Chief Executive John Lee Ka-chiu is on the show this week.

He talked to us about his third Policy Address, he gave us an overview of his thoughts on reform philosophy. John Lee explained why he helped the SMEs to overcome the short-term cashflow problem. Also, he delved into his new initiatives such as building an international gold trading market and international shipping center.

Chan: Good evening and welcome to Straight Talk. I'm Eugene Chan, and it is a great privilege to have our Chief Executive, John Lee join us tonight to delve deeper into the new initiatives, announced in his third Policy Address which was delivered just last week. We will hear from him how they will make Hong Kong better and stronger. It is an honor to have you back, CE, and thank you for joining us.

Lee: The honor is mine, and thank you for giving me this opportunity to be here so that I can talk more about my Policy Address, explain it more to the audience.

Chan: Right, CE. Firstly, I must send our heartiest congratulations to Hong Kong regaining our ranking as the world's freest economy. This is a significant achievement and this highlights your government’s effective policies and commitment to fostering a vibrant and open market. And, before we go into the details of your Policy Address, I thought this would be a good opportunity to ask you about the thought processes in putting together this year's PA, as I feel that it is important for us to understand your mindset so that we can all be on the same page. And singing from the same songbook. Just to point out, I thought I would wear green as well to signify our common desire that we all want Hong Kong to thrive.

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So, you have delivered three policy addresses now and, with its unique focus and goals and the first two, you laid out an ambitious plan for Hong Kong, like charting a brighter tomorrow and fostering a vibrant economy and in this year's policy address, it took you a bit shorter – two and a half hours, for the nine chapters and 228 paragraphs and 104 pages. So, how has the positioning and direction of your policy addresses evolved from 2022, until today?

Lee: Well, I must thank you sincerely, Eugene, you did spend a lot of time on my Policy Address. And the three policy addresses, and, in fact, they are linked together, it’s a progression. This year, the theme I chose for the Policy Address is, we should reform for enhancing development and building our future together. I look at each year what this period is all about. And then set my target, and then set my theme. Let me explain. 2022, what time was it? It was a time when we were hit by COVID, so we were all in the same boat. So, we need to help each other. So, the theme I set at that time was that together, we should hope to aim for prosperity, economic development. And then 2023, what time was it? It was a time when we came out of COVID, and it was a time, a year when we first stepped on the path to prosperity. So, the target at that time was to create happiness, again, smiles on people's faces, create jobs, and also to develop the economy. And let us come back to normal life. And, for that target, I set the theme that we have to all work together on building the economy, building prosperity, and then we hope to create happiness, a feeling of hope and good for Hong Kong. So, you read the two years’ policy addresses and you know why those themes were set. This year, what year will it be now? It is now a year when we have security well in our hands. So, with security quite confirmed and Hong Kong being safe and stable, we really can go all-out to really strive for prosperity and we should do this together, because we need to reform, because this is a time we may have to go through changes, because some sectors, because of some structural changes, including customers' habits, shopping habits – all these things may have changed. Structurally, it is not cyclical anymore. So, we need to face the problem and then change ourselves and improve. So, we need to reform. And different sectors have different things that they can do better. So, we must reform together to enhance our economy and in due course, will create hope, happiness, prosperity and, eventually, a brighter future. So, all these are linked together and it is a progressive governance direction.

Chan: Right, CE. And since you mentioned that, I'm sure community consultation has always been a very central component of your processes, and I'm sure this year is no different. Could you share with us how engaged our community is at the moment, and how have the feedback or insights actually significantly influenced your decision-making process in terms of this Policy Address?

Lee: So, I'm thankful to the nine thousand opinions or suggestions I received in this year's consultation exercise. I thank sincerely the committee members whom I met while I made my district visits and they have all told me how they thought about what I should do and helped me to make decisions about priorities because one of the main functions of government is redistributing resources. So, setting priorities is important. I have advocated the importance of aligning thinking and aligning efforts together since I took up office in 2022. So, the key word I use in Chinese is, togetherness. ”同“

Chan: Right.

Lee: Togetherness, because I think one plus one will be bigger than two and, if everybody synergizes, we don't discount each other, reinforce each other. So, 7.5 million people will become bigger than 7.5 million people.

Chan: Indeed.

Lee: And I have used an analogy on different occasions. What we need is that everybody is not just an entity one, everybody says, becomes a 1.01 the multiplication factor, the complex multiplication factor, will be astronomical.

Chan: Indeed.

Lee: So, the togetherness, the team building and the alignment of thinking and functions are important, and that is what I'm trying to do.

Chan: Right, CE. Since we're on the word reform, which is a key theme of this year's Policy Address, someone counted that you mentioned it 33 times.

Lee: Some said 41.

Chan: Right, and very comprehensive approaches. You emphasized fixing the shortcomings and overcoming hurdles while fostering growth. Can you tell a bit more in brief, what is your philosophy behind reform, so that we all understand what you're trying to do and whether we should have more patience? And when should we expect results?

