As a follow-up to my last post, Tom Holland nails it in the SCMP today (surprisingly so, given my current expectations of the quality of the logic in that publication’s opinion pieces). The article is free to non-subscribers, so you have no excuse not to read it… but here are the best bits anyway (with my emphasis):
Too much market, too little government? Is CY kidding?
American think tanks might like to dub the city the world’s freest economy, but local residents know better. Government in Hong Kong is neither small, nor hands-off. On the contrary, the government is expanding, and its tentacles extend into a whole range of unlikely economic sectors.
“For my five budgets, I have increased government expenditure by nearly 70 per cent,” boasted Financial Secretary John Tsang in February. “This exceeds GDP growth of 21 per cent for the same period.”
The government sells us our water. It owns and operates our railways. It runs the airport. It even owns the city’s theme parks, via controlling stakes in both Ocean Park and Hong Kong Disneyland.
The government hosts business conventions through the Trade Development Council. It dabbles in stocks and shares via its stake in Hong Kong Exchanges and Clearing. It sells insurance through the Hong Kong Export Credit Insurance Corporation. And it structures asset-backed securities through the Hong Kong Mortgage Corporation.
And of course the government is the dominant player in the city’s all-important property market. As monopoly owner of all land in Hong Kong, it controls the market’s supply of building plots. And it is by far the city’s biggest landlord, renting out around half of all the homes in the city.
Lately, the government has also gone into property development in a big way. Its controlling stake in the MTRC and its ownership of the Urban Renewal Authority make it one of the largest developers of private residential and retail premises in the city. It owns and operates dozens of shopping centres through the Housing Authority. And its Hong Kong Science & Technology Parks Corporation develops and manages industrial estates.
QED, sadly. But it’s still freer than most places… for now…