Hands On or Hands Off?

Is Hong Kong’s approach to economic policy really as ‘hands off’ as we are led to believe? How are economic policies determined within Hong Kong’s unique governance structure?

Tony Latter draws on his deep knowledge of Hong Kong drawn from years in senior positions in the Hong Kong Monetary Authority and Government Secretariat to answer these two central questions about Hong Kong’s economic management. He provides both general and specialist readers with an original and wide-ranging exploration of the workings of Hong Kong’s economy and the way its economic policies are determined.

Challenging Hong Kong’s ‘hands off’ image, the author finds and critiques copious instances of government intervention over the years. He also examines how the government’s much vaunted budgetary discipline is less ‘laissez faire’ than the numbers suggest. Overall, policy formation seems to lack a rigorous, consistent analytical framework. Officials often do not appreciate the distinction between violations of the ‘hands off’ principle that desirably improve the ‘supply side’, and violations which foster particular sectors and special interests, frequently influenced by business heavyweights with direct access to the territory’s leadership.

This book should be read by anyone interested in Hong Kong’s economic policy and the processes that underlie it. It will appeal not only to general readers, but to business and professional people who have to function within this unique system of economic management, as well as to academics and researchers in the fields of economics, business or politics.

Tony Latter worked for many years at the Bank of England, with spells at the Bank for International Settlements in Basel and the Organisation for Economic Cooperation and Development in Paris, and the National Bank of Ukraine. His association with Hong Kong dates back to 1982, when he began a three-year term as Deputy Secretary for Monetary Affairs; he was responsible for initiating the re-adoption of the currency board in 1983 and for ensuring its success in the early stages. In 1999 he returned to Hong Kong as Deputy Chief Executive of the Hong Kong Monetary Authority. In 2003 he moved to the University of Hong Kong as a visiting professor of economics. Having since relinquished full-time duties there, he remains a senior research fellow of the Hong Kong Institute of Economics and Business Strategy.

“Mr Latter’s own hands-on experience of economic policy in Hong Kong shines through in this insightful and highly readable analysis of the city’s struggle to define the proper role of government in the economy.” —David K. P. Li, Chairman and Chief Executive, The Bank of East Asia Limited

“Tony Latter is an economist who writes economically. There is no fluff here. All the essential elements about Hong Kong’s economy are succinctly presented here. Latter has another distinction—he has a dry and wicked wit.” —Christine Loh, Chief Executive Officer, Civic Exchange

“From his unique vantage points, Tony Latter’s thorough research and insightful commentary on the modern Hong Kong economy pulls no punches, creating a book that is both readable and entertaining for both practitioner and layman alike.” —David Eldon, former Chairman, The Hongkong and Shanghai Banking Corporation Limited

“Tony Latter’s book examines the ups and downs of laissez faire policies in Hong Kong. For those who wish to have a deeper understanding of the political economy challenges of public policy decision making in a changing institutional context it is essential reading.” —Professor Richard Y. C. Wong, Deputy Vice-Chancellor, The University of Hong Kong