Speech to the Hong Kong 20: Developments and Opportunities Business Forum – Hong Kong and its Lessons for Australia – Doltone House, Sydney
The year 2017 marks the 20th anniversary of the establishment of the Hong Kong Special Administrative Region under the “one country, two systems” formula. And in the two decades since that momentous event the ‘Pearl of the Orient’ has continued to successfully blend Eastern culture with Western values.
To be sure, it’s impossible not to be impressed by what one sees and feels in Hong Kong. And I say that having experienced it for myself when I visited in 2015.
Because of its openness, dynamism and vitality, this metropolis has transformed itself into an international financial, shipping and commercial centre. Whereas half a century ago manufacturing was at the heart of the City’s economy, the service sector now accounts for 93 per cent of Hong Kong’s GDP.
As noted by the territory’s former Financial Secretary:
“The ‘Made in Hong Kong’ label has been replaced by ‘Financed in …’, ‘Designed in …’, ‘Conceptualised in …’ and ‘Made by Hong Kong’.”
Today, Hong Kong is home to the world’s 6th largest stock market. It boasts the world’s 4th largest shipping register, and its international airport is the world’s busiest airfreight hub.
Above all, it is a magnet for people with imagination, vision and big ideas.
PREPARING FOR THE FUTURE
For proof of this you need only look at the major infrastructure they are building, projects that when completed will further drive Hong Kong’s economic development and link it more closely with the mainland.
They include an expansion of Hong Kong International Airport with the construction of a third runway on 650 hectares of reclaimed land and a mega 29 kilometre bridge connecting Hong Kong with the western part of the Pearl River Delta region.
Then there are the rail projects that Mr Leong’s MTR Corporation is delivering.
Firstly, a new cross-boundary Express Rail Link that will plug Hong Kong into China’s 16,000 kilometre High Speed Rail network and secure the territory’s position as the southern gateway to the mainland. Once commissioned towards the end of next year, this link will, for example, cut travel times between Hong Kong and Guangzhou in half.
Secondly, in line with the Government’s policy of using rail as the backbone of Hong Kong’s transport system, MTR is currently expanding the rail network by 25 per cent, with new and extended lines having been commissioned in just the last two years – and there are more to come.
By 2021, the network will consist of more than 270 kilometres of track serving neighbourhoods where 70 per cent of the population live.
The Hong Kong authorities get it.
To make a modern city work you need to invest in rail infrastructure.
Such an investment is not only one of the most effective ways of reducing congestion and averting gridlock; it also delivers significant environmental spin-offs and helps prevent people and communities becoming socially isolated and economically disadvantaged.
But building rail lines is expensive.
And here again there are lessons we can learn from our Hong Kong friends.
MTR has pioneered the use of “innovative” financing. Their “rail plus property” business model allows them to fund rail upgrades from the revenue stream derived from developing the land around and the airspace over stations for housing and commercial activities such as shopping malls and offices.
I am not suggesting that this model can simply be replicated here in Australia. However I do believe that we have the intellectual capacity amongst both our policy makers and investment community to successfully adapt the principles that underpin it to develop a distinctly Australian approach to financing the infrastructure needs of Australian cities.
One project where such an approach could be applied is the much-needed Western Sydney Rail Link via the Western Sydney Airport. Indeed, given much of the corridor along which the line would run is greenfield government-owned land, this project offers the greatest opportunity to test the potential of value capture within an Australian setting.
That’s why I have been so insistent that this vital piece infrastructure needs to be built alongside the residential and industrial developments that are planned instead of retrofitted after that growth has occurred, most likely at significantly greater cost to the taxpayer.
As Peter Newman, professor of sustainability at Perth’s Curtin University, has said:
“If you want to get money for the private sector you have to run it as a redevelopment project rather than as a transport project.”
BUILDING LIVEABLE, SUSTAINABLE CITIES MATTER
As well as delivering the public transport infrastructure that’s key to Hong Kong’s economic productivity, MTR under Mr Leong’s leadership is also focussed on “creating communities”.
