John Lee’s uphill battle to secure Hong Kong’s future
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Hello and welcome to this special episode of Inside China. I'm Yonden La Tu, Managing Editor of Content here at the South China Morning Post and host of Talking Post, our signature interview series. As he enters his third year as Hong Kong's leader, Chief Executive John Lee's performance is in the spotlight, along with the significant challenges he faces.

His focus is now shifting from enforcing national security to fighting an uphill battle to get Hong Kong's economy back on track and attract foreign investment, despite seemingly overwhelming odds in a war of narratives and geopolitics beyond his control. In this candid, freewheeling conversation with us, he discusses all these issues and more. This is Talking Post, and here's Hong Kong's John Lee. ♪

Chief Executive, thank you very much for joining us again. The last time we spoke on this show was a year ago and you had just finished a year in office and it was a bit too early to take stock. But how are you doing by the way? How's the stress levels going? I don't see you losing much hair or turning grey. So it can't be so bad. A lot of work every day. When people ask me what I really want, I frequently say I want 48 hours a day. So that is the amount of work I'm doing every day.

But being the chief executive is more than a job, it's a mission. So I try to do as much as I can, pull together my team and really listen to what people think about what we should do in which area. Basically, we want to develop the economy well so everybody benefits from it. We want to ensure that people have a good livelihood in Hong Kong. That's what I have been aiming at.

If you ask me how I look at how overall we're doing. - Because it's been two years, right? And now you're entering your third year. You'll soon be approaching the midpoint of a five year term. So I think it's really time to take stock of how much you've achieved so far. - Well, you look at the KPIs I've set for my government, the first year something around 150, the second year 170. And all the KPIs are,

achieved and it's not just the KPI's I think I've changed the culture of the government in a lot of ways we are result oriented we listen to people's

opinions. We engage more with media friends, with different stakeholders, with electrical members. We try to listen as much as possible and then see what are the right things and what are the most important things we should do. I think so far if you look at the two years, first of all the year when I took office the economy was

on a downward trend. So it's a contraction of something like 3.7%. And then the year after, the economy has improved. It's a positive growth of 3.3%. And this positive growth continues this year. And I predict it will continue also in further years because this year predictions between 2.5 to 3.5% GDP growth, which I think will give quite a good indication to people that, well,

We have, first of all, achieved the turning point of the economy being on a positive trend again. And some positive things have happened. For example, the recent competitiveness report has indicated Hong Kong's competitiveness has improved by two positions. Well, what does that mean to me?

I think the most important thing for a chief executive is to ensure that we are on the right track, we're doing things in the right direction. And all these indications suggest that we are, because we have seen a lot of talents coming into Hong Kong, actually exceeding our expectations. We have invited a lot of new companies, new enterprises to come to Hong Kong. For example, Invest Hong Kong has invited more than 50% of companies to come to Hong Kong.

and also our Oasis, which are office of attracting strategic enterprises. They've also invited a lot of enterprises in Hong Kong. All together, they will bring into Hong Kong 120 billion investments, creating something around 20,000 jobs. So all these things indicate that we are doing, I think, in the right direction. And I am asking my team to keep moving at a fast pace. If I compare

the government team now with the government team two years ago when I took office, I think we are moving forward and we are moving forward regularly at a faster pace. That is important because

I'm a believer that there's never the best, only the better. So we keep to move forward every day in the right direction and I think we'll hit targets one by one and then bring real benefits to people's livelihood. Has your team done well so far? How do you grade them? Have they met the expectations that you set? You wanted a results-oriented team.

And so far, how good is it? Well, overall, I think they have. First of all, I have changed the culture, as I have described to you. So the team spirit is strong, and the team is stronger as we progress. And you look at some of the results at district, right? In the first way it took office, I think there were two classic cases of back lanes being actually taken back from people who had longed, somehow occupied it for their own use.

