Positive non-interventionism

Short description: Hong Kong's economic policy of the 1970s and 1980s; forerunner to neoliberalism

Positive non-interventionism

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Positive non-interventionism (Chinese: 積極不干預; pinyin: Jījí bù gānyù; Jyutping: zik1gik6 bat1 gon1jyu6) was the economic policy of Hong Kong; this policy can be traced back to the time when Hong Kong was under British administration. It was first officially implemented in 1971 by Financial Secretary of Hong Kong John Cowperthwaite,[1] influenced by Arthur Grenfell Clarke and Geoffrey Follows which believed that the economy was doing well in the absence of government intervention but that it was important to create the regulatory and physical infrastructure to facilitate market-based decision making.[2] The policy was continued by subsequent Financial Secretaries, including Sir Philip Haddon-Cave. While the American economist Milton Friedman has cited it as a fairly comprehensive implementation of laissez-faire policy,[3][4] others have described it as a variant of corporatism[5] or even as a mixed economic system.[6]

## Contents

* 1 Handover of Hong Kong and the decline of Positive non-interventionism
* 2 First-hand explanation
* 3 Similar philosophies
* 4 See also
* 5 References
* 6 External links

## Handover of Hong Kong and the decline of Positive non-interventionism

Although post-handover Financial secretaries such as Donald Tsang, Antony Leung, Henry Tang and John Tsang all defended the minimal intervention approach, they didn't call it positive non-interventionism and didn't advocate for it.[7] Donald Tsang called his economic policy "Big Market, Small Government",[8] and embraced the Third Way, influenced by Wong Yuk-man and Tung Chee-hwa and similar to Andrew Wong.[9][10] During his term as Financial Secretary of Hong Kong, Donald Tsang coined the term "caring capitalism" in 1996, which describe the governments's approach of giving priority to economic growth and then using the new-found wealth to develop social infrastructure and welfare services.[11] William W. L. Wong argues that Hong Kong had under Donald Tsang had a welfare capitalist system,[12] and Christian Aspalter also holds this view,[13] but it is still contended that Donald Tsang used positive non-interventionist elements.[14] After Hong Kong became part of the People's Republic of China, Hong Kong implemented a mix of a liberal economy and a welfare state.[15][16] Peter Guy argues that Hong Kong embraces a predatory form of capitalism.[17] Under John Tsang’s term as Financial secretary, welfare measures rose in 2012.[18] During his term as Chief Executive of Hong Kong, Leung Chun-ying embraced some elements of positive non-interventionism[19][20] and also used it as a governance strategy.[21][22] Like her predecessors, Carrie Lam also used positive non-interventionist policies[23] even after pledging to adopt a “new fiscal philosophy”[7] and being seen as a person which advocated for the third way.[24] However under John Lee Ka-chiu since 2024 the government tries to navigate between capitalism and socialism, it is not known whether it will officially pursue third way policies.[25]

## First-hand explanation

According to Cowperthwaite:

> In the long run, the aggregate of decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is less likely to do harm than the centralised decisions of a government; and certainly the harm is likely to be counteracted faster.[26]

According to Haddon-Cave:

> positive non-interventionism involves taking the view that it is normally futile and damaging to the growth rate of an economy, particularly an open economy, for the Government to attempt to plan the allocation of resources available to the private sector and to frustrate the operation of market forces.

Haddon-Cave goes on to say that the "positive" part means the government carefully considers each possible intervention to determine "where the advantage" lies, and, although usually it will come to the conclusion that the intervention is harmful, sometimes it will decide to intervene.

