Henry Tang Ying-yen, chairman of the board of the West Kowloon Cultural District Authority, and member of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference. (ROY LIU / CHINA DAILY)

Chairman of the Board of the West Kowloon Cultural District Authority, Henry Tang is on the show this week.

Henry Tang says the city will suffer from internal bleeding if it relies solely on internal circulation with closed borders amid the pandemic. He says Hong Kong needs to reconnect with the rest of the world to revive its economy and think about its future epidemic strategy.

He says art and culture is a new engine for Hong Kong's future economic development. Pointing out the construction cost overrun of the West Kowloon Cultural District project, he said the COVID-19 pandemic also impacted on the project. He shared with us his solution to solve the finance trouble the WKCD project is facing.

Check out the full transcript of TVB’s Straight Talk host Dr Eugene Chan’s interview with Henry Tang.

Chan: Good evening. You're watching Straight Talk with Eugene Chan. Our guest tonight is the honorable Henry Tang, who I'm sure is a familiar figure to all of us. He has served Hong Kong in many different capacities, including with the government, as our Chief Secretary for Administration. Tonight, we have invited him as the Chairman of the Board of the West Kowloon Cultural District Authority to tell us how the recent downturn in the economy will affect the success of the West Kowloon Cultural District. Welcome, Mr Tang!

Tang: Thank you very much, Eugene.

Chan: Henry, you have certainly made headlines recently when you made the comment that Hong Kong is suffering from internal bleeding, if our economy is only relying on internal circulation, with closed borders, amid the pandemic situation. So, it's a very serious statement that you have made? Why do you make that statement at this time?

Tang: Well, actually, the timing was not coincidental, Eugene, because I have been watching the Hong Kong economy, (I) come from the private sector, and in government, and in many of their bodies for many, many years, for decades. So, I think I know the culture of the Hong Kong economy and the whole system quite well. I'm really seriously worried that our economy is going to suffer irreparable damage if we don't do anything to put it back on the right track again. So, while China's economy, their whole volume is big enough so that they can live on both internal circulation, with exports at the same time, quite well, we can't, because our volume is much bigger than the 7 million people that we have in Hong Kong. So, that's why I feel it is time for us to really put this on the front and center of the government's agenda, together with some of the other issues like housing, which I know is very urgent. But it is important to address these issues sooner rather than later.

Chan: Right, Henry, as you rightly said so, I mean, with your decades of experience watching the Hong Kong economy, I mean, Hong Kong has always ranked very highly in the world, if not the top as a global city. And in fact, we brand ourselves as Asia's world city. I mean, we're still ranked as the world's freest economy, as you see a recent survey. But if you look at the wealthiest places in the world, we have slipped four places, from eight to 12. With New York being top and Singapore No. 5, and we are the expatriates’ favorite cities to choose for liveability. We are 50 out of 52. I mean, it's quite a significant, given that expat make up 10 percent of Hong Kong's population. Is that the reason why we are bleeding internally already?

Tang: Well, first of all, Eugene, I wouldn't put a lot of emphasis on the number of millionaires in Hong Kong in terms of rating. I obviously feel more at heart with people and how normal people live, and how they will cope with COVID and the economic challenges that we are facing. So, I care about the normal people and how they will face this challenge going into the future. But liveability has always been a challenge, firstly because of housing, and secondly, because Hong Kong has always relied on being a regional center for managing businesses all around Asia. And we are losing that advantage. And Singapore has been very strategically poaching our people, poaching our businesses and poaching some of the regional headquarters as well as important exhibitions. I know some of them will come back because businesses do galvanize back towards where most of the business transactions are done. So, some of them will come back, but not all of them will come back.

Chan: Henry, in the past shows this issue has been brought up repeatedly. And we know that our quarantine arrangement is one of the major issues that has made a lot of expatriates find it very difficult to continue working or living here. So, now we're down to a three plus four day quarantine arrangement for overseas travel. This has made Hong Kong residents travel easier compared to before, but definitely not very inviting for business travelers or tourists, because basically, they can’t go out to eat for seven days. I mean, Hong Kong is a place that's a paradise. So, how can we go on? But if we are going to relax everything, I mean, we may overload our medical system. And without a dynamic zero policy, we may not be able to open borders with the mainland. So, what solution do we have?

