Occupy Central

Apec's Beijing move no skin off Hong Kong's nose

Despite dire predictions that moving an Apec meeting to Beijing will damage Hong Kong's standing, business folk are unlikely to care

PUBLISHED : Tuesday, 04 March, 2014, 11:13am
UPDATED : Wednesday, 05 March, 2014, 1:25am

The following conversation might or might not have taken place. However, its contents will be treated with disbelief by the serried ranks of "experts" who purport to know how business is conducted but have never had their knowledge sullied by any actual experience.

Those with some business experience might acknowledge this exchange with a knowing wry smile.

Location: Boardroom of XYZ Ltd, Canary Wharf, London

Event: Weekly management meeting

Chairman: Cyril, can you give us an update on plans for establishment of the Hong Kong office.

Cyril: All going well, chairman, but I keep getting pesky calls from some outfit called InvestHK.

Bentley (chairman's second son): Funny you should mention Hong Kong. I saw something on page 28 of the paper about a meeting of the Apec finance ministers being moved from there to Beijing. Does anyone know what this Apec thingy is?

Cyril: No idea, probably some kind of government BS.

Chairman: But does it matter to us in any way?

Cyril: Can't think why it would, unless these Apecs are going to give us a better deal on the rent.

Chairman: I rather doubt that; sounds to me as though those wily chaps in Hong Kong have just saved themselves some money.

Bentley: Yeah, but it won't be much fun for those guys who have to go to Beijing. A pal of mind told me that you can hardly breathe the air there.

Chairman: That's as may be; let's get back to business.

Although practically nobody thinking of locating a business in Hong Kong will give two hoots whether the largely irrelevant Asia-Pacific Economic Co-operation people meet here or in Timbuktu, we have been solemnly assured that the removal of the upcoming Apec finance ministers' meeting to Beijing will be bad for Hong Kong's reputation, bad for business and even worrisome for the SAR's future as a commercial centre.

In the same vein, but with even greater vigour, pundits are anxious to tell us that if Occupy Central takes place, business in Hong Kong will be shattered.

They seem to forget that movements such as Occupy Wall Street and London's Occupy the City, unlike Occupy Central, were specifically aimed at business itself, but this did nothing to shatter their reputation as the go-to place for international firms.

As it happens, most really big corporations see freedom of expression as a plus. Maybe these self-appointed Hong Kong lovers think that this place is so fragile that the smallest whiff of protest will bring it to its knees.

If they are right, Hong Kong has some fundamental problems. Fortunately they are quite wrong and have little idea what it takes to become a business hub.

Some of it emanates from serendipity. Silicon Valley, in California, for example became a magnet for hi-tech companies because some exceptionally successful technology-based start-ups happened to be there and other companies quickly clustered around them.

Other places, notably London and New York, became hubs in part by design but mainly because they developed a critical mass of industries that needed to be in proximity to each other.

Of course it mattered that at one time London served as the capital city to the world's dominant economy and New York remains the commercial capital of the world's biggest economy.

Protests in New York and London did not shatter their reputation as the place for global firms

What this meant was that international corporations could be located alongside their counterparts, facilitating ease of communication and a steady flow of opportunities for developing their business.

However, this still left space for places like Hong Kong that possessed unique regional advantages.

It is no longer politically correct to point out that Hong Kong's singular attraction was its location at the tip of China without being part of the Chinese system.

This means that Hong Kong possesses certain essentials for business that are lacking on the mainland. These include rule of law, a convertible currency and a relatively open market. Moreover, we benefit from being in a neighbourhood where a number of other countries are also lacking in these essentials.

Business folk are simple people; they need a decent infrastructure in which to operate, and they want a degree of certainty that the surrounding environment will not impose arbitrary restrictions on their ability to conduct their activities.

A modest tax regime and extras such as a business-friendly government are pluses, but these are not primary considerations.

As for whether government or, indeed, other organisations choose to hold meetings in certain cities, let me ask you one thing: how many businesses do you know that are thinking of moving to Davos, where that big international talk fest is held annually?

Nor will they move to Beijing because they heard that the Apec finance ministers are going there for a chinwag.

Stephen Vines runs companies in the food sector and moonlights as a journalist and broadcaster