A traveller’s notes

Of course, in line with standard practice, I need to declare that I was a guest of the Hong Kong government as part of their Sponsored Visitors’ Programme. But, the range of views and opinions canvassed during my numerous discussions was wide and knowledgeable. However, if I hear the words ‘financial tsunami’ again I will tear out even more of my hair. 

The other phrase I encountered regularly was ‘one country, two systems’, but more about that later.

Planned infrastructure projects interested me the most, along with discussions on the state of the global economy and, thereafter, the outlook for Hong Kong. Arguably, the Hong Kong economy is amongst the most vulnerable given the nature of the latest global recession. 

Hong Kong’s economy is concentrated in the financial services industry and in the trade in manufactured products exported from mainland China to (primarily) the United States.

So, here was an economy potentially facing turmoil, upheaval and collateral damage in the face of the greatest financial crisis for generations. In times of financial uncertainty I had expected to hear, at the least, of some hesitation in expanding capacity. 

And with the future of China’s exports to the US in some doubt, I had expected a pause for breath regarding the future of physical links to the mainland.

But, infrastructure projects were proceeding without, it seemed, not much of a second thought. The paradox didn’t strike me till late – but there was a lot to take in during the week.

Further, the projects being pursued are not small in scale and most appear to be focussed on improving links with mainland China.  Development of more border crossings, a series of bridges and tunnels to Macau and Zhuhai, a high-speed rail link to Shenzen and on to Guangzhou, and a rail link between the airport and Shenzen airport were all brought to my attention.  

In addition, a re-development of the old airport site into a cruise ferry terminal, along with ongoing transport connections on Hong Kong Island and across to Kowloon, were also mentioned.

As to the current state of the economy, Hong Kong has fared reasonably well from the ubiquitous ‘financial tsunami’. The exposure of Hong Kong institutions to the toxic assets of US and European financial houses appears to have been fairly limited. But there was much discussion with both public and private sector players, about the imbalances in the global economy and the potential consequences for Hong Kong. 

The surplus on trade with the US built up by China (mirrored by a US deficit) could potentially destabilise future world growth. As the Chinese consumer becomes wealthier, and so labour costs converge, this imbalance will theoretically shrink. But how long would such a process take? Some aren’t at all optimistic. 

While arguably an exaggeration, one comment stuck in my mind: “80 years from now the Chinese consumer may save the world, but Hong Kong was built by the American consumer; - and we need him now”.

Others weren’t quite as pessimistic, noting the continuing (and increasing) attraction of Hong Kong to foreign companies wishing to explore expansion into mainland China. In this context the ‘one country, two systems’ phrase made a common appearance. 

A lot was placed on the attractiveness of a place where the ‘rule of law’ was respected. Looking further ahead, questions as to the emergence of Shanghai as a financial centre of the future were similarly met with affirmations of the ‘rule of law’ argument.