## Similar philosophies

While John Tsang Chun-wah wasn't a positive non-interventionist, he followed a fiscal conservative philosophy[27] while embracing some social welfare programs.[28][29][30] During his term as Chief executive, Henry Tang supported free markets and a small government similar to Donald Tsang's "Big Market, Small Government" program. Dozens of people aired their grievances to Henry Tang over the funding cuts to welfare services made over the past couple of years.[31] However, later he claimed that some policies aimed for welfare, even when lawmakers were critical of this, after year's Henry Tang promised higher rent for elders.[32][33] Times before he praised after all social enterprises.[34] also he promised more family-related reforms.[35] and promised more social welfare for social workers.[36] The practice things Tang did make Tang's philosophy closer to positive non-interventionism.[37] Tang openly embraces capitalism[38] and also admires the US President Calvin Coolidge.[39]

## See also

* John James Cowperthwaite
* Milton Friedman
* Philip Haddon-Cave

## References

1. ↑ Heiwai Tang (2021-04-14). "The 50-year Impact of Positive Non-interventionism on Hong Kong". https://www.asiaglobalinstitute.hku.hk/storage/app/media/Op-eds/The 50-year Impact of Positive Non-interventionism on Hong Kong.pdf.
2. ↑ "Why we intervened". November 1998. https://www.hkma.gov.hk/media/eng/publication-and-research/quarterly-bulletin/qb9811/qbfa01.pdf.
3. ↑ Reed, Lawrence (10 February 2014). "The Man Behind the Hong Kong Miracle". Foundation for Economic Education. https://fee.org/articles/the-man-behind-the-hong-kong-miracle/.
4. ↑ "Hong Kong: A two-stage economic experiment". 30 June 2017. https://cepr.org/voxeu/columns/hong-kong-two-stage-economic-experiment.
5. ↑ Schenk, Catherine R. (June 2017). "Negotiating Positive Non-interventionism: Regulating Hong Kong's Finance Companies, 1976–1986". The China Quarterly 230: 348–370. doi:10.1017/S0305741017000637.
6. ↑ "Speech by CE at Hong Kong Business Community Luncheon (English only)". https://www.info.gov.hk/gia/general/200610/17/P200610170152.htm.
7. ↑ 7.0 7.1 Lee, Peter (2023-04-01). "Explainer: Why Hong Kong is constitutionally obliged to balance the books" (in en-GB). https://hongkongfp.com/2023/04/01/explainer-why-hong-kong-is-constitutionally-obliged-to-balance-the-books/.
8. ↑ "Chief Executive - Big Market, Small Government". http://www.ceo.gov.hk/eng/press/oped.htm.
9. ↑ "The 'middle way' or just plain middling?". October 29, 2008. https://www.scmp.com/article/658103/middle-way-or-just-plain-middling.
10. ↑ "Reviewing and Evaluating the Direct Elections to the Legislative Council and the Transformation of Political Parties in Hong Kong, 1991-2016". https://www.davidpublisher.com/Public/uploads/Contribute/58ec39d6f3976.pdf.
11. ↑ Lau, Chi Kuen (1997). Hong Kong's Colonial Legacy. Chinese University Press. pp. 79–80.
12. ↑ Wong, William W. L. (2007). "The Resilience of Personal Economy of Ageing: An Examination of the Productivist Welfare Capitalism of Hong Kong". Journal of Comparative Social Welfare 23: 81–88. doi:10.1080/17486830601100008.
13. ↑ Aspalter, Christian (14 December 2010). ﻿Different Worlds of Welfare Capitalism: Australia, the United States, the United Kingdom, Sweden, Germany, Italy, Hong Kong and Singapore﻿ (Report).
14. ↑ Fuller, Douglas B. (2010). "Introduction". Innovation Policy and the Limits of Laissez-faire. pp. 1–7. doi:10.1057/9780230304116_1. ISBN 978-1-349-32389-0. https://research.cbs.dk/en/publications/introduction-choosing-to-lose-hong-kongs-tradition-of-positive-no.
15. ↑ Sawada, Yukari (June 2004). "The Social Security System in Hong Kong: Establishment and Readjustment of the Liberal Welfare Model". The Developing Economies 42 (2): 198–216. doi:10.1111/j.1746-1049.2004.tb01063.x.
