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Opinion | Forget past glories, Hong Kong must find relevance in a changing world
- Hong Kong’s economic malaise is structural. China will remain a powerful economy and global player, but this does not ensure the city’s relevance unless it shakes itself up
- The crucial question is what it can offer as unique advantages, and how its limitations can be overcome through self-reform and collaboration
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With the pressure of enacting Hong Kong’s Article 23 domestic security law off, the government is keen to focus on restoring the city as a global hub, events capital and “superconnector”.
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It must be recognised, though, that reliving legacies is unrealistic. Some fundamentals have changed: the economy is ageing, the geopolitical climate is unfavourable and several advantages have been lost.
Hong Kong has gained immensely from China’s economic reform and opening up, with local businesses among the first to partake in mainland reforms. Apart from being a gateway for foreign investors and a window on international practices, the city was also a role model for modernisation.
As a venue for risk diversification, Hong Kong became the preferred base for many companies’ regional headquarters and offices, and a talent hub. Its transshipment trade, logistics, shipping and aviation benefited from China’s emergence as the world’s largest factory and major market.
As the Chinese economy grew, demand for investment escalated. Mainland corporations sought Hong Kong listings as they went multinational. Hong Kong’s financial intermediary functions became vital. As an international financial centre, Hong Kong soon surpassed Tokyo to sit on a par with London and New York.
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Asymmetries with the mainland – in wages, operating costs and market penetration – worked in Hong Kong’s favour when its goods and services as well as brands and cultural styles were sought after. Those were the heydays.
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