It has been said time and again that Hong Kong has no asset but its people.
Indeed, it was the talent and hard work of the people that turned this
"barren rock" into a vibrant financial centre.
The regional economic environment has gone through several sea changes in the
past. But every time, Hong Kongers could fend off the challenges and exploit the
opportunities to their benefit.
Of course, they owe at least part of their past success to a largely
non-interventionist government and a fiercely independent judiciary. Such a
political and social environment has provided the flexibility and security for
many entrepreneurs to constantly adapt their businesses to meet changing market
demands.
But it takes people with a keen business sense and a willingness to take
risks to adapt so well to changes that were mostly outside Hong Kong's control.
Without them, Hong Kong would probably have long ago regressed into a remote
trading outpost, its spectacular harbour notwithstanding.
Many successful entrepreneurs in Hong Kong are first- or second-generation
immigrants from the mainland. Recognizing the past contributions of mainland
immigrants, Hong Kong should be making serious efforts to entice young talents
from around the country.
The success of such efforts could be decisive in the future of Hong Kong as
it makes its transition from a provider of traditional services to a
knowledge-based economy. This is not just an empty slogan. If it fails to make
this transition, Hong Kong could become truly irrelevant to the mainland's
economic development.
Hong Kong's role as a trans-shipment centre for the industrial hinterland of
the Pearl River Delta is diminishing rapidly as more and more goods are diverted
to the new container ports in Shenzhen and other cities. This is just one
example showing that Hong Kong can no longer compete with many mainland cities
in providing traditional services.
This is not the end of the world for Hong Kong. The nature of the challenge
is not new to Hong Kong either.
Memories of the massive exodus of industries to the Pearl River Delta in the
1980s are still fresh in many Hong Kongers' minds. Despite the hollowing out,
Hong Kong did not collapse. Instead, it took the opportunity to transform itself
from a low-cost manufacturing base into a high-value-added services centre.
During that time, many factories were closed and hundreds of thousands of
workers were laid off. But most of these workers were quick to adapt to the new
economic environment, learn new skills and find employment in the services
sector.
Now, Hong Kong is facing competition from many lower-cost services centres on
the mainland. The opening of the mainland's banking sector to foreign financial
institutions could lead to a gradual shift of at least some financial services
to Shanghai. Many foreign banks in Shanghai have already begun to look for
larger premises to expand.
Driving down costs to compete with Shanghai or any other mainland city is
totally untenable. The erosion in living standards would have made such a move
completely meaningless. What's more, it may not work because the competitors all
enjoy other advantages, such as proximity to the markets and well-established
connections with prospective clients.
The way to go is to move further up the value-added chain. To compete, Hong
Kong will have to nurture talents who can produce new solutions by leveraging on
its distinct advantages, which include the rule of law, free flow of information
and a pro-business administration that is relatively free of corruption.
In addition to training its own, Hong Kong has been scouting for talents from
the mainland with various degrees of success. Many mainland university graduates
have expressed an interest in moving to work and live in Hong Kong not only by
the promise of higher pay but also by the more open social environment.
A personal friend of mine from Guangzhou has told me that her ambition was to
find a good job in Hong Kong after graduating from business school at a top US
university. If she comes, it will be a net gain for Hong Kong.
Another friend from Shanghai won a scholarship to study for a master's degree
in journalism at a Hong Kong university. She wants to stay and work in Hong Kong
after graduation because she is captivated by the vibrant lifestyle and creative
energy of the young people there.
But she is worried that she may not be able to find a job in Hong Kong
because not many employers are willing to go through the arduous process of
securing a work permit for an inexperienced mainland candidate. It would be a
waste for Hong Kong if she were forced to leave after obtaining an advanced
degree.
Perhaps the Hong Kong government can find a way to make it easier for young
mainland talents to make Hong Kong their home. The contributions they can offer
to the transformation of Hong Kong to a "knowledge-based economy" seem obvious.
Email: jamesleung@chinadaily.com.cn
(China Daily 09/08/2006 page4)
