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?
In the 1980s, many commentators tried to build a reputation for
themselves by playing up the competition between Hong Kong and
Singapore to become the regional financial center. They spent a
great deal of time and effort digging up nuggets of mostly trivial
information to prove which city was allegedly in front.
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)
