Dear Fellow Citizens,

Chief executive Carrie Lam just announced her second Policy Address on Wednesday. The Policy Address has a lengthy discussion on economic development, yet, against the background of a China-US trade war, the discussion seems to be dissociated from reality .

Under “One Country, Two Systems”, Hong Kong is a unique international city. Hong Kong relies not only on the Mainland, but also on the international community. We treasure universal values, and we act according to international standards. In return, we enjoy special and independent status, allowing us to have independent tariffs and receive other unique treatments that differ from what the Mainland enjoys.

But, in these years, the international community has raised doubts about the effectiveness of the “One Country, Two Systems”. In particular, after Victor Mallet’s visa refusal, these concerns are more and more serious, and pose real threat to our society. It is unprecedented that Canada, the EU and the US government all made separate announcements and questioned Hong Kong government’s decision, showing concern over our freedom of speech, and most importantly, over the principle of “One Country, Two Systems”. Hong Kong people all know that the livelihood and survival of Hong Kong depends on the wisdom of the CE striking good balance between “One Country, Two Systems”. Any skewing of the balance may induce irreversible damage to the development of Hong Kong. If we lose our special status and every unique treatment, Hong Kong will also lose our value and will not be able to contribute in the same way to promote the future growth and development of Hong Kong and the Mainland.

Unfortunately, we can hardly find any words to show that our CE is taking this matter seriously. In the Policy Address, under the chapter “Coping with the Rise of Trade Protectionism”, CE only states measures to cope with the trade war. In her concluding remarks, CE even provides a utopian picture, claiming that the Belt & Road Initiative and the Greater Bay Area Development will give hope to us. From the Policy Address, it shows that the government heavily believes in riding on "One Country" but neglects the equally important "Two Systems". Once the balance is upset, no one can tell what the consequences are. If the international society loses confidence in our autonomy, and only regards us as an ordinary Chinese city, we will eventually lose our advantages. As CE admits in the Policy Address, she has “dual responsibility”. Therefore, in Hong Kong’s best interests, not only does she have to uphold the principle of One Country, she also has to defend the uniqueness of the Two Systems. Any imbalance between One Country Two Systems will only expose us to danger and uncertainty, in particular in the trade war.

The importance of autonomy is important but neglected in the Policy Address. On the contrary, land supply is heavily addressed, but addressed in a questionable way.

CE introduced the Land Sharing Pilot Scheme (LSPS) in the policy address, which applies to privately owned land not covered by Government’s planned development. The LSPS in essence is the old Public Private Partnership (PPP), allowing private developers to cooperate with the government in housing development. The LSPS is questionable, as it inevitably induces allegations of collusion between government and developers. This fear of allusion was stated by CE when she was the Secretary for Development. She voiced against PPP when concluding the 2nd consultation report of North East New Territories Development, claiming that PPP will induce the impression of government-business collusion. It is therefore strange why she changed her stance today.

The LSPS is also questionable in its implementation. Under the scheme, private developers lead the development projects. However, private developers would only consider their own interests, often in the form of profit maximization, and not in the interests of the society. Once the LSPS is implemented, it will ease the concerns of developers as their land bank will no longer be resumed by the government. On the other hand, the developers can make use of the negotiation procedure to further manipulate the pace of flats supply. This in turn implies that the government is giving up its power to lead any projects under the LSPS.

Finally, the scheme is also redundant. For years, the government can utilize Land Resumption Ordinance to resume private land for public development. Once the government utilizes this Ordinance to develop brownfields and abandoned farmlands, the government will provide basic infrastructure in the area. The provision of infrastructure will also decrease the difficulties in satisfying various planning requirements, therefore enhancing the chance of other adjacent developments. Hence, if the government fulfills its role in providing basic infrastructure, there is no ground for the government to provide extra incentives to private developers through LSPS. On the other hand, if the developer really wants to develop their brownfields and abandoned farmlands, they can always start their project, and get planning permission by providing infrastructure to a level the government would accept. Hence, the LSPS simply further strengthens the allegations of collusion between the government and developers.

Compared to the proposal of Lantau Tomorrow, LSPS only received little attention. But, the LSPS may pose a more immediate and serious threat to our society. Lantau Tomorrow has to undergo designated procedures like conducting feasibility studies, and should obtain approval under Environmental Impact Assessment Ordinance and meet other statutory requirements. Also, the Legislative Council has the statutory authority to approve the project’s budget. In contrast, there are far fewer statutory requirements for projects to meet under the LSPS. The government also does not have to request formal consent from the Legislative Council to start the scheme. From this angle, the Legislative Council and the society as a whole does not have much power to scrutinize the implementation of the LSPS. In other words, it is harder to detect and avoid any under-table government developer collusion in the scheme.

Over decades, land development has been a sensitive topic in Hong Kong, not only because it directly affects housing supply, but also because of the vast interests behind. Lantau Tomorrow may provoke the interests of different parties in the long run, yet the influence of the LSPS is immediate, and any government-developer collusion will probably be harder to uncover. We thus need to critically examine the details of this scheme to avoid any injustice.

Yours faithfully,

Wu Chi-wai