{"id":138915,"date":"2019-07-29T12:00:02","date_gmt":"2019-07-29T11:00:02","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=138915"},"modified":"2019-07-29T09:11:54","modified_gmt":"2019-07-29T08:11:54","slug":"hong-kong-in-decline","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2019\/07\/hong-kong-in-decline\/","title":{"rendered":"Hong Kong in Decline"},"content":{"rendered":"
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Losing ground: China\u2019s spectacular rise has affected Hong Kong\u2019s thriving financial services industry, along with development of port services.
Reuters<\/p><\/div>\n

28 Jul 2019 – <\/em>Two generations ago cheap goods from Hong Kong were labelled simply \u201cMade in Hong Kong,\u201d but their poor quality soon made that embarrassing.<\/p>\n

For marketing reasons they were then labelled \u201cMade in the British Empire\u201d or \u201cEmpire Made.\u201d Britain, home of the First Industrial Revolution, was better regarded than any Far Eastern outpost.<\/p>\n

However, manufacturing could never suffice for Hong Kong\u2019s economy because of limited land and rising property prices.<\/p>\n

Enter the space-efficient financial services industry, along with development of port services. Then a generation ago Hong Kong began to face its biggest challenge: China\u2019s spectacular rise.<\/p>\n

But if Hong Kong would be part of China again, wouldn\u2019t it also enjoy the mainland\u2019s rising fortunes?<\/p>\n

Hong Kongers always had a problem with the first part ever since Britain\u2019s takeover in 1841.<\/p>\n

From the late-1970s the West was all for China\u2019s \u201copening up\u201d policies. Hong Kongers looked across the water to see Shenzhen\u2019s phenomenal rise from old market town to bustling modern metropolis.<\/p>\n

Shenzhen had twice Hong Kong\u2019s population and a much faster rate of development. As just one cog in China\u2019s production behemoth, Shenzhen soon buried Hong Kong\u2019s prospect as a manufacturing centre.<\/p>\n

In global references Hong Kong-Shenzhen-Guangzhou is the world\u2019s biggest productive mega region, demographically twice the size of the next biggest in Nagoya-Osaka-Kyoto-Kobe.<\/p>\n

But Hong Kongers still regarded themselves as a breed apart from the mainland \u2013 a \u201cMade in the British Empire\u201d attitude dies hard.<\/p>\n

Surely Hong Kong still had superlative status as a leading port and financial services centre?<\/p>\n

Not quite, especially when Shanghai would soon outclass it on both counts.<\/p>\n

Hong Kong slipped to fifth place among the world\u2019s busiest container ports. Among the world\u2019s Top 10, six are now on China\u2019s mainland.<\/p>\n

The Shanghai Municipality\u2019s population is 3.5 times Hong Kong\u2019s, with an area 5.7 times as large, meaning a more relaxed population density of just 62% of Hong Kong\u2019s.<\/p>\n

Shanghai\u2019s 2018 nominal GDP was US$494bil (RM2.04 trillion), which was 136.1% of Hong Kong\u2019s. Even Shenzhen is catching up with Hong Kong, falling short by just 3.3%.<\/p>\n

Business is Hong Kong\u2019s business, but the mainland is doing better in both performance and prospects.<\/p>\n

The Hong Kong stock market is not necessarily stable. Since the 1960s it has experienced a dozen market crashes.<\/p>\n

Shanghai\u2019s Stock Exchange market capitalisation of US$5.01 trillion is larger than Hong Kong\u2019s by 26.5%. Hong Kong\u2019s exceeded Shenzhen\u2019s by only 12.8%.<\/p>\n

Hong Kong as business enclave has been eclipsed and outdone by the mainland. At the same time its future increasingly depends on the mainland.<\/p>\n

Since 1997, Hong Kong dropped from representing 20% to just 3% of China\u2019s GDP.<\/p>\n

For China today Hong Kong is just another Chinese city, meaning it is dispensable. Shenzhen and the rest of the mainland do not need a nettlesome Hong Kong for China\u2019s continued rise.<\/p>\n

Hong Kong protesters have committed at least a dozen strategic errors.<\/strong><\/p>\n