Transcription
Welcome back, viewers, to the second segment of "Stock Market Insights." Our guests today are Mr. Shi and Professor Zhuang Tailiang. In this segment, we will discuss the topic of Hong Kong's economy. Today, Ming Pao's column quoted sources from the pro-establishment camp, stating that "The government's newly released five-year plan consultation document seems to lack surprises and has received mediocre public reception. Critics suggest that various bureaus have merely pieced together existing policies to complete their homework." What are your thoughts on this statement? Has the government lacked a breakthrough mindset this time? Because Hong Kong's "five-year policies" may not necessarily follow the mainland's approach entirely. The mainland has more binding indicators and fewer directional ones, for example, stipulating a 5% growth rate per year, a certain unemployment rate, and so on. However, it is difficult for Hong Kong to use binding indicators. If binding indicators are not met in the mainland, government or state-owned enterprise power can be used to achieve them. But Hong Kong cannot do that. If our indicator is 5% economic growth, and it's not achieved, it's not achieved. Moreover, we are in a low-growth environment, so setting a 2% growth target is not very meaningful. Therefore, we mostly focus on directional goals. It's not that after the entire five-year plan is released, Hong Kong's economic growth will be very high and unemployment will be very low. It is very difficult for us to use binding targets, so most of them are directional. Therefore, this five-year plan may indeed be primarily directional. In short, we aim to achieve an international innovation and technology center. How you achieve it may have different definitions for everyone. Therefore, seeing more directional and fewer binding aspects might lead to lower expectations. Mr. Shi, what are your thoughts on this five-year plan? In fact, after the reform and opening up, the mainland has introduced many operating models based on market mechanisms. However, it still has socialist characteristics, with plans and deployments. Furthermore, government civil servants are accustomed to guiding the economy and supervising enterprises, and they also have certain tools and measures. Therefore, it is relatively easier for them to set plans. The Hong Kong government actually doesn't have many things it can do. Businesses might feel that if you don't surprise me too much, I can adapt more easily. If you ask me to do something outside my domain and something I'm not familiar with, but you insist that I do it, the difficulty will be very high. Therefore, Hong Kong's对接 with China, of course, wants to focus on high-tech areas or education. However, what Hong Kong can control and have a certain degree of leadership and influence over is actually land. Most of Hong Kong's land is in the hands of the government. How land use is planned, the government still has the power to formulate and implement it. Therefore, the focus of policy is largely on the development of the Northern Metropolis. The development of the Northern Metropolis includes education and technology, and it also hopes to improve the per capita living area through land supply. There are still certain areas where progress can be made. However, Hong Kong is different from the mainland. The mainland has state-owned enterprises. If mainland private developers collapse, they still have a group of state-owned enterprises like China Resources, COSCO, Poly, etc., that you can ask for help or to fill the gap. They will all follow the state's command. Hong Kong's private developers have considerable influence. The government's greater influence lies with the Housing Authority, the Housing Society, and the Urban Renewal Authority. Some of these are not government departments but semi-official organizations. However, the government's influence is relatively large. These can play a greater role in the new five-year plan, or if you develop infrastructure such as transportation systems, the government can plan more. As for the degree of cooperation from developers, they are not uncooperative. They have acquired a considerable amount of agricultural land near the Northern Metropolis in the past. Therefore, what they are doing now, and their applications to the government for land premium payments, of course, when the government allows them to develop, they also need to cooperate with the needs of the Northern Metropolis. However, private developers will make good use of the resources they already have. Whether they do well or not is better than before. Previously, developers did not apply for land premium payments, and the government would acquire the land. Developers were willing to return it to them because they needed money. The government said it needed these lands, and developers were overjoyed. Now, the developers who own land there are willing to negotiate land premium payments with the government and cooperate with the government's urban planning needs for development. After they develop the land they hold, they will then develop what the government wants to develop. The problem is that the government may need to take more initiative at this moment, for example, in industries like education, healthcare, and infrastructure. The government needs to take the lead first. Until it is well-developed, developers will gradually join in. Now, the advantage is that land prices have risen, and developers are more enthusiastic about bidding for land, so the implementation of the Northern Metropolis will be easier than before. But it is still a completely new attempt for Hong Kong, with the government taking the lead in such a large area of land, with early planning and gradual implementation. Hong Kong has had little such experience before. Now it is a new attempt. We hope that as conditions mature, the government will help, and private enterprises will cooperate, and finally, the plan can be implemented. Another economic phenomenon in Hong Kong is the "K-shaped economy," which means that within the same economy, there are two different directions of development. Hong Kong's technology and finance have been relatively prosperous recently, but some traditional industries, such as catering, seem to be declining. What are your thoughts on this polarized economic phenomenon? Of course, Hong Kong's leading sector is finance, and now perhaps technology is increasing. In fact, catering is a part of people's livelihood and should not experience drastic fluctuations. The current drastic fluctuations are mainly due to a group of people leaving Hong Kong, and possibly people from the mainland not coming to Hong Kong for local consumption. Therefore, industries that make money continue to rise, and industries that don't make money continue to fall. There is no immediate solution to this problem. We can only wait for it to stabilize, and then we can hope for more. For example, in terms of external demand, more tourists can help the catering and retail sectors, which were previously struggling, to be driven by demand. This group of people is larger. You cannot specifically place unemployed restaurant and retail workers, or construction workers, in the Northern Metropolis. The two are not compatible. The only way is to attract tourists and organize more events to drive local retail consumption. I think the current situation is related to the rapid economic development of the mainland and the high quality of services and products it can provide. When I go out to eat on holidays, on Sunday afternoons, I go to a restaurant, and there are fewer people. In the past, to eat in Hong Kong, you needed a familiar restaurant host to give you