Mind the Gap
by

No longer a shining example, what good is an intellectually bankrupt Hong Kong to China?

PUBLISHED : Sunday, 03 April, 2016, 1:57pm
UPDATED : Monday, 16 January, 2017, 10:26am

“We must be of use to China otherwise Hong Kong will be finished.” This proclamation is regularly trotted out like it’s a prophetic warning to all citizens. If our economies and industries don’t blindly orbit around China’s growth story of the day, then Hong Kong will surely decline. Or even worse, our Beijing masters will ignore us.

The flip side of that warning is what will happen if Hong Kong isn’t of use to China – however usefulness is defined. Certainly, the city’s utility isn’t served or appreciated as an example of how a liberal society works in a Chinese culture. Taiwan is the first Chinese society to accomplish that with an elected government.

Li Ka-shing labels current downturn in Hong Kong property, retail sales worse than during Sars epidemic

So if the creativity and dynamism of Hong Kong’s economy grinds to a halt because all of our capital and energy is held by and devoted to rent-seeking property oligarchs, then will China classify Hong Kong as a have-not vassal city like Washington, D.C. treats Detroit? Hong Kong may not be fiscally bankrupt like Detroit, but it is becoming intellectually bankrupt.

China has already surpassed Hong Kong in building new industries like social media and financial technologies. China has more users of online payment systems than any country. Hong Kong should have developed this kind of intellectual property. But, our best minds were lost to property flipping and managing its proceeds. Hong Kong’s establishment overstepped its already considerable hubris – that Hong Kong could lead China.

With the city’s infrastructure and economy inevitably integrated into China, it is the closing of the Hong Kong mind which is the city’s biggest impediment to any new kind of prosperity. So this is what happens when our industry leaders become addicted to the import-export of Chinese tourists.

Emperor Watch Jewellery, other Hong Kong retailers face tougher market conditions, fewer mainland tourist buyers

Hong Kong retail sales declined 13.6 per cent in the first two months of this year – the worst since the 1999 Asian Financial Crisis. Total retail sales in February fell 20.6 per cent to HK$37 billion compared with the same period last year, deteriorating from January, when it contracted by 6.5 per cent.

In the first two months of this year, the number of visitors to the city declined by 13 per cent. Mainland Chinese tourists dropped by 18 per cent, despite a 7 per cent growth of overseas visitors.

After the signing of the Sino-British Joint Declaration in 1984, Hong Kong’s first big cliché was “stability and prosperity.” Exco member Lydia Dunn used to proclaim that line repeatedly until it became meaningless. You can’t have prosperity without some change and instability.

For the US, it was the social and economic upheaval caused by successive waves of immigration that built the foundation of the industrial and post-industrial revolutions and ultimately the technological revolutions from the personal computer to the internet.

Selling the inherent contradiction of “one country, two systems” requires our version of Donald Trump’s The Art of the Deal. Except Hong Kong doesn’t possess the political and business leaders with the skills, desire or foresight to sell the Hong Kong deal to Beijing.

And what is the Hong Kong deal? A place where the tenuous and borderline unsustainable combination of civic freedoms with a lack of democracy has to find a way to work without appearing to threaten Chinese sovereignty.

business-article-page