Opinion | China’s help will keep Hong Kong a beacon of finance and prosperity

Hong Kong’s Covid-19 problem will end once China opens up and the city will regain its reputation as a vibrant international centre

The new chief executive will have the central government’s full support and be able to focus their attention on pressing domestic matters

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Light rays reflect off the International Finance Centre in Central on October 6, 2021. Hong Kong’s position as the Asia-Pacific’s leading financial centre will continue thanks to the support of the central government. Photo: Nora Tam

Published: 3:30am, 17 Apr 2022

Questions about Hong Kong’s viability as the leading financial centre of the Asia-Pacific are back in fashion. Observers recognise that passage of the national security law in 2020 restored peace to the city. Now, alarms are being raised about the ineffective government response to the Covid-19 pandemic.

Dissatisfaction has grown over the restrictions and policies that hinder or prevent international business travellers from coming to Hong Kong and locally based people operating in the region. There is no dispute that this damages the city’s reputation as a sophisticated global centre.

Hong Kong’s pandemic approach is arguably more rigid and longer-lasting than other leading global centres. Understandably, international firms are upset with the government. As a result, fears of a “brain drain” and reports of locally based international firms leaving Hong Kong or are planning to exit fill the business press.

The current challenges might seem overwhelming, but they pale next to some prior events. One example is international firms leaving Hong Kong during the Japanese occupation of the city from December 1941 to August 1945. Hong Kong quickly recovered.

The city’s Covid-19 problem will end once China opens up. The city will regain its reputation as a vibrant international centre. The reason is that its vast internal business networks include many subnetworks which are settings for exchanges of knowledge and expertise and constitute bases for collaboration.

These networks have functioned for more than 150 years and are superior to the networks in every other Asian city, and they reach globally. Critics fail to grasp the scale, complexity and depth of these networks. It is necessary for firms to directly participate in them to be competitive in Asia.

China’s leaders have repeatedly criticised the government for failing to effectively implement Article 145, which deals with the charge to develop policies and implement them to improve economic conditions and address the social welfare needs of Hong Kong citizens. As Leo Goodstadt documented in his book A City Mismanaged, the local government has failed abysmally in the areas of health care, education and housing for Hongkongers. That failure undermines a pivotal aim of the Communist Party – to make sure citizens’ welfare is secured.

There is much to be optimistic about. The new chief executive will have the full backing of China’s leaders to address these social conditions. They created an organisational structure which provides direct access to the senior leadership in Beijing and frees the chief executive from concerns about dealing international concerns.

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