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Shipping has been one of Hong Kong's mainstays on the international scene, but for how much longer? Photo: EPA
Opinion
Philip Bowring
Philip Bowring

To survive, Hong Kong must retain its international outlook

Philip Bowring says Hong Kong can learn much from the history of East Asia's maritime trading centres, not least that it cannot afford to turn inward

The history of the rise and fall of trading centres on the coasts of East and Southeast Asia should be a salutary warning to Hong Kong of two dangers. One is the erosion of its unique advantages as a result of outside pressure, and the other an attempt to protect the status quo for the benefit of entrenched interests.

The city of Makassar in South Sulawesi is one of the poorer parts of Indonesia. But, 400 years ago, it was a city of half a million people, at least as important as Hong Kong is today. It was not just a thriving port city visited by ships from India, China, Portugal, Spain, Britain and the states of Southeast Asia. It was famous for its openness to all traders, the interest of its rulers in science and laws, its expansion of literacy and its tolerance of all religions, even though its ruler converted to Islam. Visitors spoke highly of its good order. Its sultan, Alauddin, made a statement that still underlies maritime law as expressed through the UN Law of the Sea Convention: "God made the land and the sea; the land he divided among men and the sea he gave in common. It has never been heard that anyone should be forbidden to sail the seas".

Makassar eventually fell victim to Dutch imperialism and its demand to control the spice trade, of which Makassar had become the centre. So was extinguished not just a free trade port, but also, in time, all the interest in technology, crafts and the writing of history as an accurate record rather than a tool of state ideology and royal mythology. All those aspects of enlightenment had come with being an open, trading society. All that survived was the Bugis tradition of boat building, seafaring and map-making.

The exchanges that take place here that have nothing to do with China are at least as important as those that do

Likewise, one could name half a dozen or more cities along the coasts of the region which, at one time or another, were pre-eminent not because they were major sources of goods or gave access to rich interior provinces, but because they offered the greatest freedoms for traders of all kinds, and because they provided security and were driven by the need to promote commerce. There was Palembang, Jambi, Pasai, Aceh and Barus on Sumatra, Banten and Demak on the north Java coast and (before Singapore) Kedah, Johor, Patani and Malacca on the Malay Peninsula. They declined for various reasons, including competition, shifting trade patterns, silting of harbours and - by no means least - the ending of their independent status at the hands of larger states. Their common feature was that they were more places for exchange than source.

China, too, has its examples. Guangzhou is a natural international trading centre, being ideally situated both on the southern China coast and with access to the interior via the Pearl River and its tributaries. Yet for 200 years or so during the Song and Yuan dynasties, it lost it pre-eminence to Quanzhou , now in Fujian province, for reasons more to do with state policy than commercial logic.

So what does this history tell us about Hong Kong's focus? Firstly, the absolute top priority is an international outlook. The exchanges that take place here that have nothing to do with China are at least as important as those that do. That applies whether one is talking of merchandise, finance or myriad other services. A Hong Kong focused on competing with Shanghai will ultimately lose because Shanghai is bigger and more central. The more Hong Kong relies on the mainland for exchange, the more likely, too, it will be subject to the sort of central government policies that are now hitting Macau.

The more Hong Kong relies on laundering mainland profits, the more likely it is to get hit when Beijing faces fiscal difficulties. Instead of relying on favours from Beijing, such as those occasionally doled out via the Closer Economic Partnership Arrangement (Cepa), Hong Kong needs to be as active as Singapore internationally. There is plenty of scope for this in all manner of trade, finance, scientific and academic fields without treading on Beijing's toes. Cepa is a crutch Hong Kong should not need.

In trade-based states, merchants have naturally had a large say in government. The problem for Hong Kong is that the business community with clout is not the one that brings in business, but the one that makes profits from dominant ownership of land and services. This de facto tax on international exchange has not only raised costs, but also blocks social mobility by creating a business aristocracy with limited interest in the factors - for example, clean air - that aid competitiveness. It was shocking to learn that, at a time when proud nations like the Netherlands are sufficiently committed to competition to allow the national airline to be taken over by the French, Hong Kong is protecting supposedly local interests - Cathay Pacific - to the detriment of the city's international role.

Continued efforts to protect Hong Kong's separate identity - whether language, culture, freedoms, laws and practices from mainland-driven encroachments aimed at eventual takeover by Shenzhen - are needed for the sake of not just Hong Kong, but also China as a whole. But there is a danger that Hong Kong will take on a defensive, populist nativism and business protectionism that focuses not on its own fundamentals, but what is bad about others, be they mainlanders or foreigners.

This article appeared in the South China Morning Post print edition as: Look beyond the mainland
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