Hong Kong remains a free market with a very bright future
I refer to the article by Philipp Martin Dingeldey and Wan Tin Wai ("Losing its lustre", July 4), who, as graduates from a Singapore university, denigrate Hong Kong. However, their claims are wrong.
Hong Kong is described as having "chronic income stagnation" for non-professional workers.
Its unemployment rate is 3.2 per cent, which is full employment, and wages can only go up in such a situation. The article also points to a high Gini coefficient, but this is due to 150 migrants (mostly dependents) coming daily from the mainland on one-way permits.
The authors say that, according to a Guangzhou research firm, "Hong Kong was losing its edge as a global financial and commercial centre", but international rating agencies such as the Fraser Institute and Cato Institute have repeatedly declared Hong Kong to have the freest economy in the world. Furthermore, its high land price is due to a shortage of land, not cronyism.
The article quoted a report in the Financial Times describing Hong Kong to be "the worst place to invest in Chinese IPOs" with lower returns and higher risks.
Hong Kong raised more funds from initial public offerings this year than any other financial centre except New York.
The authors also said that the city's "position as an international trade hub is at stake, with its logistics sector facing increasing competition from southern China".
London was an international trade centre and also had a very busy logistics sector, but when it further developed as an international financial centre, land was at a premium. So it gave up its logistics business and developed its wharves into residential and commercial areas.
With high land prices and rising wages, Hong Kong should, as it has done to its manufacturing sector, shift at least half its container ports up north, to release more land for residential and commercial purposes.
Finally, they referred to Hong Kong as a place with a high cost of doing business. Hong Kong is a free market and will adjust to market forces.
As long as there are profits to be made, the multinational companies will keep coming and Hong Kong will continue to shine.
S. W. Lau, Central