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Chief Secretary Carrie Lam
Yesterday the Steering Committee on Population Policy (SCPP) issued a consultation document and started a four-month public engagement exercise to collate public views on population policy.
Reconstituted in December 2012 following a pledge by the Chief Executive in his Election Manifesto, the reinstated SCPP has broadened its membership by incorporating non-official members from various fields.
Members are new but the issues they are dealing with are not. Population policy has been continually placed in the public domain. But the significance of our demographic challenges and their implications on our socio-economic development has yet to be fully appreciated and thoroughly deliberated in the community. Hence the SCPP is launching this public engagement exercise to bring the city up-to-date on the population challenges we are facing, deepen public understanding about the issues involved, and seek community consensus on broad policy strategies to manage the challenges.
Our demographic challenges
Latest projections show that our population will age at a faster pace than previously expected. By 2041, almost one in three of Hong Kong’s population will be aged 65 or above. Life expectancy at birth will increase to 84.4 years for men and 90.8 years for women.
Our labour force will peak at 3.71 million in 2018 and start to decline from that point onwards when the post-World War II baby boomers retire. Labour force participation rate will drop from 58.8% in 2012 to 49.5% in 2041.
Our total fertility rate, despite encouraging pick-up from the trough of 0.9 child per woman in 2003 to 1.3 in 2012, will remain low and is hardly adequate to achieve the natural replacement level of 2.1.
Higher life expectancy and low birth rate taken together will mean an upward trend in our total dependency ratio, from the current 355 dependent persons per 1,000 working age persons to 712 per 1,000 by 2041.
The Government is very alive to these demographic challenges. Two reports released respectively in 2003 and 2012 have highlighted those issues of concern and recommended measures to tackle part of the problem. In 2013, the Working Group on Long-Term Fiscal Planning has been set up in the Treasury Branch of the Financial Services & the Treasury Bureau to explore ways to make more comprehensive planning for public finances to, amongst others, cope with the fiscal challenges arising from an ageing population. The Commission on Poverty has commissioned a consultancy team to explore how we may improve our existing retirement protection arrangements. Plans for meeting people’s housing needs are set out in the Long Term Housing Strategy now undergoing public consultation.
In line with the commitment of this term of the Government to address Hong Kong’s long term interest, the SCPP attempts to take a holistic and strategic view of our population policy in order to help the Government formulate meaningful policies.
Five policy strategies
The SCPP considers that a sustainable population policy should seek to promote economic and social progress. It should aim at finding a balance between creation of economic wealth, equal opportunities for all people and better quality living.
Noting efforts made by other committees in areas including retirement protection, housing, public finances as well as health and welfare services for the elderly, the SCPP proposes to focus on tackling the challenges through five policy strategies.
First, we should increase the quantity of the labour force by drawing more people into the labour market. Female homemakers and early retirees are amongst our key target groups. Providing more job opportunities for young people is another worthwhile direction to pursue. Helping new arrivals from the Mainland, persons with disabilities and ethnic minorities join the job market can provide the much needed boost to our labour force. Gainful employment is also conducive to their social integration.
Second, we should enhance the quality of the labour force by improving education and training and minimising skills mismatch, and ensure our young people have the right skills needed by economic development. We should diversify our economic base and encourage businesses to move up the value chain and increase job diversity. We should also revive the value of vocational education as an alternative learning and career route to traditional academic pursuits.
Third, we should align our talent admission regime with our broader economic development strategy, and target specific groups of talent that can facilitate Hong Kong’s development in key industries, while adopting a more proactive “we seek you” approach to go out and market Hong Kong as a place of opportunities for global talent. We should also bring home Hong Kong people living or studying abroad or on the Mainland. We need to consider a more effective importation of labour system without jeopardising the interests of local workers.
Fourth, we should foster a supportive environment in which individuals’ aspiration to form and raise families can be fulfilled as far as possible, though Government should not interfere with one’s childbearing decision.
Fifth, we should gear up the community to embrace the positive opportunities of an ageing society, as future generations of the elderly are better educated, healthier and financially more independent. These include building an age-friendly environment, promoting active ageing and developing the silver hair market.
We have included in the consultation document open-ended questions to facilitate the public framing their input on how these policy directions, if supported, can be put into practice.
Our stance on three public concern issues
Lately, population policy has already attracted some discussions even before the start of our public engagement exercise.
While SCPP has an open mind on ways to manage the population challenges, our stance is clear on three topical issues of public concern.
A population cap is undesirable. Hong Kong needs population growth to cope with a rapidly ageing population by adding people to the shrinking workforce to maintain competitiveness. This is especially relevant when our annual average population growth, which has been declining steadily since the 1950s, is now at a low level of 0.6%. It is predicted to remain low in the years to come. A population cap would only compound, not resolve, the population challenges we are facing. We acknowledge that population growth will put pressure on infrastructure, housing, public services and the environment. We will continue to undertake robust population projections to support continued planning and investment well ahead of time.
The One Way Permit Scheme should be preserved. The scheme, designed primarily for family reunion, has a firm constitutional basis. When cross-boundary marriages are making up 35% of our locally registered marriages, there is clearly a continued need for an orderly arrival of spouses and children of Hong Kong people for family reunion via the scheme. About 48% of the working age new arrivals are economically active. With proper training and support services, this source of newly added population can provide timely relief to our tight labour market.
Type II children are not a solution to our demographic challenge. Instead, the birth of some 200,000 such children in Hong Kong prior to the implementation of the “zero delivery quota” policy has presented some transient, multi-faceted problems we need to properly address through flexible measures. Concerns arising from the application by parents of cross-boundary students (including Type II children) for kindergarten places and allocation of primary one school places in the northern part of the New Territories call for enhanced planning and preparation in order to ensure that the needs of local students (i.e. students residing in Hong Kong) are being taken care of.
Tell us your views
A well-educated, hard-working, flexible and enterprising workforce has always been one of Hong Kong’s greatest strengths. But we can only hope to remain ahead of the game, if we can nurture our home-grown talent as well as attract the best and the brightest talent from around the globe, and strive to be the most sophisticated and efficient platform for the world to do business with the Mainland of China and for Chinese enterprises to be connected with the world – our “super-connector” role.
A less outward-looking or less international Hong Kong will cost us our economic vitality. Only if we maintain our cosmopolitan outlook and practices, including the use of English, will we be able to stay ahead of our competitors. And only if we remain vibrant as a competitive economy will we be able to offer the fullest opportunity of employment to our citizens and create the financial ability needed to deal with our social challenges. This should form a core consideration of our population policy.
There is no lack of contentious issues in the consultation document. Controversial though they may be, we have chosen to set them out for public discussion as we strongly believe in resolving differences through engagement and dialogue. We will advocate rational discussion on these issues to seek common ground while accommodating disagreement, with a view to achieving the broadest possible consensus. There is no quick fix or simple solution. What we call for is a common vision and a fine balance among different interests.
I encourage all Hong Kong people to think in terms of real longer-term benefits for this city, for the interests of our future generations and take an active part in the
public engagement exercise in the following four months. Public views so received will form the basis for the SCPP to formulate an actionable agenda covering short and long term measures. Please share with us your “Thoughts for Hong Kong” on or before 23 February next year.
Chief Secretary Carrie Lam wrote this article for local newspapers on October 25, 2013.
