John Lee gives his second policy address for Hong Kong

On Wednesday, Chief Executive John Lee gave his second policy address since taking the reins in 2022.

John Lee gives his second policy address for Hong Kong
Hong Kong Chief Executive John Lee delivers his annual policy address at the Legislative Council in Hong Kong, China October 25, 2023. REUTERS/Tyrone Siu

The backstory: Over the past few years, Hong Kong has weathered some economic storms, largely due to COVID restrictions and mainland China's zero-COVID policy. To put it in perspective, Hong Kong's economy shrank by 3.5% last year, leading to a significant exodus of businesses, talent and capital.

But this year, there's been a notable change. The Hong Kong government decided to ease COVID restrictions and reopen its border with mainland China. While this move offered hope for economic recovery, it hasn't been a smooth ride. The city is grappling with issues like a shortage of workers and a real estate market that's still on the path to recovery. 

The development: On Wednesday, Chief Executive John Lee gave his second policy address since taking the reins in 2022. He announced new measures aimed at boosting the economy, bringing businesses and talent back to the city, raising the birthrate and other priorities. 

For example, the city is slashing stamp duties for home buyers, whether they're local or non-residents. Stamp duties are basically the taxes you pay when you buy property, and this is the first time the government has made such a significant change to housing rules in a decade. It’s also reducing the stamp duty for stock trades from 0.13% to 0.10%. The goal here is to get the stock market buzzing with more activity.

When it comes to property sales, it’s cutting transaction fees in half, which should get things moving in the real estate sector. Lee is also keen on improving national security. He's introducing patriotic education in schools and beefing up cybersecurity measures to protect the city. 

Hong Kong also has plans to increase the supply of land for housing and lower market data fees for brokerages. 

Also, for the next three years, at least, the government will hand out a one-off cash bonus of HK$20,000 (US$2,555) for each newborn of permanent city residents to encourage more births. Lee also announced a measure to make getting talent-related visas easier to attract talent from Vietnam, Laos and Nepal. These moves are all part of Hong Kong's strategy to tackle economic challenges and maintain its status as a global financial hub.

Key comments: 

"A vibrant stock market is vital for upholding Hong Kong's status as an international financial center and maintaining our competitiveness," said Hong Kong Chief Executive John Lee. 

"We will roll out patriotic education to enhance national identity and appreciation of the richness and beauty of the traditional Chinese culture amongst the people of Hong Kong, laying a good foundation for our national unity and solidarity," said Lee.

"The relaxation of cooling measures is only a band-aid solution that is unlikely to reverse the downward trend of home prices," said Joseph Tsang, chairman of property consultancy JLL in Hong Kong.