Tang: Eugene, I support the government's policy that we must protect two groups of people. Among the two groups of people that any COVID policy must protect, first is our public health care system. That mustn't collapse, mustn't be allowed to collapse because there's an overload of cases. And we have seen this all over the world how the public health system collapses when there's a sudden surge of COVID cases. Second is protecting the health and the lives of the Hong Kong people. And those are our two main goals that we need to be very, very much aware of. So in that sense, I do support the government's policy that we must control the number of cases to a manageable number, so that our public health system does not become overloaded, people will still be able to enjoy the excellent health care system that we do have. And I want to really thank all the healthcare workers that have contributed to our success. Many people have excellent comments about the quality of the health care that we have in Hong Kong. And secondly, we need to protect the people of Hong Kong, so that we don't expose them to unnecessary risks of COVID infection. And if they do, how to protect their lives and their health, and I think the answer is vaccination. We now have a good vaccination rate for adults. But the rate for children and for the senior population is still not desirable. It's not bad, but it's still not very high.

Chan: Would you say that? I mean it looks like it's the government and the public. I mean, the community has been trying to push up the vaccination rate, but…

Tang: Yes.

Chan: … they're still far from the most ideal rate you would like. So, can we still afford to free up our quarantine arrangement, in that sense?

Tang: I would suggest that the government can differentiate between those who are fully vaccinated and those who are not fully vaccinated in terms of travel arrangements. So, if they are fully vaccinated and they travel overseas, then when they come back, we can relax the entry requirements substantially, whether zero plus, or subject to certain number of tests subsequently. I think we can relax (the rules for) those who are fully vaccinated. For those who are not fully vaccinated, we should have in place a stringent quarantine arrangement, so that we do not want them to come back here and bring the disease to us.

Chan: Right. So, Henry, let's move on to the West Kowloon Cultural District. I mean, as you know, we had a record low number of tourists in Hong Kong and the real GDP growth forecast for 2022 was revised downwards to negative 0.5 percent to up 2.5 percent. But you managed to deliver two museums this year, I mean, the M+ and the (Hong Kong) Palace Museum. Congratulations. So, can you give us an update on what is the situation with those two museums? They're the most recently delivered?

Tang: Well, they have been enjoying a very, very good attendance and very well supported by those who have attended. M+ since its opening in November of last year, despite having closed for three and a half months in the middle because of COVID. We still recorded one and a half million visitors in this period, which means Hong Kong people are really keen to understand what art is all about. And what is even more encouraging is actually the Palace Museum. It only opened in July of this year. So, it has been open for just over two months. But in these two months, we have welcomed 400,000 visitors to the Palace Museum already. And right now getting a ticket to come to the palace has been the most challenging…

Chan: Really?

Tang: Because of the people and because they really want to come. I understand the exhibits at the Palace are easier to understand because they are very classical and they are Chinese, and it’s porcelain, it’s art, it's paintings, it's sculptures and so on. So, they are much more easy to understand for people who are not very experienced in terms of looking at art. Contemporary art is much more difficult, because contemporary art challenges your thoughts and makes you think, rather than you're looking at a pretty object per se.

Chan: Henry, so, just going forward, if the government has listened to your views, and the community's views as well and move forward with the new arrangement for the quarantine arrangement, say if inbound quarantine is abolished here, but the mainland, our borders remain closed. Do you still see a continuing growth in attendance from overseas visitors?

Tang: Yes, if we make a differentiation about vaccination, so that those who are fully vaccinated will be able to basically come in and go out very freely with certain tests. Again, I think Hong Kong as a regional headquarter, as a center for exhibitions, center for food and beverage and center for others. Businesses will come back very quickly. Because by now, I don't think they have really entrenched themselves into other parts of Asia as well. They have moved there temporarily. But if we live them there for too long, they will become fairly well entrenched and we will not be able to bring them back.

