China Daily | Positioning HK as 'City of Strategy'

release time:2022-08-23

By Edward Tse


A recent article authored by Gao Feng Advisory CEO Dr. Edward Tse was published by China Daily on July 17.

Addressing a ceremony in Hong Kong on July 1 celebrating the 25th anniversary of the handover, President Xi Jinping listed four expectations for the special administrative region -- the HKSAR government should improve its governance and ensure greater stability and prosperity in the region; Hong Kong should continue to provide strong impetus for growth and unlock enormous creativity and development potential of its society; the SAR should earnestly address people’s concerns and difficulties in daily life and make ensure that all residents share the fruits of economic development fully and fairly; and Hong Kong people should work together to safeguard harmony and stability, and create a better future.

The president emphasized that for continued development, Hong Kong needs to embed the central government’s initiatives and goals in its developmental plans and policies. Xi said: “Hong Kong should continue to create strong impetus for growth. 

With its special status, Hong Kong enjoys good conditions and broad space for development. The central government fully supports Hong Kong in its efforts to seize the historic opportunities offered by the nation’s development, and actively dovetail itself with the 14th Five-Year Plan (2021-25) and other national strategies, such as the development of the Guangdong-Hong Kong-Macao Greater Bay Area and high-quality Belt and Road cooperation.  

The central government fully supports Hong Kong in carrying out more extensive exchanges and close cooperation with the rest of the world and in attracting entrepreneurs with dreams to realize their ambitions in Hong Kong. 

The central government also fully supports Hong Kong in taking active, yet prudent, steps to advance reforms and dismantle the barriers of vested interests in order to unlock enormous creativity and development potential of Hong Kong society.”

New Chief Executive John Lee Ka-chiu stressed that his administration is keenly aware of the trends in China and the world, and shall develop a more effective and strategic approach. He emphasized better alignment of Hong Kong’s policies and programs with national development and the creation of more opportunities for young people. 

He said trends in both the country and the world need to be considered, while boosting a sense of national pride among the young. In a speech on June 27 at the graduation ceremony of Tsinghua University’s Advanced Master of Public Administration Hong Kong Government Talent Program, he called for deeper understanding of the overall status of national development and the global perspective.

Clearly, both Xi and Lee pointed out that the HKSAR government must become more efficient and develop a more strategic view.

From my perspective, continuing to take on a minimalist role is no longer an option for the HKSAR government. It should be much more proactive and adopt a “can-do” attitude in  dealing with emerging changes and challenges. Amid an era of mega changes and complexities, Hong Kong should build a strong set of strategic planning and executional capabilities.

In fact, the HKSAR government has not been able to establish an efficient and productive governance system since the city’s return to the motherland. Successive chief executives had tried hard to carry out reforms, but with mixed results. Some of them primarily relied on their past experience and were linear and incremental in their thinking. Some had the right thinking but the then-prevailing political climate and the capabilities of some of their supporting cast didn’t allow them to achieve their visions.

Former chief executive Carrie Lam Cheng Yuet-ngor transformed the Central Policy Unit -- the government’s long-standing senior advisory group – into the Policy Innovation and Co-ordination Unit. Before the Northern Metropolis development strategy was announced in her final policy address, her administration decided to address the land supply problem (arguably one of the city’s most pressing and critical issues) via a full-scale “public consultation” process. 

This “bottom-up” approach has created little tangible, game-changing results. It’s bewildering how that problem-solving approach was decided upon in the first place.

Similarly, the Innovation and Technology Bureau has yet to put forward comprehensive technology development plans for the HKSAR. Innovation and technology were highlighted by Xi as a core focus area for Hong Kong.  

However, the HKSAR government has done a pretty good job in charting its finance strategy in a manner that’s commensurate with its position as an international financial center. To meet Xi’s aspirations, as Lee said, the HKSAR administration must keep the “big picture” in mind and establish strategic capabilities.

I suggest that the new HKSAR government should consider the macro context with a top-down perspective, with four principal components -- a global vision; China’s role in the world, as well as its development trends; the dynamic exchanges and interaction among Hong Kong, the Greater Bay Area, the Chinese mainland and the world; as well as Hong Kong’s own development.

Consideration must be given to how these four aspects would affect policy making and strategic priorities in the short-, mid- and long-term.

It’s important to ensure that the HKSAR’s entire senior management team can  develop a holistic view and build strategic thinking and planning capabilities.

Lee should take appropriate action in the following aspects:

First, a new strategic planning organization should be set up to drive the city’s overall development plans, instill strategic thinking within the HKSAR government, as well as Hong Kong society at large, and offer the chief executive advice on macro development and priorities. This organization should also facilitate cross-departmental coordination in formulating an integrated development strategy and action plan;

Second, the “new CPU” should strengthen integrated strategic planning capability by providing training in strategic thinking, analysis and planning to other policy bureaus and senior government officials;

Third, the SAR government should build channels for communication with local communities, think tanks and associated ecosystems, and disseminate its strategic plans to the public effectively;

Fourth, the SAR government should ensure effective coordination with the Chinese mainland’s governmental planning organizations, strategic departments and related think tanks to ensure that Hong Kong’s planning is consistent with national priorities;

Fifth, the administration should collaborate and communicate with various global think tanks to foster a better understanding and appreciation of strategies for Hong Kong, the Greater Bay Area and the nation as a whole.

Sixth, a holistic perspective and strategic thinking capabilities in Hong Kong society should be developed, especially among the younger generation. The government could introduce suitable curricula for cultivating strategic thinking capabilities in schools and provide training opportunities by encouraging more debates and discussions.

Lee has already announced plans for setting up a Chief Executive Policy Unit that would be accountable to him, and with a focus on macro policies and strategic decisions. I support such a move.

I would like to see Hong Kong position itself as a “city of strategy” with a strategic mindset, a clear purpose and overall strategic thinking capabilities.

Hong Kong should communicate more effectively and extensively with the mainland and the world. Besides addressing local issues, a strategically capable Hong Kong can also promote multilateralism and help showcase China to the world.

About the Author

Dr. Edward Tse is founder and CEO, Gao Feng Advisory Company, Adjunct Professor of School of Business Administration at Chinese University of Hong Kong, Professor of Managerial Practice at Cheung Kong Graduate School of Business, and Adjunct Professor at the SPACE program of University of Hong Kong. He is a member of Global Future Council on China at the World Economic Forum, as well as a member of advisory boards for private equity and venture capital companies. He started his strategy consulting career at McKinsey’s San Francisco office in 1988 before returning to Greater China in the early 1990’s. He became one of the pioneers in China’s management consulting industry, by building and running the Greater China operations of two leading international management consulting firms (BCG and Booz) for a period of 20 years. He has consulted to hundreds of companies, investors, start-ups, and public-sector organizations (both headquartered in and outside of China) on all critical aspects of business in China and China for the world. He has also advised the Chinese government organizations at different levels on strategies, state-owned enterprise reform and Chinese companies going overseas, as well as to the World Bank and the Asian Development Bank. He is the author of several hundred articles and five books including both award-winning The China Strategy (2010) and China’s Disruptors (2015), as well as 《竞争新边界》 (The New Frontier of Competition), which was co-authored with Yu Huang (2020). He holds a SM and a SB in Civil Engineering from the Massachusetts Institute of Technology, as well as a PhD and an MBA from University of California, Berkeley.

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