October 17, 2024 · 《Ming Pao》
On the day this article appears in the newspaper, the Policy Address will already have been delivered on Wednesday. However, since the author had to submit the manuscript on Tuesday, this article cannot evaluate the chapters on reform in the Policy Address. Fortunately, the aim of this article is not to chase an instant soundbite of commentary, but to take a higher-level and broader perspective, drawing on reform experiences from Chinese and foreign history to explore the patterns of success and failure in reform, and thereby to identify the pathways and methods for Hong Kong to overcome resistance to reform.
This article is the final instalment of the trilogy “From ’50 Years of No Change’ to ‘Recognising, Responding, and Pursuing Change’.” Part 1 of the series (published 5 September 2024) analysed the background to reform, explaining that Hong Kong’s social elite and the public had long measured new developments by the values and standards of “50 years of no change,” with the result that social inertia was fostered, and Hong Kong’s development lost momentum or even came to a halt. Part 2 (published 26 September 2024) analysed why reform always faces hard-to-overcome resistance, and why many reforms that would benefit the public are often stillborn because small groups with vested interests oppose them. Part 3 explores in depth the pathways and methods for overcoming resistance to reform.
Among Hong Kong’s Chief Executives, the first Chief Executive, Tung Chee-hwa, came closest to being a reform-minded leader. The political difficulties he faced at the time — how to put into practice the unprecedented “One Country, Two Systems” and how to cope with one economic crisis after another — share more than a few similarities with today’s environment. Many of the reforms he put forward back then are precisely the reforms Hong Kong needs to pursue today. The lessons of their success and failure deserve our close attention.
1. Tung Chee-hwa — The Tragedy of a Reform-Minded Chief Executive
Tung Chee-hwa’s reforms covered an extremely broad range of areas, including: implementing the Principal Officials Accountability System to strengthen constitutional accountability; pushing forward civil service reform to raise administrative efficiency (major cuts to the civil service establishment, replacing pensions with provident funds, pay reductions, etc.); establishing a high-level Commission on Strategic Development to formulate long-term development strategies and positioning Hong Kong as “Asia’s World City,” replacing the colonial government’s laissez-faire drift that lacked long-term goals and strategy; and pursuing land and housing reform (in particular the “85,000” policy) to address the “deep-seated contradiction” of high property prices and the difficulty of getting a home.
In addition, he vigorously pushed the development of high technology, hoping Hong Kong could shake off its long-standing over-dependence on traditional industries (finance, trade, tourism). The measures included the construction of large-scale research infrastructure such as the Science Park, Cyberport, and the Hong Kong Applied Science and Technology Research Institute. At the same time, he set up an Innovation and Technology Committee led by Chang-lin Tien, former Chancellor of the University of California, Berkeley, to plan a blueprint for innovation and technology development — measures including an allocation of HK$5 billion to set up the Innovation and Technology Fund and the creation of the Innovation and Technology Commission. Finally, Tung Chee-hwa also performed major surgery on education reform, with measures including strengthening early childhood education, reforming primary and secondary schooling (switching to whole-day schooling, implementing six-year secondary education, breaking down the traditional arts/science divide, introducing school-based management), the “3-to-4-year” university reform, establishing sub-degree programmes, and strengthening teacher training.
Looking back from more than twenty years on, among all of Hong Kong’s Chief Executives, Tung Chee-hwa devoted the greatest effort to reform in two areas — land/housing and innovation and technology — yet both remain sore points for Hong Kong today. Tung’s reform was left unfinished, and he himself stepped down citing “bad legs,” bearing out the historical fate that “reformers come to no good end.” Whether the current and even the next-term government can complete the reforms Tung Chee-hwa began more than twenty years ago remains unknown. Precisely because the road of reform is long and winding, we must be all the more careful in drawing lessons from reform experiences in Chinese and foreign history.
Successful reform requires several conditions. First, a reform blueprint and roadmap must be drawn up to set priorities, so that firepower can be concentrated and the war front kept short, avoiding making enemies on all sides.
