Following the cancellation of opposition groups in Hong Kong, China’s leaders intend to target the city’s wealth shortage and low-cost housing, which Beijing blames for fueling social unrest.
Senior officials are discussing ways to expand the city’s fiscal structure and increase land supply, in an effort to alleviate inequality and high living costs in one of the world’s most expensive cities, according to people familiar with the talks. The deliberations could lead to large-scale reviews of Hong Kong’s economic and welfare systems, although no specific proposals have been put forward, people said.
Changes to Hong Kong’s low-tax system would increase revenue for more social spending, but one challenge is how to do so without undermining the city’s attractiveness as a financial and business hub. Land policy reforms can help improve access to cheaper housing, although officials need to overcome the ingrained influence of local property tycoons, whom Beijing considers too passive in their support of government targets.
For Beijing, efforts to reduce dissent in Hong Kong in the past year – from filling opposition figures on national security taxes to a planned reorganization of the city’s electoral system – are meant to pave the way for social and economic revisions. Political repression has drawn attention mainly from Western governments, which have accused China of breaking its promises to allow the Hong Kong government to remain semi-autonomous until at least 2047.
What Beijing ultimately wants to address in Hong Kong is not “politics, but deep issues,” including the lack of affordable housing and the city’s “deeply polarizing income gaps,” said Bernard Chan, a member of the national legislature. of China and Hong Kong’s Cabinet.