In receiving a delegation of Hong Kong's Business and Professionals Alliance a couple of days ago, Zhang Dejiang, Chairman of the Standing Committee of the National People's Congress (NPC), pointed out that Hong Kong should put its focus on economic development. "A boat sailing against the current will be swept downstream if it fails to forge ahead. Only when the economy keeps developing will people's livelihoods keep improving. Everything else is empty talk." These remarks are gems of wisdom which hit the nail on the head pinpointing problems facing present-day Hong Kong. They serve as a timely warning and reminder worthy to be pondered and reflected time and again – particularly under the current political and economic situation. Absolutely we should not take it lightly or still feel self-contented.
In the meeting, Zhang Dejiang also raised two very significant points. One was that Hong Kong's competitive edge began to weaken, which should be given high attention. The second was that not everything, big or small, should be politicised. These are indeed the most crucial and fundamental problems facing present-day Hong Kong's development. The first is mainly caused by economic factors including the impact of the global financial crisis as well as the continuous high-speed development in East Asia and neighbouring regions. The second is mainly caused by political factors. In recent years and especially in this year, some people stir up opposition for the sake of opposition, striving to arouse antagonism between the Central Government and SAR, between the SAR Government and the general public and between social groups inside Hong Kong so as to throw a monkey wrench into economic activities. These two problems, if not dealt with in time and effectively, would lead to no end of trouble and Hong Kong's future would be doomed.
At a forum in Hong Kong last week, Zhou Bo, Deputy Director of the State Council's Hong Kong and Macao Affair Office, had also given a similar reminder. He had pointed out that Hong Kong's competitive edge was weakening, so that Hong Kong should speed up and Hong Kong people should strive for self-renewal as opportunities would slip through one's fingers too easily. Deputy Director Zhou had also called on Hong Kong to continue playing a positive role in two respects. One was to pioneer renminbi (RMB) offshore businesses in Hong Kong, and the second to participate in the construction of the new-type special zones such as Qianhai, Hengqin and Nansha. The significance in these two respects is self-evident. RMB offshore centre becomes a new growth pivot of Hong Kong's financial industry and also a stepping stone for RMB's internationalisation. Qianhai, etc. are key experimental zones to pilot cooperation between Guangdong and Hong Kong, and are to lay the foundation and pave the way for the Mainland to fully open up its services to Hong Kong. These two fields naturally become the priority of priorities in the future win-win cooperation between the two places.
Central Government leaders' reminders clearly point out what must be focused on for Hong Kong's economic development and the general direction for Hong Kong's progress: the crux of the matter is to sharpen Hong Kong's competitive edge and to eliminate political interference. To achieve this, we must take a correct attitude and conduct a serious self-reflection. We should never feel self-important and self-contented but instead should be always prepared for the unexpected and exert ourselves. First of all, we must no longer think that Hong Kong still has very strong competitiveness, boastfully talking about Hong Kong's advantage and status being irreplaceable. In fact, Hong Kong's competitive edge is noticeably weakening due to three factors. 1) Macro-economically, production cost increasingly grows. In particular, property bubble pushes rental higher which in turn stimulates consumer price and wage to hike. 2) At micro-economic level, market management is far from perfect. Either in financial market or in the market of tangible goods, there are various loopholes which should be plugged. The problems of parallel imports and supply shortage of baby formula are a manifestation in this regard. 3) Optimisation of economic structure and industrial upgrading and transformation lag behind. This shows there is something wrong with our long-term resource-allocation mechanism, and the government's failure to effectively fill in the gap left by market failure.
All in all, if Hong Kong wants to sharpen its competitive edge, great efforts must be devoted and the SAR Government is required to play a stronger and more effective leading role. For this, there are a lot to be done, and we must race against time as time is running out. At the same time, a more urgent problem is to deal with the anti-development political movement. For example, making use of dock workers to create trouble will only speed up the contraction and out-bound transfer of our shipping industry, which is already seen as a sun-set industry in Hong Kong. If the "Occupy Central" movement really achieves its purpose of paralysing Central, it will inevitably have a big impact on Hong Kong's status as an international financial and commercial hub. Exaggerating friction caused by people exchange between the Mainland and Hong Kong to stir up emotions of people in the two places will inevitably affect the source of Mainland visitors to Hong Kong. It is now time for the SAR Government and citizens to say "NO" to such irrational behaviour that jeopardises Hong Kong's economy and people's livelihood.
Needless to say, the SAR Government should make a more profound and substantial response to the reminder made by Zhang and Zhou, instead of just saying a few perfunctory words without due care. Otherwise Hong Kong's prosperity and stability cannot be sustained.
29 April 2013