A resilient HK will again have to put its capabilities to the test
Donald Trump’s surprise victory in the US presidential election has unnerved many investors and business leaders in Hong Kong and other regional economies as it represents a repudiation of the familiar US trade and foreign policies largely shaped by liberal intellectuals who have dominated US politics and public opinion for decades.
These policies, centering on the liberalization of global trade, have brought tremendous economic progress and prosperity to many developing economies in the region. As a regional financial center and trading hub, Hong Kong has benefited greatly from the rapid progress of globalization, resulting in the progressive dismantling of barriers against the international flow of capital and goods.
Trump had made globalization a dirty word in his campaign and his message had helped him win the support that propelled him into the White House. Like Brexit, Trump’s triumph was the result of a successful revolt by the common people against the intellectual elite who have ruled for so long that they have forgotten how to communicate with the working class.
Obviously, it’s futile to convince a worker who hasn’t had a raise in years the benefits of globalization, which is seen by Trump and his fellow workers to have enriched only the wealthy minority. Indeed, the widening wealth gap is a real and highly contentious issue not only in the United States, but also in many other developed economies, including Hong Kong.
Trump had repeatedly vowed during his campaign to renegotiate the trade pacts with other nations and punish those trading partners he considered to have taken advantage of the US. How far he can go in doing that is open to debate. But, with the power of office and the backing of the Republican-controlled US Congress, he can intentionally, or unintentionally, start a trade war with the developing economies in Asia and other regions.
The thought of an isolated United States, surrounded by trade barriers against imports, is enough to send a chill down the spine of business people in Hong Kong and other regional economies. Hong Kong people are known for their quick adaptation to changes in the external economic environment. This capability will soon again be put to the test.
Although US President-elect Donald Trump’s idea of an isolated US may dent the global economy’s recovery, Hong Kong is capable of adapting itself quickly to the shifts in the global economic environment.