If our business elites continue to pin their hopes on Beijing's subsidizing policies, Hong Kong stands no chance in this competition in the long run.(Originally published on EJ Insight on Feb 21, 2011
Hong Kong: A city without character
By L K Shiu
If someone were to write a book on the “Rise and Fall of Hong Kong” in the near future, the call for national planning would no doubt constitute an important chapter.
When the Basic Law was promulgated in 1990, China was all too eager to reassure the Hong Kong population that “socialist system and policies shall not be practiced in the Hong Kong Special Administrative Region” (Article 5). In fact, the whole mini-constitution is to uphold a high degree of autonomy of the SAR, economic autonomy being the key. State planning of the economy is a core and distinct feature of socialist ideology and has been long feared. This city prides itself on its laissez-faire tradition and every year when the U.S. Heritage Foundation, or its likes, publishes its annual index on economic freedom, the government feels compelled to take close heed.
But now we see concerns or even anxiety in Hong Kong, not over the loss of autonomy, but rather being left out of the state economic planning exercise. There could not have been more abrupt changes in men’s worldview in 20 years. More interesting is the fact that such anxiety is perhaps all the more felt by elites in the business sector – the purported arch-enemy of socialism.
For sure, signs of change were noticeable long ago. In 2006, the Chief Executive, setting out the future economic direction in his Policy Address, happily made reference to the National 11th Five-Year Plan which states that “support will be given to Hong Kong’s development on such fronts as financial services, logistics, tourism and information services, and the maintenance of Hong Kong’s status as an international center of financial services, trade and shipping.” By and large, Donald Tsang's major initiatives since then had been in line with the tone laid down in the Eleventh Five-Year Plan.
Tsang’s actions echoed the local elites' anxiety about being marginalized in the competition against Shanghai. This is understandable but the call for Hong Kong to be gradually subsumed under China’s national five-year plan is misplaced for several reasons. I shall mention only two here.
First, state planning in any country is a matter of power play. Bureaus and departments, provinces and cities, and cliques or parties behind them, vie for resources and favors in state planning. Has the Hong Kong SAR any advantage in this? No. The city has no connection to the intricate power web of the mainland and its elites have little intimate operating knowledge of its politics. Whereas the former Chief Executive is one of the vice-chairpersons in the Chinese People’s Political Consultative Conference, the role is understood to be ceremonial. Hong Kong does not (and will not) have its own political spokesman in the Politburo, as Shanghai or Beijing does. Its political influence is not even comparable to a mid-sized city of China.
Second, any state planning involves the redistribution of resources and assigning rights and responsibilities for national development, in particular in a highly centralized country like China. In the past, many provinces or cities had foregone part of their economic benefits to meet other policy goals such as maintaining social stability or a clean environment. In contrast, the calls by Hong Kong elites over the years have given rise to an impression that they are merely seeking more and more concessions from the Central People’s Government. There is no free lunch and the brawl between Hong Kong tour guides and mainland tourists, widely reported and sensationalized in state media, is an alarm to this city that its incessant demands are inviting contempt. Its long-maintained role-model image is shattering. The jealousy of other mainland cities will one day come to this question: why do we have to give preferential treatment to this rich cousin who’s not paying any national taxes or shouldering any national responsibilities?
If our business elites continue to pin their hopes on Beijing's subsidizing policies, Hong Kong stands no chance in this competition in the long run. If we do not believe that a subsidized industry can thrive on its own, little shall convince us that a subsidized city can stand on its own feet. I am less concerned, therefore, that Hong Kong will lose out because of the competition from Shanghai, but rather that it chooses to compete on a disadvantaged battleground. We risk not only losing our role-model status but the very character that defines this unique city of China.