Oct. 12 (Bloomberg) -- Hong Kong Chief Executive Donald Tsang began his final annual policy speech today in which he is expected to address discontent at a surge in home prices that threatens to mar his legacy.
The top government official of the Chinese territory on Oct. 9 pledged to “break with tradition” after admitting to mistakes in housing policy during his six years in charge. While proximity to China boosted exports, retail spending and services in the former British colony, an influx of mainland money also pushed home prices beyond the reach of many people.
Tsang took office in 2005 after mass protests led his predecessor to quit, and with the economy smaller than when the city was returned to Chinese rule eight years earlier. Gross domestic product growth of 26 percent since then, unemployment at a 13-year low and a minimum-wage law failed to stop his popularity plunging as a widening wealth gap fuels public anger.
With policy options limited by the currency’s peg to the dollar, Tsang on Oct. 9 signaled he will repeat a pattern that’s seen more than HK$180 billion ($23 billion) in power subsidies, tax rebates and other sweeteners awarded by the government in the past four years.
“Tsang’s quick fixes of handing out candies are like opening a Pandora’s box,” said Joseph Cheng, a professor of politics at the City University of Hong Kong. “Hong Kong can be pretty proud of its economic performance, but Tsang has made no efforts to push long-term policies addressing livelihood issues.”
Tsang, 67, admitted to “mistakes” by stopping the supply of land after property prices collapsed in 1997. The subsequent surge in home prices was the biggest source of public anger, he said in a radio interview broadcast on Oct. 8. He is likely to unveil a new subsidized home-ownership program in today’s speech, the South China Morning Post reported yesterday.
A career civil servant who held posts as financial and chief secretary, Tsang’s first stint in the top job began after Tung Chee-hwa quit two years early following protests by more than 500,000 people in 2003 and hundreds of thousands in 2004.
“Tsang’s worst nightmare would be a repeat of seeing half a million people taking to the streets,” said Ivan Choi, a politics lecturer at the Chinese University of Hong Kong. “He tries to avoid anything that could trigger social conflicts. He’s just a politician working for his own survival, not a statesman with vision.”
Tsang’s legacy was hard to see as many of his initiatives were “realized in a watered-down version,” Choi said.
The final policy address will be longer than usual, Tsang said Oct. 9 as he plans to review his four decades of public service.
--With assistance from Jasmine Wang and Ben Richardson in Hong Kong. Editors: Ben Richardson, Patrick Harrington
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