Hong Kong's Carrie Lam vows closer Beijing ties to revive economy

Hong Kong Chief Executive Carrie Lam vowed to continue strengthening ties with China, using an annual policy address to defend Beijing’s tightening grip over the financial hub and announce new steps to boost economic links with the mainland.

In a speech on Wednesday that was delayed in order for her to consult Communist Party leaders in Beijing, Lam said her administration’s aim was to restore confidence following another tumultuous year. She spoke against the backdrop of a new wave of virus infections, an economy in deep contraction, worsening wealth inequality and political turmoil.

“The primary objective of this policy address is to look at ways to get Hong Kong out of the impasse and to restore people’s confidence as soon as possible,” she said in the speech, which cited President Xi Jinping’s vision for Hong Kong at the outset.

Lam said Hong Kong’s economy can benefit “from its proximity to the mainland and the central government’s long-standing support under the ‘one country, two systems’ principle.” The city’s “economic development will be given new impetus” by relations with China, she said.

During Lam’s speech of more than 2 hours, the Hang Seng Index pared a gain of as much as 1.7 per cent and was 0.6 per cent higher as of 1:30 p.m. local time. The announcement on the stock connect initiative disappointed investors betting on more fund inflows into shares of technology behemoths listed in Hong Kong.

Lam spent a sizable part of her speech promoting the Greater Bay Area concept that envisions Hong Kong’s economic and political future being much more closely entwined with the nearby mainland cities of Guangzhou and Shenzhen. She spoke about various programs to boost employment opportunities for young Hong Kongers to take jobs in the mainland, including a wage subsidy scheme for people working in technology companies.

However, critics in Hong Kong see the project as an attempt to further erode the former British colony’s autonomy following Beijing’s moves to crack down on political speech and assembly. Many Hong Kong youth— including those who took part in pro-democracy protests that drew millions on the streets — have said they wouldn’t accept the much lower salaries there, nor risk traveling there and being detained at the border.

Opposition politician Claudia Mo, who resigned along with other pro-democracy politicians this month, criticized Lam’s remarks on the GBA, saying on Twitter that it would mark the “end of Hong Kong as we know it.”