Jake's View

Hi-tech dreams will not lead Hong Kong to promised land

This town’s fortunes have been made by doing what China cannot or will not do

PUBLISHED : Monday, 02 November, 2015, 5:04pm
UPDATED : Monday, 16 November, 2015, 4:43pm

Commerce minister Greg So Kam-leung hopes the Finance Committee can finally endorse funding for a new innovation and technology bureau next week – and that it can be set up in less than two weeks.

SMP, November 1

I can’t remember quite why it is that legislators have been so dead set on stopping this Technology Bureau. It has to do with disliking the chief executive, I think, or gunning for the incumbent of the technology functional constituency seat or something equally irrelevant.

But while I cannot follow the reasoning (it’s a bit dim down there), I see nothing wrong with putting a big nix on the idea. A bureau is meant to be a thinky-thinky element of government as opposed to a department (which we must thus assume is entirely mindless) and I cannot see scope for government-style thought here.

The difficulty is a simple one. Hong Kong’s fortunes are inextricably linked to China’s and throughout its history these fortunes have been made by doing what China cannot or, for various policy reasons, will not do itself.

If history is any guide, Hong Kong’s best option is to do something Beijing cannot understand or cannot approve

It has been so from the very start when this town was founded by armed robbery for the purpose of drug trafficking. Beijing objected to opium. Hong Kong thus filled the commercial gap. Two thirds of present day Colombia would understand.

A less dubious and more recent example is the rag trade. China, with a vast, low-paid labour force, should have been a world centre of garment production by the 1960s. Political turmoil did not allow it to happen. Hong Kong therefore stepped in until China could take its proper place in this industry some 30 years later.

Hong Kong meanwhile switched to trade and financial services to help China in those service elements of industrial exports which ran counter to Communist Party dimwittedness on financial matters. They say in Beijing that China is now ready to take this role back from Hong Kong, too. Yeah, sure.

But, if so, what useful advice can a government bureau offer on what to do in the future when that bureau is effectively beholden to Beijing through appointment and, if history is any guide, Hong Kong’s best option is to do something Beijing cannot understand or cannot approve?

The government answer in the case of this bureau is simple. Our Chief Executive, Leung Chun-ying, went to Jerusalem recently and was told on the mount that hi-tech electronics is the answer. It was the same pilgrimage that his mentor, former chief executive Tung Chee-hwa, made some years ago and the same answer.

Why the hi-tech quest should have led them to Israel must remain a mystery but I do know that it will lead CY to no promised land of Asia.

For starters, producing computers and smart phones is not hi-tech. Buy the required production equipment, hire technicians to run that equipment and you too can lose billions on lo-tech assembly work or pay it all away to foreigners whom you have invited in to take advantage of you. Just ask Singapore.

The hi-tech is in the critical components that go into the hi-tech equipment, things like the microprocessors, the high-density memories or the GPS modules and Hong Kong will never get a worthwhile look-see at these. They are steel-armoured in protective foreign patents and the licensing costs are nosebleed material.

All the rest is no more hi-tech than plastic toys or garments, less than garments, in fact, because there is real skill in being a seamstress and not much in being a clean room technician whose every move is prescribed by the manual.

Hi-tech is a delusion for us. Hong Kong has no history, no base of knowledge, no support industries and only paltry intellectual property rights in it. We can only waste money and effort in it. The Taiwanese laugh when they hear of our hi-tech dreams and they are entirely right to do so.

This town has gone through several major changes in economic direction over the years, all of them led by its entrepreneurs feeling out where the market leads them. It is a method of economic development that has served us extremely well.

I shudder to think of the paths to waste down which this technology bureau will lead us.