Lee: Well, I try to do exactly what you have just asked for. So, in chapter one, a whole chapter, the first chapter, when you open the Policy Address, I tell about this, I tell about what my governance philosophy is. I talk about how reform should be done. So, reform means making improvements. The main purpose of making reforms is important. Reform is not for reform's sake, it is for creating better governance and creating results. I think that these are the most important things. So, we have to then examine, what are the things that we are doing well. And what are the things we're doing not so well and where are the areas that we should have acted but have not and where the threats are, which will be counter-productive, what we call the SWOT analysis – strength, opportunity, weakness, and threats. All leaders do this, I have been doing this regularly. Reflection for improvement.

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So, chapter one tells where I see strength. I will consolidate it, where I see weaknesses. I try to strengthen it, where I see threats. Then I will mitigate it. I do a prevention system. And I build up the resilience to absorb it. Where I see opportunities, then I will grasp it. And there are so many opportunities around us. Luckily, under "one country, two systems", Hong Kong is the only city in the world that enjoys both our country's advantage and also the world's advantage. We're so lucky. So, we have this unique advantage we must grasp. And one other opportunity that has arisen as a result of geopolitical tension, which is not a good thing, but still we can, out of the bad side, create opportunity, because Hong Kong's advantage is that we are safe and stable. Particularly, I think the center of growth has moved to the East. And also people look for diversification, looking for risk mitigation, then, Hong Kong is the right place, right? So, Hong Kong is so safe and stable and with all the great infrastructures, all the systems they've built and you've given one good example, which is we have been rated as the number one freest economy. So, with all these opportunities, attractions and strength all in one place ... Opportunity, it's something we need to grasp, and that is why I want to tell everybody in Hong Kong and also our neighbors: this is what you can make good use of – all the opportunities, the strengths and all the resilience that are built in Hong Kong.

Chan: Right CE, let's take a short break now. And viewers, stay tuned. We will be right back.

Chan: Thank you for staying with us. We have our CE John Lee, talking to us about the 2024 Policy Address. He has given us a bit of an overview of his thoughts, especially the reform philosophy. Now let us focus on some of the new initiatives outlined in the address. So, CE, I found that in your 2024 Policy Address, you have 9 chapters, 228 paragraphs, and 104 pages. And there are a number of significant reforms. Obviously, we can't go through each and every one of them tonight. However, could you share with us two or three of the most critical aspects that you believe will make the most immediate impact on making Hong Kong a better and stronger city?

Lee: Well, I think all the measures that I have announced, they have different significance in different areas. So, I think it would be difficult to compare in this regard.

Chan: Right.

Lee: In simple terms, all have their own significance and values, and it affects different sectors. But something, I think, and basically, people will feel is he has introduced the 8 measures to help SMEs …

Chan: Right.

Lee: They represent over 95 percent of the businesses in Hong Kong. And I have heard many opinions that we need to help them to overcome the cash flow problem. And they are, I think, a lot of them, relate to, for example, the catering and retail sectors. And they do suffer structural changes because of a change of customer behaviors, change of shopping patterns. So, I do think that we need to help them. This is why we have reintroduced the moratorium system when they don't have to pay for the actual loan, but only pay for the interest. This is to help them to overcome what I believe will be a short-term cash flow problem. That is why I set it to 12 months – that is the period for them to overcome the challenges. I am positive because overall if you look at Hong Kong, the economy is growing positively. We estimate it will be between 2.5-3.5 percent growth. That means we should be doing well. But of course, for some sectors, because of the structural changes, then they will have to face up the challenges. So, we are trying to actually focus on the weak areas in order to help them. And I have heard that a lot of SMEs find this really helpful. So, I am glad. But we want to not just help SMEs, we want to align this reform sense and also the action. Indeed, some may be very long-term, because, such as what I've suggested about building the commodity trading ecosystem, that takes quite a number of years because we are now at a very low stage. But that also means that we will have big growth. This is a blue ocean, this is the new blue sky for us. But there are some things, I think, that we can do the reform immediately. And I am glad to see, for example, those in the travel industry, they are already reforming themselves. For example, they are already designing new lines of visit for tourists. And also some of the catering businesses have been reforming themselves. 

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I think the government's message has been so loud and continuous, then the recognition of change has reached a level, which I think has taken shorter time than I would have expected for them to align to this thinking, which I feel happier about. One of the successful enterprise operators has advised me how he managed to go through the difficult times over the years since COVID up to now. He said the importance of being successful is to create a difference, so that you will be different than others, and people must come to you for that advantage. But as a government official, what I can do only is tell everybody the direction, the policy area, and where the growth areas will be, and where the challenges are. And then I have all the measures to help you strengthen yourself or let you survive during the difficult time.

Chan: Right.

Lee: But it’s up to the players themselves. And I am very glad that they are all waking up to it, and a lot really are finding new ways to improve their businesses. And I see positive development in this area. And the good news to me is we have shortened the awareness time, the cognition time, and then we are already at the stage of reforming.