And when we check again, then the situation remains as we cleared two years ago. So there was no relapse and a lot of construction black spots, they have been cleared as well. And that's one thing. The second thing, if you look at the different KPIs they have set, the KPIs themselves are both a mean and an end.

They are an end itself to show that we do what I am then, ask them to do and they achieve them. But more importantly, it's a means to change. It's a mean to change the culture of being result-oriented. It's a mean to change people to constantly look for improvements because a lot of KPIs actually are suggested by them. For example, Invest Hong Kong.

I mentioned them setting a KPI, inviting something like 1,100 odd companies in three years. And in less than 18 months, they invited 640, which in a way is better than that half mark. So I'm pleased with that initiative, that self-motivation.

One other thing is they are quite willing to go forward in a preemptive way to anticipate threats. For example, the Chief Secretary has already been in charge of a task force which will deal with extreme weather attack. That means they will plan ahead, much more ahead than before. They will inform the public much more in advance and they will do all the preparation clearance

clearing debris, clearing leaves of all this drainage

because flooding is one of the most likely trouble that we have. So you're saying we're not going to have as severe problems as, you know, people trapped at the airport in the middle of a typhoon with no way to get to the city? The severe flooding, you've seen that. I mean, this is where the mercy of the weather. But you're saying we are much better prepared now? It's not going to be so bad the next time we get hit by a black rainstorm? There will always be challenges. There will always be unexpected big attacks.

And this happened around the world. Hong Kong is not unique. And we see this happen in neighboring cities, in different countries. So extreme weather is a persistent threat. And it will only be worse because of global warming. See, the weather is something that you can't control. So we can manage our expectations here. But say, for example, what about something like your household waste charging scheme? The intention was noble.

and the determination was there and your officials repeatedly said that no, we were going to go ahead with it and we in the media warned you many times that there's a lot of confusion, it's going to be quite messy and it went on for a long time before finally they climbed down and to say, oh hang on, we're not ready. But we spotted it right from the beginning. So...

When you talk about being satisfied with your ministers and their performance, does that include something like this? Well, I think we have to look at the whole thing in the right perspective. It was a law created before our government took office. So,

Preparation work was done at that time, but was that preparation work done enough? We assume office and then already the Secretary for Environment and Ecology has done a lot of extra things. I think we have mentioned already, well at the time we took office, there was actually almost zero collection for household food waste, almost zero.

And the Secretary has introduced household food waste collection boxes in different housing estates from zero to something. And then I think a lot of other collection points, he has mentioned that they have been increased by something like 700 to something which has doubled. So yes, we have tried to do a lot, but because I think the foundation was a very low and unfulfilled one.

So we have a lot of catching up to do. And eventually show that the catch up, even at this fast catch up, it wasn't enough. So we have to be realistic and being able to appreciate the real situation and then think of the right way to deal with it. I think it's what the government should do. Imagine if we roll out something that 70% of the population disagree with it. Would they be cooperative? And the other thing is,

I personally think that we should not be focusing on such a policy which affects 7.5 million on the pretext of punishment. Because to me, the whole strategy, other than education, which we have found that not enough, other than the provision of facilities, which we think is not enough, we have still a lot to do, the philosophy should not be punishment focused. And I think it has.

and the philosophy also has been not just punishment focused, but punishing some wrong people. For example, cleaning worker. When they are doing their day-to-day job, what they should is collect waste from people. So they're not the culprits.

So I think we have to approach it in a proper way. And I think when the strategy should be somehow be refined, then that is why I make that decision. Are you learning some lessons on the job like this now? I think everybody learns. You learn, I learn, right? And that is the way to make improvements.

I have said that I'm a believer there's never the best or the better. So there's always things to learn. And in the Chinese saying, when three people get together, there's already a teacher. So that is my philosophy. That's why I've been telling people about it. I believe everybody has blind spots. There's no all in this world. So wisdom lies around us and mostly.

in society, in the business sector. So you of course understand media better than I do. So I have to keep learning from you. And that is how we improve. And I think my team is sharing the same belief as I do. That means we don't have internal wastage of debating every day as to how we should move forward. So there's quite united thinking within this government ship.

