In Davos, Carrie Lam Praises HK's Welfare Policy

The Chief Executive, Carrie Lam, warned other countries at a World Economic Forum meeting in Switzerland on Wednesday that they shouldn't neglect the problem of inequality, as she hailed Hong Kong's spending on the poor.

Lam told a panel discussion in Davos that it is easy for developing countries to get carried away with boosting their economies and in the meantime, forget about the importance of building an inclusive society.

She called on emerging economies to address people's needs, otherwise politicians may find they suffer at the ballot box.

"If economic growth, especially in the emerging economies, does not meet this requirement of inclusiveness, we may end up with some of the problems that mature economies are now facing," Lam said.

"People are very aggrieved, there is unequal distribution of resources, young people do not have enough opportunities. So some very strange things will happen when you turn to the people for a decision if they are so unhappy, as we have seen from some election results and also some referendums."

"So it is extremely important for us to bear in mind at the outset of growing the economy that inclusiveness. And that is one reason why in the case of Hong Kong, we are a small economy, our public sector accounts for only 20 percent of GDP. But we spend 60 percent of that 20 percent of GDP on social services."

The Chief Executive was also forced to fend off criticism of China's Belt and Road initiative, saying it's all about international cooperation.

The moderator of the panel discussion noted that some countries have described the initiative as an attempt to compromise their sovereignty, by making them financially dependent on China.

Lam said such concerns have to be addressed through dialogue.

"If one reads carefully into the speeches made by President Xi, the focus is really on international cooperation. But about the worries of some of these countries along the Belt and Road about sovereignty, that requires constructive dialogue," Lam said.