MR CHAN KIN-POR (in Cantonese): Deputy President, Hong Kong’s society and economy have been hard hit by the double whammy of social unrest followed by the new pandemic, leaving many devastated industries waiting for revitalization.
In order to prevent and combat the pandemic, the Government has spent an aggregate amount of over $300 billion on relief efforts, which inevitably has a huge impact on the public coffers. As of the end of December last year, the current fiscal year has seen a deficit of $310 billion and the fiscal reserves have plummeted to just more than $840 billion, which is indeed unprecedented in history. In the face of such an adverse environment, the Policy Address has to respond to the aspirations of society and at the same time make good preparations to rev up the economy. This will be accompanied by great difficulties and constraints in actual practice. However, I consider the current Policy Address to be a dedicated, high-quality piece of work because it has also offered some concrete proposals on people’s livelihood and the economy. The biggest question now is how to implement the proposals and rebuild the public’s confidence in Hong Kong.
In my view, the first thing worthy of recognition in the current Policy Address is that it is receptive to good advice. As Deputy President said just now, it has adopted the proposal of the pro-establishment Members to shelve the applications to the Finance Committee (“FC”) for the creation of directorate posts at the current time when the Hong Kong Government is financially stretched, so that FC can spare more time to attend to details when vetting and approving works projects of public concern and thus expedite the construction work in Hong Kong. To be honest, under the current circumstances where many people are unemployed or underemployed, if the Government still indicates a wish to create high-ranking official posts, how can Members support it? Therefore, now that the Government has quickly halted the creation of directorate posts, FC will have more time to vet and approve works projects. It is absolutely necessary to create jobs for the grass roots. The Chief Executive deserves recognition for being receptive to good advice.
In addition, the Policy Address mentions public sector reform and the requirement to streamline administrative procedures, including making concrete efforts to streamline land development approval processes, as well as expedite the approval processes for lease modifications and other applications, so that the current bureaucratic mechanism for land approval will be streamlined to greatly speed up the availability of land. While noticing that this point has not been discussed much in the community, I find it to be almost the biggest highlight in the entire Policy Address. Why is Hong Kong so slow now in implementing whatever measures? It is because we have been doing everything in a bureaucratic manner. We have added new regulations and procedures, but never streamlined the processes so that we can work faster. In the past, one could not expect the Legislative Council to ask the Government to change. Only the Government knew internally what needed to be changed. I consider this point most important throughout the Policy Address and having the greatest impact on Hong Kong, but it is a shame that there is actually no discussion in the community about such a fundamental change and no one sees it as a good thing. I think it will be helpful only if Hong Kong people really see the crux of the problem and are willing to push the Government to do these concrete things.
In fact, it takes dogged determination to make reform succeed. Eliminating or streamlining outdated approval procedures will enhance the Government’s efficiency, reduce manpower requirement and induce a feeling among the public that government services have improved, which is actually a multi-win situation. I believe that, to achieve anything now, the Government needs to convince civil servants at all levels to break with conventional work practices and accept new reforms, because reforms can hardly succeed without their support. Reform is never easy, but if we can achieve it in its true sense, it will definitely do Hong Kong a great favour by enhancing our competitiveness, which is currently the most pressing task for Hong Kong because we have wasted more than a decade in long-lasting infighting. Now that the political situation is more stable, I believe it is time for us to look at ways to strengthen our competitiveness and this is ultimately a blessing to the public.
The Policy Address has other highlights as well. The Chief Executive has announced that 330 hectares of land have been identified for providing 316 000 public housing units to meet the demand in the coming 10 years, a significant increase of 44 000 units over the 2019 estimate. This is the first time since the Government announced the Long Term Housing Strategy in 2014 that the public housing supply has reached the target. In fact, despite going through the big debate on land supply in 2018, the community has been struggling to find a solution. This time, against all odds, the Government has finally identified sufficient land. This is no mean feat at all. Unfortunately, however, there is not much applause from the community either.