And this ship, to me, is progressing in the right direction, faster every day. And I won't stand to hit targets and targets. You plan to keep this team for the rest of your term? No, they're doing fine. And so why shouldn't they continue? And the team will only be better because you can see the bigger engagement they have with people. So we appreciate opinions, sentiments more. And also, they have two years experience now.

And I think to his experience, it's quite important. And I have been hearing some supportive opinions and of course some not supportive opinions. But so far, I think people have been saying that, well, we are in the right direction. I think that's important. Chief Executive, you painted a rather positive picture of Hong Kong's economy and the future to come as well. But you do realise that there are circumstances completely out of your control.

headwinds internationally, basically. So basically what we're talking about is the Western alliance that is ganging up against China and Hong Kong is often caught in the crossfire. You've got the US presidential election coming up and if you've been following the news, you can see that there's some wild stuff going on out there in terms of the two presidential candidates, one who may go to jail. So all bets are off and you have no idea how they're going to behave towards China in the heat of politics.

in this very important election. So how are you going to firewall the city from punishing sanctions that they may well impose on Hong Kong? And again, when I say this, you and I know that this has nothing to do with human rights in Hong Kong. It has nothing to do with freedoms in Hong Kong. It's to do with attacking China

And this city, they see this as the weakest link. So on the one hand you want to develop the economy, you've moved on from national security to the economy and livelihood, which is the most important for Hong Kong people, and you're talking about developing the city into a tech hub. All that is dependent on, is controlled internationally by the US and its allies.

How are you going to deal with this? Well, the first thing I want to say is it's despicable that they attempt to pervert the cause of justice by threatening sanctions on officials, particularly on judicial officers, judges, when a lot of significant trials are taking place. That is a despicable attempt to pervert the cause of justice. But you're right. It's like extreme weather we have just discussed. I can't change extreme weather. I can only do better myself.

So what I should do? Build a stronger team, make us be able to protect ourselves and also build strengths so that we can win on other sides. This world is not just monopolized by one or two countries. It's a big world. There's a big world of

almost 200 countries. And there are a lot of new opportunities for us to capitalize on. I have mentioned that first of all, our relationship with this region's neighbor countries is very important. And also there are new markets. ASEAN countries are neighbor. 10 countries, we have very good relationship.

ASEP, 15 countries, 15 economies, and it represents 70% of our trade. And of course it's important. And of course, new markets such as the Middle East, which I visited, already I'm seeing the mutual positive directions that have happened. We visit them and they visit us. And this is not just people to people, it's money and also initiatives as well.

And then of course, Europe is also an area that I'm seriously increasing our interaction with.

My colleagues, a lot of POs have been visiting to France, Germany, even the UK. See, Europe, the same Europe that has its representatives here attacking your judicial system, attacking your governance, attacking everything, every day. You have the same European officials here when you ban protests, say, for the 10th anniversary, they go down there almost inciting a protest. So you're expecting to do business with these people?

Well, they have of course their political agenda which they will continue. I would imagine that the relationship will not become very good. But I think equally all countries are pragmatic. Pragmatic in the sense that you want to create benefits to the people in your country. Otherwise, they will lose their office.

So I think what will benefit people, other than different political ideologies, is actually better business, better investment, better return, and also better people-to-people engagement. Government and government, of course, they each have their political agendas. But I think people are pragmatic. Investors want bigger return on money. Workers want to have better jobs.

entrepreneurs want potential opportunities. This is what Hong Kong is all about. And I think people are so pragmatic with what Hong Kong can offer, both because of Hong Kong's strengths and also because Hong Kong's two advantages, one being connected to mainland, one being connected internationally.

