Letters from leaders of Hong Kong's political parties and government departments.
Dear mentees of the London School of Economics and Political Science
It was good to see you all again. We had a very hearty chat. I am sure we will have many more opportunities to get together.
Amongst other things, we have discussed about your concerns on Hong Kong and whether that would affect your decision to return to Hong Kong to work.
The soaring housing price is a big problem for all the 90s and millennium generations. You all had experience of living in rented accommodation or college halls during your study and I trust you enjoy the space and privacy that these accomodation offer you in London.
Although the government has been trying hard to increase land and housing supply in the private and public sectors, there is no quick fix to the housing problem.
In the short run, there may be a few administrative and fiscal measures to increase supply of housing units moderately and to curb overseas investors from speculating in residential properties in Hong Kong.
First, as a second wave measure, after levying vacancy tax on property developers, the government should study the feasibility of levying vacancy tax on residential units owned by overseas individuals or companies.
Second, an annual property registration tax should be levied in the form of a multiple percentage of rates on residential properties held by special purpose vehicle companies, this is merely a form of levy to compensate any loss in stamp revenue in any future transaction had the property been held directly by natural person.
Third, anti-money laundering procedures should be implemented for overseas buyers to identify their source of finance before any transaction can be completed.
I understand that New Zealand has recently enacted legislation to prohibit non-residents from buying residential properties with a number of minor exceptions. This is a drastic measure which may not sit well with Hong Kong’s openness and free economy, but none the less a measure of last resort should the escalating housing prices cannot be curbed. In the meantime, a rigorous anti-money laundering regime would fence off any shady overseas buyers with dubious source of finance.
Your next concern is about the quality of jobs you could find in Hong Kong. Some of you prefer spending some years working in a foreign country, especially for those who like to work for high-tech companies. You think that very few of the global technology groups seem to be willing to locate their regional headquarters in Hong Kong and many of the existing tech-companies are but service companies within a larger group, for example, fintech companies servicing a banking group, the choice of jobs in the high-tech field is limited.
Although there are quite a number of start-ups in Hong Kong, their profile may not fit in with the ideal first jobs you are looking for. Bureaucracy, red tape, lack of flexibility in policy and a regulatory vacuum in many of the innovative products and services may have hindered the location or incubation of more of these companies in Hong Kong. I will relate your concern to the Chief Executive when I meet with her coming Monday.
Many of you, if given a choice, would prefer working abroad rather than in the mainland although mainland and Hong Kong governments have introduced policies to facilitate Hong Kong residents to work across border. These include the recently announced issue of residential cards which will allow cardholders to obtain a wide range of public and social services across the border. You though believe that local conveniences and tax and social security arrangements are not the core problems which prohibit young people from working in the mainland, you would like improvement in food, drug, medical and environmental safety, and access to internet and social media without censorship. While these changes may not be imminent and outside the realm of the Hong Kong government, the Greater Bay Area could be an experimental ground for new, progressive and more ground-breaking policies.
Many of you mentioned that Hong Kong is a place of uncertainty, these include uncertainty in policy direction when a new chief executive is installed, uncertainty about the future system and direction of Hong Kong when after 2047 the system of capitalism will expire under the Basic Law and hence the uncertain of the survival of the one country two systems beyond 2047. While I think the uncertainty brought about by a change in our Chief Executive would not be greater than any change sustained by a change of a ruling party of any democracy, there is a dire need for the long-term benefit and development of Hong Kong to clarify the 2047 issue, if not, I can see a lot of brain drain and drifting away of foreign investment from this city.
Many of you have gained valuable experience from your summer job, I hope you can have a good rest and spend some time with your family before the start of the new term. Talk to you soon and all the best.