Hong Kong’s financial chief to stay on in new leader John Lee’s new Cabinet

HONG KONG Financial Secretary Paul Chan will stay on in his post, according to a government statement on Sunday (June 19), as incoming Chief Executive John Lee opts for stability in an effort to bolster business confidence in the struggling Asian financial hub. 

The 67-year-old Chan has served as financial secretary since 2017, overseeing a deep recession triggered by anti-government protests in 2019 and a strict zero-Covid policy in the following years.

Other Cabinet picks include Eric Chan, who has been named chief secretary and the No 2 official, and Senior Counsel Paul Lam, who will head the government’s judiciary, according to a statement published by the Hong Kong government. Lee and his executives will all take office on July 1, when Hong Kong marks the 25th anniversary of its handover from Britain.

Hong Kong’s economy is facing a myriad challenges as Covid-19 quarantine measures have largely isolated the once-vibrant city since early 2020 amid a plunge in Chinese markets. The city’s economy contracted 4 per cent in the first quarter, one of its worst performances in the past 30 years.

On May 12, the Hong Kong Monetary Authority intervened to prop up the local dollar for the first time since 2019 as it approached the weak end of its trading band against the US currency.  

Lee, a former policeman who’s known largely for overseeing a crackdown on protesters and implementing a Beijing-imposed national security law, has little business experience as he prepares to take over leadership of the government.

Global investors and the local business community are both awaiting clarity on his financial and economic policies and, most importantly, whether he will loosen the strict Covid-19 travel restrictions that have put the city’s status as an international financial hub at risk. 

A British colony until 1997, Hong Kong is on high alert as Covid-19 infections have risen to more than 1,000 recently, although there is no sign yet of tighter curbs ahead of the swearing-in ceremony. Its measures still rank among the toughest, with at least a week’s hotel quarantine for overseas visitors and mandatory daily testing for tens of thousands of people.

In his first comments after being selected by 99 per cent of 1,424 valid ballots cast by a committee of China loyalists in an uncontested race, Lee vowed to safeguard security and protect Hong Kong from internal and external threats. He said he would also work to enhance overall competitiveness and seek to integrate the city’s economy with neighboring Guangdong province as part of the Greater Bay Area plan.

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After overseeing Hong Kong’s land supply for 5 years, Chan, an accountant by training, was appointed financial secretary by Beijing in January 2017. His biggest most recent measures included distributing HK$102.4 billion (S$18.2 billion) in consumption vouchers for 2 consecutive years to prop up growth as businesses shuttered and unemployment climbed. He also raised stock trading stamp duty last year for the first time since 1993, a surprise move to shore up government finances that shook markets.

Some Hong Kong media have said that Chinese President Xi Jinping is expected to attend Lee’s swearing-in ceremony in Hong Kong, but it was not confirmed whether any senior mainland leaders would attend. BLOOMBERG, REUTERS