OCTOBER 2009, NUMBER SIXTEEN
WILL SHANGHAI REPLACE HONG KONG AS CHINA’S LEADING FINANCIAL CENTER?
It could well happen unless Hong Kong recognizes the threat and works harder to keep its place, according to the first two articles in this issue of the Hong Kong Journal. China’s State Council has set 2020 as the year by which Shanghai is supposed to become a global financial center, taking over—to a great degree—the present role of Hong Kong. Yet bureaucratic Hong Kong pays too little attention and doesn’t innovate in ways that could exploit its many advantages. However, Shanghai too has problems and may find success more difficult than expected, according to this issue’s third contributor.
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By Dong Tao
Not according to Dong Tao, senior Asia regional economist for Credit Suisse Bank. He finds Hong Kong too content with established ways, too bureaucratic to make the necessary changes and much too short of innovation and enterprise to exploit its many strengths. The result, he concludes, could well be Hong Kong’s relegation to the financial minor leagues as an exuberant Shanghai, backed by the central government, takes the lead role in China’s future development. Yet, he writes, it needn’t end that way, provided Hong Kong’s government and financial leaders can build on their many strengths as global business changes.
Surviving Through Difference: Can the Hong Kong Markets Succeed?
By Philip Bowring
The Shanghai challenge isn’t adequately recognized in Hong Kong, agrees Philip Bowring, a former editor of the Far Eastern Economic Review and now a columnist for the International Herald Tribune. But it also fails to recognize emerging competition from other Asian centers in Singapore, Taiwan and Korea as new types of financial markets develop. He believes that Hong Kong, however, retains great potential as an international center thanks to its financial history, advantages the others won’t match for many years. But to succeed its leaders must look abroad more rigorously and abandon their Sino-centric approach to the markets.
By Scott Tong
The glitzy Chinese city has hopes as shiny as its new buildings in Pudong, yet may find it much harder than expected to become a global financial center, writes Scott Tong, China bureau chief for Marketplace, the business news program on U.S. public radio. Shanghai has much of the needed hardware to challenge Hong Kong and others, but remains short of the software—among other things, enough trained people, dependable laws and freedom from government meddling. With the central government pushing hard, Shanghai steadily will gain importance as a financial center. But as long as foreign exchange controls exist, and the software remains deficient, Hong Kong has an opportunity to expand its own global role.
By Naubuhar Sharif
What has been bad news for China could become good news for Hong Kong if a government plan succeeds, writes Naubuhar Sharif of the Hong Kong University of Science and Technology. Some Chinese exports—notably of food and medicines—have gained a worldwide reputation as dangerous to human health and even life. So Hong Kong hopes to develop a center for product testing and certification, one that—for a price—could stamp a credible seal of approval on mainland products, one that global customers would trust. Professor Sharif concludes that it could be done, but the effort won’t be easy.
By Christine Loh
Hong Kong’s long-running, and sometimes half-hearted, campaign to curb air pollution may soon find new energy, writes Christine Loh, who is chief executive of Civic-Exchange, a nonprofit think tank, and also an official in several environmental organizations. Partly because the government finally has conceded that protecting public health is part of its environmental duty, she suggests “the tipping point has been reached at last.”
Hong Kong’s Response to Climate Change: Waiting for A Green Light from Beijing
By Paul G. Harris
China remains reluctant to lead the fight against global warming; despite being the world’s largest polluter by some measures, it demands exemption from controls it wants applied to richer nations on grounds that it is still a poor developing nation. But some parts of China are already rich by world standards and could do much more, writes Paul G. Harris, a professor of environmental studies at the Hong Kong Institute of Education. Specifically, he believes affluent Hong Kong should demonstrate how Chinese cities like Shanghai and Beijing could cut emissions and raise the mainland’s profile in the war against global warming. But he says this would require a degree of political will that so far has been lacking.
By Michael DeGolyer
The long-running political battle between reformers and conservatives is heading for a showdown that has no certain outcome, writes political science professor Michael DeGolyer of Hong Kong Baptist University. The basic issue concerns if, when and how Hong Kong will achieve universal suffrage, which China says remains the “ultimate” goal for local politics. Pro-democracy forces, frustrated by the slow pace of reform, seem ready to gamble everything on a strategy that could bring them victory—or a spectacular failure.
By Robert Keatley
After many months of bad news, there is reason to believe the Hong Kong economy is starting to recover, writes Robert Keatley, editor of the Hong Kong Journal. But a look at 2009’s third quarter shows that the political outlook remains murky, with few signs of compromise in view. But other recent events—such as the continued publication of books banned in China, the emergence of a serious contest for the coming elections and a courtroom victory for the legislature’s powers—show that Hong Kong in many ways remains distinctly different from other Chinese cities.