We all know that Hong Kong is one of Asia’s shopping mecca. With its busy city streets and night markets to its bustling port and center of commerce, Hong Kong is undeniably one of the ultimate business hubs in Asia. Even before Singapore and South Korea and other Asian cities grew international prominence, there was already Hong Kong. This former British colony became China’s Special Administrative Region in 1997 after the transfer of sovereignty from the United Kingdom. Hong Kong now maintains a separate economic and political system from China under the “One Country, Two Systems,” principle.
The legendary Hong Kong skyline is quite a sight to behold. You’ll never run out of things to do and food to eat. No wonder it is a favorite destination for tourists wanting to satiate their wanderlust. Over the years, other Asian destinations also became popular to Westerners but Hong Kong still remained on top of the list both for wandering tourists and the busy businessmen who frequent its crowded streets. But with economic and political tension in the background, what will be the future like for this renowned destination?
Hong Kong’s next chief executive — to be selected on Sunday — will inherit an economy vulnerable to China’s growing pains on one side and volatile global capital flows on the other.
Having weathered war, revolution, handover, crises, epidemics and much else over its turbulent history, the gateway to China has repeatedly overcome challenges. It now boasts a wealthy population and an economy that’s ranked as the world’s freest place to do business.
But its traditional four pillars are being buffeted once more.
Financial services face competition as China develops other hubs. Its position as the world’s seventh-largest exporter of merchandise trade is at risk as companies use alternative ports along China’s coast. Tourism and retail sales have been dented by a corruption crackdown on the mainland. And rising borrowing costs tied to Federal Reserve policy cast a shadow over record-high property prices that continue to defy government attempts to cool them.
Such economic strains are blamed in part for fueling political deadlock that’s hindering economic development. Tensions have risen — most notably when pro-democracy protesters occupied key parts of the city in 2014 — amid complaints Beijing isn’t observing its promise for a “high degree of autonomy” when it took over the former British colony in 1997.
Even renowned businessmen can tell that business is slowing down in Hong Kong while other neighboring Asian countries continue to enjoy a progressive growth. Just what is happening in the financial Mecca of Asia is a reason for concern for many, especially among those who do business in Hong Kong. But are things really that bad or is it just a minor slump that is not uncommon at all?
Hong Kong’s richest man, 88, was talking about how the city’s economy was expanding at a slower pace than the rapid growth he witnessed in the past. Now, people focus on making more money and building taller buildings, he said.
The tycoon, who heads CK Hutchison Holdings Ltd.and Cheung Kong Property Holdings Ltd., said he was just getting emotional and didn’t cry. Li has also been nursing a cold, he said.
Li, speaking during his annual earnings press conference, earlier pointed out that tourism-related industries in Hong Kong have deteriorated in the past year. He also said that within his retail operations worldwide, Hong Kong’s performance was among the worst.
Let us not forget the fact, though, that Hong Kong has always been ranked as the freest economy in the world through the Index of Economic Freedom for 20 long years. It is proof that Hong Kong still got it all together despite the changing of the times but is it enough?
The critics underestimated the Iron Lady. She got a deal that preserved much of what was good about old Hong Kong, and which has served the entire PRD well. Though China gained sovereignty over the territory, it promised to respect its governance for 50 years, a system that was dubbed “one country, two systems”. This has held up far better than had been predicted.
But as the 20th anniversary of the handover on July 1st approaches, Hong Kong is wondering about its future. Many locals are unhappy about being ruled by the mainland, with some activists even calling for independence. Economic growth is sluggish. Twenty years ago Hong Kong’s economy accounted for 16% of the Chinese total, dwarfing the rest of the delta. Now it makes up barely 3% of China’s GDP and less than half of the PRD’s economic output.
We are all witness to the rapid progress of China. It is making waves in all aspects of nation-building, from building infrastructures, strengthening defense, claiming territories, rising economy, etc., China shows no stopping. But as China’s economy seems to keep on rising, that of Hong Kong remained on a plateau. Is it any indication that this once infamous financial Mecca of Asia has seen better days? It really is hard to tell because business is still bustling and the economies of other nations have also suffered over the past few years. So, the future of Hong Kong remains uncertain just like with everybody else but we know this Chinese territory will not give up without giving a strong fight.