Encourage free competition while allow monopolies existed in several types of goods and services provision, for example, electricity and franchised bus.
A typical episode usually appeared in the colonial period: Underestimate the revenue and overestimate the expenditure, usually estimated budget to turn into an enormous surplus. Do not adopt the “Keynesian” approach in managing the public finance.
The fundamental philosophy: “Big market, small government”: low welfare expense.
Strictly follow the “Balance budget” principle: “living within our means”.
As early as November 1973, at the Conference on Managers in a Changing Hong Kong Environment, Sir Philip spoke on, amongst other things, the role of public policy. He said that, "the Government must accept such responsibilities as are necessary to ensure that management decisions are not frustrated by imperfections in the operation of the market mechanism, leading to economic inefficiency or social distress which only the Government can remove."
In September 1979, he talked about interventionism and the adjustment mechanism, amongst other things, in a speech on the Hong Kong Economy in Transition. He said that: "A pragmatic view dictates an admission that interventionism can be relevant to the maintenance of economic stability in Hong Kong even in the general context of a philosophy of positive non-interventionism".
Government do not believe market forces will always operate efficiently without some guidance and even the existence of legal constraints, they play an active role in the provision of those services and facilities essential to life in a civilized community to make sure the stability of society, it included:
Land use and zoning.
To impose ground rules and legal constraints to mark out the area within which market forces are allowed to operate.
Many laws to govern the economic activities: contracts, banking industry, stock exchanges and commodity trading.
Infrastructure projects, Airport project, also the government will own or directly provide some goods and services to the citizens, for example, construction of the MTR, KCT, provision of postal service, supply of water and police, etc
For education policy, government introduced the 9-year compulsory free education.
Public Housing, announcement of the 10-year housing development plan, the public housing estate and Home Ownership Scheme.
Healthcare services and Financial sector which takeover the Ka Wah and Overseas Trust Bank
In other words, Positive non-intervention, “Positive” means creating an environment that rewards industriousness and intelligence. Such an environment consists of a free market, the rule of law, tax rates are not excessive. By “Non-Intervention” is meant a self-imposed restraint not to interfere with the working of the market or with private sector decisions.
After the change of sovereignty and government in 1997, despite administrative and policy continuity under the logic of minimum change, demands and supports for more active and more explicit forms of state intervention have emerged as a combined result of the reconstitution of ruler ship, shifting political powers and social expectations, as well as changes in the internal and external environments of the economy. Evidence of such new policy departures in the new post-colonist state can be found most notably in the areas of housing, education and industrial development.
In 1997, the government published for public consultation a review of its Long Term Housing Strategy. Chief Executive Tung Chee Wah announced to increase the supply of flats to meet forecast demand for housing, in particular by providing a steady and sufficient supply of serviced land. At least 85 000 flats will be built each year starting from 1999-2000;
Start of the Asian Financial Crisis, massive and concerted attacked against Hong Kong dollar and the stock market in late October 1997. Local interest rates came under much upward pressure. Marked corrections occurred in both the stock and property markets, giving rise to severe knock-on effect on domestic demand. In 1998, when HKD was under attack again, government threw HK$118 billion (S$15.2 billion) of public funds into buying stocks.
In 1998, government suspended the land sales for 9 month in order to maintain the property price.
Government set up 2 billion scheme to help non export-related Small and Medium Enterprises (SMEs) to obtain loans.
In 1999, government announced the Cyberport Project and deal with Walt Disney Co. to build a Disney Theme Park at Penny Bay. Both of these projects without selected by open tender. The Tung administration has pumped billions of dollars in cash and land subsidies into everything from a Disney theme park to a Cyberport, a real-estate cum information technology project conceived at the height of the dot-com bubble and now struggling to find tenants.
In 2001, government suspended the sales of flats under the Home Ownership Program.
In 2003, Confirmation of the Closer Economic Partnership Agreement and introduce the Individual Travel Scheme for the mainland residents.
In my point of view, the Positive Non-intervention approach is a very successful policy under Colonial government, before 1997. However, due to the economic and society changes, I think the approach is not fully suitable for Hong Kong now.
A scene for active rulership is now definitely set in place. There are both demand-side and supply-side factors driving the SAR Government towards a more interventionist role. Such a development may well generate more policy debates and conflicts, fiscal difficulties or tensions from unmet demands, but it seems fair to suggest that the government has reached a stage where withdrawal from interventions are practically impossible, otherwise new political crises may be precipitated which will endanger the economic viability and social stability of Hong Kong, upon which the logic of the SAR ‘state’ ultimately rests.
On the other hand, some feature of Positive Non-Intervention approach are still suitable use in Hong Kong - low tax rate, should not intervene the business activities (for example, wages) etc., because I think the main factor for investors to consider investment is free market economic.