Although it will take five years of time-consuming construction before there is a significant increase in supply, the news is great, after all, for those on the Waiting List for public housing. Meanwhile, it has sent a positive message to the community that the Government is capable of providing sufficient land. If the Government receives no encouragement and hears nothing but constant criticisms even for carrying out such a major reform and advancing efforts that will bring great changes to the social landscape, I think that even ordinary people, let alone the Government, will lack motivation to work. Therefore, in my view, the people of Hong Kong should really think it over. In the future, if the Government has wrongdoings or inadequacies at work, such as doing a bad job in epidemic prevention, we have to criticize it. On the contrary, if it has done a good job, there should be some applause to bring about more fairness and afford sufficient encouragement to those officials who are willing to work in the “hot kitchen”. Otherwise, who would be willing to work there? They are all elites, who will not worry about not being able to find a job, and yet they are still willing to stay in this “kitchen”, so they must have a great heart for service. We must support these outstanding officials.
I believe that this is the first step in reversing the long-term shortage of land supply. The Government will soon press ahead with a number of measures, including the development of brownfield sites, land sharing, the study on Lantau Tomorrow, near-shore reclamation and rock cavern development. If all these measures are successfully implemented, the housing difficulties in Hong Kong will gradually be resolved. The Hong Kong community must understand that the prerequisite for stability and prosperity in society and a hopeful future for Hong Kong is that people enjoy peace in life and find contentment at work. I believe that the Government has moved heaven and earth to achieve the target this time, but the ultimate solution to Hong Kong’s housing problem indeed relies on the full support of the community as a whole.
The current Policy Address has adopted my long-standing suggestion that when the pandemic situation stabilizes, the Government should roll out large-scale publicity and promotion strategies to promote Hong Kong to businessmen, investors, entrepreneurs, researchers and talents around the world. In fact, in recent years, Hong Kong has become piggy in the middle of the Sino-US arm wrestling and, for good measure, suffered from social turmoil due to the occurrence of large-scale unrest. It was not until the Central Authorities enacted the National Security Law for Hong Kong that calm returned to Hong Kong. However, some foreign governments and political organizations have been wantonly smearing Hong Kong, and the international community is extremely concerned about the rule of law and the business environment in Hong Kong. Therefore, I suggest that the Government should go on the attack by drawing up a detailed explanation plan and promoting it to the international community so as to consolidate Hong Kong’s status as an international financial and business centre.
In fact, attracting and retaining international investors is very important if Hong Kong is to maintain its status as an international metropolis and financial centre. According to the latest data from the Census and Statistics Department, the number of business operations in Hong Kong with parent companies located outside Hong Kong has dropped from 9 040 two years ago to 9 025, among which the number of regional headquarters has dropped from 1 541 two years ago to 1 504, and the total number of persons employed has fallen from 490 000 to 480 000. The overall decline, though not considered significant, has sounded an alarm. The number of foreign companies doing business in Hong Kong had been rising over the past few years until last year when the upward trend reversed. Besides, the survey shows that 4% of the companies have expressed an intention to relocate outside Hong Kong and 21% have indicated that they remain undecided about whether to stay in Hong Kong for business development. This situation is concerning. Therefore, I hope that the Government will proactively explain to international investors the real situation in Hong Kong, considering that most of the information they receive about Hong Kong is actually very one-sided or incorrect. If possible, the Government should give the international business community a clear explanation face to face so as to possibly dispel their misunderstandings. At the same time, apart from explanation, it is also advisable to promote headquarters economy, for example by following in Singapore’s footsteps to provide personalized services to those interested in investing in Hong Kong, with a view to attracting investors to Hong Kong, in exchange for their recruitment of more local staff.
Deputy President, next, I would like to focus on issues of concern to the insurance industry. The insurance industry has long been striving to make inroads into the Greater Bay Area in order to push forward the sustainable development of the insurance industry. In the Policy Address, the Chief Executive has brought the good news that, with her total support, we have secured explicit support from the Mainland Government for Hong Kong’s insurance industry to establish after-sales service centres to provide Hong Kong, Macao and Mainland residents holding Hong Kong policies with comprehensive support in different areas including enquiries, claims and renewal of policies. In addition, Hong Kong private cars will also be allowed to enter the Greater Bay Area and Hong Kong vehicles will be granted “unilateral recognition”. The industry greatly welcomes these initiatives and will make use of this opportunity to press for the opening up of a wide market in the Greater Bay Area. At the same time, it will continue to strive for other schemes to be rolled out in the Greater Bay Area, including Health Insurance Connect, Life Insurance Connect and the possibility for Hong Kong and Mainland residents to purchase insurance products from each other’s sides. In fact, such schemes are well worth striving for because they will enable long-term development of the insurance industry, thus contributing to Hong Kong’s economy while creating a large number of quality jobs. As the two sides are currently discussing the details, which involve rather complex regulations, provisions and daily operational routines, I hope that the Government will allow the representative of the industry, i.e. the Hong Kong Federation of Insurers, to participate directly in the formulation work to ensure practicability of the relevant rules. In fact, as there will be more insurance products in the Greater Bay Area covering both the Mainland and Hong Kong in the future, it is indeed necessary to have a professional body representing the industry to take part in various discussion channels. I urge the Government to implement this proposal.
