Separatism will doom Hong Kong REGINA IP

A slew of bad news hit Hong Kong recently. On the financial side, downgrades of the Hong Kong Special Administrative Region's credit rating and ranking as an international financial center followed in quick succession. The real economy is faring no better because both visitor arrivals and retail sales registered sharp declines in the first two months of this year. Businesses fear that the decline is not cyclical but part of a secular downturn arising from Hong Kong's loss of competitiveness across many sectors.

Those who care about Hong Kong and have been watching closely will not be surprised. Last year, the Urban Competitiveness Report published by the Chinese Academy of Social Sciences found, for the first time, that Hong Kong's overall competitiveness had been overtaken by Shenzhen. Even more significantly, back in mid-2013, Strategic Forecast, a US-based global intelligence company, had warned of the SAR's "declining economic fortunes" arising from its "growing antagonism toward surging mainland cultural and economic influence into Hong Kong".

As an age-old Chinese adage goes, an outside view sometimes provides greater insight into one's predicament. The Strategic Forecast said: "Hong Kong is experiencing an identity crisis." The SAR's growing discomfort over the mainland's growing influence had prompted "a tide of 'nativism' that could make Hong Kong less appealing to outside businesses just as other cities are poised to seize investment opportunities". It also warned: "If it (Hong Kong) is to keep its competitive edge, it is going to have to abandon the complacency born out of its advantaged position and start seeking new opportunities for growth."

Indeed, no better word describes Hong Kong's economic philosophy than "complacency". Resting on its laurels as the world's "freest economy", Hong Kong has long neglected the need to seize the opportunities offered by the mainland's economic surge to develop a comprehensive growth strategy. As though spellbound by the "50 Years No Change" mantra, Hong Kong's economic leaders have failed to alert residents to the transformative changes which have been occurring around them, or urge them to adapt to the new competitive paradigm.

Republican US presidential candidate Donald Trump's popularity appears to signal a global surge of nativism which, at the same time, is being countered by a global chorus of condemnation. There is nothing more natural than loving the country or city where one has grown up. Yet if nativism is built into an end in itself, and puts whatever is local above ideas and connections which create value, then it becomes a narrow, constricting force hindering a person's or city's development.

Unfortunately, as forewarned by outside observers, Hong Kong's nativism has degenerated, in some quarters, into a battle cry for change by illegal and violent means.

Recently, political groupings purporting to represent young people have emerged urging the establishment of Hong Kong as an independent state. These young people have no idea that they could be putting Hong Kong on a potentially dangerous collision course with the motherland and bringing an unmitigated disaster to the SAR.

The reality is Hong Kong has been an inalienable part of China from ancient times. It is devoid of natural resources - its greatest assets have been its geographical location and the prodigious industry and ingenuity of its people. Its economic fortunes are increasingly interwoven with those of the mainland - a valid point made by the credit agencies that downgraded Hong Kong's risk ratings.

Hong Kong has in the past succeeded on the back of its openness and strategic location at the southern gateway to the mainland. Separatism, or rather the anti-mainland doctrine in disguise, will reverse a well-trodden path and doom Hong Kong.

The author is a non-official member of the Executive Council and former secretary for security of the HKSAR government.

(China Daily 04/23/2016 page5)