Economist Stephen Roach’s comment that “Hong Kong is over” has sparked renewed discussion about the city’s future. His views are part of a broader trend in recent years that consistently underestimates China’s potential. While these opinions are worth noting, they should not erode confidence in Hong Kong’s development prospects.
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In 2012, I wrote an op-ed for the Post mentioning the prediction that Hong Kong would surpass New York as a global financial centre. I’ve had the privilege of working at a local regulatory body in Hong Kong, which further solidified my confidence in Hong Kong’s future. As for Western scholars who have lowered their expectations of the Chinese economy, such as former US Treasury secretary Larry Summers, I believe China’s economic trajectory will prove them wrong.
Before the Covid-19 pandemic, mainstream global economic research institutions widely predicted that China would surpass the US in economic size by around 2030.
In fact, measured by purchasing power parity (PPP), China is already the world’s largest economy. This method is straightforward. For instance, if a hamburger is selling in Shanghai for 20 yuan (US$2.8) and in New York City for US$20, this would imply a PPP exchange rate of 1 yuan to 1 US dollar.
The pandemic has changed many aspects of global dynamics. China-US competition has intensified, and this has fuelled negative rhetoric about China among Americans. Advocating for China’s success or predicting its economic ascendancy has become politically incorrect in the US. More critically, the deterioration of US-China relations has caused many Chinese-American researchers to leave the US and return to China, including Hong Kong. Several of my friends are among them.
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Although British occupation played a significant role, Hong Kong’s status as a global financial centre has long been closely tied to the development of mainland China, rather than being a gift from the United States or the United Kingdom. Among the former British colonies in the Asia-Pacific, perhaps it is only Hong Kong and Singapore that have maintained economic prosperity.
Investors put in last-minute application at HSBC’s branch in Kwun Tong just as Industrial and Commercial Bank of China’s initial public offering is about to close in Hong Kong on October 19, 2006. The IPO was the world’s largest at the time. Photo: Martin Chan
