Wednesday, 16 January 2013

Will This Policy Speech Save Leung?

Will Hong Kong look like this in the future?
Hong Kong Chief Executive Leung Chun-ying finally gave his first policy speech since he took office last March.

And while there were many expectations for him to deliver, he is probably hoping his initiatives will stave off the criticism and calls for him to step down, which critics have been doing for months. You can read the full address entitled "Seek Change, Maintain Stability, Serve the People with Pragmatism" here. Sounds very mainlandish, don't you think?

Also interesting to note the cover has Chinese kids running on some green grass with blue skies in the background -- and two South Asian kids too. Somewhat inclusive...

In any event the biggest priority is housing -- to make it affordable especially for young people trying to enter the market.

"Land shortage has seriously stifled our social and economic development and smothered many opportunities for people to start and expand their businesses," he said, noting some 200,000 people were on the wait list for public housing.

In his speech Leung noted many families had to move to smaller flats, or even factory buildings, while single people with low salaries were stuck in subdivided flats that are unhealthy to live in.

"As long as the housing shortage persists, we have no alternative but to restrict external demand and curb speculative activities," he added, which means many foreigners who are keen to live here long-term won't be able to buy a flat until they become permanent residents.

Leung said more land would be rezoned for housing, and new areas opened up for development, with the aim of having 67,000 units entering the market in the next three to four years. He is targeting 100,000 subsidized public housing units that will be built in five years from 2018, and another 75,000 already planned in the next five years.

Any land that is not used will be considered for housing, and unused industrial land will be re-purposed for housing as well. The big concern is building these units fast enough, as they were needed many years ago already.

"We recognize that problems stemming from property prices and rental, cage homes, cubicle apartments and sub-divided units cannot be solved overnight," he said. "But we must acknowledge these problems, understand the gravity of the situation and take the first step forward to resolve them," he said.

It is expected there will be no immediate impact of Leung's speech on the housing market, so it'll be interesting to see how buyers react.

Leung could not be too radical when it comes to the housing market as any immediate flood of housing will adversely affect property prices, and yet the demand is so great; he is in an unenviable position, but at least he has pledged to kick start the solution.

His other main issue is tackling air pollution and he has pledged HK$10 billion ($1.3 billion) in subsidies to phase out over 80,000 heavy-polluting diesel vehicles, while new emission targets are now set with those in Guangdong province. He has also said the government will consider legislation to push ocean-going vessels to switch to low sulphur diesel. Recycling is also high on the agenda, though nothing quite concrete yet.

Other highlights include Leung's pledge to set the poverty line and allocate HK$900 million to enhance facilities for the elderly.

During and after his speech, Hong Kong people took to Twitter and voiced their frustration that Leung didn't seem to do anything radical or substantive in the short term.

Are they asking for too much? Or is Leung not brave enough?

We shall see how his policies are executed and play out in the end.

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