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A Snapshot of the Hong Kong Economy

Robert Campbell shares details about the GAE trip to Hong Kong.

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Over the winter holidays, the School of Economics conducted a trip to Hong Kong through their Go Abroad program, which brought twelve students to examine economics in China. During our ten days in Hong Kong, we visited political parties, opulent skyscrapers, vegetarian communes, bankers’ clubs, and abandoned villages. In other words, our visit focused on contrast.

A Vibrant Economic History
Our first visit after recovering from the nineteen-hour journey across the globe was to the Lion Rock Institute, a think-tank based in the Hong Kong central district. There we learned about Hong Kong’s growth during the Chinese Cultural Revolution, when hundreds of thousands of Chinese citizens braved sharks and the People’s Republic Army to swim across Kowloon bay to Hong Kong Island. The survivors arrived penniless and driven, yet within 30 years they had built one of the wealthiest economies on earth. The colonial finance minister during that period, John Cowperthwaite, famously adopted a policy of ‘positive non-interventionism’, whereby he rejected almost all interference with Hong Kong’s economy, believing that this would stifle growth. During this period, actual growth figures are unclear since he also refused to generate national accounts on the grounds that his superiors would use them to justify economic interventions. However, we do know that in 1998, when the United Kingdom rescinded control over Hong Kong, GDP per capita in the city had outstripped that that of the UK.

Political Tensions
While Hong Kong has become immensely wealthy, the income inequality between the highly productive financial sector and the remainder of the economy appears to have created some political tensions. During our visit to the Democratic Party, Hong Kong’s largest prodemocracy party, we learned that there is greater public support for increased redistributive spending than is manifested by Hong Kong’s Legislative council (Legco). Emily Lau, Democratic Party firebrand and retired seven-term Legco member, explained to us that Hong Kong’s Legislated Council is constructed to systematically prevent democratic parties from ever gaining a majority vote, despite their popular support. This message was echoed during our meeting with a serving Democratic party Legco member, who explained that Legco is rigged to support Beijing through the enshrined ‘functional constituencies’. Essentially, there are Legco seats designated for representatives of Hong Kong’s various working sectors, many of which are wedded to Beijing for economic reasons.

As bad as this sounds, not everyone we spoke to during our visits thought of Hong Kong’s limited democracy as a negative thing. Our host at the Lion Rock Institute argued that Hong Kong’s impeccable public finances, fiscal surplus, and continued high growth figures are attributable largely to its technocracy and indirect feedback loop between public sentiment and public policy. The evidence remains unclear, but the sheer possibility that Hong Kong’s prosperity is attributable to its lack of political freedom made us uncomfortable.

Transport Efficiency and Complications
Despite our limited time in Hong Kong, we were frequently able to pack three visits into a single day, often impossible on Go Abroad trips. Among other things, Hong Kong is famous for having one of the world’s most efficient and least expensive public transit systems. Underground trains run with shockingly high frequency and low prices. Despite the flat 67p charge for a Metro ride, Hong Kong’s train service remains one of the few on earth than runs at a profit.

Our group was similarly impressed by the other public transit options, which allowed us to flit about the city with almost alarming speed. In the space of a few hours, one can start at Lamma Island, a former vegetarian commune populated by bungalows and tin shacks atop floating rafts, take a ferry to the skyscrapers in Kowloon Harbour, and then take the metro to any number of places within the city.

After growing accustomed to lightning fast and effortless freedom of movement, our day trip into the city of Shenzhen in Mainland China gave us whiplash. On the day of our visit to Shenzhen, we left early in the morning with the intention of arriving at the Chinese Border Visa office when it opened at 9:00. After passing numerous security checks and waiting out an unannounced hour long delay in the visa office opening, several members of our group were turned away for having passports that were too old, too new, or in one person’s case, one passport that was too old and another that was too new. Those of us not cut loose at the visa office were beckoned through several more layers of security, including additional x-rays and biometric scans, followed by a unidirectional underground train out of Hong Kong. When we finally resurfaced around 11:00, we realized the three-hour journey had taken us only 6 kilometers.

The security did not end when we resurfaced in Shenzhen. Within the city’s internal transportation system, every subway entrance was stationed with paramilitary police and metal detectors; the walls bedecked with Communistic propaganda and security cameras. Beyond the initial security check, the train platforms were more often than not stationed with additional guards. As we watched our backpacks enjoy their third or fourth dose of radiation, the group wondered why one would want such overbearing security in a city low in crime and devoid of terrorism. Theories abounded, but an answer remained unclear.

Positioned against this authoritarian background was our visit to a highly westernized ‘maker-space’, which provides communal access to manufacturing and design tools to local entrepreneurs and artists. As we looked around at the kitsch iPod speakers designed to look like vintage radios and a 3D printed desk — both made by maker-space members — the attitude and environment seemed better suited to a Silicon Valley break room than an authoritarian state. We had the same disorienting feeling during an after-visit Starbucks run: the sensation of standing in estuary between two radically different, seemingly incompatible worlds.

Lasting Connections
On our penultimate day in Hong Kong we had the pleasure of meeting the then outgoing president of Hong Kong University and current vice-chancellor of the University of Edinburgh. During our meeting, he spoke about his experiences at Hong Kong University during and after the umbrella revolution of 2014, and his decision to come to Edinburgh. Among other things, we learned about the time he was held hostage by the students of HKU when they barricaded a building he was occupying, in an attempt to gain audience with an unaffiliated faculty member. We had the chance to assure him that he would not receive such treatment at Edinburgh, and to express our hopes for his then upcoming tenure here.

As our trip came to an end, it became abundantly clear to the group that our visits, despite their depth and diversity, had only scratched the surface of Hong Kong. The Go Abroad trip to Hong Kong was both a substantive insight into a culture and economy far removed from our own, but also a springboard for further investigations into an on-going case study in economic freedom. As several of our trip members look to return for internships and exchange programmes in Hong Kong, it is clear that the value of our trip extends beyond the limited time we spent there.


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