Political correctness blinds authorities to parallel trading solution
What sort of crazy situation is this in which a customer, the biggest customer no less, is told that their patronage is no longer wanted because they are buying too many goods and paying a bit over the odds for the privilege?
Now turn this question on its head and ask what happens to all the other customers who complain about being squeezed out and being forced to pay higher prices because of the buying power of the biggest customer?
There are no prizes for guessing that the subject here is the controversy over parallel trading, the bizarre euphemism used to describe buyers from the mainland coming to Hong Kong to purchase goods for re-sale. This controversy confirms, should it really need confirming, that there is no such thing as the absence of politics from Hong Kong’s business relations with the mainland, nor indeed is it anything less than a fantasy to imagine that somehow business determines the politics rather than the other way round.
The business logic of what is happening is lost in an atmosphere of anger and recrimination
There are many other examples of this, such as the introduction of dual listings on the local and mainland stock exchanges, banking licensing for Hong Kong banks on the mainland and the enhancement of the Bank of China’s role here, not just as a note issuer but also involving the listing of new shares on the local bourse. Then there are various cross-border trade agreements with “alluring” names such as Cepa, or the Closer Economic Partnership Agreement, carrying varying degrees of ineffectiveness.
However there is nothing quite as up close and personal as the influx of mainlanders seeking goods that are either not available or deemed to be of dubious provenance on the other side of the border.
It is the latter reason that explains why mainlanders come here to buy things such as baby milk powder. The arbitrary application of rule of law on the mainland is the root cause of concern over the authenticity and safety standards of products that are readily available over there but simply not trusted by mainland consumers.
Political correctness ensures that no one in the Hong Kong government is brave enough to baldy state the obvious facts of the matter because their wider relevance is painfully obvious. This is combined with an abject helplessness in trying to resolve the problem. So called Hong Kong leaders will do no more than say they are waiting for orders from Beijing on how to deal with this by controlling the flow of mainland visitors.
However, even without dabbling in sensitive areas of cross-border jurisdiction, a resolute Hong Kong government could do a great deal to relieve the strain caused by the influx of visitors. This would entail improving the transportation infrastructure and the building of specialist centres to cater for this trade. Instead, cross-border transportation efforts are confined to massive white elephant projects such as the bridge to Zhuhai (the place where the influx does not originate). Even simple things such as establishing more border crossings are shunned in favour of faffing around with new machines at the existing immigration areas.
Meanwhile the business logic of what is happening is lost in an atmosphere of anger and recrimination. Even those of us who worry about many aspects of closer integration with the mainland, fully recognise that cross-border economic links are not only essential but account for a significant proportion of Hong Kong’s prosperity.
A businesslike response to this demand for goods (for that is essentially what this is all about) is to find ways of facilitating supply that are not to the detriment of the local population. This is easier said than done but for a trading centre like Hong Kong, that has largely developed to current levels of prosperity by simply not being the same sort of place as the rest of China, surely this should not be that difficult.
However in the new world of political correctness officials are loath to admit this simple fact and, far worse, are actively engaged in developing policies that will eradicate the differences that create the economic rationale of Hong Kong as a gateway to the rest of China and, conversely, as a place for mainlanders to do things and buy things that they cannot buy at home.
Of course Hong Kong should be making greater efforts to diversify its economic dependence on business with the mainland but the structure of the local economy is more or less entirely devoted to this purpose. It would take enormous dollops of vision and creative thinking to change course but creative thinking is hardly the hallmark of the Hong Kong government. Nor can the conglomerates that dominate the economy be accused of creative thought, as this is hardly required to operate companies that rely on cartels and other restrictive business arrangements.
Stephen Vines runs companies in the food sector and moonlights as a journalist and broadcaster
