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Long term vision and decisiveness the best policy approach

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Policy addresses often can be fraught with undertakings and maiden addresses even more so. Their potential for outlining an administration's vision, which will affect business confidence and decision making, gives them a heightened status.

Chief Executive Leung Chun-Ying's pending policy address therefore shapes as a potential watershed in Hong Kong's business and economic history. There are two reasons.

The first is the fact that it is the Chief Executive's maiden address, while the second concerns the economic and historical position in which the SAR finds itself.

If it is to be a positive watershed, the address must articulate effective policy prescriptions in a number of key areas.

Hong Kong faces a number of challenges amid continuing global and regional uncertainty. While ideally located in what is the most dynamic economic region, Hong Kong - somewhat incongruously - finds itself in a parlous situation.

Its position as the region's commercial and financial hub is being challenged, and not only by traditional rival Singapore. A number of cities on the mainland are growing in prominence as financial centers of gravity - a trend which will only continue.

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Long term vision and decisiveness the best policy approach

  1. 1. ABNEY AND ASSOCIATES HONG KONG NEWS EDITION Long term vision and decisiveness the best policy approach
  2. 2. Policy addresses often can be fraught withundertakings and maiden addresses even moreso. Their potential for outlining an administrationsvision, which will affect business confidence anddecision making, gives them a heightened status.Chief Executive Leung Chun-Yings pending policyaddress therefore shapes as a potential watershedin Hong Kongs business and economic history.There are two reasons.The first is the fact that it is the Chief Executivesmaiden address, while the second concerns theeconomic and historical position in which the SARfinds itself.If it is to be a positive watershed, the address mustarticulate effective policy prescriptions in a numberof key areas.
  3. 3. Hong Kong faces a number of challenges amid continuing global andregional uncertainty. While ideally located in what is the most dynamiceconomic region, Hong Kong - somewhat incongruously - finds itself in aparlous situation.Its position as the regions commercial and financial hub is beingchallenged, and not only by traditional rival Singapore. A number of citieson the mainland are growing in prominence as financial centers of gravity- a trend which will only continue.Add to this an aging population, a narrow and volatile tax base, and awidening income gap and the magnitude of the challenges facing theSAR become obvious.These factors must inform domestic policy decisions and how effectivelythey are addressed will shape Hong Kongs ongoing competitiveness andstandard of living.
  4. 4. Addressing these challenges will require of policy makers an acuteawareness of the landscape in which businesses must operate andhow this will shape business decision making.Information gleaned over time by CPA Australia, through surveysand consultation with its members and the broader Hong Kongbusiness community, delivers a valuable insight into how businessviews these challenges and what it believes are the necessaryprescriptions.The business communitys views have been canvassed on a rangeof issues including taxation, human capital and general economicsentiment and while the responses have not been universallydownbeat, the clear message was of the need for urgent policyaction in certain key areas.
  5. 5. The need for comprehensive tax reform, an education system that is moreattuned to business needs and measures to address the cost of doing businessin Hong Kong featured prominently among the concerns expressed by businessleaders.These all point to issues around ensuring Hong Kongs ongoing competitivenessin a dynamic and volatile business and economic landscape.Events in Europe and the United States, as well as the mainland of course, willcontinue to influence Hong Kongs fortunes, but it can still remain the author ofits own story.The picture is definitely not all doom and gloom however. Hong Kongs manyattributes as a center of business and finance have not evaporated.The strength of its business and regulatory institutions remain as does a strongresidual confidence - both in this region and globally - in doing business in theSAR. The importance of these factors cannot be overstated.
  6. 6. It remains a jurisdiction which is viewed by most others as a shining example ofcommerce, industry and innovation.However, no nation or region can assume continued economic primacy as abirthright. In recent years weve seen the dangers of such complacency in other partsof the globe.Leading the competitiveness race by definition denotes hard work and a willingnessfor sometimes making tough and often, initially at least, unpopular decisions.The Chief Executives maiden policy address presents a critical opportunity to mapthe path ahead.It must strike the right balance between articulating a long-term vision for HongKongs place in a shifting landscape and delivering the more immediate policyprescriptions necessary to steady the ship.The author is CEO of CPA Australia.

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