2. Reform Naïveté
Tung’s reform was left unfinished not only because he was over-ambitious and under-talented, because his deputy Anson Chan dragged her feet behind the scenes, and because of bad luck (the Asian financial crisis, the 9/11 terrorist attacks, and SARS), but mainly because he was burdened by “reform naiveté” — rushing into battle without first drawing up a reform blueprint and roadmap, and failing to anticipate the powerful resistance reform would encounter, particularly because the reform front was too long and covered too many areas, making enemies on all sides.
Winning the trust of the people is an important condition for successful reform. If reformers earn the trust of the social elite and the public, reform becomes twice as effective with half the effort. Whether the public trusts reformers depends chiefly on the government’s past performance — a government with a poor track record will naturally struggle to win the public’s trust. For example, in the early period of Mainland China’s reform and opening up, a satirical “doggerel” adapted by the public from the lyrics of “The East Is Red” clearly expressed the popular scepticism towards reform: “The Communist Party is like the sun — wherever it shines, it brightens; the Communist Party’s policy is like the moon — different on the first and the fifteenth of the lunar month.”
3. Signal Theory: Shang Yang’s ‘Moving Wood to Build Trust’
“What is past is beyond recall; what is yet to come may yet be pursued.” No matter how poor the government’s track record, reformers can still win the public’s trust through “out-of-the-ordinary” measures or memorable lines. In ancient times, Shang Yang’s “Moving Wood to Build Trust” is a classic case of winning the people’s trust. Viewed through the lens of signal theory in economics, Shang Yang delivered a clear signal that he was “a man of his word” by fulfilling an apparently “absurd” promise (anyone who moved a piece of wood from the south gate of the capital to the north gate would receive a reward of fifty taels of gold), thereby earning the people’s trust. By the same token, when a gambler “cuts off a finger to quit gambling,” it is not because “cutting off a finger” has any logical connection with quitting gambling, but because this out-of-the-ordinary act sends a clear signal that the gambler has made a firm resolve to quit.
In addition to Shang Yang’s classic “Moving Wood to Build Trust,” there are many other memorable lines from reformers throughout history that clearly signalled the ruler’s resolve for reform and have lived on in the annals. Examples include: Wang Anshi — “I am not awed by changes in heaven, nor bound by the precedents of the ancestors, nor swayed by the words of men”; Wen Jiabao — “If a thing benefits the country, I shall go forward regardless of personal peril; how could I shy away from fortune or misfortune?” (a line of poetry by Lin Zexu); and Zhu Rongji — “Whether ahead of me lies a field of landmines or an abyss ten thousand fathoms deep, I shall march forward without hesitation, without looking back, giving my all until my dying day,” together with his even more brilliant line: “I have prepared 100 coffins — 99 for corrupt officials, and one for myself.”
Deng Xiaoping, the chief architect of China’s reform and opening up, proposed as early as 1979 the establishment of the Shenzhen Special Economic Zone to push reform forward. The setting up of “Special Economic Zones” was a remarkably bold and out-of-the-ordinary measure, not only because it carried the suspicion of “going capitalist,” but also because “special zones” easily reminded people of the foreign concessions in modern China that had cost the country its sovereignty and dignity. Precisely because this measure was so bold and politically sensitive, it could serve as a clear signal of the reformer’s resolve.
Compared with the Special Economic Zones, the Special Administrative Region under One Country, Two Systems is not only an unprecedented move in the history of the Chinese Communist Party, but also a rare arrangement in human history. The establishment of the Hong Kong SAR has played an indispensable role in advancing the country’s reform and opening up. Beyond the abundant capital, management expertise, and new concepts that Hong Kong has brought to the country, the unprecedented One Country, Two Systems arrangement has sent a clear signal to the whole country and the whole world of the nation’s resolve for reform and opening up. This signalling function is more important than ever today, as the United States and its allies attempt to encircle China; and exploring the uniqueness of the Hong Kong SAR under “One Country,” and fully developing and using the differences between Hong Kong’s “system” and the Mainland’s “other system,” is precisely the core signal of the “Hong Kong Story.”
