Next Hong Kong Leader John Lee Vows Focus on Housing, Business Climate

(Bloomberg) -- Hong Kong's next leader vowed to repair Hong Kong's standing as a global financial hub, while still meeting China's demands on security and a cautious approach toward Covid-19. 

Chief Executive nominee John Lee outlined his policy plans Friday, just nine days before he's expected to be elected by a committee of about 1,500 mostly Beijing loyalists. The former chief secretary and security minister laid out his proposals to balance the city's gradual re-opening with mainland China's Covid Zero policy.

“Covid is not going to live with us forever. At some stage, it will be under control,” Lee told reporters in a question session after releasing his platform. “It is important that we will do a balancing act. On one hand, we will keep the disease under control, but at the same time, we will allow business to go about as much as possible.”

He proposed what he said was a new system, in which sectors deemed non-high risk for spreading infections could be allowed more leeway than others. He provided few details about how such measures might work or how they would differ from current policies.

Lee is set to be elected May 8 to succeed Chief Executive Carrie Lam, in a process that Chinese authorities made largely a formality by indicating their support for the former police officer as the sole candidate. He'll face pressure after he takes office on July 1 to restore business confidence, manage an aging society, address the city's housing affordability crisis and manage virus curbs, which have deterred travel to the once easy-to-access financial hub.

In a speech to mark the platform's release, Lee said he would review key land and housing policies proposed by Lam, including development of the Northern Metropolis near Shenzhen, which aims to be a technology and science center that integrates Hong Kong with mainland China. Lam also pitched the Lantau Tomorrow project, to be situated on artificial islands. 

Lee laid out a laundry list of policies all aimed at strengthening Hong Kong's financial links to mainland, including expanding the offshore yuan business in the city and deepening connections between markets on either side of the border. Promotion of green financing and further development of the city's bond market were among agenda items he mentioned. 

Details of Lee's platform had been previously reported by local media including the South China Morning Post and Sing Tao newspapers. 

Further cracking down on the city's opposition appeared to remain a focus for Lee, who played a central role in quashing pro-democracy protests in 2019 and implementing a sweeping national security law imposed by Beijing the following year. He affirmed plans to press ahead with the passage of a security measure known as Article 23, which was shelved in 2003 after it triggered massive demonstrations. 

China's top official overseeing Hong Kong, Xia Baolong, last July singled out housing as a key problem the future leader must tackle. The city for years has grappled with ways to alleviate a chronic housing shortage, which has made it the world's most expensive residential market and left some of its poorest residents to live in coffin-size homes. 

Lam revealed the Northern Metropolis plan in October, with the aim of attracting people from more crowded parts of the city to increase the population of two combined districts to 2.5 million from 1 million over 20 years. In 2018, Lam released plans for Lantau Tomorrow, a project centered around building artificial islands to alleviate the housing crisis.

Both plans face significant hurdles. It isn't clear how the government will pay for either as Hong Kong recovers from almost three years of economic obstacles.

©2022 Bloomberg L.P.