Motion on “Speech on Motion on Boosting Total and Sustainable Competitiveness of Hong Kong”(2013.05.30)

In a recent report on home competitiveness released by the Chinese Academy of Social Sciences, Hong Kong tops the national league for the 11th consecutive years with its “consolidated economic competitiveness” and “sustainable competitiveness”. However, there are causes for concern behind prestige. The same report also says that Hong Kong’s comparative advantage is diminishing and its gap with Mainland cities are closing. We are losing edges in terms of talents, hardware and software.

Frankly, there is nothing new in this report, as we are not unfamiliar with these issues, but unfortunately we are still in search of solutions. Nowadays, Hong Kong is lagging behind Singapore in many respects and the Mainland is catching up. If we are not resolute to find breakthrough, Hong Kong would lose its leadership not before too long.

Several learned colleagues have moved to debate on our economic outlook at recent meetings. Hon Jeffrey Lam has tabled a motion on business environment. Hon Lam Tai-fai is moving this debate on competitiveness. Hon Ng Leung-sing will table a motion on international financial centre later. We should pay tribute to all three of them for reminding us that Hong Kong is facing unprecedented and imminent challenges. I ask the Government and the public to listen carefully to what are said in these debates and reconsider our future. It is time to put disputes and differences behind.

According to the said report, our economy is still highly dependent on finance and properties but land and housing supply are in serious shortage. Excessive property prices and speculative activities are creating economic bubbles. In turn, surging rental pushes up inflation to affect small and medium businesses as well as livelihood. Moreover, an aging population and contracting labour force are eroding our competitiveness. The report also envisages that services industry in Hong Kong is vulnerable to a maturing Mainland economy.

In the wake of such demanding situation, we should inject fresh dynamics in the economy for new breakthrough. I have made many proposals at earlier debates and shall not repeat. I would only supplement that Hong Kong is indispensable only if we possess attributes that are unique to ourselves. For instance, our reputation is high and this attribute must be defended.

Actually, foreign investors have faith in our adherence to contracts. Doing business in Hong Kong needs not worry about unknown factors. Mainland consumers are particularly confident in goods and services offered in Hong Kong. Our renowned reputation is still bringing sustainable opportunities and we should endeavour to guard it. In fact, this attribute is derived from our core values of rule of law, prevention of corruption, freedom of information and high civic quality etc. Lately many inferior products are found in market. For instance, beef meat ball is found to contain no beef. In my view, such unscrupulous behaviour should be severely punished.

Another comparative advantage is simple and low taxation. As I understand, foreigners are still fond of Hong Kong as gateway to China and many are operated from Hong Kong. Among their considerations is low taxation. Foreigners are complaining against increasing costs of operation in China, particularly complex and high taxation. Many have chosen to base in Hong Kong for the privilege of low taxation. Therefore, simple and low taxation is still advantageous in retaining foreigners. It should not be altered.

Lastly, I would like to remark on our airport. The Airport Authority’s plan for the third runway is meeting challenges and queries. Hong Kong is an international aviation hub. Aviation is artillery of our economy. If it is unobstructed, the economy would be healthy in development. If it is blocked, the economy would suffer from high blood pressure. According to labour statistics, the airport provides 65,000 jobs directly and over 120,000 jobs indirectly. If the four pillar industries that are closely related to aviation are also counted, over half of the labour force is covered. Significance of the airport is self-explanatory.

According to design, air traffic at Chek Lap Kok would reach saturation by 2018 but latest figures show that it is approaching capacity already. There were 1,172 flights on the first day of this year’s Easter long weekend, a record high. As the figure is only 28 flights less than the daily capacity of 1,200, the critical day would come much sooner. When the airport reaches capacity, it would be incapable to meet increases in passenger and cargo demand. Airlines would have no choice but to cut second and third tier flights and would also be under pressure to increase fares. Both would affect our competitiveness. Worst still, landing rights are rather complex. Flights not coming to Hong Kong do not necessarily go elsewhere in Guangdong. More likely than not, our rivals would benefit instead. Thus, I believe that the third runway is indispensable and imminent to maintain our competitiveness.

Of course, we should not trade environment for livelihood. Admittedly, the third runway would affect environment and ecology. I ask the Airport Authority to allocate sufficient resources for remedies to the environment and ecology, for sustainable development and for assurance of pollution-free engineering work.

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