Can Hong Kong become indispensable to the nation again?

Lawrence J. Lau says 20 years after the handover, it’s time to abandon the policy of positive non-interventionism as the economic and social challenges facing the city cannot be solved without long-term planning and coordination

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Lawrence J. Lau

Published: 11:46am, 30 Jun 2017Updated: 8:37pm, 30 Jun 2017

Hong Kong must make itself once again indispensable and irreplaceable, doing what other Chinese cities cannot do. Illustration: Craig Stephens

Despite all the predictions of doom by Western pundits in 1997, Hong Kong has done well since its reversion of sovereignty to China 20 years ago. The handover was a historic event, hailed by Chinese everywhere as the closure of the century-long humiliation suffered by China at the hands of the Western powers, beginning with the Opium War. Even Taiwan sent a delegation to Hong Kong for the handover ceremony.

The transition itself went smoothly under the leadership of Tung Chee-hwa, the first chief executive of the Hong Kong special administrative region. However, soon after, East Asia was engulfed by a currency crisis, leading to widespread devaluation and economic recession everywhere (and the bursting of the housing bubble in Hong Kong). This was followed by the outbreak of the severe acute respiratory syndrome in 2003, the 2008 global financial crisis and the subsequent European sovereign debt crisis, which all affected the economy negatively.

Hong Kong, ever so resilient and resourceful, survived all these crises. Today, the city remains ahead of South Korea and Taiwan in real gross domestic product per capita, but behind Singapore. The most significant change is the decline in the size of Hong Kong’s GDP relative to the mainland’s – it went from 8.7 per cent to just below 3 per cent, and on a per capita basis from 16.6 times to only 5.6 times.

However, during the past two decades, income inequality in Hong Kong has risen sharply, as has the cost of housing, which doubled between 1997 and 2016. A significant proportion of Hongkongers live in tiny, substandard, illegally subdivided rooms, which are a major fire hazard.

The outgoing chief executive, Leung Chun-ying, has tried his best to improve the housing situation. I believe his successor, Carrie Lam Cheng Yuet-ngor, will continue working on it. However, this problem cannot be solved overnight. We need a vision and a credible plan, so that people know decent and affordable housing will be available for all in, say, 10 years. This should help to dissipate a great deal of the latent anger among our people.

The “one country, two systems” principle has been widely misunderstood. It is meant to be a single country, with two economic systems. It is not meant to be two different political systems. Whatever happens to the “two systems” in 2047, it will always be “one country”. Photo: Reuters

Politically, Hong Kong has not fared so well. The “one country, two systems” principle has been widely misunderstood. It is meant to be a single country, but with one part, the mainland, operating under the socialist economic system and the other part, Hong Kong and Macau, operating under the capitalist economic system. It is not meant to be two different political systems. Whatever happens to the “two systems” in 2047, it will always be “one country”. It is therefore essential to embrace the idea of “one country”, even if one does not support the current policies of the central or the Hong Kong government.