In addition, Hong Kong’s economy has been brought to its knees by the pandemic and the insurance industry is hardly an exception. The current fact that Mainland customers are unable to come to Hong Kong to take out insurance has a huge impact on the industry. Given the deep economic ties between Hong Kong and the Mainland, the prolonged boundary closures on both sides definitely have a bearing on the economy of Hong Kong. Since Hong Kong’s local market is limited, Mainland customers are an important source of customers for various sectors. Resumption of cross-boundary activities is of paramount importance to the economy. While certainly understanding that it is impossible to resume cross-border activities at this time when the outbreaks persist, the industry hopes that the Government will, with concerted efforts of the public, do a good job of preventing and combating the pandemic, with a view to achieving “zero infection” as soon as possible when the pandemic abates, so that it will not take long for the economic exchanges between the two places to be resumed. I also hope that the Government will make all the preparations for the recovery of the economy. More than that, I hope that the Government will discuss with the relevant Mainland authorities to explore ways to facilitate the purchase of Hong Kong’s insurance products by Mainland customers. Do they definitely need to come to Hong Kong to take out insurance? Or is there a better way, such as taking out insurance on an electronic platform?
The current pandemic has dealt a severe blow to the insurance industry, particularly in the case of long-term insurance business, where new office premiums in the first three quarters of 2020 fell by 29.4% over the corresponding period in 2019, amounting to a decrease of $41 billion. This is not only because Mainland people are unable to come to Hong Kong to take out insurance, but also, more pointedly, because the insurance industry has traditionally adopted a face-to-face sales approach, with which sales are difficult to come by when people avoid contact with each other amid the pandemic. In the face of these operational difficulties, the industry has worked very hard to turn the crisis into an opportunity. With the approval and assistance of the Insurance Authority, the industry has launched online or remote sales platforms to sell some approved products, including health insurance and deferred annuities. They have received an excellent market response. The industry wishes to continue with this sales approach in the future while being able to work in parallel with the traditional sales approach, but this also entails amendment to many compliance conditions, as well as huge capital. Therefore, I urge the Government to offer support in terms of legislation as well as vetting and approval procedures.
The Policy Address has also mentioned that the Government should be visionary, improve existing policies and measures, and remove barriers for our industries. To be honest, removal of barriers is highly essential to the insurance industry. As the business environment in Hong Kong has shown signs of deterioration in recent years, the insurance industry is struggling to stay afloat. In recent years, the regulatory bodies have increased the number of compliance conditions, which are ever increasing in harshness. In addition to being required to pay a high compliance cost, the insurance industry is stymied by these conditions, which have a direct impact on our operation. I hope that the Government will take a cue from the practice of our competitor Singapore. That is to say, on the one hand, we basically comply with international requirements, but on the other hand, what the Government can hopefully do is contemplate how to maintain a more relaxed environment under this framework to suit the local situation, for example by extending the time for compliance to afford us more time for adaptation, or by taking other flexible measures in the light of the local situation. Only in this way can the industry be given more room to compete with its international rivals.
Lastly, I would like to mention that a large group of self-employed insurance intermediaries are bearing a heavy brunt from the pandemic and even the various measures under the Anti-epidemic Fund may not be able to help them. Many of them were originally middle-class people rarely entitled to social welfare despite paying quite a lot of tax in normal times. As the pandemic persists, the Government has given priority to the grass roots and frontline employees, so this group of self-employed people are not much benefited and have now been plunged into financial difficulties and crisis. Having repeatedly reflected the plight of the industry, I hope that the Government will respond with compassion to the situation of the industry by taking relief measures for this group of self-employed people, as well as a huge number of self-employed people engaged in other industries in Hong Kong. Thank you, Deputy President.