Defying predictions that her days as a heavy hitter are over, Regina Ip manages to spark a brief spike in property stocks. In a Bloomberg interview, she sort-of implied that the government might be considering cutting extra stamp duty for Mainlanders with non-permanent status living in Hong Kong. The government quickly denies it, and Reg clarifies that it’s nothing official – just an idea being pushed by her ‘political’ party (more here).
Part of the confusion arises from Ip’s dual roles as a party leader dreaming up inane attention-grabbing ideas, and as a member (‘the Convenor’, if you please) of the supposedly advisory Executive Council who is bound to support government policy. The Standard criticism-by-shoeshine editorial says…
[Ip] holds the distinction of being the first woman convener of Exco, and the first with political affiliation since Hong Kong returned to China.
But, to coin a phrase, with great power comes great responsibility.
As the leader of a body of advisers that helps the chief executive in policy making, Ip should know she speaks on behalf of the government – and not her party.
The ‘great power’ thing is a joke. In our top-down system – now with extra guidance from on high in Beijing – ExCo and its ‘Convenor’ play essentially ceremonial roles. But all the more reason to assume her words reflect government thinking.
The impact on developers’ share prices underlines how desperate the Hong Kong stock market is for some excitement. Apart from a few local property and financial companies, most of the big names are Mainland firms viewed with increasing caution by international investors, as the dismal performance of the Hang Seng Index shows.
The main thing is that cutting tax for Mainland property buyers sounds 100% believable. Ever since the late 1990s, Hong Kong administrations have taken every step imaginable to push up housing prices. Even the imposition of extra stamp duty for non-resident property-buyers 10 years ago seemed designed to have limited impact. With interest rates and emigration rising, current property valuations (US$1 million for a 500-sq-ft concrete box in Shatin) look more presumptuous than ever. The bureaucrats must be itching to start curbing supply and/or stimulating demand. What we don’t know is whether their Beijing overseers will let them.
With most pro-democracy politicians in jail, Regina is just about the only non-boring public figure in town. You can see why Bloomberg interview her. Maybe just don’t take her so seriously next time.