Haphazard integration is bad for Hong Kong, and the mainland too

David Lui backs longer-term planning to help solve existing problems

PUBLISHED : Wednesday, 10 October, 2012, 12:00am
UPDATED : Wednesday, 10 October, 2012, 4:06pm

In recent months, there has been increasing discontent and resentment among people in Hong Kong about closer links with the mainland. No doubt, this will continue. Such attitudes are understandable and we should listen sympathetically.

Yet closer links also generate economic benefits to people in Hong Kong. As some have pointed out, the arrival of mainland tourists has helped to stabilise and grow our economy post 2003. Without them to offset the reduction in numbers from Japan, Europe and the US, our employment situation would not be so buoyant.

However, tourists from developed nations did not present the city with many internal issues - unlike the arrival of massive numbers of mainland tourists.

So let's look at some of the problems posed.

First, people from the mainland and those in Hong Kong have distinctly different values and attitudes as a result of the different stages of social, economic and political developments in the two places.

Second, they have different needs. Mainlanders worry about safety standards, and see in Hong Kong attractive values such as better living standards and a much freer environment.

Third, we have underestimated in discussions and policy considerations the issue of capacity and the implications of the influx of mainlanders on people living here and the strain put on our services.

Fourth, the economic benefits generated from mainlanders is not being shared by all Hongkongers.

Fifth, the situation has been made worse by the global financial crisis. The massive stimulus by various central banks combined with fiscal measures to stimulate growth have caused income disparity to continue to widen; some people have access to easy credit and low interest rates, allowing them to make more money, while low-income earners have seen any savings they may have shrink.

It is inevitable that the mainland and Hong Kong will continue to forge closer ties. So while we should welcome closer co-operation and development, we must not overlook our ability to meet the expected surge in demand and its impact on Hong Kong people and economy. The interests of local people cannot be overlooked, compromised or displaced. Clearly, better longer-term planning and development is needed from both sides.

Hong Kong should lead and assist the mainland's move to a more open economy and market. It should not encourage practices that are not in the long-term interest of China's social, economic and political development.

One questionable area, for example, is the fact that so many of our local shops have been turned into high-end retail outlets to cater to mainlanders. What are the motives of the people making these purchases? For what purpose will the goods be used? Why are mainland visitors allowed to buy so many of these goods and return across the border with seemingly few checks. Have the necessary taxes been paid, for example?

Should Hong Kong encourage and endorse such activities? Will such behaviour support sustainable development on the mainland? The Hong Kong government and people should exercise their own judgment and seek support of the mainland authorities to tackle the problem.

Many years ago, our streets were full of mobile phone shops. Later, many gave way to property agents and those now seem to have been replaced by jewellery and watch shops. It will be interesting to see how long this trend lasts. I suspect the Hong Kong landscape will continue to evolve with the further opening of the mainland economy and society.

While there must be understanding and support on the part of the Hong Kong people, as it can be argued that it is in the best interests of the city to do so, we need to manage this process much better to avoid the current situation where the implementation of ideas results in problems that were not foreseen and have yet to be addressed.

David Lui is vice-chairman of Schroders Investment Management HK Ltd