Hong Kong once played a leading role among Asia’s four “little dragons” — Taiwan, South Korea, Hong Kong and Singapore — in the early years of the digital economy, on back of its open economy and massive trade demand from mainland China.
The city drew a number of multinational corporations for establishment of regional headquarters, thanks to a low tax and laissez-faire approach adopted by the government. And several key infrastructure projects, including a new airport and a new container terminal, provided new momentum for economic growth.
Hong Kong moved ahead of others on initiatives such as Real Time Gross Settlement (RTGS) among banks, new clearing system in stock exchange, and the Octopus payments system for consumers.
The city’s telecom infrastructure, such as 3G network and fiber broadband, also developed rapidly along with robust economic growth.
Making a lot of money, several local conglomerates, meanwhile, started to deploy their massive profits worldwide.
Despite the good and early start, Hong Kong, unfortunately, has lagged behind when it came to adopting a new economic growth model.
Local enterprises were often too conservative, and hesitated to step out of their comfort zone. As a result, the city’s economic growth has begun to moderate.
Also, frequent political divisions and old-style governance structure have led to several projects suffering delays, cost overruns or even failure. The affected projects include a new cruise terminal, the Hong Kong-Macau-Zhuhai Bridge, and the high-speed cross-border rail link.
The city’s newly-established Innovation and Technology Bureau, meanwhile, also has nothing much to boast about.
Efforts to attract leading global data centers have been tardy, and initiatives such as faster payment system, API Banking, eID, eKYC have failed to come on stream in time.
Many Hongkongers believe they can protect their interests by deviating from China. However, the fact remains the city’s well-being and growth depends a lot on maintaining its appeal as an open economy and a gateway to China, helping it attract global capital.
Hong Kong serves as a bridge between the East and the West, which is its unique value proposition. If the city can utilize its unique advantage and complete new infrastructure projects in a timely manner, it can play a key role in China’s Belt and Road initiative as well emerge as a key player in the tech and digital economy.
This article appeared in the Hong Kong Economic Journal on Nov 16
Translation by Julie Zhu
[Chinese version 中文版]
– Contact us at [email protected]