making for Hong Kong
Mr Gordon Siu, recently appointed Head of the Central Policy Unit, was the
Foundation's guest speaker on 15 January 1998. This is a summary of his remarks.
Mr Siu outlined the role of the Central Policy Unit (CPU), which was to advise the three
senior leaders of the Hong Kong Government -- the Chief Executive, Chief Secretary and
Financial Secretary -- to draft the Policy Address and to conduct special studies. Since
the staff of the CPU was small -- six persons -- the unit worked with outside think tanks
such as One Country Two Systems and the Policy Research Institute.
The CPU looked at overseas experience with think tanks. Hong Kong had relatively few
such institutions. Other countries were better-resourced: New York alone had over a dozen;
there were many more in the rest of the US. Mr Siu looked forward to supporting Hong
Kong's new Commission on Strategic Development. Long term scenario planning was something
new to the Hong Kong Government. However, some multinational companies did it, and a few
overseas governments, including Israel and Singapore did long range plans of this nature.
On the East Asian financial crisis, Mr Siu felt that the so-called Tiger economies had
generated an aura that had attracted more praise than critique. Yet although these
economies had genuine strengths, some of them lacked sound systems, and in some corruption
was prevalent. Nonetheless, the crisis had its positive aspects. There were opportunities
for Hong Kong, niches in manufacturing, for example. And the example of Korea would
encourage China and other regional economies to get their houses in order, which in turn
would help Hong Kong. For example, the corporatisation of state owned enterprises in China
should be made more transparent and orderly, with proper auditing, etc.
On the question of Hong Kong's large fiscal reserves, Mr Siu felt that the Basic Law
did not rule out a deficit budget, but merely required that the budget be balanced over
the longer term. However, he did not feel that the time was ripe for a deficit now. While
he was prepared for a degree of austerity in the Civil Service in view of the general
climate, Mr Siu warned against paying Civil Servants too little, as some politicians were
advocating, since this would create problems of its own.
There were positive aspects of the economic difficulty that Hong Kong was now going
through. Wages and property prices had gone too high since the early 1990's and, since
there could not be adjustment through the currency because of the dollar-link mechanism,
these price levels had to fall. This was natural. Mr Siu warned against expecting the
Government to solve all the economic problems. Hong Kong's strength in the past had not
been reliance on government; it had been the fighting spirit of the people of Hong Kong
that had seen the territory through crisis in the past, and would do so again.
The above summary does not necessarily represent the views of the Hong Kong
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