In his latest annual Policy Address, delivered on Sept 17, Hong Kong Chief Executive John Lee Ka-chiu launched a groundbreaking model for development of the Northern Metropolis, an area bordering Shenzhen that’s about a third of Hong Kong’s total area. Unless an audacious approach is adopted to reconfigure Hong Kong’s development model, it would take years, perhaps decades, to transform the Northern Metropolis into a launchpad for Hong Kong’s high-tech transformation.

A few months after Lee took charge as chief executive, his administration introduced a bill to cut back the long lead time for development. Legislation to shorten procedures for town planning, land resumption and acquisition, reclamation of foreshore and seabed, compensation for road construction, and so on was enacted one year after Lee took office, but that only reduced the time required for developing large plots of land by six years, and smaller plots of land by two years.

Other than the long lead time, the high cost of land development, shortage of engineers and skilled manpower for building tech enterprises, plus the high cost of electricity and shortage of computing power compared to the supply on the Chinese mainland and some Southeast Asia countries, all weighed on interest in investment.

There have been calls from the legislature and the business community to establish a statutory authority for the Northern Metropolis development to cut red tape and provide flexibility, similar to the statutory bodies established for developing the airport and the West Kowloon Cultural District. The Northern Metropolis, however, is far more complicated, embracing a wide gamut of development plans from tech parks to university towns, to areas designated for professional and logistics services, and conservation zones for recreation and ecotourism. Land also needs to be developed to accommodate a target population of 2.5 million people.

Despite the strong wish to waive cumbersome legal and regulatory procedures, the Northern Metropolis cannot be built in a legal vacuum, which could have disastrous consequences. To speed up development, new laws will need to be enacted, and government departments will need to work together to simplify procedures. The massive legislative and coordinating work required cannot possibly be handled by any single statutory authority led by private-sector leaders without the support of practically the whole of government. Conflicts of interest must be avoided to preserve Hong Kong’s reputation for offering a level playing field and clean, transparent governance.

To implement this new development model, the government could enact broad, enabling primary legislation, with detailed arrangements for the industrial or tech park companies to be set out in subsidiary legislation. A far more efficient and collaborative legislature enables the government to accelerate development by making greater use of subsidiary legislation

The chief executive must have thought hard about all these issues before announcing that he will personally take charge of the project, and establish three working groups led by senior officials to devise “development and operation models” for the tech and industrial parks, to speed up construction of the university towns, and to coordinate planning, engineering, land, transportation, and environmental protection procedures.

Above all, Lee pledged to adopt diverse development models permitting more flexible land-grant and development arrangements to reduce costs and incentivize market participation. New dedicated legislation to accelerate and reengineer development will be enacted, which will permit statutory industrial or tech park companies to be set up with tailor-made terms for land-grant and funding arrangements.

To implement this new development model, the government could enact broad, enabling primary legislation, with detailed arrangements for the industrial or tech park companies to be set out in subsidiary legislation. A far more efficient and collaborative legislature enables the government to accelerate development by making greater use of subsidiary legislation.

Arrangements have existed for a long time, under the Financial Secretary Incorporation Ordinance, to enable the government to acquire and hold land and property, government securities, and shares in any private or public company through a corporation named “The Financial Secretary Incorporated”. It would make perfect sense for the government to make use of this existing law to set up and invest in special-purpose companies established in the Northern Metropolis.

Why does the government have to go to such great lengths to jump-start technological and commercial development in the Northern Metropolis? That’s because previous administrations had shied away from innovation and tech development for such a long time that development costs, compounded by sclerotic procedures, have become prohibitively protracted and expensive. It has become an absolute imperative to overhaul existing models.

If successfully implemented in the Northern Metropolis, the new development model, lessening costs of land development and enabling direct government investment, could be adopted for large-scale development projects in other parts of Hong Kong. More efficient procedures developed for cutting red tape could show the way for the rest of government.

As one of the much-vaunted “four little tigers (or dragons)” of East Asia in the 1990s, Hong Kong squandered the opportunity for technological upgrading largely because the city was able to prosper in subsequent decades, without much effort for innovation and diversification, thanks to the meteoric rise of the Chinese mainland’s economy. Millions of shopping-loving tourists from the mainland thronged to the city, while fast-growing mainland companies raced to be listed on Hong Kong’s stock exchange. The local administration was able to enjoy robust growth without making any effort to boost tech development.

To paraphrase Australian economic historian Mark Elvin, who studied why China failed to adopt technology in the late imperial era, Hong Kong was caught in a “high-level equilibrium trap”. Riding high on the mainland’s stupendous expansion in the 2000s, finance and tourism were sufficient to fuel Hong Kong’s growth. Hong Kong enjoyed “quantitative growth” but a “qualitative standstill”.

The rapid development of artificial intelligence will change how we work, and how companies and economies will compete. Any economy that fails to master AI will risk being left in the dust. The Northern Metropolis represents our best hope for mastering the latest, cutting-edge technologies. The groundbreaking approach for the Northern Metropolis development is long overdue and should be fully supported.

The author is convenor of the Executive Council and a legislator.

The views do not necessarily reflect those of China Daily.