Here Comes the Sun
Last week we wrote about the gloom in Hong Kong and explained some of the factors behind it. But there is another side to the story. Hong Kong has seen gloom many times in its history. It has never failed to bounce back. Today, we look at some of those occasions.
How this echoes our blog post of 16th December 2019, written at the height of the serious riots in Hong Kong. We described the crises in 1980, 1983, 1989, 1999, 2003. At the peak of each crisis came cries of ‘Hong Kong is finished’, ‘people are leaving in droves’, ‘just another Chinese city’ (whatever that may mean). Yet, within as little as six months, the city had bounced back and was more vibrant and successful than ever.
The same will happen again.
Hong Kong’s GDP growth
Often seen as a key indicator of Hong Kong’s mood and prosperity, emigration is not new. In a well-balanced paper written in 1990, Ronald Skeldon examined the then high rate of emigration. Was it caused purely by the potential transfer of sovereignty of Hong Kong to China in 1997? No, he argues:
In fact, far from being negative, the movement of people in and out of Hong Kong is essential. Permanent citizens who ‘left’ often return with new skills and insights. Those who ‘leave’ may not actually have left at all but simply choose second home elsewhere. In either case, the city receives new talent each year from many sources. It changes, yes. But, as every country finds, movement of people brings new vitality to the economy and to its social life.
The World Bank chart shows how volatile Hong Kong’s economy is. More than most cities, it reacts rapidly to changes in the world and especially in China. Because it is small, diverse, entrepreneurial, and hard-working, Hong Kong takes advantage of changes in order to adapt and grow. This happens as rapidly as it suffers from downturns.
The Greater Bay Area is just one such huge opportunity for Hong Kong.
In 2019, the area was home to some 68 million people and had a combined gross domestic product of about $1.5 trillion, roughly equivalent to that of Australia or South Korea. Hong Kong can connect the Greater Bay Area with the rest of the world, much like San Francisco’s role in the San Francisco/Silicon Valley Bay Area.
The opportunities for Hong Kong are immense.
For the past 27 years, I have delivered annually summaries of the business prospects in Hong Kong to employers’ groups and other organisations. In even the most optimistic years, I have necessarily highlighted threats to the economy. As the World Bank chart shows, sometimes those threats have been substantial and have come to pass.
Yet, within a very short time, Hong Kong rebounds into growth. Its prosperity and happiness return. Nowhere else in the world has so great a capacity for adaptability and renewal.
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