Hongkong for a bowl of congee
SCMP Dec 23, 2008
There have been many highlights in Donald Tsang Yam-kuen's long career
as a servant of his superiors, British and Chinese - but last week
was outstanding. At this time of growing unease in Hong Kong over the
recession, there he was again in Beijing to get a pat on the head from
President Hu Jintao .
Last Saturday's South China Morning Post (SEHK: 0583, announcements,
news) front-page picture of a grinning "Santa" Tsang shaking
hands with a serious-looking president says volumes about his self-image.
That he needs to seek constant reassurance from those who appointed
him, rather than those for whom he is responsible, is troubling.
As for the 14 measures by which, it is claimed, the mainland will
help Hong Kong through the downturn, they deserve critical analysis.
First, though, the principle that a rich Hong Kong should need or ask
for help from a mostly still poor motherland is contrary to the principles
of the Basic Law and Joint Declaration. If Hong Kong, with massive
fiscal and foreign exchange reserves, cannot stand on its own feet
in the same way as smaller Singapore, what justification does it have
for retaining the exceptional economic and social freedoms that it
regards as its birthright?
Missing from the 14 items is any reference to the one thing most important
to Hong Kong's commercial role: that the recession should not be an
excuse for protectionist actions to shield national industries or disrupt
the free flow of capital. But, instead of focusing on Hong Kong's global
role and commitment to open trade, Mr Tsang's ambition, seen through
this list, is to further the city's integration into a Greater Shenzhen
and to devalue its free-trade reputation by seeking preferential deals.
Two of the 14 items relate to currency trading use of the yuan. That's
fine, if they are part of a broader mainland policy on yuan usage,
or Hong Kong is being used as a testing ground. But, let the mainland
make its own currency policies according to its needs, and not pretend
that they should be devised for Hong Kong's special benefit.
Likewise, mainland policies on the listing of firms in Hong Kong have
been, and should continue to be, based on China's perceived needs.
It is dishonest to suggest that Beijing will, or should, put Hong Kong's
interests before those of mainland markets.
Then there is speeding up cross-border physical links - the Hong-Kong-Macau-Zhuhai
bridge, the rail links between airports, and to Guangzhou. These are
politically motivated mega projects of scant economic benefit to Hong
Kong which will generate few of the kind of jobs the city needs. They
are part of "making the Pearl River delta a world-class metropolis" -
a code phrase for submerging Hong Kong's identity with its poorer and
Some of the 14 "gifts" are pleas for special treatment for
Hong Kong which will be noticed by other members of the World Trade
Organisation, who will then use them as an excuse to put up barriers
to a Hong Kong as a mainland surrogate. One is the suggestion that
the mainland should raise export tax rebates (a highly contentious
issue in global trade) to help Hong Kong firms. Another is that Hong
Kong companies should be supported in bidding for the next phase of
the Shenzhen metro. Yet another is that more mainland services should
be opened to Hong Kong (but not other WTO member) firms.
Others among the 14 items are platitudes such as "secure stable
water, food and fuel supplies from the mainland" and "facilitate
co-ordination between the delta's container ports". But they add
to the impression that Hong Kong needs mainland support.
For sure, there might come a time when specific help is needed - for
example, currency swap arrangements, should the Hong Kong dollar come
under pressure. But, such deals already exist between countries - most
recently between China and South Korea. They are part of international
and intra-regional co-operation. Hong Kong should act in that context
if it is to retain its separate economic and social system. As it is,
the chief servant seems set - to use the biblical phrase - on "selling
its birthright for a mess of pottage", or bowl of congee.
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