priority seating, otherwise, you would have to wait for a while to get a table. If you knew a restaurant host, it was much more convenient. In the past, there was no worry about work problems. Now, many restaurants in Hong Kong are mainland brands, but you eat the same quality of food, and the price in the mainland is vastly different. Therefore, it is because the services, products, and prices in the mainland are more attractive, leading to consumption in the north. And the goals of people coming to Hong Kong are already different. Therefore, Hong Kong's retail industry is worrying. Will it affect some people engaged in related work? Perhaps unemployment, and fewer opportunities for wage increases. This is because the objective macro environment has changed, so you must adapt. You cannot change it. Your descendants will have to find ways to transform. You need to see which sectors in Hong Kong have prospects and enter those industries, otherwise, it will be very difficult. In fact, the middle class is also being marginalized and eroded. Professor, what are your thoughts on this? It depends on what industry you are in. If you are in an industry that can be replaced by technology, then it might be dangerous. But if you are in a professional, protected industry, such as doctors, lawyers, and accountants who still need to sign, those might be better. You can pay attention to the employment figures for full-time university students now. Previously, the relevant figures were over 80,000 openings per year. In the past two years, it dropped to 60,000. Now it's only over 30,000. Over 30,000 is enough for the graduates of the eight local universities. If there is some external competition, it might not be enough. The number of university students recruited by companies has significantly decreased. This may also be due to the impact of AI technology. Mr. Shi, do you think many middle-class people will be eroded? The status of the middle class and professionals is not as high as before. Some people, like influencers, earn more than professionals. Also, the professional ethics seem to have loosened. These may be related to their social status and reduced income. Some things, if they have a certain dignity, they might not do them if they can get by. Therefore, living in a global metropolis like Hong Kong, the standard of living is relatively high, but you also face strong competition. Living in a metropolis will definitely be more stressful than living in rural areas. Perhaps people are starting to think about retiring to the countryside. As mentioned earlier, everyone may need to change themselves, not just individuals, but also government departments and public institutions. The West Kowloon Cultural District Authority announced last week that starting July 1st, they will conduct public fundraising. They will install more than 10 self-service donation machines in the museum. Currently, their main venues already charge admission fees. Is this appeal for donations considered double charging? What are your thoughts on the West Kowloon Cultural District's move? Some museums worldwide are free, but even free museums have donation boxes. You can donate as much as you like. So, voluntary donations are not new. However, museums are unlikely to operate on a commercial basis. If land costs are included, with such low foot traffic, it's impossible to operate. But now, it's about earning as much as possible because visiting a museum is a choice. If you have a good experience, you will want to donate more. This extra income is good for the museum, but it may not be a substantial amount. But at least it's an additional source of income. The donation is voluntary, meaning even after buying a ticket, you can donate if you wish, just like a "tip." Donating will not affect your desire to visit the museum. Mr. Shi, what are your thoughts? Most museums either have government subsidies or wealthy individuals who are willing to take on more social responsibility for politics, art, or cultural activities. They are willing to make donations. Without these donations or government subsidies, museums cannot survive on ticket sales alone. This is the case worldwide. But how much can be collected by placing donation machines for people to donate? There is doubt about it. Usually, people just donate loose change as they pass by, not tens of thousands or millions. For this, you need to find industries that are currently popular, for example, SpaceX recently went public. It doesn't even need to make a profit; its asset value has risen very high based on imagination. If it makes money so easily, it should contribute to humanity. Otherwise, what's the point of immigrating to Mars? Therefore, you should find this type of people. The money earned from asset appreciation, if they willingly contribute it to society for its operation, let them contribute voluntarily. If those people are not self-aware, even as a businessman, I think the government can set up plans. Money earned in a certain way should be contributed to the entire society, national development, or even the future of humanity. That is, establish regulations requiring them to donate. That would be better than placing a few ATMs and appealing for donations, which won't help much. Also, regarding the West Kowloon model, there is a large open space outside. The management fee is about two to three hundred million. The budget is over a billion. Two to three hundred million is used to manage these areas. The income from admission tickets is not enough to cover related expenses. Therefore, a more sustainable approach would be to return the outdoor areas to the relevant government departments for management, significantly reducing management costs. Regarding increasing revenue and reducing expenditure, you mentioned whether some land should be sold, in addition to returning it to the government as the professor suggested. It was originally conceived that way. When West Kowloon was first developed, I also helped work in some art organizations. In fact, it was initially for developers to bid on. According to the plan we negotiated with developers at the time, it would have been built long ago. Of course, you would reserve some land for developers to develop, allowing them to profit from the land. But the problem is that they took on the entire project. I actually agree with developers taking on the entire project, leveraging commercial interests. However, at that time, society proposed not to rely on real estate, but to rely on the government or based on the needs of artistic development, considering various factors, not just profit. But if the profit issue cannot be resolved, it has now become a burden for the government. I think the West Kowloon Development Authority may need to comprehensively review its development model. Of course, some parts have already been decided, including some commercial and retail properties. Unfortunately, it is now encountering an environment where commercial properties are not in demand, prices are low, and it is difficult to find buyers. Therefore, it has become so difficult now. Even selling the properties only provides temporary cash flow. Even if some rent is collected, it cannot cover the expenses of over a billion. To generate over a billion in rental income, those buildings might need to be worth tens of billions. Is there enough residential property to collect billions in rent? It might solve the problem temporarily, but it cannot solve the deficit in the long run. Understood. Our time is up for today. Thank you again, Mr. Shi and Professor, for joining us. If you, our viewers, enjoy our program, please leave comments, like, and subscribe to our channel. We will see you next week.