So, talent attraction is a strength of Hong Kong. Hong Kong being an international city, which people can both work hard and play hard, is an attraction. The little tax system is a big attraction.

you only have to pay 50% of your income tax, where you may have to pay something like 20 to 40% if you work elsewhere. And also, Hong Kong's tax is not just simple, it's also very vital to individuals. There's no dividend tax if you invest, there's no capital gain tax. So you make investment here, you take home what you get. And also we have no estate tax,

This is very vital to big wealth people and we have a lot of incentives for different sectors as well. Yes, sure. I mean, there is no disputing the attractions that Hong Kong has to offer for business. But the problem is what's going on here is a war of narratives, right? And Hong Kong, unfortunately, I have to say from my observation, is losing this war of narratives because the counter-narrative is so strong. So take, for example, the...

Now you've got all these national security cases coming up, very high profile. And this is an area that you're going to be attacked for sure because they will question the rule of law here and judicial independence. And it doesn't help that you have foreign judges at our top court quitting. One of them has just broken all boundaries now. He's gone to the extent where he's gone to the media to complain about judicial independence here. And he's infused politics in that now. And this is a very influential judge. People listen to these people.

So, he's going around saying Hong Kong is on the verge of becoming a totalitarian state. And you and I know it's ludicrous, but that's the message that's going out. And these stately English lordly gentlemen saying it to their audience is accepted. And this dissuades people from coming here to invest. How will you tackle that? Well, there is a very serious disinformation campaign, no doubt about it. And that has happened

many years ago, 3 2019, when we had that black violence and colour revolution. And that campaign will just go on. Serious disinformation campaign. It's not easy, but we have to be confident that we do our part better. So we just have to work out and tell people what the true and real situation of Hong Kong is. We will go out and tell. I think the whole of Hong Kong will go out to tell.

It's not just the government team. Everybody who knows that this is false will have to tell. Because in the name of justice, in the name of being truthful to the world, and more importantly is, I think we work on the people rather than the government. We work on the people by expanding our network, inviting people to come to Hong Kong. We have organized a lot of international conferences here. A lot of big shots have come to Hong Kong. I think they are influential people.

So they will go back and tell the true Hong Kong situation to the world. We invite opinion leaders also to come and we just have to keep doing it. And the other thing is, well, yes, they have monopolized some positions.

But there are other positions where we can open up. So I'll tell the world, for example, in the Middle East. I'll tell the world in ASEAN. I'll tell the world in Asia Pacific. I'll tell the world in Central Asia. And I'll tell the world as we go out. So I will be making visits to different parts of the world. But it is a tough disinformation campaign. Is the worst yet to come? And are you going to win this fight?

Have you got enough time to win this fight? Well, at the end of the day, truth always prevails. I think righteousness always prevails. And although we have very professional liars, thefts, who are all trained up by different governments to steal, to lie and to cheat you, as a former Secretary of State has openly told people, they will continue to do it. But awareness is important.

and also try to protect yourself more so that you don't get somehow be injured or infected in due course. Wake up to it and go out, build strength in yourself so we will make ourselves stronger. We'll tell people all about it but then it's not all bad news. If you look at some of the ratings of Angkor,

That justice prevails, that independent studies. You can see our competitiveness has grown up in many different areas. Our universities have been rated highly

and people have come to Hong Kong has already told good stories of Hong Kong as well. Alright, Chief Executive, we've run out of time. Time always flies when you're having fun, isn't it? So, we'll have to bring it to a close, but we do wish you all the best in your remaining three years and maybe beyond that, let's see. You never know, right? Well, I'm very confident in Hong Kong. I'm confident in Hong Kong people's resilience and Hong Kong people's will to

to do always better, to also beat challenges. I have strong faith. We have gone through different stages of economic changes and we've all come out with flying colours. We'll continue to do that.

Thanks for listening to this edition of Inside China. Don't forget the Talking Post video version of this interview is available on scmp.com. Take care and bye for now.

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