‘One country, two systems’ will be an anchor in a year of uncertainty
Globalisation faces its biggest test since the financial crisis, and the growing protectionist sentiment is a challenge to both mainland China and Hong Kong
Terrorism remains an abiding fear in 2017, refuelled by the use of a lorry to attack Christmas shoppers in Berlin. Sadly the likelihood of random threat is predictable. However, what sets the new year apart from the old was not so predictable. It is the rise of populist politics, exemplified by the election of Donald Trump as the next president of the United States and the vote to leave the European Union by Britain, one of the EU’s strongest economies. Few experts forecast either. Few countries will be unaffected by either or both. In the year we elect a new chief executive and celebrate the 20th anniversary of reunification, a finance and commerce hub like Hong Kong must remain vigilant and ready to adapt.
Populism appeals to common interests and prejudices with simple explanations and solutions for complex economic and social issues. Hence Trump’s campaign rhetoric scapegoating China for America’s economic woes, with undertones of trade and currency wars, and his anti-migrant policies, including pledges to build a wall against Mexicans and curb Muslim migration. And hence the success of a Brexit campaign against migration under freedom of movement within Europe.
It remains to be seen how Trump’s campaign rhetoric plays out, though the appointment of China hawks to his trade team is not encouraging. Along with his injudicious remarks on the one-China policy, this points to more friction.
Right-wing populist hostility to humane refugee policies has undermined the stabilising European political and economic leadership of German Chancellor Angela Merkel, prompting fears that looming elections in both Germany and France could see the continued rise of the far-right.
Globalisation of markets for goods, services and capital faces its biggest test since the financial crisis. Amid growing protectionist sentiment, this is a challenge to both China and Hong Kong. The mainland needs to defend and expand free trade to grow its economy, such as through the “One Belt, One Road” strategy, an agenda in which Hong Kong has a vested interest.
At the same time both face events that will help define their future direction. The city’s next chief executive will take office on the 20th anniversary of the handover, amid an array of divisive political and livelihood issues. Towards the end of the year China will complete a major power transition. Amid such change and uncertainty, adherence to the principles of “one country, two systems” will be an anchor of stability and confidence.