Planning myths. 上｜Hong Kong is not suitable for planning, or does it not know how to plan? ｜01 Weekly

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Written by: Yang Yingwei

2021-06-16 08:30

Last update date: 2021-06-16 08:30

In mid-March, the 13th National People’s Congress passed the "Fourteenth Five-Year Plan for National Economic and Social Development of the People’s Republic of China and the Outline of Long-Term Goals for 2035" (hereinafter referred to as the "14th Five-Year Plan"). Local governments subsequently issued corresponding interpretation documents, formulated detailed implementation policies, and committed themselves to "planning" in response to "planning."

However, in Hong Kong across the river, the Chief Executive and the Secretary-General only wrote blogs to show "welcome", and seemed to respond to "planning" with "statements".

In fact, many Hong Kong people often hear that "planning" has changed. Is it because Hong Kong is not suitable for "planning" or is it because Hong Kong does not understand "planning"?

Many people believe that the reason why Hong Kong has not systematically formulated social and economic development policies in response to the "14th Five-Year Plan" is that Hong Kong pursues a capitalist system that is different from the socialist one system in the Mainland under "One Country, Two Systems". It is suitable and does not require any planning.

The well-known sociologist and vice president of the Education University of Hong Kong, Lu Dalak, wrote in 2014 a paper "A Boundary Global City: Hong Kong's Situation in Transition after 1997" to understand Hong Kong’s transitional difficulties: "Hong Kong’s society and economy need a lot of effort. Locally and collectively, they seek a transformation, explore new directions, and try new strategies. But Hong Kong society—from the government to the chambers of commerce to the citizens—has always been poor at planning. In fact, they don’t like planning either."

The reason why Hong Kong has not systematically formulated social and economic development policies in response to the "14th Five-Year Plan" is that Hong Kong pursues a capitalist system that is different from the mainland's socialist one system under "One Country, Two Systems."

(Information Picture/Photo by Liao Yanxiong)

Ideological myth that capitalism does not need "planning"?

Lv Dalak explained the reason why Hong Kong society "dislikes planning" in this way: "Some people believe in the market and believe that as long as they respond to market signals, then "the ship arrives at the bridge will naturally be straight", and there is no need to do more unnecessary things, and at the same time avoid ( The government) is getting more and more help. Some people do not accept the government’s lead or lead, and feel that it is better to innovate spontaneously from the bottom up... Furthermore, considering the specific situation of the SAR government today, even if the citizens change their normal state and accept The government takes the lead in promoting development. It also lacks the power of governance and cannot establish consensus or set the general direction for future development, eliminate resistance, and successfully implement policies."

The so-called "preventing the (government) from getting more help" and "not accepting the government's leadership" are simply the "market first" economic liberalism, or the laissez-faire fundamental capitalism, which is naturally opposed to the government-led " "Chinese-style planning" stays far away, even thinking that it is a unique product of "planned economy" or "socialism."

However, the change has already happened.

The first is that capitalism is changing, and reflections on free markets and calls for "strong governments" have begun to appear everywhere.

Paul Romer, winner of the 2018 Nobel Prize in Economics, earlier pointed out at the "Hong Kong Economic Outlook" seminar organized by the School of Economics and Management of the University of Hong Kong that in the past, the world had too much faith in free market principles, thus weakening the government's role in social and economic governance.

He predicted that the development model of a weak government may have come to an end, because in the future there will be some tasks that can only be done by a strong government. The 2008 financial tsunami and the 2020 new crown epidemic are just examples of the need for a "strong government" because " When people rely too much on the market, they cannot protect the public interest."

However, calling for a "strong government" does not require the government to "directly intervene" in the market. Rather, it hopes that the government can use the "visible hand" to solve the social problems arising from the blind pursuit of profit by the market.

According to Romer’s speech, society generally distinguishes economic activities from "good or bad for the society" and "good or unprofitable for the market." As a viable government, even if the activities are not profitable for the market, as long as they are good for the society, It should be supported. On the contrary, if relevant activities are beneficial to the market but endanger the society, they should be supervised.

For example, basic research is beneficial to society but not profitable in the market, while bitcoin in financial activities is profitable but will encourage crime, and its damage is even "far more than nuclear energy." "We have supervised nuclear energy with incredible caution, but we have repeatedly destroyed finances in history, and these damages will continue to happen."

