Opinion | Hong Kong's fundamentals provide protection and hope against adversity

By Grenville Cross

When the National Security Law for Hong Kong was enacted in 2020, the United States immediately saw an opening. By striking at Hong Kong, where the "one country, two systems" governing policy had worked so well since 1997, it imagined it could deal a blow to China. If the city's prosperity could be damaged, China's progress might be harmed, a key US foreign policy objective.

In 2020, therefore, with no regard to the harm it could cause to ordinary people, the then-US president, Donald Trump, ended Hong Kong's special trading status with the US. He hoped that, stripped of its privileges, the city would suffer grave economic damage.

But, just to make sure, Trump also decreed that, when goods made in Hong Kong were exported to the US, this could no longer be indicated. Instead, all the city's exports would have to be labeled "Made in China", thus making its products indistinguishable from those of any other Chinese city. Trump's move, of course, showed rank disregard of global norms, given that Hong Kong is a separate member of the World Trade Organization.

No less disgusting than Trump's actions were his words, which vividly demonstrated the lengths to which the US is willing to go to halt China's progress. On July 14, 2020, he expressed the hope that, as a result of his handiwork, Hong Kong would lose its commercial appeal. He said he expected its economy would "fail", given that it would no longer be in any position to "compete with free markets". He even prophesied that "Hong Kong markets will go to hell, nobody's going to do business", oblivious to the misery this would cause to those who would lose their jobs, many of whom had hitherto seen the US as a friend.

Once Joe Biden became president in 2021, he eagerly embraced Trump's agenda, and sought to harm Hong Kong yet further. He was clearly worried that the city was not only surviving, but even picking up steam, with an economic expansion of 7.9 percent in the first quarter having been recorded. On July 16, 2021, therefore, to reverse this trend, he issued his now-notorious "Hong Kong Business Advisory", which appalled everybody who cared for the city, including some of his fellow countrymen.

Biden's advisory warned US companies that they faced risks to their operations if they continued to do business in Hong Kong, and he hoped this would disrupt things. He imagined he could scare at least some of the 1,400 members of the American Chamber of Commerce ("AmCham") into packing their bags, while also frightening away any American entrepreneurs who were thinking of setting up shop in the city.

Although Trump and Biden come from very different political traditions, they share striking similarities. Each has tunnel vision, with an inability to see the wider picture. Both have colonial mindsets, and each hankers after the halcyon days when the countries of the world all knew their place. In their playbook, the US, with the Almighty at its side, sits at the top of the pile, and woe betide anybody who fails to doff their cap when Uncle Sam comes calling or passes by.

Since, moreover, Trump and Biden are both Cold War throwbacks, neither can adjust to changed realities. Both believe that aggression can secure America's fading grandeur, and even a succession of failed wars has taught them nothing. By disregarding the lessons of history, they, and their cronies, pose an existential threat to world peace and prosperity.

One lesson, however, the pair have had to learn is that their strategies in Hong Kong have not worked, notwithstanding Five Eyes' backing. Indeed, far from succumbing, Hong Kong has more than kept its head above water, to the puzzlement of many in Washington, DC. Although, like bully boys everywhere, Trump and Biden thought it would be easy to trample the "little guy" underfoot, they miscalculated their victim's resilience, as well as its friendships, some unexpected.

Once Biden issued his advisory, AmCham immediately distanced itself from him. It explained that "this city has a crucial role to play as an international business hub", and that it remained "a critical and vibrant facilitator of trade and financial flow between the East and West". On Jan 18, 2022, moreover, AmCham disclosed, following a membership survey, that 41 percent of firm leaders were optimistic for the city's business outlook, that 29 percent planned to expand their investments over the next two years, and that Hong Kong was "seen by the majority to be competitive as a global hub".

The AmCham president, Tara Joseph, also commented that "Hong Kong has always renewed and refocused after challenging times", and she was absolutely right. Far from being defeated by the Trump-Biden offensive, the city is now, as the evidence shows, not only pulling through, but actually cementing its economic credentials. This was why, for example, the International Monetary Fund, on June 9, 2021, declared that Hong Kong's financial system remains resilient to future financial shocks and crises, pointing out that "the banking sector remains well capitalized, profitable, and non-performing loan ratios remain low".

Quite clearly, the IMF report shows the success of the HKSAR government's long-standing efforts to ensure financial stability. Those efforts have been sustained throughout by sound fiscal policies as well as by robust institutional frameworks and market infrastructures, and they continue to bear fruit.

On Jan 28, 2022, the government announced that Hong Kong's economy grew by 6.1 percent in 2021, ending two years of contraction. There had, despite the US, been a double-digit growth in exports, and stronger private consumption had helped to fuel the rebound. It was expected, moreover, that the economy would expand further in 2022, although uncertainties remained. These, however, were unrelated to Biden's hostility, but were down to the pandemic and high inflation in some major economies, including the US.

So, despite the heartless efforts of Trump, Biden and their Five Eyes cronies, the city's prospects, with the support of the entire country, are still bright. In their desperation to hurt it, they underestimated the city's resilience and its fundamental strengths. Those strengths, as the director-general of InvestHK, Stephen Phillips, recently explained, include a business-friendly environment, a convenient geographical location at the heart of Asia, an attractive tax regime, a free and open market for capital and information, and a common law based legal system that is ideal for an international legal center, incorporating dispute resolution. The city is also, following the failed insurrection of 2019-20, one of the safest cities in the Asia-Pacific region, not least because of the primacy of the rule of law.

In 2016, the former governor, Chris Patten, said, quite correctly, that "nobody has ever made money betting against Hong Kong, and Hong Kong usually comes out on the right side of the argument, and certainly on the right side of history", and Biden, for one, should take note.

As the past two years have shown, Hong Kong knows how to defend itself, how to overcome adversity and how to enhance its prospects. The sooner the US realizes this, ends its bullying and resumes normal relations, the better it will be for everybody, itself included.

(Source: China Daily)

The author is a senior counsel, law professor and criminal justice analyst, and was previously the director of public prosecutions of the Hong Kong SAR.

The views do not necessarily reflect those of DotDotNews.

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