Very often, doom-mongers like to avoid positive news and prefer to go down a dark rabbit hole in search of negativity. To a certain extent, the pessimism levels of these analysts offer insights into their misperceptions of the economic outlook of a city or country; their misperceptions are an important guide for investors to assess the business risks and opportunities of that place. 

Recently, Morgan Stanley’s former Asian head Stephen Roach has cast a pall over the future of Hong Kong. Although Roach might have overlooked, or at least failed to give, appropriate weight to some positive economic and political factors in his assessment, his controversial narrative has generated a tsunami of public debate on the economic prospects of Hong Kong.

This is not the first time that doom-mongers have expressed an extremely gloomy view of the city. The last time Hong Kong was declared “dead” was back in 1995 when Fortune magazine ran a commentary with the horrible title: The Death of Hong Kong. The Asian financial crisis did bring Hong Kong to the brink of economic recession, but the city was able to rebound. To nobody’s surprise, Hong Kong’s resilience over the years has proved that Fortune was wrong.

READ MORE: Hong Kong’s economy is doing much better than many depict 

According to Roach, Hong Kong’s “demise reflects the confluence of three factors”. First, China is no longer a passive “Big Brother”. Like many Western critics, he has put the blame on “a new Beijing-centric national security law”. Second, “the Chinese economy has hit a wall” because of several factors that, he said, have adversely affected Hong Kong’s economy. Third, “the US-China rivalry has gone from bad to worse”, with  the Hong Kong Special Administrative Region getting “trapped in the crossfire”.

China faces a shrinking, aging population that will dampen its economic productivity. According to a prediction made in a report carried by The Lancet, China’s population will fall below 1 billion in the 2070s

As mentioned previously in this column, not a day seems to go by without a commentary in major Western media outlets or social media platforms detailing the challenges facing the Chinese economy. Geopolitical observer Peter Zeihan  has even predicted that China would cease to be a political entity within a decade. Both Zeihan and Roach have placed emphasis on China’s “demographic deficit”. 

Undoubtedly, China faces a shrinking, aging population that will dampen its economic productivity. According to a prediction made in a report carried by The Lancet, China’s population will fall below 1 billion in the 2070s. But on the plus side, China’s aging population will create a booming silver-hair economy and any drag on economic growth will be offset by rising labor productivity driven by innovative technologies and progress in climbing the value-added curve. Besides, China’s talent pool and educational advancement are no less important in the equation. 

China’s recent emphasis on new productive forces offers grounds for cautious optimism that the world’s second-largest economy will be able to promote high-quality economic development. President Xi Jinping said the original and disruptive home-grown innovation will incubate new industries, new models and new drivers to help the country achieve scientific and tech self-reliance to fight the battle in core technologies. Nor can we turn a blind eye to the fact that China has become the world’s second-largest spender on R&D.

With respect, we must point out that Roach has underestimated the resilience of the Chinese mainland’s economy and the strong determination of Chinese people and their leadership to promote economic development in the country. Hong Kong’s economic prowess is not solely tethered to its current capabilities but is poised to capture the promise of the mainland’s pivot toward technological and innovative frontiers.

The allegation by Roach that Hong Kong is overexposed to the risk of “mainlandization” is totally incorrect. We would like to state in no uncertain terms that the principle of “one county, two systems” has in no way been undermined by closer economic ties between Hong Kong and the mainland. The promulgation of the National Security Law for Hong Kong was necessary and reasonable because the dark cloud of anarchy was posing a serious threat to Hong Kong’s political stability from the second half of 2019 to early 2020. 

None of the consuls general or business chambers consulted by the HKSAR government over the forthcoming Article 23 legislation opposed the legislation. Besides, Roach overlooked the enormous benefits brought about by closer economic integration between Hong Kong and the mainland when he made that allegation.

READ MORE: Government work report heralds new opportunities for Hong Kong SAR 

Closer economic integration has played an important role in helping Hong Kong become an innovation and technology (I&T) center. The Hong Kong-Shenzhen Innovation and Technology Park is the bridgehead for I&T cooperation between the two cities. Closer economic integration between Hong Kong and other mainland cities in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) remains the solution to our quest for high-quality growth. As Andy Kwan Cheuk-chiu, director of the ACE Center for Business and Economic Research, has correctly pointed out, the bay area is one of the few ways for Hong Kong to easily tap growth opportunities given geopolitical tensions worldwide.

It is worth noting that the money flow from the mainland side of the bay area has boosted the city’s wealth management assets from HK$23.96 trillion ($3.06 trillion) in 2018 to HK$30.5 trillion at the end of 2022 — almost a 30 percent increase. Recently, Vice-Premier He Lifeng set out some suggestions for cementing Hong Kong’s participation in national development. They included strengthening its wider influence through its role as an international asset management center, participation in regional cooperation and as a support platform for the development of the GBA and the Belt and Road Initiative. Though there may be a long lag between policy proposals and their implementation, these proposals are beneficial to the long-term development of Hong Kong.

Finally, the city’s economic  prowess is not solely tied to the fortunes of the United States and China; its skill at tapping into burgeoning markets, such as those in Southeast Asia and the Middle East, showcases the polyvalent nature of its services platform. Hong Kong is now focusing on business collaboration with Southeast Asian and Middle Eastern countries. Our think tank is confident that the above-mentioned policy initiatives, together with the unique advantages under “one country, two systems”, will ensure that Hong Kong has a bright economic future.

Michael Hui is director of International Trade Affairs, Chinese Dream Think Tank, and founder of Forever Watch Co. Ltd.

Kacee Ting Wong is a barrister, part-time researcher of Shenzhen University Hong Kong and Macao Basic Law Research Center, chairman of Chinese Dream Think Tank and a district councillor.

The views do not necessarily reflect those of China Daily.