16. ↑ Chan, Raymond K.H. (July 2004). "Globalisation, Unemployment and the Welfare Regime in Hong Kong". Social Policy and Society 3 (3): 273–282. doi:10.1017/S1474746404001782.
17. ↑ "The View | Question for Hong Kong is what kind of capitalism does society want". 10 May 2015. https://www.scmp.com/business/global-economy/article/1792256/question-hong-kong-what-kind-capitalism-does-society-want.
18. ↑ "Rethink needed on welfare policy". 10 January 2012. https://www.scmp.com/article/989742/rethink-needed-welfare-policy.
19. ↑ "(PDF) Positive Non-interventionism and Innovation". https://www.researchgate.net/publication/349026244.
20. ↑ Wang, Jue (March 2018). "Innovation and government intervention: A comparison of Singapore and Hong Kong". Research Policy 47 (2): 399–412. doi:10.1016/j.respol.2017.12.008.
21. ↑ Wong, Yue-Chim (3 February 2021). "Positive Non-interventionism as Governance Strategy". Hong Kong Economic Journal, 4 November 2015. https://www.academia.edu/45046795.
22. ↑ "Yue Chim Richard Wong 王于漸 | Positive Non-interventionism as Governance Strategy « Yue Chim Richard Wong 王于漸". 4 November 2015. https://wangyujian.hku.hk/?p=6365&lang=en.
23. ↑ "Archived copy". https://www.asiaglobalinstitute.hku.hk/storage/app/media/Op-eds/The 50-year Impact of Positive Non-interventionism on Hong Kong.pdf.
24. ↑ "潘學智 : 林鄭一周年溫和政治興起". July 16, 2018. https://raypoon.hk/en/林鄭一周年溫和政治興起/.
25. ↑ "Opinion | Tension between socialism, capitalism holds back Hong Kong's recovery". 2 December 2024. https://www.scmp.com/opinion/hong-kong-opinion/article/3288611/tension-between-socialism-capitalism-holds-back-hong-kongs-recovery.
26. ↑ Official Report of Proceedings of the Hong Kong Legislative Council (March 24–25, 1966) p. 216
27. ↑ "The remaking of financial chief John Tsang into 'local Hong Kong boy'". South China Morning Post. 12 December 2016. https://www.scmp.com/news/hong-kong/politics/article/2054000/remaking-financial-chief-john-tsang-local-hong-kong-boy.
28. ↑ "CSSA bill after court's decision will impact budget: John Tsang Chun-wah". 23 December 2013. https://www.scmp.com/news/hong-kong/article/1388506/cssa-bill-after-courts-decision-will-impact-budget-john-tsang-chun.
29. ↑ "From miser to God of Wealth, John Tsang lifts lid a little on public coffers". 21 March 2013. https://www.scmp.com/news/hong-kong/article/1195708/miser-god-wealth-john-tsang-lifts-lid-little-public-coffers.
30. ↑ "Pragmatism with a touch of idealism | Voice of Hong Kong". http://www.vohk.hk/2016/03/07/pragmatism-with-a-touch-of-idealism/.
31. ↑ "Tang brushes aside complaints of needy". 24 November 2004. https://www.scmp.com/article/479434/tang-brushes-aside-complaints-needy.
32. ↑ "Henry Tang rejects claims that budget lacks long-term direction". 19 April 2007. https://www.scmp.com/article/589574/henry-tang-rejects-claims-budget-lacks-long-term-direction.
33. ↑ "Cash for the elderly on Henry Tang's agenda". 13 February 2012. https://www.scmp.com/article/992484/cash-elderly-henry-tangs-agenda.
34. ↑ "Henry Tang praises social enterprise". https://www.news.gov.hk/isd/ebulletin/en/category/healthandcommunity/051101/html/051101en05011.htm.
35. ↑ "Henry Tang launches Family Council". https://www.news.gov.hk/isd/ebulletin/en/category/healthandcommunity/071214/html/071214en05012.htm.
36. ↑ "CS visits integrated family service centre (With photos/Video)". https://www.info.gov.hk/gia/general/201011/10/P201011100261.htm.
37. ↑ "Speech by Financial Secretary at Joint Business Community Luncheon (English only) (With photos/Video)". https://www.info.gov.hk/gia/general/200703/08/P200703080150.htm.
38. ↑ "Henry Tang: Better Times Are Here". 23 June 2007. https://www.newsweek.com/henry-tang-better-times-are-here-102245.
39. ↑ "Speech by CS at SCMP conference (English only) (With photo and video)". https://www.info.gov.hk/gia/general/200802/21/P200802210133.htm.

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