Pro-democracy legislator Raymond Chan is taken away by security guards after he protested against Hong Kong Chief Executive Leung Chun-ying during Leung’s annual policy address
Hong Kong faces a standstill unless China-backed plans for restricted elections and measures to cool record home prices are implemented, Chief Executive Leung Chun-ying said in his first major address since pro-democracy protests divided the city.
The city will forgo having its first-ever election for the chief executive in 2017 if it can’t agree to China’s terms, Leung said. The public also needs to accept that an attempt to increase land supply for homes will mean making choices, he said. The city’s housing shortage is caused partly by lowered development intensity and land zoned for country parks in the past, he said.
“We must make choices,” Leung said at the start of his annual policy speech. “We have to choose between implementing universal suffrage and a standstill; on the economy, between progress and stagnation; and on people’s livelihood, between reforms and clinging to the status quo.”
Leung is seeking to push through electoral reforms that face opposition from lawmakers, after China’s decision to vet candidates for the city’s first election triggered 11 weeks of street protests. He also yesterday earmarked HK$50 billion (USD6.5 billion) for a retirement fund and raised minimum wages, as he seeks to bolster public support.
Halfway through his five-year term, Leung needs to show progress with his pledges to improve housing affordability, narrow a wealth gap and implement universal suffrage in 2017.
Property curbs failed to stop home prices from climbing to a record last year, while China’s insistence last August that all candidates for the election must be screened brought tens of thousands of protesters onto the streets for almost three months. Leung has rejected the demands of the activists for public nomination as against the law.
“As we pursue democracy, we should act in accordance with the law, or Hong Kong will degenerate into anarchy,” Leung told lawmakers.
Protesters had surrounded government offices and occupied key roads, endured tear gas and pepper spray, and clashed with the police before public opinion swung against them. Leung’s popularity dropped to a record low during the biggest political crisis the city has faced since its return to Chinese sovereignty.
Leung yesterday also urged the public to cooperate with the government’s work to increase land supply for housing.
“The consultation process for land planning and development has become drawn out with increasing controversies and uncertainties,” he said. “Society as a whole must make hard choices.”
There will be about 14,600 units of new private homes available annually over the next five years, a 30 percent increase from the preceding five years, Leung said.
Home prices advanced to a record last year as buyers shrugged off property curbs imposed by Leung, which included a 15 percent levy on foreign buyers. The government price index gained 12 percent in the first 11 months last year to an all-time high in November, driven by smaller-sized flats.
“I don’t think today’s speech will change the market expectation on property price in near term,” Raymond Yeung, an economist at Australia & New Zealand Banking Group Ltd. said yesterday. “Judging from the hot pre-selling of both public and private projects, demand seems to hold up.”
Leung also yesterday announced a raft of measures to improve people’s livelihood. Other than the retirement fund, Leung raised minimum wages by 8.3 percent to HK$32.50 an hour. Separately, Hong Kong will abolish a program that allowed foreigners to gain residency by investing in the city.
“CY Leung has decided to stick to his guns, unwavering, on the political reform,” said Jean-Pierre Cabestan, a political science professor at Hong Kong Baptist University. “CY’s proposed welfare and housing reforms may help him regain some popularity, but it will not solve the challenges that his government is facing. As a consequence, I sadly predict more trouble for the government, its relations with the community and the Central government-Hong Kong society relationship.” Michelle Yun , Bloomberg
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