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Housing in focus as Hong Kong leader seeks support in post-protest address
[HONG KONG] Hong Kong leader Leung Chun-ying is expected to focus on housing, the economy and youth issues in his policy address on Wednesday, seeking to bolster support after last year's massive pro-democracy protests and widespread calls for him to quit.
The annual policy blueprint has been a key platform for leaders in the Chinese-controlled city to hand out billions to the less-advantaged in the form of tax breaks, or to signal shifts in economic, property and political policies.
This year, however, after months of political upheaval that saw protesters occupy key parts of the city for more than two months, Mr Leung must try to boost his ratings among a population that knows that, under Beijing's watchful gaze, he is unable to offer anything significant in the way of democratic reform.
The balancing act is to heal divisions, maintain strong ties with Communist Party rulers in China, on which Hong Kong's economy overwhelmingly depends, and ensure the financial hub's economy - expected to grow around 2.2 per cent this year - remains on a steady keel.
"It (the policy address) can rescue his approval ratings a little bit," said political analyst Ma Ngok. "It really depends on the public reception on the economic and livelihood policies, because people really won't have much expectations on the political front."
The former British colony returned to China in 1997 under a "one country, two systems" formula that gives it some autonomy from the mainland and a promise of eventual universal suffrage. Beijing has allowed a free vote for city leader in 2017, but insists on screening any candidates first.
As one of the world's most expensive cities for property, housing will again be a focus, Mr Leung told reporters, saying the government would boost supply to moderate prices, including spikes over the past year in smaller to medium-sized flats.
The government has already pledged to supply 480,000 flats over the next 10 years, but Barclays analyst Paul Louie said Mr Leung may bolster this with a subsidized housing scheme and open up hilly, pristine country parks to limited development, a move likely to infuriate environmentalists.
"Not all of Hong Kong's land has been used to construct flats. To increase land for such a purpose, we need to rezone some land," Mr Leung said. "We will need the public's support and we will also have to increase the number of construction workers."
In tiny Hong Kong, more than seven million people are packed in high-rise apartments into just 30 per cent of the territory, with green belts, country parks, woodlands and wetlands taking up the rest of the land.
"Unlike 12 months ago, when home prices had only risen 2.3 per cent in 2013, this past year's 11.2 per cent increase should enlist a more hawkish tone, perhaps with a reference to 'some signs of overheating'," Mr Louie said in a research report.
And with the democracy protests driven by students, Leung may also offer concessions such as a new-business start-up fund for youngsters, the South China Morning Post reported.
At a time when China's economy remains vulnerable to a protracted slowdown, Hong Kong has struggled on many fronts given its growing ties with the mainland.
Initial public offerings, crucial to its financial services sector and broader economic health, have dried up, including from China. The offshore yuan market has slowed markedly thanks to more offshore yuan hubs coming online.
Even financial services have seen torrid times as large global institutions struggle. Standard Chartered Bank recently shuttered its global equities operations and laid off a number of people, many of them in Hong Kong.
Some analysts said that economic incentives alone were unlikely to appease the youth.
"Will our young generation welcome these measures?" asked Joseph Wong, a former senior Hong Kong government official. "I really don't think so."