He also warned that Hong Kong used "small government and big market" to gain advantages in many aspects, but the advantages have been reduced, but it is still very dependent on the market.

Calling for a "strong government" does not require the government to "directly intervene" in the market. Rather, it is hoped that the government can use "visible hands" to solve social problems arising from the blind pursuit of profit by the market.

(Profile picture)

Second, the "Chinese-style planning" is also changing, the role of the government has been adjusted, and direct intervention in the market has gradually decreased.

The head of the Department of Economics of Hong Kong Baptist University, Zheng Yusheng, combed: "It used to be called the "Five-Year Plan", but now it is the "Five-Year Plan"." The document has changed from "plan" to "plan", and its nature has also changed from "instruction" to "instruction" and "Coordination", and the "14th Five-Year Plan" is an "outline", most of which are "predictive indicators" rather than "binding indicators". Other ministries and local governments are still required to formulate "local conditions" implementation accordingly. Program.

He also pointed out that the predecessor of the National Development and Reform Commission, known as the "small State Council," was the National Planning Commission. "Guideliness", mainly responsible for instructing the establishment of major projects."

It is not difficult to see that the capitalist society dominated by the market economy and the government's economic development plan can actually play a larger role respectively, and there is no contradiction between the two.

Huang Yuanshan, deputy director general of the think tank "Unity Hong Kong Fund" led by former chief executive Tung Chee-hwa, likened that even capitalist companies have strategies and plans. "JP Morgan will always think about where the market is and where the goals are. The ship knows how to do it, what do you ask the CEO to do? Everyone is good to go to get off work every day." Zheng Yusheng also clarified that the so-called "planning" is not the government "interfering" in the market, but requires the government to have strategic thinking to promote the cultivation of the market.

For example, the "14th Five-Year Plan" mentioned that Hong Kong should build an international shipping center: "How to position Hong Kong airport may involve air traffic rights and the division of labor with mainland airports. All need to be discussed." Taking air traffic rights as an example, it involves countries. Airspace security cannot be solved by airlines through economic means. AA officials and the mainland government need to negotiate at the political level.

Huang Yuanshan, deputy director general of the "Unity Hong Kong Fund", likened that even capitalist companies have strategies and plans.

(Information Picture/Photographed by Huang Shuhui)

However, Zheng Yusheng believes that Hong Kong is not suitable for formulating "plans" and "indicators" because of the lack of institutional guarantees.

After witnessing many disappointing rulings, Zheng Yusheng has no confidence in the government's ability.

He explained that as important as planning is the "incentive system." The mainland has established a corresponding system to ensure the effectiveness of planning. For example, local officials must be promoted with political achievements, so they will try their best to meet the standards during their term.

On the other hand, Hong Kong will face the two problems of "who can do it" and "how to do it" once it is "planned."

He lamented that there are many generalists among civil servants, but they are not familiar with industrial development and do not know how to start; even if the planning is made at the central level, there is no local incentive system to push them to achieve their goals.

"Who can do it" and "how to do it" correspond to the planning ability and execution ability of the ruling party.

In other words, it is not that capitalist society is not suitable for planning, but that the SAR government lacked the ability to formulate good plans and implement goals in the past, which created the negative impression that the government “should not make plans” as mentioned in the previous article, and fell into the “Taxi "Tuo Trap" in a vicious circle.

Continue reading:

Planning Myths.

Next｜In addition to writing "blogs", how should senior officials respond to the "14th Five-Year Plan"?

The above was published in the 269th issue of "Hong Kong 01" Weekly (June 15, 2021) "The Fourteenth Five-Year Plan" has clear goals and Hong Kong is still trapped in the myth of social and economic planning.

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Highlights of the 269 issue of "Hong Kong 01" Weekly News:

[Cover report] The world’s lowest corporate tax warns of Hong Kong’s international tax reform wave!

The 14th Five-Year Plan has clear goals, Hong Kong is still trapped in the myth of social and economic planning

Drift in Hong Kong

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"Military technology complex" becomes a new modern battlefield

Urban Planning, Housing Policy, Long-term Housing Supply, Hong Kong Economy "14th Five-Year Plan" 01 Weekly Report