China’s Hong Kong is booming
TEXT OF STORY
Lisa Napoli: Happy anniversary to Hong Kong — on Sunday, the territory holds a big party to celebrate 10 years of Chinese rule.
Traits from the British years still dominate: a capitalist economy, free press, an independent judicial system… Some expected that to be bad for business in Hong Kong. But Kate Woodsome says the formula has surprised even the biggest skeptics.
Kate Woodsome: Two years before Britain gave up its last major colony, Fortune magazine ran a story titled “The Death of Hong Kong.” It predicted China’s communist system would choke Hong Kong’s capitalist economy.
Christopher Hammerbeck: That to me was totally bizarre, frankly.
That’s Christopher Hammerbeck of the British Chamber of Commerce here. He says the obituary was a bit premature.
Hammerbeck: The one thing that is quite sure about history is that trade relationships far outlast uncomfortable diplomatic relationships.
After the 1997 Asian financial crisis, Hong Kong’s economy did suffer badly. But it has rebounded, and is experiencing its fastest growth since the late 1980s.
Hong Kong largely has China to thank. Mainland Chinese make up more than half of Hong Kong’s 25 million tourists. Loads of tourists line up every day for the bus to Ocean Park. They go for the pandas and gondolas.
Shishi Wong came from Shanghai to see how Hong Kong merged its two identities.
Shishi Wong: I just felt it’s such an efficient place that everybody just knows exactly what to do. But at the same time, you can see like how the Chinese culture is here. It’s amazing.
Investors feel the same. Last year, so many mainland companies listed on the Hong Kong exchange that the territory rivals London as the world’s biggest IPOs market. Its GDP reached $189 billion last year, and is expected to grow about six percent this year.
Tai Hui, an economist for Standard Chartered bank, says investors stay in Hong Kong because it’s the closest you can get to China and still enjoy international business standards.
Tai Hui: One of the strong advantages of Hong Kong has always been the institution. So the likes of rule of law, the independent judiciary, the strong governance system, the accounting system.
But Hong Kong is looking over its shoulder. Chinese cities like Shanghai are cleaning up their markets, and that’s attracting investors.
In Hong Kong, I’m Kate Woodsome for Marketplace.
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