Next Magazine (Second opinion A002, 2012.5.3)

As an employer in Hong Kong, every week I see resumes from people around the world who are looking to work here. As frequently there are businesses looking to establish themselves here in many industries, artists looking to establish a name in Asia and sporting codes looking for a profile. Universities are attracting more international students. Interest in Hong Kong is as great from people and businesses in other parts of China.

Hong Kong today is like the London or New York of an earlier era, when young and driven people from around the world come in hope of greater opportunity. Not everyone makes it, but most would think they had a fair chance. Contrast this world of opportunity with the popular view in the print, electronic and social media that opportunity and upward mobility in Hong Kong is fading, schooling is in crisis and pollution is driving people away.Why the disconnect?Perhaps we are concerned about the competition from new migrants, both international and from other parts of China. Singapore is currently having a debate about the rate of immigration and the impact on jobs for those born there. In Europe the essential idea of open borders that was core to founding of the EU is now being questioned. Debates about cross border driving licenses and maternity in Hong Kong suggest similar fears.Perhaps the relative attractions of Hong Kong compared to other cities remain great, but the absolute level of opportunity for people living here has diminished. Higher costs of living, steadily accumulating bureaucracy in fields like financial services, Hong Kong’s version of a licensing Raj limiting entry in many fields, threats of new legislation and barriers to entry in established businesses all make establishing new businesses more difficult than it once was.The rise of politics in Hong Kong also contributes. There is a belief that policy solutions can be found to most issues and problems. As a result failure can be blamed on political failures as well. Moreover, key political decisions are often remote, opaque or populist with weak checks and balances from the ballot or constitution. This reduces an individual sense of responsibility for one’s fate.

What do those looking to Hong Kong for opportunity see? First, they see a highly efficient airport, and a transport system and physical infrastructure that makes Hong Kong wear its dense population more lightly than most large cities. They also see tax rates that allow them to keep most of the fruits of their labor and the gains from their investments. People experience superior service, where tradesmen turn up on time and the myriad of support services for business work well. The legal system quickly facilitates large transactions and effectively arbitrates commercial disputes. The streets are safe and corruption is contained. Hong Kong has become a meeting place for people across the world, i.e. a city that is tightly integrated with global businesses.Contrast this with much of Europe, where the cities are more physically attractive, but so many young people are eager to leave. High minimum wages create extremely high unemployment even in the richest countries (10.8% for the Eurozone). Few European cities of any size are as safe as the streets of Hong Kong. The burden of pensions and transfer payments is crushing for budgets and leaves large parts of the population dependent on government support. Tax rates reduce the incentive to work and encourage the most successful people to leave. The cost of living remains high, with less of the “value” options that still exist in Hong Kong. Education and health care outcomes are not as good as they once were. There is little for Hong Kong to copy in Europe.Hong Kong might have pollution, but the environment is nicer than much of China; and with effort, has every prospect of improving. Access to international education may be tight, but likely no worse than New York and the increasingly competitive market provides alternatives of quality. Hong Kong is different. It is an Asian city, yet racier than European cities and works better with more people. People in Hong Kong and their families take responsibility for their own future. Our challenge is to remain different, preserving our freedoms and our free commerce.

Bill Stacey is in his 10th year as a resident of Hong Kong and is Chairman of the Lion Rock Institute.