Some of the expressions of Hong Kong's autonomy are large and politically contentious - immigration and economic regulation come to mind. However, other expressions of autonomy can be seen in our day-to-day lives. One clear symbol can be found in any wallet, in the purple, green, red and brown bank notes of the Hong Kong dollar. Hong Kong is, perhaps, the only city, apart from Macao, governed under the same rules, that prints and administers its own currency.

This leads into a greater power - the ability to control the value of a currency. A country with its own currency can alter how much it is worth, both domestically and internationally. Many states let their currencies float freely on the international market; others, such as China, choose to manage the value of their currencies to suit economic conditions, at least to some degree.

Most countries have their own currency, and so has the power to coin and control their own money. However, this is not true of every country. Countries in the eurozone have collectively agreed to give up their currencies in favor of the euro, printed by the European Central Bank in Frankfurt. All the eurozone countries, from larger France and Germany to smaller the Netherlands and Slovakia, have given up the power to control their own currency.

Some countries have even less power to control their own currencies. At least in the eurozone countries, the currency is printed by an organization that each state is a member of. Several territories and countries in South America and the Caribbean, such as Ecuador, El Salvador and Panama, use the US dollar as their sole legal tender. In other words, the value of their currency is not controlled by their capitals, or by some international organization, but by the Federal Reserve in Washington DC.

A country with monetary autonomy can alter the value of their currency in response to economic circumstances. From quantitative easing in the United States to China's alteration of its exchange rates, countries with central banks can, in effect, change the value of their currency as a matter of economic policy. Hong Kong, at least in principle, has this same power. If there is an economic slowdown, the Hong Kong government can respond by altering the value of the Hong Kong dollar. The fact that it doesn't is due to economic considerations or ideological beliefs on the part of the Hong Kong Monetary Authority (HKMA), and not due to any actual restriction on Hong Kong's powers.

Countries in the eurozone do not have this power, which is arguably the cause of Europe's debt crises and low growth. Whereas any other country, when faced with an economic crisis, can lower the value of their currency to increase their exports and help resolve their debts, eurozone countries have no ability to alter the euro's value. These countries are forced to reduce their debts through austerity, which only serves to lower growth even further.

Some will undoubtedly argue that the Hong Kong dollar's peg to the US dollar constrains Hong Kong's ability to control its monetary policy, much in the same way the eurozone agreement constrains European countries' ability to control their monetary policy.

Ignoring the question of whether or not the peg is good for Hong Kong's economy, the fact remains that the peg is a deliberate choice by the Hong Kong government. It was not forced upon the city by outside authorities; instead, the HKMA, at the time, chose to peg the Hong Kong dollar as a response to a crisis. It has the power, if it so chooses, to remove the peg at any point.

It may not be advisable for the HKMA to remove the peg, and it may be that, de facto, the HKMA's policies are constrained by international currency markets, the risk of currency speculation, and the health of the economy. However, there is no formal rule that prevents the HKMA from doing what it wants. And, if the HKMA decides a peg to the yuan is more economically sustainable in the future, there will still be no loss of authority - it would be the HKMA that has made that decision.

Hong Kong people are aware of the power the city has; after all, people know enough to direct their criticism of Hong Kong's exchange rates to the HKMA. But, the power over its currency puts Hong Kong in a group that includes the US and China, and excludes France and Germany. This is a power normally afforded to sovereign states, and not even every sovereign state. This should serve to remind us of how much power the "One Country, Two Systems" structure actually provides to our city.

The author recently graduated with high honors from Harvard University and is doing an MPhil in International Relations as a Clarendon Scholar. His writings have appeared in some leading regional and local publications.

(HK Edition 11/26/2013 page9)