The Hong Kong Special Administrative Region is now undertaking its first five-year planning. This is a monumental step as the city has never done this kind of planning before. In fact, for a long time, long-term planning — in an overall and integrated sense — was considered unnecessary and counterproductive by both the government and large businesses.  

Under the city’s previous “positive nonintervention” governance philosophy, the government would not actively participate in shaping the development of industries and businesses, leaving it to the market to decide. At least, that was the theory, as in practice there was always a certain degree of government intervention — especially in the property sector, which eventually became a “pillar” with a significant impact on the livelihoods of Hong Kong residents.

Despite this notion of “nonintervention”, a Central Policy Unit (CPU) was established in 1989 within the government to provide independent, strategic advice to its officials. The CPU was retained after the handover in 1997. I was fortunate to serve as a part-time member of the CPU under the first chief executive Tung Chee-hwa.

We were told that the role of the CPU was to develop and evaluate longer-term plans for the three most senior members of the government (chief executive, chief secretary and financial secretary). Shorter-term plans stayed within the realm of the policy bureaus. As a result, there was not much connectivity between the so-called longer-term plans and the shorter-term plans. And the planning process, by and large, was not rigorous enough.

Nonetheless, at the time the CPU still played a key role as it became an effective channel in conducting “social listening” from the public. It collected feedback on policies before they were formally launched which thereafter became an important function of the CPU.

The importance and role of the CPU evolved during the tenure of each of the subsequent chief executives. Some like Tung placed more importance on it, while others less so. After Chief Executive John Lee Ka-chiu took over, he established a Chief Executive’s Policy Unit as a revamped think tank to serve him directly.

Against the backdrop of relatively little strategic planning experience and capability in the past, the five-year planning process will be a crucial step to uplift Hong Kong’s strategic thinking capability; it will also enhance the SAR’s alignment with the national development plan

To be fair, the government has done plenty of planning all along. Plans around population, land development, housing and the like were created. However, these plans were mostly sectorial-driven, focusing on specific vertical sector. Relatively little cross-sectorial perspective was considered.

For a long time — even after the 1997 handover — government officials’ view of Hong Kong was “the territory south of the Shenzhen River”. And therefore much of the government’s plans were developed with that mindset. A case in point was a plan to build a “mega cemetery complex” right next to the border with Shenzhen — near one of its most built-up districts. The apparent assumption behind this plan was that the northern-most part of Hong Kong was the most remote area and therefore it would be the best place to build a cemetery complex.

While this “Hong Kong First” mentality continued to prevail, it ran counter to the national strategy that the Guangdong-Hong Kong-Macao Greater Bay Area development became a national initiative and that Hong Kong should integrate itself into the broader national development landscape.

The fact that for a long time strategic planning was not considered essential, and at one point was abolished, was difficult for people with common sense to comprehend. As a strategy consultant, my personal experience tells me that large businesses usually have a strategic planning unit whose role is to help the company to develop its long-term plans (typically three to five years) and shorter-term plans (an annual operating plan). This capability is not only prevalent in Western multinational corporations but over time also increasingly prevalent in Chinese mainland enterprises, especially in many State-owned enterprises but also leading privately owned companies.

Of course, the tangible outcome of such a planning process — in almost all cases — is a comprehensive report. But that is simply a record of the work. The key to this kind of planning is the process itself. It involves people in the process of thinking in particular on problem definition, hypotheses validation through rigorous research, analysis, and pattern recognition. This problem solving is essential when tackling challenging, forward-looking, and cross-functional or cross-business issues. Through this, strategic planning trains up the minds of a large number of people within an organization. In other words, while the report is simply an outcome, capability building — and importantly, the mindset required for strategic thinking — is actually the critical purpose.

The same philosophy should also apply to the HKSAR government’s five-year planning process, and that kind of institutional capability building is vital. Let’s hope the government officials do not turn it into a report writing process only.  

A five-year plan like this is, by its very nature, different from the Policy Address and Budget that the government prepares every year. Not only do these plans cover a shorter time period (one year versus five), the five-year plan will be much more strategic and cross-sectorial. Representatives of the government have been at pains to emphasize this point.

Above all, Hong Kong’s five-year plan will need to take the national development plan as the key for consideration. As the nation’s significance and influence in the world continue to increase, alignment with the national development plan implies the need to incorporate global dynamics in finance, trade, and technological development into Hong Kong’s own planning.

This has never been systematically or strategically considered so far. Hong Kong’s planners will need to take on a new mindset, capabilities and process to get it right as this requirement will extend new horizons for Hong Kong that were previously not considered or deemed important. Getting this right will be challenging for Hong Kong’s planners and in fact for the general public in terms of awareness, expectation, and ways to participate.

Against the backdrop of relatively little strategic planning experience and capability in the past, the five-year planning process will be a crucial step to uplift Hong Kong’s strategic thinking capability; it will also enhance the SAR’s alignment with the national development plan.

The author is founder and CEO of Gao Feng Advisory Co, a strategy and management consulting firm with roots in China. 

The views do not necessarily reflect those of China Daily.