The old Hong Kong Club Building on Queen Statue Square, in the Central business district of the city on June 17, 1978. Over 30 years ago, the author first arrived in the city. Photo: Sunny Lee
Inside Out
by David Dodwell
Inside Out
by David Dodwell

Hong Kong: a feisty city on ‘borrowed time’

The rambunctious and impudent bravado is today barely perceptible. Self pity seems widespread. So is fear of the future

Rambunctious. Remember that word? That was the Hong Kong as seen in the 1970s by Richard Hughes in his immortal “Borrowed Place, Borrowed Time”.

It was the Hong Kong I arrived in, and was so inspired by. It was so different from the mean, miserable and cynical UK that I so eagerly fled.

Today, I have the rare opportunity to begin a new column for the SCMP. In broad terms it will aim to understand and describe the Hong Kong that has been home for over 30 years. It will explore the forces that are changing Hong Kong, both from the outside in, and from the inside out. – hence the name of the column.

Its people are different from China but are in the process of forging an identity as part of China

Needless to say, the Hong Kong of 2015 is not the Hong Kong of 1978 – the Hong Kong that Richard Hughes absorbed and described so perceptively. The full quote from his book is worth recalling: “Hong Kong is .. a borrowed place living on borrowed time… (it) is an impudent rambunctious free-booting colony, naked and unashamed, devoid of self-pity, regrets or fear of the future…”

Hong Kong is still arguably on borrowed time: until the “one country, two systems” transition period to 2047 comes to an end, so it will remain a city riddled with counter-intuitive anomalies. It is indelibly influenced by 150 years of neglectful British colonial rule. It and its people are different from China but are in the process of forging an identity as part of China.

Understanding and managing that process is proving difficult for Hong Kong people and its leaders. And it is frustrating leaders across the Mainland, who so often see Hong Kong as a petulant self-obsessed child lacking pride in the motherland and its achievements since 1978.

But much of what Richard Hughes described in the early 1970s has ebbed. The rambunctious and impudent bravado is today barely perceptible. Self pity seems widespread. So is fear of the future.

Sometimes, I fear Hong Kong has lost the unapologetic entrepreneurship that was perhaps the inevitable driver for refugees from Mainland chaos, and has instead become middle class, middle aged and managerial.

But the city remains distinctive, and has unique qualities that set it apart from other Mainland cities, or cities like Singapore, and is home to competitive advantages that often seem to be better recognised in Beijing or by the Heritage Foundation than among Hong Kong people themselves.

So this column will try to understand and describe the forces that have shaped and are changing Hong Kong, and the role it is playing for China and in the region as we move steadily closer to 2047. Unapologetically, it will try to draw upon well-founded data, even though this can sometimes seem dull. This is because so much of the opinion – and policy – that I see today is informed by prejudice and anecdote rather than objective and balanced examination of the facts available to anyone with the patience to explore.

While Hong Kong has changed over the past three decades, it is still extraordinary. And long may it remain so. Many in the West would say that the main driver for change in Hong Kong has been the transition from colonial to Chinese rule. But as has been so often the case in the past, the obvious or intuitive causes of change have not been the real causes.

In truth, Hong Kong has been, and remains, a product of the changes that have occurred in the huge and remarkable place to our north. From the empty shell left by a retreating Japanese army after their defeat in World War 2, Hong Kong has been filled by refugees from a chaotic Mainland, and then tasked to manage and facilitate China’s re-integration with the rest of the world after the xenophobic forces unleashed by Mao were superceded by the more pragmatic leadership of Deng Xiaoping.

On the foundations of investment orchestrated by tens of thousands of Hong Kong manufacturers and entrepreneurs, China has built an export-based powerhouse that is today shaping the world trading economy.

Through this stage of China’s development, Hong Kong’s pivotal role was clear, and the export-focused activity flowed naturally through Hong Kong’s port and its globally-linked trading community. This created what will always be regarded as a “Golden Age” for Hong Kong and its population.

But as China has developed and grown, Hong Kong’s distinctive role is no longer clear. Other ports along China’s coast can manage trade just as efficiently as we can in Hong Kong. And as more growth is driven by internal domestic consumption, so Hong Kong’s natural locational advantages have become less and less relevant.

Our competitive advantage now has to be rebuilt. This has punctured much of the confidence – hubris even – that characterised the Hong Kong Chinese entrepreneurs that strutted among China’s comparatively unworldly “country cousins” two decades ago. From 18 per cent of China’s GDP in 1997, Hong Kong today accounts for just 2 per cent or so.

But because our role for China is more modest than it was in the 1980s, that does not mean Hong Kong lacks pivotal importance for Beijing. I think China’s leaders – and China’s increasingly sophisticated and rich business community - recognise this more clearly than our own leaders do.

That is why they flock in such numbers to place their international headquarter operations here, to capture the legal, financial, accounting and other professional services that headquarter operations so heavily rely on.

In striving to understand and describe the distinctive characteristics that sit at the heart of Hong Kong’s ongoing competitive advantages, this column will roam widely. The journey will, for sure, be as fascinating going forward as it has been over the past three decades.

David Dodwell is executive director of the Hong Kong-Apec Trade Policy Group