Chan: Right, Henry, we have to take a break now. But viewers stay with us. We'll be right back.

Chan: Welcome back. With us tonight is the Chairman of the Board of the West Kowloon Cultural District Authority, Mr. Henry Tang. And we have been talking about the impact of the economic downturn on the West Kowloon Cultural District. So, Chairman, in the first half, you have categorically told us that the two latest museums – the Palace Museum and the M+ Museum – are doing well with attendance. So, let’s look at some of the history. This whole area was proposed by our first Chief Executive, Mr Tung Chee-hwa in 1998, in response to a survey of visiting tourists, who sighted a lack of cultural attractions. I mean international financial centers like London has a West End; New York has the Broadway; Hong Kong hasn't got anything at this stage. So, in Hong Kong now, we talk about reigniting Hong Kong, we have to start again. Do you think all these museums are going to play an important role?

Tang: I feel very, very strongly that art and culture will become a very new industry for Hong Kong to be engaged in. This industry will bring economic development to Hong Kong and, in the future, will engage, and offer opportunities for all walks of life. Both in terms of audience, participations, as well as opportunities for our youths. Because if I look at Hong Kong, I remember this conversation with Tung Chee-hwa very well, back in 1998. At that time we were faced with Asian financial crisis. And he was asking me what we should do about our economy because he knows I have very rich experience and very wide knowledge of Hong Kong’s economic development. So, what should we do? How do we revive Hong Kong’s economy? Should we go into gambling? And I said, “CH, we have to really think about whether there is any other cities in the world that are successful in financial services and gambling at the same time. And there isn't. The only city that has both is London and London has these exclusive clubs in Mayfair, who engage in some form of recreational gambling, but it's not really gambling per se; New York has Atlantic City, but it’s not New York, it’s in New Jersey.” So, there is no city in the world that can do both successfully because it attracts two breeds of people, and the culture is quite different.

Chan: Totally.

Tang: So, that's why I said we should concentrate on financial services. But I already felt very strongly at that time that the new bright spot for Hong Kong’s economic development in the future, in addition to what we have been doing well, is in art and culture, as well as innovation and technology. So, I think it was a good call. We don't want to compete with Macao in terms of gambling. We are very happy to allow people who wants to gamble recreationally to go to Macao over the weekend and have fun in all the beautiful casinos and hotels there. But concentrate on their day jobs, whether it’s financial services, shipping, so on and so forth.

Chan: So, chairman, when you mentioned this good intention, I mean, the cost of the building this whole district has always been a source of contention. I have done some background work, the government has allocated $21.6 billion of endowment fund in 2008, the construction cost have overrun it for the past 24 years. And there are already a funding gap of 11.7 billion reported 4 years ago. Someone called it a fiscal abyss. So, can you tell us, as a chairman, are you worried that you don't have enough money to keep the projects going?

Tang: I am, of course, worried because I spent my life in business, and I was the financial secretary for 4 years. And although I have done very well with public finances, I feel, for some reasons, I always walk into a job whenever there is a crisis. And West Kowloon is exactly the same way. I was asked to serve as the chairman for the second time because I know it's actually in quite deep financial trouble. I reviewed it very carefully. It’s of course a whole bunch of reasons, I won't go into and elaborate on them individually, but partly the delay is because the construction, the main constructor, the construction company ran into financial trouble and we got a lot of problems to sort out, including the delay. The overrun is because we seriously underestimated, back in 1998 and 1999, the cost of constructing these projects. But when you are sitting on $21.6 billion in 2008, I can't go back to finance committee and say I want more money.

Chan: No.

Tang: And they’d say why don't you spend the 21.6 (billion) first? Don’t say you are poor because you are still sitting on it. So I said no, let’s time it so that we will build it in a manner where the projects that cost money, like all the performing arts or all the museums, they cost money. And the one that we make money from can go hand in hand and step by step. So, this way we will try and balance as much of it as possible.

