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David Dodwell

I’m a little perplexed and bemused by the brouhaha surrounding Hong Kong’s decision to draft its first five-year plan, as if the sky is falling in around the city’s famed laissez-faire economy.
Predictably, Yale University’s Stephen Roach (he of “Hong Kong is over” fame) warned in a commentary last month that “Chinese-style central planning” could “over-promise and under-deliver”. In a 2024 commentary, he said Hong Kong had been “shackled by the deadweight of autocracy”.
But from my vantage point, Hong Kong is decades overdue for a long-term planning framework that can provide strategic coherence to how we optimise our future as a conduit between a radically changing China and a turbulent global economy.
Chinese leader Deng Xiaoping, way back in 1992 during his famous Southern Tour, was astutely aware that capitalism and communism were agnostic on the need to balance practical day-to-day administration with a clear long-term vision. Already, brittle Soviet concepts of “state planning” were old hat. He said: “A planned economy is not equivalent to socialism, because there is planning under capitalism too; a market economy is not capitalism, because there are markets under socialism too.”
Anyone familiar with the clever work of Yuen Yuen Ang at Johns Hopkins University will be aware that China’s five-year planning process has for many years been much more nuanced. She calls it “directed improvisation”: Beijing sets the big-picture objectives and local administrations are tasked with improvising to suit local circumstances.
Recall too Hong Kong’s old colonial days. Up to 1997, the British colonial government maintained the Central Policy Unit (CPU) to answer exclusively to the governor of the day on long-term strategic planning that aligned where necessary with the United Kingdom.

As Britain handed over power, the role of the CPU was eclipsed, and policymaking responsibility devolved to a highly trained and efficient administration that excelled not in long-term strategic planning, but in effective implementation of plans that had previously been delivered to them by strategic thinkers in the CPU.
Hong Kong has over the past 29 years paid a price for not replacing those “long-term vision people”. The belated adoption of five-year planning can hopefully make some amends. As the deadline for public suggestions was last Friday, we can expect a first draft of the plan next month, but already some core elements are emerging.
Foremost will be plans to accelerate development of the Northern Metropolis, expected to cost at least HK$224 billion (US$28.5 billion), and to modernise much of Hong Kong’s ageing housing stock. The imperative must be to ensure that Hong Kong’s economic infrastructure remains fit-for-purpose in the relentless global competition between leading financial service hubs. The application of new technologies in education, trade and tourism will also be front and centre.




The ageing issue is highly relevant, and sits at the heart of breathtaking new private-sector plans being proposed for what might be called a “Harbour Metropolis” – extensive revitalisation of the Central business district.
Hong Kong is unique worldwide not just as home to the largest number of skyscrapers (569 buildings over 150 metres high) but also to a massive number of elderly high-rises – about 9,000 are over 50 years old. Some of Hong Kong’s most iconic high-rises – many in the massive portfolio of Hongkong Land, the dominant landlord in Central – are in that age range. The 52-storey Jardine House is 53 years old and the nearby Prince’s Building is over 60 years old. Even Exchange Square 1 is over 40 years old.
Barely noticed, except by the tenants trying to reconfigure their businesses around ambitious new AI-driven platforms, many of the glamorous buildings at the heart of Hong Kong’s financial hub are very old and may soon no longer be fit for purpose. Air conditioning systems are ageing, as are toilet networks. Floor heights tend to be about 3m, when AI-supported businesses need 4m to house the miles of underfloor cabling. The urgent imperative is to “future-proof” premises for the information technology challenges that lie ahead.
Henderson Land’s Central Yards, the massive HK$63 billion “groundscraper” linking the main Central area to the waterfront and due to open next year, has been built to the latest environmental and efficiency standards, with huge investment in green space all around. It has made the geriatric state of “vintage” Central all too glaringly clear.

The response from the group of companies that regard themselves as Central’s custodians has been ambitious and includes collaborative revitalisation proposals, now being considered by the government for potential inclusion in the new five-year plan.
This initiative is deliberately being private-sector-led, despite costing perhaps trillions of dollars over the next quarter of a century, because of awareness that Hong Kong’s public purse is likely to be stretched by the ambitious demands of the Northern Metropolis. The aim will be built on substantial public-private coordination to provide the focused and timely funding for Hong Kong’s future global leadership as a finance, technology and tourism hub.
With elements like this, our five-year plan should give Hong Kong’s naysayers and those claiming that Hong Kong is “over” pause.


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American free-market economist Milton Friedman once called Hong Kong his “favourite economy”. Photo: SCMP

Deng Xiaoping said that both planning and the market were tools for allocating resources. Photo: AFP

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Chief Executive John Lee addresses the participants of a town hall meeting on August 2 to gather feedback on Hong Kong’s first five-year plan and the coming policy address. Photo: SCMP Pictures

Opinion

Hong Kong Opinion

News

Hong Kong

The suggestions put forward during the plan’s consultation period offer grounds for optimism for a revitalised future


The suggestions put forward during the plan’s consultation period offer grounds for optimism for a revitalised future.


Urban planning

Inside Out & Outside In

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Column

Outside In

Death knell? Hong Kong’s five-year plan is a starting gun

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The suggestions put forward during the plan’s consultation period offer grounds for optimism for a revitalised future

The suggestions put forward during the plan’s consultation period offer grounds for optimism for a revitalised future