Anti-mainland China sentiments

Root of Hong Kong's anti-mainland anger

Regina Ip says the rising tide of anti-mainland sentiment has its roots in Hong Kong's failure to develop a competitive economy independent of largesse from across the border

PUBLISHED : Sunday, 14 October, 2012, 12:00am
UPDATED : Sunday, 14 October, 2012, 2:32am

If any political lesson could be drawn from last month's Legislative Council election, few would disagree that the pan-democrats' alarm over the "mainlandisation" of Hong Kong struck a chord with the voters. This theme was ever present, whether in the form of a rally against national education or calls to "defend Hong Kong's core values".

No doubt deeply disturbing to the leaders in Beijing, this rising tide of anti-mainland sentiment is occurring against a backdrop of sustained economic growth buoyed by tourism and liquidity from the mainland. What makes Hong Kong bite the hand that feeds it?

Rather than lay the blame on the apparent "pro-China" inclinations of Chief Executive Leung Chun-ying or alleged interventions by mainland officials, I would argue that the anti-mainland sentiments are a direct outcome of Hong Kong's mismanagement of the relationship between the mainland and Hong Kong in the past decade, especially in the economic arena.

The story dates back to a policy change in 2003. After the outbreak of severe acute respiratory syndrome devastated the Hong Kong economy, authorities here decided to seek a quick fix by lifting hitherto tight controls on mainland visitors to Hong Kong. The influx of luxury-starved mainland tourists did wonders for Hong Kong's retail business, but it also created massive distortions and imbalances in the local economy, which have accentuated deep-rooted structural problems and metastasised into a prickly political issue.

The truth is, while the rising influx of tourists no doubt created an immediate boost to demand, the phenomenon of too much demand chasing inadequate supply of shop spaces, baby formula or maternity beds overstretched local resources, and, in the process, generated a backlash of resentment against the big spenders.

Hong Kong people are now waking up to the reality that the explosion of demand has led to a scramble by overseas brand-name retailers to set up flagship stores in the city, driving up rents and property prices and driving out small, popular local businesses, thus further aggravating the wealth gap and fuelling local antipathy towards the cash-rich visitors.

What the authorities have missed is that a quick fix is no substitute for a long-term strategy for restructuring our economy to enable it to create more value and hence enable our people to enjoy a higher standard of living. In an expensive city like Hong Kong, the people are bound to lose out if ever-increasing numbers of workers are engaged in jobs that create little value and hence have little room for upward advancement.

And that is precisely what has happened. As travel restrictions on mainland citizens continue to be relaxed to allow less the well-to-do ones to make multiple visits, Hong Kong people are witnessing a stampede to the bottom. Budget visitors cut costs by camping on beaches or checking into unlicensed guest houses, clogging up roads, crowding trains and turning popular tourist spots into areas sardonically dubbed "mainland colonies".

Ever since the "hollowing out" of Hong Kong's manufacturing industries in the 1980s, the city has failed to grasp the nettle and formulate an industrial policy to generate new jobs in new sectors of economic activity. Little was done to fill the slack left by industries lured away by a welcoming mainland economy.

Over the years, by leaving economic development to unbridled market forces and lacking a strong hand to steer the economy to innovation, Hong Kong has degenerated into a primarily service economy, now overly dependent on mainland tourism and investments. Meanwhile, its higher-end service sectors, notably financial services, are shedding jobs because of the ongoing European fiscal crisis. The same story is unfolding in the trade-related service sector as state-guided economic restructuring in the Pearl River Delta reduces the demand for Hong Kong's services.

As the government attempts to revitalise the local economy by returning to the old growth model of building new towns and developing the New Territories, it finds itself caught in a tight spot as villagers, developers and environmentalists alike appear to conspire to block new developments.

What the government has neglected is that in a densely populated, land-starved and expensive city like Hong Kong, it is better off promoting the development of the knowledge-based segments of the economy. Other regional economies, notably Singapore and Shenzhen, have pursued a deliberate strategy of developing the higher-value-added, knowledge-intensive sectors of the economy, such as information processing, data analysis and sharing, scientific research, high-end manufacturing, education and consulting. Yet Hong Kong's high-end jobs are diminishing as external demand shrivels.

And that's the root of the rage against mainland favours - enriching the few, depleting our resources, reducing Hong Kong to a shopkeepers' city and a playground for the nouveau riche. No amount of goodwill from mainland officials can cure this, unless we set our own house in order.

Regina Ip Lau Suk-yee is a legislator and chair of the New People's Party