The HKSAR establishment day -The glorious day or The judgment day? ( published in A-Desiflava Magazine July 2013)

Imagined a foreign friend asks you what Hong Kong’s core business is, what is your answer? Hong Kong had been a tiny fishing village for several centuries prior to the World War II. Its role was insignificant in feudalist dynasties. Opium war staged by the Britain in 1842 caused the cessation of Hong Kong Island.  Kowloon Peninsula and New Territories were further grabbed by the Britain in the clauses of Beijing Treaty in 1862. Initial ruling by the Britain brought little material changes to this village until the World War II.  Wars led to a large number of refugees fled to Hong Kong to look for shelters.  Due to the Embargo imposed on Mainland China in Korean War, Hong Kong got the benefit of ruling under the British government still had transformed into an entrepot and textile centre in contrast.  In the 80s and 90s, the financial market and property market subsequently flourished, the lions in HSBC Headquarters have invisibly become Hong Kong’s symbol from thereafter. 

For people like me, who is Hong Kong born and bred, is able use this thorough analysis to answer you.  What the answer would be if it come out from a guy living in Hong Kong less than 5 years whereas his observation is shorter than mine, he may wrongly develop an illusion that smuggling and protesting is substantively Hong Kong’s essential production line. In reality, it is not a joke; Mainlander queuing at retails and cross-border-stations are obvious.  Internally, Hong Kong protestors’ relation with the Police is on the aggravated trend.  The scale and occurrence grows irrevocably.  This month’s attention is on the 16th anniversary of the establishment of HK SAR. Besides the glory and proud we satisfied with the departure from colonial status, is it simple to use naïve stance to foresee tomorrow must be better in economic context? We herein discuss.

Small Medium Enterprise’s obstacles expanding

There is an English idiom - “As a man sows, so shall he reap”.  Is it always true? I met with an experienced businessman in a casual occasion and he adapted this sentence to narrate Hong Kong’s business situation, particularly comparing with the ecology between the British time and the SAR time.  His description is funny-“Within the same hectare of farmland, 1 ox yielded 10 baskets of rice when we saluted to the Queen. Now, 10 oxen fail to yield 1 basket of rice even you blame it in Putonghua. Without positive goal to pursue, we reverse backlash against the government and cannot but become the protestor”. Put asides his emotional expression, you see the contrast in the ease of money earning between the two eras.  Also, many entrepreneurs told me that “I am the boss in the morning but I sleep on the floor in the evening (live in small cage unit)”.  Do you sense how severe the SME is and how harsh to materialize the dream to become a businessman today?  It is because nearly all profit-assured businesses in Hong Kong are highly controlled under the large conglomerates. They had gained fame and fortune in the Embargo and their dominations and influences are deep-rooted in this soil for several generations already.  They concentrated on property developing and seize this indispensible industry in Hong Kong as the cornerstone to expand. They have stable rental income as the pillars and keep searching opportunity to extend into peripheral areas, such as transportation, utilities, telecommunication and grocery. New comers are sidelined.  After several decades, the oligopoly in Hong Kong has been forged.  So, SMEs have no choice but can only venture into the difficult and fierce competition frontiers.  One indicator to judge and apprehend the degree of concentration and domination of Hong Kong’s business sector is foreign companies’ presence. Surprisingly, all large property developers are Hong Kong based. No foreign company managed to step into this turf.  Nevertheless, you will have an otherwise finding in foods and retailers which diversity of company appears.  Isn’t it a strange phenomenon?    

