Reinventing Hong Kong
|Last week I attended a briefing by Stephen Phillips, the Director-General of Investment Promotion at Invest Hong Kong which, following the publishing of a new Report on Hong Kong’s Business Environment, and a clear and confident Policy Address by HK Chief Executive, Carrie Lam, set out a new vision for Hong Kong following the extreme disruption of the past two years. You can watch the briefing in full here, and download the slides here.|
For at least the past 50 years, Hong Kong has prospered from its unique and undisputed status as the “Gateway to China” and also as the landing pad for western companies in Asia, and its natural advantages (location, rule of law, talented workforce, low tax, robust financial system, regulatory environment etc.) were well known and widely publicised. After its ‘annus horribilis’ in 2019 and the fallout from the introduction of the National Security Law in 2020, Hong Kong is having to work hard to maintain its relevance and prominence in the region and it’s great to see how this reinvention is starting to take shape.
I particularly liked Stephen’s reference to a new “North-South Axis” for cross-border trade and collaboration in the Asian region which is an important shift from the “East-West” thinking of the past. Let’s consider the key markets involved:
Hong Kong – a population of over 7 million people and a fast growing market in its own right (despite all the problems of the past two years, and the talk of a mass exodus, the number of companies with parent companies outside HK has risen by 10% in the past 4 years to reach a record high of 3,755)
China’s ‘Greater Bay Area’ – an area the size of the island of Tasmania immediately north of Hong Kong, which represents 12% of China’s total GDP, 11 major cities, an economy the size of Canada and home to 86 million people
Mainland China – the world’s second largest and fastest growing economy with a population of 1.4 billion and 102 cities with a population of over one million.
ASEAN – immediately south of Hong Kong, a group of 10 countries, 31 urban areas with populations of over one million, a total population of 655 million and a new free trade collaboration, The Regional Comprehensive Economic Partnership (‘RCEP’), signed as recently as November 2020
China’s Belt and Road Initiative – a global infrastructure development strategy launched by China which has already engaged 138 countries and 30 international organisations in a number of large scale projects, including ports, railways, highways, power stations, aviation and telecommunications, stretching through Russia, Eastern Europe, Central Asia, Africa and Europe.
The message is clear. Don’t write off Hong Kong yet. It’s best days may well be ahead of it. Certainly a good reason to go back for a visit soon!