Feature Stories

24.05.2019

Creating a Resilient Hong Kong

Bernard CHAN, Convenor of the Non-Official Members of the Executive Council - Hong Kong's highest policy making body, analyses what Hong Kong needs to do to prepare its citizens – across all levels of society – for the radically different employment landscape of the future.

“Our public schools are quite conservative and traditional in some ways. They do a very good job of teaching basic skills, but maybe we need a wider variety of curricula and teaching methods.” Bernard Chan

Bernard Chan is not merely a businessman and the Convenor of the Non-Official Members of Hong Kong’s Executive Council, he is also the Chairperson of the Hong Kong Council of Social Service (HKCSS), an umbrella group of welfare agencies. Even before the economic disruption likely to be caused by digital technology became evident to him, Chan was someone who was already deeply concerned about the plight of the disadvantaged and about the lack of social cohesion in Hong Kong. His active role in public service is a reflection of his keen interest in three particular social policy areas: welfare, quality of life and education.

Hong Kong’s readiness

Chan believes it will be a challenge, though not an insurmountable one, for local businesses, workers and policymakers to adapt to the new environment that is likely to be ushered in by increased automation and the introduction of new digital products and services.

“As China has opened up, Hong Kong has enjoyed access to a lot of ‘easy money’ over the last few decades, through its provision of intermediary and arbitrage services,” he notes. “Some of our economic sectors have become comfortable and are maybe not prepared for the changes that will come from innovation or with new competition.”

While he considers the government to be taking its role in encouraging the development and adoption of new technologies seriously, Chan believes it needs to be more active in addressing Hong Kong’s resistance to change. He cites the manner in which vested interests resist competition as an example.

With a current unemployment rate of below three per cent, he thinks the city will unlikely suffer major aggregate job losses in the immediate future. “However, there is a huge debate about what Artificial Intelligence, robotics and so on will mean for the labor market. If it does lead to a problem with unemployment in Hong Kong, the community would clearly expect the government to act.”

Outlook for employment

The overall outlook for local employment patterns is fairly clear, he says. “More jobs will require the use of digital and automation-based tools; there will be more flexibility in terms of people working elsewhere in the Greater Bay Area; and there will be a more relaxed attitude toward retirement ages and employing older workers.”

The fact that, since 2008, Chan has been one of Hong Kong’s 36 deputies to the National People’s Congress gives him an added degree of insight into the likely effects of Beijing’s efforts to integrate Hong Kong more closely into the Greater Bay Area economy.       

“In theory, there should be significant productivity and efficiency gains from reducing various barriers around the Greater Bay Area. Look at how the tri-state area around New York City – New York State, New Jersey and Connecticut – forms a far more seamless economy.”

Even though he accepts there are political and cultural barriers that will be difficult to overcome, Chan does expect operations in some sectors, such as technology, to become more cross-border.

Preparing for the future

While Chan is uncertain as to exactly which specific skills the new economy will require, he does agree that knowledge of STEM subjects, along with the ability to think in innovative and creative ways, will be tremendously important, whatever the future holds.

To develop these skills more effectively, improvements in the local education system, Chan believes, can also help to narrow Hong Kong’s wealth and income gap, which is otherwise set to grow even wider as traditional employment patterns are disrupted.

“Our public schools are quite conservative and traditional in some ways. They do a very good job of teaching basic skills, but maybe we need a wider variety of curricula and teaching methods.”

Chan points to the popularity of private international schools among parents who can afford the fees, and wonders if local public schools could offer similar learning experiences. “We also need to ask how we can upgrade vocational and adult educational opportunities. Are these focused on the new economy or the old one?”

At the other end of the demographic scale, he believes that assisting older workers to remain in employment would not only give their health and happiness a boost, but that doing so would also be beneficial to the overall economy.

“I think we should be far more flexible about the whole idea of aging and retirement. If people in their 60s or 70s are active and productive and want to be involved, we should support them.”

He says the most obvious solution to the problems arising from an aging population is an extended working life. There’s a clear economic rationale to encouraging employers to retain older workers, working part-time or in mentoring roles. In addition, since an active lifestyle helps maintain mental and physical health, the elderly should also be enabled to contribute to society in other ways, through voluntary work or other activities.

However, Hong Kong’s biggest challenge, in Chan’s view, is in transforming itself into a much more appealing place to live and work. Such a change will be necessary if the city wishes to attract the kind of skills the future economy will need from overseas. 

“We have excellent infrastructure, excellent institutions, clean government, a great legal system, low taxes and so on. But we are in danger of falling behind in terms of quality of life.”

Even though there is a shortage of space, this is not, fundamentally, an issue of resources, he says. “Going back into history, Hong Kong has been all about business, and that is still the culture in policy-making and throughout much of the community. If you look at more recent policy on planning and welfare, you can see that our priorities are changing – but it’s still a gradual process.”

Bernard Chan

  • Hong Kong Deputy of the National People's Congress of the People's Republic of China
  • Convenor of the Non-Official Members of the Executive Council of the HKSAR Government
  • Chairperson of the Hong Kong Council of Social Service
  • President of Asia Financial Holdings Ltd