If cities were people, who would they be? London – an ageing, pinstriped banker, feet on desk, pontificating on better days? New York – a squat 30-something, leisure-clad, disdainfully elbowing the less ebullient aside?
And what, then, of Hong Kong? With the Year of the Pig already here, just what would be the current incarnation of the city? Somewhat worryingly, it’s present persona is reminiscent of a nervy, imminent retiree-to-be, heavy on experience, keen to prove its continuing relevance and desperate to steal a last few good years before succumbing to the inevitable – side-lined and reduced to mere spectatorship.
It’s tough being Hong Kong in the 21st century, but could 2019 be the year it finds the niche it’s been desperately scouting around for? It has not been an easy process. When you’re solely defined by past glories, you’re always in trouble.
Until 1997, its uniqueness was undeniable – the East meets West nexus, a little bit of Blighty amid the Oriental expanse. Post 1997, it weathered the trauma of being re-embraced by the motherland, rejoicing in its role as the gateway to the world’s fastest-growing economy. Back then, it was also something of a cash cow.
In the late ’90s, some 50% of all Chinese overseas trade was channelled through Hong Kong, while the city accounted for a fairly massive 18.4% chunk of the country’s GDP. The comparative figures from last year, however, show that the city’s share of China’s overall foreign trade was about 13% and its share of national GDP had fallen to 3%.
With Hong Kong now less conspicuously the mainland’s piggy bank, what are the factors that will shape its fortunes in the Year of the Pig and beyond? Well, Hong Kong’s destiny is very much in the hands of its mighty neighbour / landlord. Given the city’s proximity – culturally and geographically – to the mainland and its dependency on its fellow countrymen financially, logistically and legally, it’s China’s national initiatives that will indeed shape the future form and function of Hong Kong.
Of the many mainland programmes that are currently underway, three have particular implications for Hong Kong – the Belt and Road Initiative (BRI), the planned Guangdong-Hong Kong-Macau Greater Bay Area and the Hong Kong-Zhuhai-Macau Bridge. The other issue that will have particular economic reverberations is, of course, the ongoing US-China trade dispute.
The BRI – China’s ambitious infrastructure redevelopment and trade facilitation programme – has the clearest international repercussions. But Hong Kong’s role in the larger scheme of things here is nebulous at best. Despite championing the initiative at every turn, Hong Kong is still scrambling to prove its worth to the programme. While the city is doing its level best to position itself as the BRI’s gatekeeper, it is coming across a familiar obstacle.
Essentially a bid to restore itself to its role as the pre-eminent commercial conduit to the mainland, the problem is that mainland businesses and their overseas counterparts are increasingly happy to deal directly with one another, dispensing with the need to pay a third party. The 2019 challenge is for the city to prove its value by making President Xi’s vision a reality. A few loudly trumpeted success stories could make a world of difference.
The Greater Bay area is a newer initiative. In essence, it’s an extension of the Pilot Free-Trade Zone scheme, which granted certain mainland cities / regions (notably Shanghai) the privileges that had previously only extended to Hong Kong – including free flow of information, certain import / export entitlements and RMB transaction settlement rights.
At first glance, it could seem that Hong Kong’s incorporation into the Greater Bay landscape could further diminish its uniqueness – a summation that is hard to argue with. If, however, the city can suitably leverage its international reputation, connections and know-how, the Greater Bay could be just the platform it needs to reassert itself, with the manufacturing muscle that comes as part of the deal likely to prove indispensable.
Less significant for the city, overall, is the arrival of the world’s longest sea bridge. While it ties the SAR to the mainland in as visible a way as possible, its commercial possibilities remain bogged down in uncertainty and protracted wrangling between the authorities at either end of the structure.
Finally – and something of a wild card – is the US-China trade war. With two of its key trading partners likely to be at extended loggerheads over the next 12 months, where does this leave Hong Kong? Although Hong Kong-origin goods are technically exempt from the mooted 25% tariffs, traders in the city are already jittery, sure their costs are going to increase, while unsure just how long this particular spat will continue.
While the tariffs are likely to put a dampener on Hong Kong’s 2019 exports, the majority of businesses, according to local government statistics, are expecting a slowdown in growth. Ultimately, while galling to company owners, the tariff war will be but a sideshow in the wider scheme of things with few, if any, implications for Hong Kong’s long-term prosperity.
So then, for our putative anthropomorphisation of the city, the question really should be not “Who is the city right now?”, but rather “Who does it need to be?” If Hong Kong can emerge from the Year of the Pig, leaner, defter, a confident Mr Fix-It for the mainland on the world stage, it will have been a bountiful 12 months indeed.
Text: William Elliot; Pictures: Imagine China