A mix of Monaco and Dubai?

SCMP July 12

Great cities must change if they want to keep up with a changing world around them. However remarkable their natural or geographical endowments, they do not always do so. Rio de Janeiro has never made up for the move of the capital to Brasilia, and the loss of much commerce to Sao Paulo. Who talks now of Trieste, once the seaport of the great Austro-Hungarian empire, let alone of Tangier or Aden?

Back in 1997, when it was normal to muse over Hong Kong's future, I suggested it could well become the Monaco of the region. That seemed a little far-fetched at the time. But as China has changed, so have Hong Kong's relative attractions. Now, a mix of Monaco and Dubai seems a reasonable aspiration.

Hong Kong has two singular attributes. One, known to all except Chief Executive Tung Chee-hwa, is its separate political status which, in turn, underpins its position as an international financial centre.

The second is less obvious to those who live here, but always strikes visitors: its natural attractions - harbour, mountains, beaches, sea. Shekou and Yantian may rival our port, and Guangzhou might compete as an aviation hub. Beijing will always be its arrogant self as the national capital, and Shanghai is the natural commercial capital of China. But think how ugly most of these cities are, even without the air pollution, compared with Hong Kong.

Hong Kong thus has one God-given comparative advantage, not just compared with other Chinese cities, but with the likes of Tokyo, Seoul or Bangkok. Like Monaco, it was born beautiful.

Yet instead of capitalising on this, the city is slowly but surely throwing it away by failing to recognise that times have changed. Above all, it must offer quality of life and quality of services.

But it is stuck in a 1970s mindset. Like America and its eating habits, the government thinks about quantity not quality. Infrastructure projects are driven by the giantist mentality as though success was measured in cubic metres of concrete laid, trees cut down, reclamation achieved. This is partly a matter of bureaucratic inertia, and partly of an administration in hock to the interests of developers and contractors.

As Jake van der Kamp recently noted in his column, capital spending and related policies continue to be driven by long out-of-date population, sea trade and other projections which ignore both reality and the regularly updated projections put out by the Census and Statistics Department. The government seems deliberately blind to what should be the foundation of all planning and spending decisions: demography. Spending proceeds, despite the size of the budget deficit and without any real concern for rates of return.

Hong Kong is more than just years behind places such as Sydney or Boston, and dozens of European cities, in investing in quality over quantity and in environment over the rights of car ownership. Investing in quality of life would bring benefits for the city's population, which suffers health problems from unnecessary levels of air and water pollution.

It would keep high-value-added business in Hong Kong because high-value-added people value clean air, clean beaches and hills to climb. It should not be just about putting a stop to coal-fired power stations and uncontrolled smoke emissions by trucks, ferries and tramp steamers. It should be about investing in the things that preserve and enhance Hong Kong's natural comparative advantage.

Mr Tung's father was an honorary consul to Monaco. Perhaps the son should visit the principality - and Boston, and Sydney. Next time he is in Singapore, he could learn something about city management rather than pick up hints about a one-party state and suppressing dissent.






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