LISTEN TO TOP government officials and much of our corporate sector and you learn there is a remarkable thing about Hong Kong. In case you didn't know, this city has unique economic problems that defy experience in the rest of the world.
Consider some of the latest musings by bankers, senior executives and officials: the property market should be propped up by taking government-built flats off the market; mobile telephone licences should be given away even though everywhere else is auctioning them with great success; and, of course, Hong Kong has no need for statutory consumer protection.
Do these people know what they are talking about? There is ample evidence that they do not, and the pity of it is that they should know better. Standard Chartered Bank's regional chief economist, Kwok Kwok-chuen, last week bizarrely argued that the Government's sale of Home Ownership Scheme flats was forcing the market lower and advocated renting them out instead. His comments were a typical example of muddled thinking in what passes for policy analysis in Hong Kong. At the same time consumer rights lawyer Audrey Eu Yuet-mee highlighted the absurdity of the Government's resistance to a formal competition law that would tackle rampant price rigging.
The developed world has moved a long way since Hong Kong was singled out as a model of small government and free-market virtue in the 1970s. Since the collapse of socialism as a credible economic idea, huge intellectual effort has been put into making markets work better. The goal has been to make capitalism cleaner, fairer and more efficient. Despite the emerging backlash against globalisation and free trade, recent years have been marked by the success of market economics over producer economics.
Put simply, that means economic policies are designed with the single goal of maximising benefits to the consumer. As a starting point that is fairly simple, but the implications run deep. It represents a learned pragmatism that markets work best when they are open and free of cosy cartels.
From the go-getting United States to a reforming Europe and slowly liberalising Japan, there is no longer much argument over big economic ideas. Instead, policy has focused on the more specific issues of opening markets and forcing firms to compete within a transparent legal framework.