Chan: Right.

Lee: Different people reforming in different ways. So, we shorten, we will be shortening the actual transitional period. So, we will be embarking on the road to even bigger prosperity faster and earlier. And that is something I find satisfaction in seeing.

Chan: CE, definitely, so what you are saying is that the partnership between the government and the Hong Kong people is definitely more obvious.

Lee: The togetherness.

Chan: The togetherness, as you said earlier.

Lee: And the team.

Chan: Yes, the team

Lee: The whole Hong Kong team.

Chan: Right. And under your Policy Address, you also have a key focus on reinforcing Hong Kong’s position as a financial, shipping, and trade center, and you have new initiatives, such as the international gold trading market and promoting high value-added maritime services. Are you confident that with all that, we will be a competitive city amongst other cities around us?

Lee: Well, we have been very competitive already. But I will not be satisfied with the present level. We are, I think, the fifth most competitive economy in the world. We have risen 2 positions. I look at all these rankings, mainly for the purpose of ensuring that I am making my policies in the right direction, whether we are on the right track. So, all these increasing ranking, such as the competitiveness ranking, increase from 7th to the 5th. We have just again been announced as the freest economy in the world. And financial center, we have moved up one position, from the 4th to the 3rd. All these things suggest to me, I believe, that the policy directive is correct, the measures are correct, and society as a whole is doing the right thing because all these are international assessment reports. They adopt very objective standards. And I am glad that through the process, we have been progressing. But I think we can progress even more.

Chan: Right.

Lee: My philosophy is there are never the best, only the better, keep improving.

Chan: Right. CE, I have also noticed that the covers of the Policy Address for the past 3 years has featured robots made in Hong Kong as representatives of innovation and technology. Are you aiming … are you planning to establish a sort of robotics industry chain, leveraging our advantages as an international platform, and also align with the national policy development? I have just picked that up when I was reading your policy addresses.

Lee: Well, thank you for being so attentive. That obviously is one area, but there are many areas we can develop. Our strength is not just in robotics, our strength is in research, our strength is in data science, our strength will be in advanced technology. Biotech, we are very good, and new material, and new energy, sustainable growth. These areas are highlighted in the Policy Address, where I think a lot of scholars, a lot of experts, have advised me these are the obvious advantages of Hong Kong. So, as I have told you, I do this whole analysis, I agree they are our advantages, more than that, they are not just our present strength. These strengths will grow because if you look at the Policy Address, we have ‘The Loop’. ‘The Loop’ is going to be a very advanced science park, which we will have a mirror, a sister science park on the Shenzhen side, just over the Shenzhen river. And this ‘one boundary, two science parks’ principle is to allow us to take advantage of both sides. Hong Kong strengths then reinforce Shenzhen strengths, mainland strengths then reinforce Hong Kong strengths.

Chan: Right.

Lee: One plus one will be bigger than two. And also I think we will make this ‘Loop’, I think, one of the world’s high leading examples of how we can strengthen our digital competitiveness, our research capabilities, and also the high-end advanced production, in the five areas, for example, I have told you. And also I think biotech, we have a lot of advantages, our medical service has been accepted as world-class, and our professionals are very devoted. And they have the mission and passion to be able to contribute and strengthen in this area. So, I think we can be very positive in this area.

Chan: Right. CE, I am going to ask you a very important question, I am sure the viewers will want me to ask you as the last question, that Hong Kong has been facing huge challenges and everyone has been tightening up their belts, particularly in the retail and the F&B sector that we brought up earlier. Of course Hong Kong people are adaptive and innovative. But I think many of our viewers would want to know: would you say our economy has bottomed out? Because you have all the figures and you said we are having 2.5-3.5 percent growth. And what type of recovery do you anticipate that we are going to have?

Lee: Well, in fact, 2.5-3.5 percent growth, I think it is quite a balanced assessment. I am more positive thinking because in a way I am an insider. I know what new measures the central government will be rolling out, I know what are the things that I have requested for. And if some of them become really roll-out-able, then the additional impetus will be quite big. For example, I have said that we will, we hope to, invite more visitors from Shenzhen, from other parts of the (Guangdong-Hong Kong-Macao) Greater Bay Area, and I am very grateful to the central government for looking at my suggestion so sincerely.

Chan: Right.

Lee: And so, I hope that there will be good measures rolling out. And that impetus, together with the other short- and medium- and long-term measures, will bring us to new heights.

Chan: Right. Chief Executive, thank you for sharing your insights on this year’s Policy Address, your vision for Hong Kong is the core of bold reforms and strategic initiatives. We look forward to seeing them unfold to make Hong Kong better and stronger on the world stage. As our CE himself said, “Through our united efforts to reform and innovate, our economy will go even stronger and our people will lead a better life, making Hong Kong a shining city”.

Let us all work together. Thank you for joining us and have a good evening.