22 August 2019
Hong Kong consistently ranks high in global competitiveness surveys. Its core strengths remain 17 years after the handover. Photo: Naiirb
Hong Kong consistently ranks high in global competitiveness surveys. Its core strengths remain 17 years after the handover. Photo: Naiirb

Hong Kong core strengths remain unshakable

A recent survey by British financial services group Barclays found that 30 per cent of wealthy Chinese picked Hong Kong as their favoured place to migrate, ahead of Canada with 23 per cent.

In May, IMD, an international business school in Switzerland, ranked Hong Kong as the fourth most competitive place in the world, behind the United States, Switzerland and Singapore, down from third in 2013.

These are just two of many international surveys that place Hong Kong as one of the best places on the planet to do business, despite its increasing “mainlandization” and years of bitter political fighting which has split the population down the middle.

Its core strengths remain the same 17 years after the handover – a strong and independent legal system, a well-educated and open-minded workforce, a business-friendly regulatory system, world-class financial companies and high-quality services in property, retail, tourism and other sectors.

In August, Lord Neuberger, president of Britain’s Supreme Court, said that China had not undermined judicial independence in Hong Kong nor sought to interfere in the judicial system.

The city’s role is the same as it has been since it became a British colony in 1842 – providing goods and services to China that are banned or restricted there. For many decades, it was trading, finance and the port that drove the economy.

During the past 30 years, Shenzhen, Guangzhou, Shanghai and other mainland cities have built factories, ports, airports and other infrastructure that have taken over much of the business that used to pass through Hong Kong.

No matter – Hong Kong has replaced these with other services for mainland companies and individuals. It remains the most important Chinese city for dealing in foreign currencies and for the rich to invest in property, financial instruments or placing their money abroad. It offers free exchange of currencies, low or no taxes and freedom of travel, speech and publication unavailable in the rest of China. So it is one of the most important centres for mainlanders to buy luxury goods and other items that are taxed at home.

Reforms in China include no liberalisation of media or publishing; under Xi Jinping, the regime is become more restrictive. So Hong Kong is the most free city in China to publish and buy books, magazine and films. It remains one of the most favoured destinations in the world for mainland tourists.

The number of non-Chinese living in Hong Kong has increased since 1997. Tens of thousands of local people who emigrated to Canada, New Zealand and elsewhere before the handover have returned to live and work. All these are signs of the strength of its economy and quality of life.

Enzio Von Pfeil, an economist at IAM Legacy, said: “People do not really reckon how efficient can be a move to Hong Kong, thanks to its high degree of efficiency and Chinese attitude of ‘can-do’. English here is still much better than in the mainland where people must speak Mandarin to find their way about. Here, you can still get away with English.”

So much for the good news. The bad news is that Hong Kong is one of the most expensive cities in the world, with an average monthly rent of HK$44,000 (US$5,680) for a three-bedroom apartment in the city center; service apartments cost at least HK$18,000. Education in non-Cantonese schools costs between HK$90,000 and HK$250,000 a year; some schools demand the purchase of debentures in addition.

So Hong Kong is a good city to live in if you are rich, own your own property and have the means and freedom to travel and make use of its excellent airport and airlines.

But it has deteriorated since 1997 in some respects; this hits worst the poor, the unskilled and those without property. At the handover, the city was already one of the most densely populated places on earth. Each day, 150 migrants arrive on single-entry permit, increasing this density, driving up property prices and worsening pollution. Apartments are becoming smaller and more expensive.

The government and civil society have expended enormous amounts of time, energy and money on the debate over political reform; this has divided the population down the middle, with no sign of a resolution. Beijing will not revise its offer of the electoral system in 2017, nor will the democratic camp give up its fight for a free election.

People fear that “mainlandization” is corroding public institutions such as the Independent Commission against Corruption after revelations that its former chief Timothy Tong spent millions of dollars in public money on entertaining mainland officials; 85 of the 155 lunches or dinners he hosted exceeded official guidelines and he bought Mao Tai, the rice liquor that is the favoured drink of China’s rich and privileged.

They also wonder if its current investigation into media tycoon Jimmy Lai is directed by politics and not law.

But the overall balance is positive. With nearly one-third of its 50-year grace period over, Hong Kong remains a global “brand city”, a place where tens of thousands of people, Chinese and non-Chinese, would like to live.

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Hong Kong is under threats of mainlandization but has so far remained a competitive and an efficient city. Photo HKEJ

Hong Kong legal sector held a silent protest with black clothes on Jun. 26, criticizing that the State Council’s white paper has undermined judicial independence in Hong Kong. Photo: HKEJ

Hong Kong-based writer, teacher and speaker

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