By Tom Fowdy
An article in the Economist, of all publications, unusually declares that "The trade war may reverse Hong Kong's commercial decline" and that it will "regain ground lost to Singapore and New York." Notwithstanding of course the biased assumption, that is loaded with the post-2020 narrative that national security laws have caused a "decline" in the city, the article is nonetheless making he argument that China's Special Administrative Region (SAR) will actually be a benefactor from Trump's destructive global trade wars, which will diminish other locations at its expense. Thus, it predicts better times for the city.
First, The Economist, as its name suggests, is a well-known advocate of liberal capitalism and free trade. Its premise is inspired by the old school British economists such as Adam Smith, who argued that markets are a virtue and that free trade is essential for economic progress. Thus, although this specific magazine has played a large role in pushing anti-China propaganda across recent years and aligning with elite narratives, the ideology of market liberalism is baked into the DNA and purpose of The Economist.
Therefore, it goes without saying that the magazine does not like protectionism, destruction of free trade, the tearing up of global economic integration, and so forth, the trade wars pursued by President Donald Trump. The Economist sees this as inherently bad for America and the world, regardless of what it thinks of China. Thus, although the publication has pushed the nonsensical "Hong Kong decline" narratives in recent years arguing that the city's national security measures will drive businesses away, it now sees the bigger picture amidst Trump's global economic sabotage: Hong Kong is one of the most important advocates of free trade in the world.
Hong Kong is the epitome of free trade and manifestation. It is so well regarded by British capitalists precisely because it represents the personification of this pro-market ideology advocated by Smith. Hence, Hong Kong was built into a free port, a hub of tariff-free trade, and a global financial centre. They don't call it "Asia's World City" for no reason; it is a pivotal point where goods, markets, and capital intersect, creating a gateway between China and the wider world. Hong Kong is therefore the antithesis of Trump's isolated, insular, and aggressively protectionist vision that wants to destroy open markets in favour of American-centric unilateralism. Hong Kong opens doors, Trump closes them.
So why might Hong Kong benefit from Trump's trade wars? In such a turbulent world, businesspeople and investors are going to seek out safe havens where they can trade and invest, free from tariffs and disruptive measures. Hong Kong is an anchor not only for China's massive market, but also a nexus to the surrounding region of the Asia Pacific too. This is a city where goods can be imported for free, where businesses can set up effectively, smoothly, and with little taxes, backed by a solidified rule of law regime that safeguards their interests, and thus allows them to position themselves closely to the world's fastest-growing markets.
Why, for example, should a businessman invest in an import company in New York City when his business has been hit with massive tariffs from every single place possible, when he can set up in Hong Kong instead and focus on other markets? The administration's policies aim to try and cripple China, as well as bring back jobs into America, but in the process of doing so have shown the US market to be politically unstable, chaotic, and fraught risks. American unilateralism assumes that they "hold all the cards," and that other countries will sacrifice their outbound trade and relations with China to appease Washington, but this is a chronic misreading of the situation and the state of the world today. Be it countries or businesses alike, the logic of global trade and enterprise is to diversify and multiply options, not to be forced into an "us vs. them" binary. There is thus no overt "loyalty" to the United States; if America makes its market untenable, they will consolidate elsewhere and wean away from dependency upon them. Hong Kong is, contrary to all the politicised attacks against the city in recent years, seen as a safe, stable, and legacy option which continues to serve as a flagbearer of the global trade system Trump wants to dismantle.
The views do not necessarily reflect those of DotDotNews.
Read more articles by Tom Fowdy:
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