Hong Kong has its unique history within Asia and for the world to remember with a feeling of nostalgia! Hong Kong as the Special Administrative Region (SAR) of Peoples Republic of China (PRC) is no ordinary Capital City or a State of a Country but has been treasured and nurtured with many names with changing geopolitical and economic climates. Since 1997 it has been growing as the Gateway to China, besides mega cities like Shanghai and Beijing, Hong Kong is looked upon with special envy and respect. It is treated and cherished by PRC as the Pearl of Orient. After World War II, Cambodia loosing its charm as a French Colony or Pearl of Asia followed by Manila as the next Pearl and then Hong Kong, which gained the coveted title silently and continued to be growing and shining Pearl of the Orient.
Will there be any dent on the future economic growth of Hong Kong due to ongoing rhetoric and trade wars between US led Western corridor and PRC? Whether the excuse of National Security law or PRC reaffirming its sovereignty is a transient stage. Hong Kong citizens and economic dynamics of Hong Kong have demonstrated their resilience time and again. To shed some light on what near term future holds for Hong Kong, one has to review the economic parameters first. Economy is the key driver of Hong Kong and core strength for its independence and identity within the various economic corridors of PRC and Asia. Unless PRC pursues military strategy in South East Asian Countries affected by Spratly Islands occupation disputes, Hong Kong will remain at the cross-roads of trade and commerce for economies of Asia, Africa, and Middle East for decades, if not the next century. China led BRI projects and collaboration with Asian countries.
What are the indicators of such an optimism?
- Reduced Competition between Shanghai And Hong Kong Ports: China will be behind the survival and growth of Hong Kong Air Space and Maritime Hub for international logistics hub, despite setback due to Pandemic.
- US led Sanctions not effective in China and Hong Kong: As part of China’s Special Administrative Region, the impact of sanctions on individual entities may not be applicable for such entities to use Hong Kong for their financial and trade operations.
- Independence of Customs and Excise Controls: Hong Kong may remain a free port for importers and exporters, which as time passes, will be apparent whether the tariffs imposed in retaliation to other countries on exports from China, may not be applicable for imports and exports from Hong Kong.
- Hong Kong Continues to Grow as Legal Services Hub: Ministry of Justice of Russian Federation in 2019 selected Hong Kong as the Venue for international arbitration and nominated HKIAC as the Permanent Arbitration Institution in the list of Foreign Arbitral Institutions. The legal services sector is already expanding with Belt & Road Initiative investments and with number of arbitral institutions within SAR, is set to enhance attractiveness of Hong Kong as Asian capital for international dispute resolutions.
- Trade Centre for Consumer Goods and Communication Products: HKTDC has been promoting Hong Kong as the trading hub for importers and exporters to showcase new inventions, products and services through trade fairs and exhibitions. This is likely to get additional boost which is set to grow with stability due to new security legislation.
- Intellectual Property Laws and Independent IPO: With effect from December 2019, Hong Kong Intellectual Property Department has become an independent IP Office for registration of patents and other intellectual property rights. This is set to enhance the importance of Hong Kong as a hub for innovations and services related to IPRs.
- Changing Business Focus: The business model appears to be shifting from tourism to industrial supply chain and logistics hub of the world, with well-integrated ports, land transport through new bridges and highways and shipping lanes.
The above is a brief sample of signs for what future could hold for Hong Kong. The more will become apparent as the air travel returns to normal after the pandemic situation is under control. Forward looking investors and enterprises should conduct a due diligence independent of geopolitical rhetoric to get an in-depth view of the economic indicators of Hong Kong. For assistance Contact email@example.com for further details or to conduct due diligence exercises.