4. Crisis Management at the Reform Turning Point
Reform can rarely be achieved in one stroke; turning points are inevitable. The key lies in the leader’s crisis management — whether the damage to the reformer’s authority from these turning points can be reduced. Yet the SAR government, when facing difficulties, has often neglected crisis management.
Tung’s “85,000” plan is a case in point. At the time, Hong Kong property prices had plunged because of the Asian financial crisis, and the housing plan clearly needed revision. The government needed to send the public a clear signal of how the plan would be revised, but the government offered no explanation for a long time. It was not until 29 June 2000 — three years after the financial crisis broke out — that, in an exclusive interview with TVB, Tung was asked whether the “85,000” target would be revised and, for the first time, openly said: “Since 1998, the words ‘85,000’ have never been mentioned again — do you think it still exists?” Whether Tung delayed stating his position because of indecision or because he could not bring himself to lose face, this “not mentioning it means it does not exist” approach to governance was clearly irresponsible and caused enormous damage to the government’s credibility.
Tung’s mistake lay not in putting forward the “85,000” plan, but in failing to explain to the public how the plan would be revised when revision was needed. An even greater mistake was overlooking the fact that opening up new land requires lengthy preliminary work; once he shelved those land-creation preliminary works during the economic downturn, by the time the economy later recovered and a large volume of housing was needed, there was no land to build on.
The current-term government’s on-again, off-again handling of the Municipal Solid Waste Charging Scheme has likewise damaged the authorities’ prestige. The Waste Charging Bill was passed back in August 2021 by a Legislative Council dominated by the pro-establishment camp, by an overwhelming majority of 37 votes in favour to only 1 against. Originally scheduled to take effect at the end of 2023, it was postponed to 1 April this year because of a shortage of frontline staff, and then postponed again to 1 August in the face of social opposition. Yet opposition voices only grew stronger, and on 27 May the government, for the third time “knocking down yesterday’s self,” decided to postpone it indefinitely.
There are no small matters when it comes to people’s livelihoods. The waste-charging scheme requires every household and many businesses to change their daily behaviour to fit government policy — never an easy matter, and turning points are inevitable. What is regrettable is that the government, in the face of this crisis, has been indecisive and ambiguous, and has failed to convey a clear signal to the public. Why this scheme, pushed by the government for years and passed by an overwhelming majority of LegCo, came to nothing has still not been clearly explained.
5. Reform Is Always a Journey
Pursuing reform is an art of adapting to time, place, and people, and a complex system-engineering project. Across Chinese and foreign history, examples of reformers who fell short of completing their work are legion. After Tung Chee-hwa left office in dejection, although most Hong Kong people do not necessarily consider him a successful Chief Executive, in fact many of the reforms he initiated back then are still operating effectively today, including: the Principal Officials Accountability System; civil service reform (such as replacing pensions with provident funds); the discussion and formulation of long-term development strategies by the Commission on Strategic Development; the large-scale infrastructure for high-tech development (Science Park, Cyberport, ASTRI) and various funds; and many reforms in education (except for Liberal Studies).
Although reform of land, housing, and innovation and technology has shown no significant breakthrough in over twenty years, looking at global experience, reform in these two areas is extremely difficult: property in most of the world’s major cities is very expensive, and young people struggle to afford it; and innovation and technology is a “winner-takes-all” game in which “one general’s success is built on ten thousand bones,” with many losers and only a handful of winners.
Today, the SAR government will continue to pursue reform in land, housing, and innovation and technology; whether it succeeds will probably only be known in ten or twenty years’ time. Although the road of reform is inevitably long and winding, reformers across the ages have accumulated a wealth of experience for us. As long as we draw lessons carefully, we can not only avoid repeating the historical fate of reformers, but also see more clearly and walk further by standing on the shoulders of those who came before us.
(Translation supported by AI)
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