(Photo: Chris Lusher)
Hong Kong’s geographical location and ‘One Country, Two systems’ arrangement with the mainland, coupled with simple environment for doing business is the crux of Hong Kong’s success as one of Asia’s leading tigers. Its fundamental strength lies in its proximity to the Chinese mainland and the Pearl River Delta region. But with China quickly liberalising its economy and evolving into a full-scale consumer and market-based economy, is Hong Kong at risk of losing its appeal? Fears are rising that China’s progress could mean that Hong Kong may just not be needed any more.
From 2001 to 2015, the Hong Kong port saw over 30% decline in market share of South China’s cargo market. With ports in the mainland like Shanghai and Shenzhen increasing liberalisation of trade and shipping policies, Hong Kong is quickly losing its significance as a shipping hub.
In fact, since 2004, Hong Kong dropped from first place, as the world’s busiest container port, to fifth.
Simon Lee, founder and principal consultant of AdvB, a public affairs and social media firm, expresses concern over Hong Kong’s wishful thinking that it will remain ‘special’ in Beijing’s eyes: “It is unreasonable and unrealistic to expect China to stay put simply to protect the interests of Hong Kong.”
However, Callan Anderson, Executive Director at The Hong Kong Trust Company Limited doesn’t believe that China will damage Hong Kong’s standing, “we are as important to China as China is important to Hong Kong and the rest of the world… China may have an issue about politics, but they don’t have an issue about economics.”
Anderson also expressed concern over Beijing encroaching on rule of law, and freedoms of the press and speech, condemning the manner in which booksellers were kidnapped to instill fear and embolden self-censorship. The rule of law and the free flow of information are supreme in Hong Kong, something that Singapore and China cannot compete with. The rule of law in China doesn’t allow for contracts to be upheld and it isn’t likely to change in the foreseeable future, so Hong Kong still stands to gain as the middleman. However, the curtailing of academic freedoms, the growing practice of self-censorship among media outlets, and China’s increasingly pervasive interference over Hong Kong politics could very well be the variable that undermines the city’s unique advantage.
Along with a robust rule of law and access to information, innovation is the backbone to a truly free and competitive economy. Hong Kong is indeed the freest economy in the world, ranked first for twenty two times in a row by the Heritage Foundation. However, the World Economic Forum’s latest Global Competitive Index ranked Hong Kong seventh, while Singapore came in second, and China twenty-eighth. Innovation was the island’s weakest point, as the report noted, “the challenge for Hong Kong is to evolve from one of the world’s foremost financial hubs to an innovative powerhouse.” Unfortunately, it wasn’t until 2015 that Hong Kong set up the Innovation and Technology bureau. The city has been playing catch up and the government has been working overtime in the past year to shift its focus toward innovation and fostering an entrepreneurial spirit.
The 17th edition of the Hong Kong Forum, organized on behalf of the Hong Kong Trade Development Council (HKTDC) and the Federation of Hong Kong Business Associations Worldwide (FHKBAW) in late November can attest to that. This year’s event hosted more than 12,000 members from 30 countries and the focus was on Hong Kong as an international platform for innovation, creativity and entrepreneurship.
Inspiring young business leaders such as Tony Verb, a serial entrepreneur from Hungary, and Managing Partner of Metta, an online and offline platform to catalyse entrepreneurship, shared how they are harnessing the city’s “window of opportunity.” “Collaboration is they key driver to innovation and start-up success,” says Tony, “and Hong Kong is a place of co-innovation, the evolution of innovation.” This year’s impressive turnout goes to show Hong Kong’ growing status as Asia’s global business platform and provides just a glimpse of what the city has yet to offer.
It’s hard to predict how the forces from the north will impact the future of Hong Kong, but so far, HKTDC has been doing a great job at marketing the island’s potential at a global level. Marvin Hough, President of the Hong Kong Canada Business Association in Canada’s capital city, and former Regional VP of Asia for Export Development Canada, applauds Hong Kong global effort, he says “the effort by the overseas HKTDC is top-notch, you don’t find better promotion, support or cooperation.” It makes for a compelling story that Hong Kong will meet its demise but for the time being, the island is continuing to be a value-added player and is adapting well and quickly to a changing paradigm.
[starbox desc=”Shahnaz Mouhamou“]