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| Don't Take City Contests Too Seriously |
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By Hong Liang Every so often, we come across reports from research organizations of many different backgrounds and affiliations in Hong Kong or on the mainland ranking cities in terms of their competitiveness, desirability or how liveable they are. Most people read about those reports in newspaper stories written by reporters who have neither the training nor the inquisitiveness to question the validity of the methodology employed by the researchers in compiling the ranking. Savvy readers would invariably show as much interest or seriousness in those stories as in the annual sour apple award for the 10 worst-dressed celebrities. I wonder if anyone really cares? Think-tanks of every ilk and disposition regularly produced voluminous studies to track the development and progress of the two cities with as much doggedness as pundits following horses on a race day. For the pundits, there is, at least, always money at stake. But for the analysts, it was a meaningless pursuit. As bankers chose between the two cities, they would simply say that the choice was obvious. Nearly all the major international banks have branches or offices in both cities. It's never a matter of which city is better suited as a financial center than the other. The fact is each city offers advantages that the other simply doesn't have. Singapore became a financial center by government edict, which called for the establishment of an offshore US dollar market. As such, Singapore developed into a funding center for the region. As a free-market economy, Hong Kong evolved into a financial center which has nurtured a host of pioneering entrepreneurs who, through their own regional networks, created a strong demand for innovative cross-border banking services. Such demand has, in turn, attracted foreign banks and numerous other supporting services. As the two centers mature, any semblance of rivalry seems to have evaporated. But our commentators and analysts must find a new rival for Hong Kong to keep themselves employed and in the public eye. They didn't have to look too far. The resurgence of Shanghai can be easily played up as a threat to the future of Hong Kong. Unsurprisingly, the survey that showed Shanghai has outranked Hong Kong in the list of most desirable cities for expatriates was widely reported in all news media. Since the publication of that report in April, many politicians and economists have been making finger-wagging comments on the diminishing relevance of Hong Kong to the mainland's economic development. Another recent survey affirming Hong Kong's lead in competitiveness didn't seem to have helped calm the city's nerves. Citing the results which indicated that Hong Kong's lead on Shanghai was only marginal, our critics painted a far from rosy picture. Shanghai would soon overtake Hong Kong in the competitiveness stakes, they were quoted as saying. Their prognosis was based largely on counting the number of containers handled, the length of roads and railways to be completed, the supply of high-end offices and apartments, and other infrastructure developments. Interviewed by a local newspaper, one of the report's authors specifically noted that the projected throughput at Yangshan Port was going to exceed that of the Hong Kong's container port in a few years. That, he said, was an indication of Hong Kong's declining competitiveness against Shanghai. That, I say, is baloney. London doesn't have a major port and yet its status as an international financial center has never been questioned. This should serve to illustrate that a financial center is not built so much on infrastructure facilities, but rather on people's skills and expertise. More importantly, such expertise and skills can only flourish within a social and economic environment that is conductive to business and commerce. Such an environment, preserved by the rule of law, will continue to guarantee Hong Kong's competitiveness for years to come. Despite its efforts, Singapore has not displaced Hong Kong as the region's financial center. Neither will Shanghai, no matter how many containers its port can handle or fancy offices its city can accommodate. City contests, like beauty contests, are fun to watch. Just don't take them too seriously. (China Daily June 13, 2006)
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