Chan: So, what will be the next installment? We know that the Lyric Theatre Complex is on the drawing board. Any supply chain issues? Will this still go on?

Tang: Well, actually the Lyric Theatre is already rising out of the ground.

Chan: Right.

Tang: From my office in West Kowloon District Authority, I can see it coming out of the ground, and then it is already beginning to build on the superstructure. So, the building will finish sometime next year 2023-2024. And with the internal fittings and all the testing out, it’s a very, very complicated project because there is an MTR rail running underneath it. Therefore it’s actually sitting on a platform that is on giant springs, so that the vibration does not transmit onto the buildings and isolated with the transfer plates. So, I have every intention to bring that to fruition because by the time the Lyric Theatre is built, the whole western part of the West Kowloon Cultural District will basically be finished. It's already attracting a lot of people, both to the museums, as well as to the Art Park. And also to our Freespace, which I believe, with the addition of the Lyric Theatre, it will only enhance the whole West Kowloon Cultural District.

Chan: Right. Chairman, we had Winfried Engelbrecht-Bresges here on our show recently, and I think Hong Kong is very fortunate to have the Hong Kong Jockey Club fully funding the Palace Museum. So, are there any such more initiatives that you have planned, so that we will be able to get to enjoy the whole district as soon as we can?

Tang: Well, we of course thank Winfried at the Hong Kong Jockey Club charities very, very much because the Hong Kong Jockey Club has been both a benefactor of the Hong Kong system and their licenses, but as well as a major contributor to our tax revenue and to our charities. So, the Palace Museum was built based on $3.5 billion funding from the Hong Kong Jockey Club. And I am looking forward to the Jockey Club continuing to support us in the next future projects because after Lyric Theatre, we are still looking for funding to build our music center.

Chan: Right.

Tang: Because the whole district lacks a music center. So, we are looking forward to build our new philharmonic hall.

Chan: Right. Winfried watches our show regularly, so I am sure he will hear your requests. Anyways.

Tang: Winfried is a great friend of mine, and he is very much his heart is in Hong Kong, and he is basically a Hong Kong person. So, I am sure he will look at every project… fairly.

Chan: Chairman, the last area I would like to ask you before the end of the show is that in our nation’s 14th five-year plan, Hong Kong is to develop into an East Meets West center for international cultural exchange and particularly, to showcase our Chinese arts and culture to the world. So, that gives Hong Kong a very unique position in this part of our nation. So, our young talent…someone messaged me and asked me that we must ask you this question – how are you going to, being you as the chairman, with all your plans and your insights, how are we going to nourish our local talents? Because how do you balance whether to invite international world-renowned shows to come? And it costs more but we don’t give the opportunity to youngsters, so where do we go from that?

Tang: Well, first of all, Eugene, those two are not mutually exclusive. I think we should nurture our local talents and also invite foreign talents to exhibit in our museums because first of all, I think any museum needs to have local content, and we do. We have actually, in our collection at M+, we do have quite a lot of Hong Kong content. At Palace Museum, we have one exhibit, we have one hall out of 9 that is done by Hong Kong curators and artists from here. So, it is a very popular one and I was there a number of times, and some of the exhibits are really truly astounding. So, we do have the talents and we need to continue to nurture them.

Chan: Right. But chairman, some of the performers in singing or plays and all that, they have been telling me that they really want to use it as a base, future base, but the rent they were offered is much higher than other places they are renting right now. Will you do something about that to make sure our talents will be able to enjoy this great facility?

Tang: We don't have enough space because for performing artists, the only space we have now is Xiqu Centre. So, until the Lyric Theatre is up and running, and until … especially the Lyric Theatre, until it is up and running, where we will have multiple different sizes of performance halls, as well as rehearsal halls. We also don’t have enough venues.

Chan: Thank you for telling us. And thank you very much for giving us the latest update on the West Kowloon Cultural District, and showing us how it can be instrumental in telling a good Hong Kong story. Have a pleasant evening. And good night!