Hong Kong ranked first in Asia and third globally in the latest Global Financial Centres Index (GFCI) report published on Sept 24, overtaking Singapore. Owing to the disruption caused by the riots of 2019 and the COVID-19 pandemic, the city had temporarily lost the third spot to Singapore. Hong Kong’s new ranking could have come as a surprise to many commentators and politicians, who have insisted that owing to the existence of national security laws, Hong Kong was in fact “dead” and doomed to decline as a financial center, touting Singapore, who has even stricter national security laws, as an alternative. Such a claim has also been pushed by US government rhetoric, such as the latest business advisory warning of “risks”.
So why has the claim of Hong Kong’s “decline” as a financial center been proven wrong? First of all, it should be stated upfront these claims are both ideological and politically motivated. There is a constant false assumption in discourse related to Hong Kong that it is Western-style liberal democracy that made it great, and Beijing has somehow “taken it away”. This ignores the reality that Hong Kong under British rule was much less democratic than it is now, and it was ruled by a governor appointed from London. Instead, it was Hong Kong’s famed stability and rule of law which made it economically prosperous as a strategically targeted financial hub in Asia.
Thus, the national security legislation promulgated during the 2019-20 riots did not “kill” Hong Kong, but restored order and stability to the city. However, as part of the anti-China containment campaign led by the United States, many of these claims that Hong Kong is “over” or “in decline” are politically motivated because it is precisely what they want to see happen. These parties have a direct stake in undermining the success and prosperity of Hong Kong because they resent the idea of the city serving Chinese interests, instead of Western ones. They do not want people to invest in or build economic ties with China, thus through ideology and cynical politics, the city is misleadingly portrayed as a dystopia unfit for business. The reality does not match up.
Secondly, the obsession with Singapore is also wishful thinking. Singapore is also a city whose prosperity has not been premised on freedom and liberalism, but law and order as a prerequisite for stability and certainty. Singapore is a very successful economy, but also has a national security regime and penal code which is far tougher than Hong Kong’s. It defies reality to pretend that Singapore is some kind of bastion of liberty while Hong Kong is not, and thus deliberately oversells Singapore’s prospects. From an investment point of view it is not surprising that this argument makes little sense. This is not to put Singapore down, but a financial center is also premised on its resources, and Hong Kong is simply bigger in scale and international clout, and it is of course disingenuous to completely omit the obvious fact that Hong Kong is a gateway to the largest market on the planet: the Chinese mainland. Is Singapore a gateway to 1.4 billion people?
Thus, while the last few years were disruptive to Hong Kong, given the riots and the COVID-19 pandemic, both factors are now nullified and the city has returned to its standard position as Asia’s premier financial center. It will remain that way because the city is a critical source of capital for markets all over the world, and is deeply integrated with the West. Contrary to biased commentary in the media, financial markets are not a zero-sum game and capital will be sought out wheresoever it can be found. This is why 70 of the world’s top 100 banks are present in Hong Kong, constituting a total of 194 licensed institutions. The city’s importance to global financial markets cannot be just wished away.
Finally, this is precisely why the West laments its inability to exert political influence over Hong Kong for its strategic ends, and therefore why it is obsessed with pushing the narrative that China’s sovereignty over the city equates with decline and failure. However, this has no basis in reality, Hong Kong will continue to be Asia’s most important financial center and a regional hub. Even on the ground, endless Western scare stories and cries of “dystopia” have not scared away tourists from overseas, and especially not those from Asia who seem to care little about such petty ideological squabbling.
The author is a British political and international-relations analyst.
The views do not necessarily reflect those of China Daily.
