Lead the Way to Meet Population Bust

SCMP February 24 12013



Now that we have Shanghai, all that [commerce] that remains at Canton has been the result of long invested capital and the superior intelligence and enlightenment of the people educated to large commercial transactions "

Those words about the role of Hong Kong were uttered in 1858 by Rutherford Alcock, who had just ended 10 years as British consul in Shanghai and then Canton. They have strong echoes today as Hong Kong seeks to stay ahead of a city favoured by geography to be the one where the Chinese interior met the outside world.

It is investment in human capital and systems, as well as in advanced machinery and processes, that has enabled Hong Kong to stay ahead. But it now seems in danger of failing to lead the mainland.

Hong Kong has "invested capital" when it comes to finance, a superiority it can probably sustain if and when currency convertibility comes to the mainland. The legal system, likewise, has the "superior intelligence" to give the city a unique position.

But there are other areas where Hong Kong needs to show it is not merely a little more advanced than the mainland but in the van of global developments. Hong Kong's environmental failures make it a backward place in terms of air quality, efficient buildings, energy saving, and waste recycling and disposal. It is now probably two decades behind advanced European nations such as Denmark and a decade behind neighbours Singapore, South Korea and Taiwan.

The Leung Chun-ying administration is making some efforts but it will take many more billions of dollars and vastly greater political commitment before it can catch up, let alone be a leader. Catch up it must, but, meanwhile, it must find fields where it can lead and provide an example for the mainland.

Given how rapidly our own population is ageing, how about a serious attempt to address the problem of ultra-low birth rates and rapidly ageing populations throughout East Asia? That applies as much to the mainland as anywhere: ending the one-child policy will make scant difference to the fertility rate because urbanisation will have a counterbalancing effect. Quite probably, mainland fertility will continue to fall to the levels in Taiwan, Hong Kong and Singapore - and perhaps lower, given the sex imbalance now prevailing among the young.

The Singapore solution has been to have a high level of immigration, of permanent settlers and a sub-class of temporary workers. It plans to continue this policy, despite public opposition, partly also because it makes a fetish of quantity over quality economic growth. Trying the same here would merely incite more Hong Kong-mainland tension and dilute local identity, and is no solution for the mainland.

So what is the answer, apart from lowering the cost of housing so it does not take up an inordinate amount of the household incomes of those of fertile age? Housing costs are one factor, but experience elsewhere in Asia shows the government should be looking at countries which have led the way in returning to fertility rates close to replacement level. These are mostly found among northern European countries. They did not set out to raise fertility; it was the natural outcome of policies aimed primarily at gender equality, recognising the proper roles of women in a modern urban society.

Hence, there are at least three things that can be done now by the government that would help reverse our abysmal fertility performance by lowering the opportunity cost of child-bearing and rearing.

First, legislate for strong job protection for pregnant women and young mothers and extend paid maternity leave to several months.

Second, provide free nursery and pre-school education for all.

Third, massively increase direct child support payments, while at the same time limiting tax deductions that mostly benefit those who least need them.

The government seems unaware that, for an ageing society, investment in children has massively greater long-term returns than the grandiose infrastructure projects it favours.

Such policies may go against the grain of the paternalist tendencies of the administration, let alone those on the mainland. But Hong Kong is already more advanced than most East Asian societies in promoting gender equality so the above steps are not too big to contemplate. And they should find favour across most of the political spectrum.

Acceptance of social change of this sort is vital, so it is disappointing that the administration has aligned itself with outdated attitudes on issues such as gay and minority rights. These are areas where Hong Kong can lead. It should lead, too, in acceptance of single-parent families, a natural outcome of broader gender equality. It is absurd to talk of this being "against Asian values" when current so-called Asian families exhibit very weak commitment to parenthood as well as a declining willingness to support the aged.

Of course, there are plenty of other fields where Hong Kong could seek to be in the van. But few are as important to the long-term social and inter-generational health of East Asia. It's time for our top officials to show some "superior intelligence".






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