HONG KONG (Bloomberg) - Hong Kong’s importance to the global economy will increase due to integration with China, incoming Chief Executive Carrie Lam said on Friday (June 23), dismissing concerns that Beijing is undermining the city’s autonomy.
President Xi Jinping’s Belt-and-Road initiative, along with a plan to create a Silicon Valley-like haven for technology and innovation by linking Hong Kong and Macau with the southern province of Guangdong, will benefit the financial hub, Lam said in an interview in Hong Kong.
“We’re now even more relevant,” Lam, 60, told Bloomberg Television on the sidelines of the Wharton Global Forum. “We will not only benefit from this deepening and opening up, we’ll actually be able to contribute to these major initiatives.”
Lam’s five-year term begins on July 1 – the 20th anniversary of the former British colony’s return to Chinese rule – with a ceremony that Xi is expected to attend. She faces growing concern that Beijing is eroding Hong Kong’s reputation as a bastion of free speech and the rule of law rather than preserving the “high degree of autonomy” it promised for 50 years after regaining stewardship in 1997.
In the interview, Lam brushed off worries that Beijing has hardened its stance toward Hong Kong, saying that calls for independence are a “sensitive flash point” and contravene the principle of “one country, two systems.”
“People now seem to be making all sorts of allegations about the tightening grip of central authorities on Hong Kong,” Lam said. “I will always ask, just give us the evidence, what are the incidents that lead people to have those sort of allegations, and then we can discuss.”
Chinese leaders have shown an increased willingness to impose their will on Hong Kong, especially when they perceive a threat to national security. National People’s Congress Chairman Zhang Dejiang, China’s top official for Hong Kong affairs, said in a speech last month that Beijing was ready to invoke as-yet utilised powers to “supervise” the patriotism of public officers.
Besides political divides, Lam inherits a city with the biggest wealth disparity in Asia. More than half of its working population earning below the level that requires paying income tax, and the assets of the city’s 10 wealthiest people are equal to 48 per cent of Hong Kong’s economy, according to the Bloomberg Billionaires Index.
Lam has pledged to focus on economic growth rather than controversial proposals that have prompted waves of protests that stymied her predecessor, Leung Chun Ying. Hong Kong’s economy is projected to expand 2.5 per cent this year, according to the median estimate of 26 analyst estimates compiled by Bloomberg. That compares with 2 per cent last year.
Lam said that housing would be her top priority upon taking office. Since it will take time to provide more land and supply, she said her immediate goal is to optimise the use of existing residential areas. Hong Kong has the most unaffordable housing in the world. Apartments the size of parking spots cost US$500,000 and median wage earners would have to save for 80 years to buy a home.
Hong Kong Financial Secretary Paul Chan told Bloomberg this month that the property market was in a “dangerous situation” and vulnerable to a correction.
Support from Beijing helped Lam – Leung’s former No. 2 – overcome a more popular rival in March to win a vote among a committee 1,194 business and political elites, an electoral system at the center of pro-democracy protests three years ago.
The city’s first female leader takes office with an average approval rate of 49 per cent, according to the University of Hong Kong’s Public Opinion Programme, compared with Leung’s 20 per cent.