TWO YEARS before the British relinquished control of Hong Kong, the United States business magazine Fortune published a doomsday piece called the 'Death of Hong Kong'.
It described a post-1997 Hong Kong in which triad-linked foot soldiers of the People's Liberation Army clattered through the streets, where judges and politicians were handpicked from Beijing, foreign companies were blackballed and corruption ruled.
Nearly five years on, Hong Kong is a very different place to what it was before the handover. Its property market has tanked, its stock market is listing, unemployment is the highest ever, prices have fallen for 39 consecutive months and it is slated to return one of the region's lowest economic growth rates this year.
Hong Kong does not blame Beijing for its woes. Rather, it is increasingly looking to the north for help, whether that be diverting mainland savings into Hong Kong's stock market or giving Hong Kong companies privileged access to the mainland market.
Political and Economic Risk Consultancy director Robert Broadfoot said: 'Everyone gets asked this, 'What has changed since 1997?' In 1997, everyone focused on the handover as the catalyst for change. What in fact happened is that the regional economic crisis was the catalyst for change. We had our eye off the mark.'
Mr Broadfoot believes Hong Kong was so focused on giving the impression that nothing would change post-1997 that it failed to adjust policy after the financial crisis. It also failed, he believes, to capitalise on its best asset, the China connection.