Quality of life matters.
And that brings me to urban policy more broadly.
A productive, efficient economy that produces jobs and prosperity is vital. But equally, we also want a richer society – one that takes full account of the human elements of city life.
This is a view shared by the Hong Kong Government.
In the words of one of its senior officials:
“…we need to continue thinking as an international city, living as an international city, learning as an international city, and enjoying the high-quality lifestyle of an international city. Only then, can we expect to nurture, to attract and to retain the best talent and to continue providing the opportunities that they expect.
“One good example is our approach to developing key areas of Hong Kong. The development-first approach has been instilled with a new mindset of people-first development.”
As a metropolis with very limited land resources, Hong Kong faces a particular challenge fulfilling the growing aspirations of its 7.3 million residents for more living space and a better quality of life. But as I have seen firsthand, Hong Kong is meeting this challenge head on, and in doing so is playing a leading role in driving the transformation of the global built environment.
The Government’s cutting-edge approach to balanced development is embodied in its “Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030”, a vision-driven, pragmatic and action-oriented plan. It covers various aspects of the built environment, from land use planning to building design to the use of the latest energy-saving technology.
Importantly, the plan also recognises that preserving and creating green space, as well as places to enjoy cultural, sporting and leisure activities, is an integral part of a liveable metropolis.
And a good example of where this plan is already reshaping the city is taking place around one of Hong Kong’s best-known and most valuable natural resources: Victoria Harbour.
Indeed, there is one thing that Sydney and Hong Kong definitely have in common: both have the good fortune of being founded on harbours that are unique in terms of their size and beauty. Victoria Harbour is a natural wonder that puts Hong Kong among the world’s great waterfront cities – and is a source of pride for the city’s residents.
And the $3.5 billion redevelopment of West Kowloon will make it even more accessible to locals and tourists alike. The site is being converted into a world-class creative and cultural hub called “City Park”.
As well as green space, this new district will feature 17 arts and cultural venues, including a museum of contemporary visual culture and several performing arts and concert halls.
Once completed, you will be able to stroll along piazzas, take in an open air performance, or simply relax and enjoy stunning views of Hong Kong at one of the many cafes and restaurants. All of this within walking distance of the West Kowloon terminus of the new Express Rail Link that I mentioned earlier.
GATEWAY TO MAINLAND CHINA AND BEYOND
I want to conclude today by emphasising that Australia has extensive and deep social, political and economic links with Hong Kong. We have long recognised Hong Kong’s importance and acknowledged its extraordinary success at navigating the many challenges it has confronted over the past two decades, from the Asian financial crisis to the SARS epidemic to the global financial crisis.
As well as being Australia’s 5th most important source of total foreign investment, Hong Kong is our 15th largest market for goods exports – and an important market for our services.
What’s more, more Australians are living in Hong Kong than any place in the world, outside of Australia and – of course – London.
For our business community, Hong Kong is an important bridge into greater China and the wider Asian region. That’s why over 600 Australian companies from a diverse range of industries including information technology, banking, accounting, legal and retail do business in Hong Kong, with many of them basing their regional headquarters in the territory.
For Australian companies it makes total sense to have a presence in the heart of the Asian region in what is the Asian Century.
Consider this one fact: between now and 2040, the world will need $118 trillion of new infrastructure to keep pace with population growth and urbanisation, with more than half of that need coming from Asian countries alone.
Without a doubt, this will offer immense commercial opportunities for Australian architects, engineers, construction firms, financiers and the resources companies that dig up the raw materials necessary to build the railways, roads, ports, power plants, telecommunication networks, dams and housing that will be required over the coming decades.
It is now up to us to grasp those opportunities.
Simply put, we need to adopt the imagination, boldness and entrepreneurial spirit that has long characterised the Hong Kong people and business community. Indeed, there is an old Chinese proverb that should guide our national efforts in the decades ahead. Roughly translated, it tells us: Do not be afraid of a long road to success only be afraid of a shortage of ambition.
FRIDAY, 8 SEPTEMBER, 2017