Why I am Making "Good Trouble" for Hong Kong

South China Morning Post: February 27, 2024

I love Hong Kong.  Yet I now find myself in the uncomfortable position as a naysayer,  My recent opinion piece in the Financial Times, “It pains me say Hong Kong is over,” has stirred up considerable controversy in the city that I used to call home.  Unsurprisingly, Hong Kong politicians have been especially critical.  But former colleagues, business associates, and good friends have also raised concerns. A response is in order.

While no nation, economy, or city is ever definitively “over,” the title of my piece was intended to be more of a wake-up call to a city that has long prided itself as Asia’s world city, the gateway to China, one of the elite Asian tiger economies, and Milton Friedman’s favorite free market.

I cited three reasons for saying that Hong Kong’s glory days may now be over: a distinct loss of political autonomy in the aftermath of the massive demonstrations of 2019-20; a weakening of Hong Kong’s economic underpinnings as a result of a protracted malaise in the mainland Chinese economy; and a squeeze from US-centric friend-shoring that has forced Hong Kong’s East Asian trading partners  to choose sides in coping with the crossfire of the Sino-American conflict.

While the pushback has been fast and furious, few have taken serious issue with the three points raised above.  Instead, many have rested their case on Hong Kong’s long-standing resilience, a seemingly innate capacity for the city to reinvent itself in the face of near existential threats. 

After all, Hong Kong was written off repeatedly — not just in the aftermath of the 1967 riots under British occupation, but also in the Asian Financial Crisis, the handover, itself, and, of course, the outbreaks of severe acute respiratory syndrome (SARS) and Covid-19.  Louis Krarr’s  scathing 1995 piece in Fortune magazine “The Death of Hong Kong,” makes my recent missive look optimistic.  Time and again, Hong Kong has defied those predicting its demise, with a series of Phoenix-like resurrections.  Why shouldn’t we expect the same this time?

The three pillars of my argument noted above bear directly on this question. Significantly, resilience this time will require a newfound political and economic policy autonomy that seems highly unlikely.

A sharp resurgence of the Chinese economy would certainly help, but I would assign a low probability to that outcome, considering the mainland’s lingering structural problems — notably demographic headwinds, weak productivity, a multi-year shakeout in the property sector, and a Japanese-like debt problem. Nor do I see a kumbaya moment for the US-China conflict that would alleviate the pressures of friend-shoring in diverting trade away from Hong Kong.

The counter is that resilience often arises out of new developments.  Hong Kong’s role as an anchor in the US$2 trillion Greater Bay Area is often cited as such a possibility.  While there can be no mistaking its potential dynamism, this regional agglomeration finds Hong Kong as one piece of a puzzle that also includes much larger and equally dynamic cities such as Shenzhen and Guangzhou. From this perspective, Hong Kong risks becoming “just another big Chinese city.”

Others pushed back on my characterization of Hong Kong’s new political constraints following the demonstrations of 2019-20.

With the passage of Hong Kong’s own national security law likely and a court system that is taking aim at opposition politicians, might resilience arise from the enduring strength of Hong Kong’s rule of law?  Fair point,  but it seems to me that Beijing now has the last word on governance — and far more forcefully than before the demonstrations.

Finally, there were those, including Regina Ip Lau Suk-yee, convenor of Hong Kong’s Executive Council, who claimed that my impressions were dated from the days I lived there (2007-12) and that I needed to come back to a still vibrant Hong Kong and “see it for myself.” That is patently incorrect. The FT piece was, in fact, written with a very fresh impression of the current atmosphere in Hong Kong that I did see for myself. 

Not only have I continued to be a regular visitor to the city since I moved back to the US full time in 2012, but I made three visits to Hong Kong last year that played an important role in shaping the impressions that motivated my op-ed. 

In fact, it was what I saw that troubled me the most. Many of my friends and former associates have left Hong Kong in the past few years. Companies are starting to do the same and many of those that are staying are discussing contingency plans for diversifying  their exposure to Hong Kong. The risk of a talent exodus is very real. 

Without talent, there can be no dynamism. Yes, the bulk of my circle of contacts remains in place. But an undercurrent of angst about the future of Hong Kong hung like a dark cloud over our recent discussions. The energy and unbridled optimism that was once Hong Kong’s most salient characteristic, its greatest asset, has been sapped.

To be perfectly honest, there is a part of me — reflecting my love of Hong Kong — that hopes I am wrong.  I noted in the FT article that the Heng Seng Index, long emblematic of the city’s success, had returned to the level prevailing at the handover in July 1997. More than few have been quick to note that the index was up for six out of eight trading days since the piece was published on February 11. Dead-cat bounce, or was it all just a bad dream?

The late John Lewis, a legendary figure in the US civil rights movement, inspired a lifetime of protest in the name of “good trouble.” By raising serious questions about the future of Hong Kong, I am hoping my wake-up call can do the same.