I thought I ought to write about my week in Hong Kong in February, partly because it might be of interest, and partly (if I’m honest) to make the point that it was by no means a jolly — even if we did manage to pack in helicopter tour and a night boat trip in the harbour.
Our first appointment on Tuesday Feb 22nd was with Mr. C.H. Tse, Deputy Director of Information Services with the HK government, who gave us a broad overview of the Special Administrative Region (as HK is known under the “One Country, Two Systems” policy enshrined in the Basic Law, described as HK’s “Mini-Constitution”). Then on to the Legislative Council Building (the Council is known as “LegCo”, pronounced Ledge-Co, for short), to meet the Hon. Abraham Shek and a number of his colleagues, followed by lunch with LegCo members including the redoubtable Emily Lau.
There are curious parallels with the EU parliament. LegCo is a (largely) elected body which nevertheless does not form a government, but it scrutinises the policies of the executive and has limited powers to amend legislation. The half of LegCo elected by universal suffrage is elected, like MEPs, by a system of regional proportional representation.
Then to the Department of Trade and Industry to meet Asst Director General Ms Winsome Au for a briefing on the CEPA — the Mainland & HK Closer Economic Partnership Arrangement. This is the basis on which HK and the mainland trade, and is oddly like an FTA — indeed I guess it is an FTA, plus some knobs and whistles! This visit was followed by the helicopter tour, which dramatised HK’s lack of land or agricultural resources. It’s either high-rise urban development or craggy mountainous country. We flew over two reservoirs, but HK has to import much of its water — for a fee — from the mainland. We flew astonishingly close to HK’s new airport, Chek Lap Kok, built on reclaimed land because there was nowhere else. I still remember the old days (I first came to HK in 1972) when airliners flew in past the high rises and the laundry lines and turned right at the chequer-board to land perilously at Kai Tak, virtually in the harbour. The old airport is still there, but being redeveloped as prime real estate. Meantime the infrastructure development is awesome, with four-lane highways and seemingly innumerable suspension bridges connecting the islands.
After the flight, we attended a dinner hosted by the EU’s Head of the EU office on HK, Mrs. Maria Castillo Fernandez, at her residence on the south side of HK Island, where we were again joined by LegCo members.
The next day, Wednesday, we met with Christopher Hammerbeck, who is Vice Chairman of the EU Chamber of Commerce but also General Secretary of the British Chamber, and is an old China hand, having first come with the military in colonial days. We also met Veronica Llorca, Project Director of the EU Business Information programme.
The on to the Dept for Mainland & Constitutional Affairs for a briefing on One Country Two Systems. I am delighted that the Chinese have stuck to their bargain on this, and that Hong Kong’s special status is maintained. It still has transparency, rule of law, enforceable contracts, excellent communications and extensive English language, which makes it a magnet for foreign investment in the region. After lunch it was the Commerce & Economic Development Dept, where we discussed HK’s bilateral trade with the EU, and its growing economic relations with Taiwan.
The last meeting that day was with Ms. Shirley Kwan and Ms. Melo Man, Principal Assistant Secretaries for financial services at the Treasury. This was a high point of the visit. HK has no dividend tax, no death tax, and maximum personal and corporate tax rates in the mid-teens. No individual should pay more than 15% tax. HK is a shining example of a low-tax economy, doing all the things that we know such economies do — like growing fast (6.8% in 2010), and attracting huge inward investment. George Osborne please note. If you want to stifle enterprise, a 50% income tax rate will do the job nicely. Hong Kong comes top of the Heritage Foundation’s Index of Economic Freedom. UK is slipping down the rankings.
After that, the boat tour in HK harbour at night. I was struck by the fact that everywhere you looked — literally everywhere, both sides of the harbour — there was nothing but high-rise buildings, and through the occasional gaps you could see …. more high rise buildings! They were all brilliantly illuminated, and we were entertained by the nightly laser light show from the tallest buildings. Not too much concern about carbon footprints, it seemed to me.
Thursday started with a visit I’d specially requested, to the Education Department where we met Ms. Cora Ho, Principal Asst Secretary. I’d been worried by reports that HK was dropping English as the language of instruction. But I was reassured. Across all HK schools there is an intensive programme to teach three languages — Cantonese, Mandarin and English. The importance of English for international trade and tourism is well recognised. Next came Ms. Margaret Fong at the Trade Development Council, and after lunch Ms. Sau Kong Lee, Senior Asst Solicitor General at the Department of Justice. She proved to be an Oxford graduate, and as sharp as a knife. I am delighted that HK is maintaining its legal system — a key element in its competitive armoury — in such fine condition.
The day’s last meeting was with Simon Galpin, Director-General of Investment Promotion at Invest Hong Kong, who outlined HK’s extensive and very successful programme for promoting inward investment.
The first meeting on our last day, Friday, was an important one. It was with the very charming Valentina Chan at the ICAC, the Independent Commission Against Corruption. There was a time when corruption was rife in the colony. But an on-going and determined campaign against corruption has turned the situation around, and HK now ranks amongst the best in the world on this issue.
Later in the morning we visited the HK Stock Exchange and met Lawrence Fok. They still retain a trading floor replete with electronic price displays, but it’s mainly for show, and we duly had our photographs taken in front of the big board. Most trading, of course, is now done from computers. But HK remains one of Asia’s leading stock markets. We went on to lunch with Robin Ip, Deputy Head of the Central Policy Unit — the unit that provides strategic advice and new thinking to the government. He’d brought with him several local academics, journalists and local politicians.
Our last business appointment was with Patrick Kwok, Director of Business Development at the HK Tourism Board (picture above). Tourism is a key industry for HK, with shopping one of the major attractions for the very large numbers who come from the mainland, from around the region and indeed from around the world. And after a week there, I can confirm that HK is a great place to visit. After the Tourism Board, as a well-earned break, we visited Hong Kong’s Museum of History — but that’s another story. Then at midnight, we caught the flight back to Europe.
I came away from HK greatly encouraged. I conclude that there are real advantages for both HK and the mainland from their unique and successful relationship. Long may it continue.