Hong Kong’s Carrie Lam to Target Housing Crisis in Political Speech, East Asia News & Top Stories
HONG KONG (BLOOMBERG) – Chief Executive Carrie Lam is expected to respond to Beijing’s call to ease the housing crisis in Hong Kong and deepen integration with mainland China in the latest political speech of her current term.
Lam’s speech, due to be delivered to the Legislative Council at 11 a.m. on Wednesday (October 6), will serve as a coda for a tumultuous tenure that has seen massive anti-government protests, a national security law faced by many international critics and the Covid -19 pandemic which worsened a recession and led to unprecedented border controls in Asia’s leading financial center.
The chief executive’s annual policy presentation comes as Beijing exerts increasing control over the former British colony, pushes for greater integration with neighboring mainland cities and repeatedly calls for housing market reforms on the less affordable in the world – a social evil seen as a catalyst for the 2019 unrest.
Lam did not say if she would run again after her five-year term expires next June.
“Housing will always be at the forefront, so whoever the CEO is, they will have to tackle this issue,” said Bernard Chan, financier and leader of Lam’s executive advisory board. “I’m pretty sure the central government is keen for the next administration to tackle all of these long-standing issues dividing Hong Kong.”
Lam told a press conference on Tuesday that she would use the political speech “to take stock of the work of the government” during her tenure in what she acknowledged “may be” her last speech this year. type.
Still, she declined to discuss the details of what she said was a two-hour presentation, saying only that housing and the supply of land were the main areas of concern highlighted by government inquiries.
Among other things, Lam will offer to streamline the city’s land use planning process to accelerate development, the Sing Tao Daily newspaper reported on Wednesday, citing unidentified people. The use of government power to take private land was inevitable, according to the report.
Other proposals reported by local media in recent days include:
– Measures to increase the supply of land and relax restrictions on the redevelopment of old buildings
– Plans to develop 8,100 hectares (20,000 acres) of land in the north of the city to build up to 500,000 units of mainly public housing
– A new railway project connecting the city to the Qianhai economic zone of Shenzhen
Lam also alluded to a government restructuring to establish offices to coordinate land use and cultural policies.
The head of the main Chinese agency overseeing Hong Kong, Xia Baolong, in July set the city’s next leader the goal of tackling the city’s housing crisis and creating “a more harmonious and peaceful society.” .
In September, Reuters reported that Chinese officials had asked developers in Hong Kong to redirect resources to help solve a housing shortage. Last week, Luo Huining, Xia’s deputy and head of the China Liaison Office in Hong Kong, called on the authorities to “step up efforts to resolve the housing problem.”
This has spurred speculation that President Xi Jinping’s “common prosperity” policy of closing the continent’s yawning wealth gap, which has swept across vast industries across the border, will be extended. to the city’s real estate market – the source of the wealth of its powerful tycoons.
Families behind the city’s four major real estate giants saw $ 6.7 billion (S $ 9.1 billion) wipe out the value of their assets in a single day last month as investors feared that Beijing is ordering a control of house prices and contagion problems concerning the indebted mainland developer China Evergrande Group. The Hang Seng real estate index had fallen 17% from its most recent high in late March, when markets closed on Monday.
Many believe the city’s next chief executive has no choice but to act quickly to meet the continent’s demands after years of a more passive approach, though experts remain skeptical of the tools available to city leaders.
“Housing will be the main topic, but I don’t think there is a silver bullet to this problem,” said Iris Pang, chief economist for Greater China at ING Bank NV.
She added that although further integration within a so-called Great Bay region comprising Shenzhen and Guangzhou will be another political priority, these policies are “mostly controlled” by the Chinese government.
Lam could be encouraged to take more aggressive action given the greater regulatory pressure from Beijing this year, as she “now has the common prosperity mandate,” said Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis SA . “I think it will basically flood the market with offers” and force developers to build as many units as quickly as possible, she said.
The pandemic is another target for Lam’s administration. Restrictive measures have largely shut Hong Kong off from the world and devastated its tourism, consumer and service industries, major employers of the working class.
This highlighted the city’s growing wealth gap – another major concern of mainland officials who oversee Hong Kong – with the number of low-income households in the city having nearly doubled in the past two years to 149,700 in March, according to a government report.
“In this political speech, we will not devote too much coverage to relief measures in areas linked to the epidemic,” Lam said on Tuesday. “However, if necessary, secretaries of relevant government offices and departments will implement initiatives, as required.”
Efforts to create travel bubbles with close neighbors such as Singapore have so far failed, with Lam now focusing on reopening the mainland border. But she probably has little influence on that front, with Beijing controlling the timeline.
“It is the decision of the PRC government, the Hong Kong government can only try to fulfill the requirements,” Pang said, referring to China’s official name.