Simon Roughneen in Hong Kong
“We are a strategically-located gateway to China”, said Rita Lau, Hong Kong’s Secretary for Commerce and Economic Development, while addressing a gathering of Irish businesspeople and officials in the city last week.
Listed by the The Heritage Foundation and the Wall St Journal as the world’s freest economy, Hong Kong sells itself as the logical place for foreign corporations to start when it comes to looking at opportunities in China, which recently overtook Japan as the world’s second largest economy, and last year passed Germany to become the world’s biggest exporter.
As well as being a base for international finance and banking giants who want proximity to mainland China, Hong Kong has its own business interests to facilitate. Donald Tsang visited a trade show in central China last week, saying that he thinks Hong Kong know-how and investment could blend well with the low land and labour costs on the mainland, perhaps presaging a move away from exports and toward tapping the Chinese market. Directly-inland is the China’s Greater Pearl River Delta region, home to 55 million people, and, which if it were a country, would be the 12th largest trading entity in the world, according to a report by Invest Hong Kong.
The sales pitch, comes with a price, however. In the thirteen years since Hong Kong came under Beijing’s rule, there has been little progress toward the implementation of the full democracy as promised in the Basic Law under which the semi-autonomous territory functions.
The once-vociferous pro-democracy politicians are now sidelined, as an apparent consensus on how to manage the relationship with Beijing takes hold. Senior business leaders and pro-Beijing groupings are backing a deal worked out earlier this summer over political reforms. These retain the limited franchise used to vote for the region’s Chief Executive, currently Donald Tsang. An expanded panel of 1200 will choose the successor, out of a population of 7 million people. The regions Legislative Council, or Legco, is partly chosen by popular vote, but half the seats are controlled by special interest groups.
A challenge to Hong Kong’s role as gateway to China might come from the mainland itself. Shanghai is being built up as rival financial hub. Though while it has a long way to go to match the legal transparency and business structures in place in Hong Kong, it is located on the mainland and has a rapidly-growing stock exchange. It serves as a reminder to Hong Kong that the Chinese Government wants options. Perhaps the buzz around Shanghai is a reminder from Beijing that it does not want to be dependent on a partly self-governing region with close links to the West, even if Hong Kong’s pro-democracy factions are losing traction.Show