Hong Kong is changing. Too bad outsiders see only decline
- The city has had a rough ride and some things have faded, like the dominance of Western business leaders in Hong Kong’s executive suites
- But the city is stepping up its Greater Bay Area integration and making new connections with formerly neglected markets. Dramatic change is afoot
The narrative predicting the imminent death of Hong Kong is alive and well, and it is probably as misplaced as it has ever been.
Most famous was the Fortune magazine cover story “The Death of Hong Kong” in June 1995, written by veteran correspondent Louis Kraar: “It’s time to stop pretending,” he wrote. “The naked truth about Hong Kong’s future can be summed up in two words: It’s over.”
There is no question that Hong Kong has had a rough passage since 1997. But the truth through this period is more one of remorseless challenges and resilience than it is of death throes.
The biggest change has been the rising presence of mainland companies and executives. Mainland companies today account for about 77 per cent of Hong Kong’s stock market capitalisation, compared with 16 per cent in 1997.
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It is true that the Western business leaders who once dominated Hong Kong’s executive suites have been progressively replaced by ethnic Chinese, and that is a death of sorts to many who once were contributors to – and beneficiaries of – Hong Kong’s success. But let’s be clear. For Hong Kong, this is simply change, not death.
According to the International Monetary Fund’s most recent World Economic Outlook notes, the world’s advanced economies accounted for about 63 per cent of global GDP in 1980 while emerging economies accounted for 37 per cent. By 2023, that balance had reversed as emerging economies accounted for about 59 per cent of global GDP and advanced economies 41 per cent.
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In short, observers from the outside see decline. From here, we see dramatic change that is focused on new and formerly neglected markets – change that excludes the United States and Europe.
I have said for the past 25 years that no one has ever bet against Hong Kong and won. Despite some turbulent decades and a story of inept local leadership, that remains true today. The narrative of collapse was wrong in 1997 and is wrong today, thanks to Hong Kong’s distinctive roles and a resilience that remains as strong as ever.
David Dodwell is CEO of the trade policy and international relations consultancy Strategic Access, focused on developments and challenges facing the Asia-Pacific over the past four decades