Kong in 2003, the central government launched an "Individual Visit Scheme" allowing residents of selected mainland cities to visit Hong Kong on their own, rather than as part of a packaged tour - reflecting the determination of the parent to support its subsidiary.

But now it appears the parent feels the risks are too high to continue investing in the subsidiary. At the same time the subsidiary must be maintained so it can continue to raise funds from overseas for the parent and help boost the parent's international image.

However, if the head of the subsidiary cannot even open a bank account, how will the parent company evaluate the international benefits of the subsidiary?

Is it really convincing for the director to say that the parent company is fully supporting Hong Kong as a subsidiary when the parent company is also running a bank, but does not open an account for the subsidiary's head?

Andrew Wong is chairman and CEO of Anli Securities