OPINION> Commentary
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OPINION> Commentary
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Free market still the best option for HK
By Hong Liang (China Daily)
Updated: 2009-02-03 07:57 Many politicians and commentators in Hong Kong have predicted that Financial Secretary John Tsang Chun-wah's budget speech on Feb 25 is going to be deadly dull.
Indeed, few Hong Kong people are expecting the circumspect Mr Tsang to unveil any multi-billion-dollar economic stimulus program, or to win political brownies with generous handouts even at a time when our external-oriented economy is under the severest stress since the global stagflation in the mid-1970s. But in these trying times, and under the special circumstances of Hong Kong, doing less may well be a wiser choice for the government than going out of its way to meddle with the adjustment process, painful as it may be, of our free-market economy. This is in keeping with the Hong Kong government's professed economic policy of "small government, big market". To be sure, there is a need for Mr Tsang and his capable team of economic planners to introduce one-off measures to bring temporary relief to those who have taken the hardest hit from the economic recession, particularly the many thousands of laid-off workers and their families. Perhaps the government would also want to consider some form of tax relief to cheer up the demoralized middle-class, which is badly shaken by the meltdown in asset value and the real threat to job security. But any grand program to counter the economic downtrend would seem most impractical, at least, for now. Some economists have banked their hope on formulating an economic stimulus package around the multi-billion-dollar Hong Kong/Zhuhai bridge project. But the sharp fall in demand for consumer products from the mainland by the recession-stricken US and other developed economies has raised doubts about the urgency of that project. Those politicians and economists who have been clamoring for greater government action need to be reminded that Hong Kong is not a sovereign state, despite the high degree of autonomy guaranteed by the Basic Law. Deficit financing is not an option under that same law. The Hong Kong government can, of course, introduce some form of economic stimulus program, provided that it is fully supported by the public and largely financed by the private sector.
But the proposed Hong Kong/Zhuhai bridge project does not seem to have generated the high degree of excitement and support from the public, investors and lenders as the building of the international airport, which was the centerpiece of the so-called "Rose Garden" program that kick-started an economic boom lasting for almost a decade until the outbreak of the Asian financial crisis in 1997. The consistency of the Hong Kong government's economic policy in upholding the free-market principle has won international recognition. A key element of that policy is to ensure that wealth is largely kept in the hands of the people, who, as a group, have proved time and again their wisdom in employing that wealth to generate even greater wealth. In these difficult times, what the government can do is to build on and fine-tune what it has achieved in the past: to make available resources, on a free-market basis, needed by the private sector to meet the challenges of the global economic recession that is expected to worsen in coming months. These are likely to be subtle moves that will not make headline news. But we can take comfort in knowing that our self-assured government will not yield to the increased economic and social pressure to compromise its free-market principle. Email:jamesleung@chinadaily.com.cn (China Daily 02/03/2009 page4) |