Sky-high property price and population composition changes

Another source of grievance is that the property price has skyrocketed to an extremely high level.  Even the continuous influxes of tourist seemingly boost the prosperity. Is everyone in Hong Kong enjoying the benefit equally? Had the government not introduced the severe stamp duties as speculation penalty, this year’s property could have continued the peak-searching under the pegged exchange environment. The property price and rental surge is out of synchronization with Hong Kong people’s salary adjustment.  As a result, with and without already inherently possesses a diverse comment to the current situation and government.  Worst still, the adaptations to SAR varies among each other.  Aren’t those posses black hair and yellow skin are all Chinese or Dragon’s offspring in nick? How come some are hostile to the other under SAR’s ruling?  In fact, Hongkongers had little interaction with the Mainlanders before the handover.  Two kinds of territorial separated people were indeed having been raised in two distinguished cultural environment and respiration system. The moment when Royal yacht Britannia which carried the last governor Chris Patten sailed in 1997, mammals and amphibians though possessed distinctive life before have to live together as the destiny. The One-Way Ticket scheme allows 150 new arrivals daily from Mainland but HKSAR Government has neither been vested with power to propose eligibility nor possesses any procedure to offer comment to decline. In 2001, Court of Final Appeal decided that Chinese citizens born in Hong Kong enjoyed the right of abode regardless of the Hong Kong immigration status of their parents.  HongKongers are both thankful and repugnant to this outcome because it creates a new industry that Mainland women start to swamp Hong Kong hospitals.  Coupled with businessman, short term family visit, expatriates and commuters, you can conceive Hong Kong is a tiny place but accommodates people with different originality and thinking. If the HKSAR Government fails to balance the need among stakeholders to gear toward cohesion, conflict sooner or later surfaces. Last but not the least, the free and independent travel policy introduced in 2005 injected tens of thousands of unfamiliar faces to Causeway Bay and TST. At the outset, indigenous HongKongers are friendly to their sightseeing and feel grateful to their assistance to rescue Hong Kong‘s poor economy after the SARs disasters. As time passed by, their behavior, conduct, value and political blind loyalty outweighed the initial delight.  Extremists even present the signal they are intruders, please return to Mainland. 

Unharmonious political and economical sentiment

The gunpowder ignites from Legislative Councilor’s debate room sometimes originated from the above difference and it spreads to public area as an aftermath. The reverberations diffuse to community, organization and internet forum. Hard to reach consent and hard to compromise is an undeniable fact, some Councilors have started to filibuster to achieve their purpose in recent years. Every Hong Kong taxpayer is burdening the to-lings and fro-lings in the irrelevant debate, you may wish to know that each Legislative Council is remunerating at HK$84 490 per month! We need a calm sentiment to settle the chronic problem but without a social cohesion is hard to ask people to discuss in calm- It is a vicious circle.

Another blow to the laissez-faire, the all along advocated policy in British era, is the introduction of Statutory Minimum Wage in 2011.  After it put into practice, some labor sectors suddenly become a protected class. Its distortion to Hong Kong ecology is immense.  It has started off a tide of job changeover whereas catering industries cannot but to raise salary to hunt for dish washers. Even the boss do so, applicants are still very few because they set security guards as their first priority with the simple reason that their wage is safeguarded by the mechanism. The above paragraph is just a snapshot of the chaotic phenomenon in Hong Kong and you could learn the rationale why my friend delivers this statement. Furthermore, I would like to stress the important of “One country two system” in business angle rather than political consideration.  Business counts on complementary positions among the parties involved. If I were a doctor and you were a doctor, no business could generate because singularity in strength and knowledge brings no trading opportunity.  If I was a doctor and you were a restaurant operator, business may occur. In macro point of view, Hong Kong used to be Western countries’ sourcing and merchandising agent to utilize Mainland China’s productivity. After the handover, China rapidly modernizes and opens. Internet redefines the communication protocol and the world turns flat to become borderless. If Hong Kong is walking on the curve to integrate into Mainland in all walks of life, will there be any complementary positions among HongKongers, Mainlanders and the rest of the world in international cooperation?  Manufacturing and trading in Hong Kong had already been shrunk to a negligible cake.  Now, the launch of mentioned stamp duties in property sector not only halts speculation but also destroy Hong Kong’s meal ticket. Back to square one, this month deserves to celebrate if only because we esteem our nation casts off the humiliated history and unfair treaty.  In practical angle, Hong Kong’s uniqueness and comparative advantages are not as strong as it used to be but the society complication is no less than the colonial time. If you regard Hong Kong as a long term place to live, to do business or to retire, use this summer holiday to deliberate what and how our future should be!  In coming issues, we find due course to further discuss.