China lists Hong Kong housing among big focuses for next leader John Lee

Hong Kong is home to the world's most unaffordable housing market, where many live in tiny subdivided units or cage homes. PHOTO: AFP

HONG KONG (BLOOMBERG) - China handed down five big goals for incoming Chief Executive John Lee's government to meet, with housing among its major focuses.

The Hong Kong and Macau Affairs Office, China's Cabinet-level office overseeing the city, published the targets on Sunday (June 19), after approving Mr Lee's Cabinet line-up.

The statement, titled "New Team, New Atmosphere, New Chapter," ordered Chief Executive Carrie Lam's successor to do more to correctly implement "one country, two systems" and address issues of immediate concerns for Hong Kong residents, such as housing.

It also called for the promotion of social development, integrate Hong Kong with the nation's development and consolidate and improve Hong Kong's international competitiveness.

The HKMAO also called for "clearer goals, greater courage and stronger measures" to ease the world's most unaffordable housing market, where many live in tiny subdivided units or cage homes, and there's a long wait for public apartments.

While Beijing has blamed social unrest in the city on such economic issues, solving the housing problem would require taming powerful local property tycoons.

"The sixth term of the Hong Kong SAR government must be good at accurately implementing 'one country, two systems' principle in the practice of governance," the statement said, referring to the city's status as a special administrative region.

It called on Mr Lee's administration to "write a new chapter" for the city's development, by uniting the strengths of all sectors.

The statement was the latest the example of President Xi Jinping's government taking a more hands-on role in Hong Kong in the wake of Mrs Lam's tumultuous five-year tenure.

The HKMAO issued no such directives before Mrs Lam took power in 2017.

Since then, Hong Kong has experienced huge anti-government street protests and strict Covid-related border controls that left it isolated. Hong Kong's economy contracted 4 per cent in the first quarter, one of its worst performances in the past 30 years.

In recent years, China has imposed a national security law on the city and remade its electoral system so only Communist Party loyalists can hold power.

Mr Lee will be sworn into office on July 1 - the halfway mark in Beijing's 50-year pledge to preserve city's liberal financial and political systems - at an event that Mr Xi might attend.

The Hong Kong government announced Sunday evening that Mr Lee's Cabinet selections had been approved by China's State Council.

Financial Secretary Paul Chan will stay in his post, while former director of the chief executive's office, Mr Eric Chan, has been named chief secretary, and Senior Counsel Paul Lam will head the Justice Department.

"The central government places high hopes in them," the HKMAO statement added. "Hong Kong society and the general public are full of expectations."

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