More sur­prises likely for Hong Kong peo­ple af­ter a dra­matic 2016

China Daily (Hong Kong) - - COMMENT - The au­thor, a CAIA de­signee, is an in­vest­ment an­a­lyst at Har­ris Fraser Group.

The past sev­eral months were un­doubt­edly event­ful. We wit­nessed many big po­lit­i­cal events — from the Brexit vote in Bri­tain in June, to the more re­cent Don­ald Trump vic­tory in the US pres­i­den­tial elec­tion and the dis­qual­i­fi­ca­tion of two young leg­is­la­tors-elect in our city — all of which were unimag­in­able a few years ago.

Who would have ex­pected the Bri­tish leav­ing their Euro­pean friends, given their close re­la­tion­ship for decades, both eco­nom­i­cally and so­cially? Who would have be­lieved Don­ald Trump, a busi­ness­man with six busi­ness bank­ruptcy records and no ex­pe­ri­ence in pol­i­tics, could pos­si­bly out­run Hil­lary Clin­ton, a for­mer mem­ber of the US Se­nate, first lady and sec­re­tary of state, and be­come the next US pres­i­dent? And per­haps more im­por­tantly to Hong Kong peo­ple, who would have pos­si­bly an­tic­i­pated the dis­qual­i­fi­ca­tion of some law­mak­ers-elect?

But these have all hap­pened this year; and it is likely that we will be see­ing more such un­usual events in 2017, a year full of elec­tions around the globe. So we sim­ply have to get ac­cus­tomed to ab­nor­mal­ity nowa­days. Take US Pres­i­dent Barack Obama for ex­am­ple; he was as sur­prised as we were the mo­ment Don­ald Trump’s vic­tory was con­firmed. But as he com­mented, “the sun will rise in the morn­ing”. So, the mes­sage here is: Let the past be the past. We need to move on, fo­cus on what we are do­ing, and plan for the fu­ture.

Po­lit­i­cal ten­sions are run­ning high now in our city af­ter the re­cent in­ter­pre­ta­tion of the Ba­sic Law by the Stand­ing Com­mit­tee of the Na­tional Peo­ple’s Congress (NPCSC) and the dis­qual­i­fi­ca­tion of two leg­is­la­tors­e­lect. Some said Hong Kong’s ju­di­cial in­de­pen­dence is at risk; while oth­ers ar­gued that the NPCSC has the power to do so, as pro­vided by the Ba­sic Law it­self.

I am not here to dis­cuss which ar­gu­ment is cor­rect and which is not. We cer­tainly en­joy free­dom to ex­press our opin­ions. But what I would like to em­pha­size here is that all of these are but episodes in our lives. Busi­nesses will run as usual. We should turn our at­ten­tion back to the chal­lenges we are now fac­ing, rather than en­dan­ger­ing the long-term pros­per­ity of the city.

What are we fac­ing? Let’s be­gin with the re­cent US elec­tion and pos­si­ble US in­ter­est-rate hikes in the next year. As a small and open econ­omy, Hong Kong is vul­ner­a­ble to many of these ex­oge­nous risks as they are in fact be­yond our con­trol. Trump’s vic­tory is no doubt a threat to many of the Asian economies given his strong pro­tec­tion­ist mind­set and ag­gres­sive bias against glob­al­iza­tion. In the mean­time, due to our cur­rency peg, fur­ther US in­ter­est-rate hikes in 2017 will ul­ti­mately trans­late into higher rate in the city too, ex­ist­ing home own­ers or po­ten­tial buy­ers would face ad­di­tional bur­den. Cou­pled with the new round of hous­ing mar­ket tight­en­ing, the risk of an eco­nomic slow­down should not be over­looked as prop­erty-re­lated sec­tors play a ma­jor role in our econ­omy. So given the chal­lenges we face, where does our fu­ture lie? I be­lieve many agree that for the next decades, the fu­ture eco­nomic de­vel­op­ment of the SAR will heav­ily in­ter­twine with that of the Chi­nese main­land. Take the Belt and Road (B&R) Ini­tia­tive as one ex­am­ple, as the main­land seeks to pro­mote eco­nomic co­op­er­a­tion among var­i­ous mar­kets via the ini­tia­tive, the SAR can ac­tu­ally play many roles other than be­ing the bridge be­tween the main­land and the rest of the world. Our close re­la­tion­ship with the main­land, com­bined with the strengths and spe­cial­ties that we have de­vel­oped so far, would for sure give us a head start pro­vid­ing the nec­es­sary ser­vices and ex­per­tise for these projects.

The main prob­lem here, how­ever, is that the idea of B&R re­mains a puz­zle for many of us. What is the con­cept of the B&R? How many economies and in­dus­tries does it in­volve? And per­haps more im­por­tantly, what role is Hong Kong go­ing to play in the ini­tia­tive?

If any­one is in doubt, I would sug­gest you to visit the B&R web­site op­er­ated by the Hong Kong Trade De­vel­op­ment Coun­cil, which pro­vides you all the an­swers to these ques­tions. I am pretty sure that you would be amazed by the range of op­por­tu­ni­ties we would po­ten­tially have. So in­stead of sim­ply mur­mur­ing about our cur­rent po­lit­i­cal sit­u­a­tion, why not shift our at­ten­tion back to some­thing that may bring us pros­per­ity. Of course there will be chal­lenges, but just as the fa­mous say­ing goes, “no pain, no gain”.


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