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Jake Van Der Kamp

'The success of Hong Kong exporters in making early inroads into the emerging markets in the mainland of China and eastern Europe bears witness to TDC's [Trade Development Council's] foresight and tireless efforts.'

Donald Tsang Yam-kuen

November 29

RIGHT THEN, LET'S start with eastern Europe. The red line on the first chart shows you the annual value of our total domestic exports. Now look down and you will see a blue line crawling along the bottom of the chart. That's domestic exports to eastern Europe. A huge achievement for the TDC there, Donald.

Next, China. The second chart shows you domestic exports to the mainland. It is indeed true that we made early inroads here but perhaps the word 'outroads' is more apt to describe the record of the past  10 years.

The only emerging thing here seems to be us emerging out of the mainland market for imported goods. Hong Kong's domestic exports to China accounted for 5.7 per cent of China's imports  10 years ago. That figure is now 0.7 per cent.

But, of course, when the TDC invites our chief executive to be its key speaker at a reception to congratulate it on the 40th anniversary of its existence, he has to make mention of at least some accomplishment it can claim, however sparse.

Sparse indeed. Our economy no longer lives on domestic factory wares and it no longer needs a big government agency to promote them. Here's an idea for you, Donald. Let's make the TDC's 40th anniversary its last. It has passed its sell-by date.

'This case [Guang-Shen-Gang (Hong Kong) High-speed Railway] brings home again that the Hong Kong system of decision making in major infrastructure projects of this type lags far behind our counterparts in the mainland ...'

'... Its [Hong Kong's] 'big market, small government' mentality has severely curtailed its ability to conduct negotiation or joint development with its mainland counterparts.'

China's 11th Five-year Plan:  Opportunities and Challenges  for Hong Kong

A study sponsored by  the Bauhinia Foundation

IT IS FAR from an original chant. In fact it has been the standard theme of all talk from across the border recently on our relations with the mainland - 'You people in Hong Kong had better watch out because we can now do everything you do and you will be marginalized unless you do things our way.'

What I cannot understand, however, is why so many people in Hong Kong want to parrot such talk as if it were actually true. Its purpose is to puff up the self-importance of bureaucrats across the border. Why should we undermine  our economy by going along with it?

Take this high-speed railway. Our government has opted to link up with it through the Kowloon-Canton Railway's existing West Rail. The bureaucrats across the border, however, want us to build a brand new line at a cost, they say, of HK$8 billion. Others say HK$15 billion is more like it. Add in the value of the land that must be appropriated and you can probably double this figure.

But that is the way they do things across the border. Fixed asset investment now accounts for more than half of the mainland's gross domestic product, a wildly excessive figure and much of this investment is in highly uneconomic transport ventures. These people say, of course, that it stimulates development.

They ignore entirely that the money must come from somewhere and that draining it out of this somewhere then has the opposite effect of sapping development in this somewhere. They have no concept of cost-benefit or return on investment or opportunity cost of money.

These may be fancy economic terms but they all boil down to what you learned at your mother's knee - be careful how you spend your money because it doesn't come from a bottomless well.

And if the fact that we heed mother's good advice then leads mainland bureaucrats to bawl at us that our government 'lags far behind' or 'has severely curtailed its ability to conduct negotiation', well, so be it. Mother's advice is still the best advice and these people are wrong.

We don't have a practice here of throwing away public money as heedlessly as they so frequently do. Let's be proud of it.



There's nothing to trumpet about TDC's meagre achievements