Happy 2024! This is a time for new beginnings. The Hong Kong government certainly wanted to start things off with a big bang – with the largest and longest
New Year’s Eve fireworks in Victoria Harbour, after an extended blackout because of years of social unrest and Covid-19.
The outsize pyrotechnic show, themed “New Year, New Legend”, was meant to remind the people of Hong Kong of our optimism and diligence, and showcase “boundless vitality and innovation”.
And we certainly do need a little pick-me-up. The Christmas holiday was disappointing in terms of lights that adorn the skyscrapers lining both sides of Victoria Harbour, as well as the drop in
restaurant and catering sector business and the 20-year box-office low for cinemas, thanks to the record number of outbound travellers.
The bad news of 2023 doesn’t end there, though. There was the property market slump, the Hang Seng Index in the doldrums and, of course, the more than
HK$100 billion (US$12.8 billion) deficit about which Financial Secretary Paul Chan Mo-po has repeatedly warned.
That is almost twice as much as the original forecast from the previous budget. Chan has already said he cannot rule out again dipping into the reserves for 2024-2025.
Given all this, we will need more than just optimism to get us through the coming year’s challenges. The sluggish economy amid a slow recovery and challenging geopolitical landscape mean we need to brace for more tough times. With dwindling reserves, the government no longer has the
luxury of spending sprees. Resources must be targeted and costly mega projects reprioritised to ensure money is spent wisely.
It won’t be easy, and it will take effort to stop the government’s bad practices of 2023. These include splashing cash the city can’t afford to finance campaigns such as “
Night Vibes Hong Kong” and
district council election fun fairs, where the impact is small and short-lived. These are only statement pieces that serve little purpose. Rather, we need the government to inject real impetus into reviving the economy.
The lights and noise are ineffective, costly and risky, and so is spreading ourselves too thin by throwing money at everything. The 38 infrastructure projects in the coming 10-15 years the government has included in the Hong Kong
Major Transport Infrastructure Development Blueprint will place an enormous burden on our finances. Prudence demands that the government makes tough choices and takes into consideration how the blueprint can be adapted.
The city’s growing reliance on the mainland economy means there is little we can do about
external factors impeding recovery. But, given that we are more interconnected with the mainland, it is right to focus on and invest in the city’s role in Beijing’s plans.
The
Northern Metropolis is perfectly situated to realise the nation’s plans for Hong Kong to be an international centre for innovation and technology. The development of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop, next to the Shenzhen Innovation and Technology Zone, will bring enormous synergy.
Making that happen as soon as possible should be our focus. To avoid making the same mistakes as with
the Kai Tak area, infrastructure and railway projects enhancing connectivity to and from the Northern Metropolis need to be prioritised.
Just as blind optimism is the biggest reason New Year’s resolutions are not kept, a healthy dose of realism and a smarter way of achieving smaller and easier goals is the way to go for the government.
Reality requires that we put on hold the ambitious and costly plans to create the
Kau Yi Chau artificial islands. The Northern Metropolis should provide enough land for now.
As we continue the work to attract foreign talent and businesses, we must play to our strengths, one of which is our simple and competitive tax regime. With a perilous economic outlook, now is not the time to
raise taxes. As much as we need to bring in more revenue, such a move would hamper growth.
The clock might have reset at midnight, but our challenges remain. The outlook for 2024 means cautious optimism and a heavy dose of reality are needed. The Basic Law requires the government to manage the city’s finances carefully and prudently. When the people see the government has a clear and achievable plan, confidence will return. Only then can we create new legends.
Alice Wu is a political consultant and a former associate director of the Asia Pacific Media Network at UCLA
