Chartwell in Hong Kong
We try and come through Hong Kong as often as possible as we have some great clients and many old friends here. Every time one sees change, and feels keenly the proximity of China’s vast economy and population. The energy you encounter here is what people mean by the centre of gravity shifting East.
Yesterday I watched the USS Bonhomme Richard, a 40,000-tonne warship, slip into Victoria Harbour and moor near the Pacific Club on Tsim Sha Tsui’s waterfront. The South China Morning Post reported on Wednesday that the warship’s arrival coincided with the the beginning of joint military exercises with the Philippines off Luzon, just 220km from the disputed Scarborough Shoal islets, also known as Huangyan Island – territory which is claimed by China. Tensions run high here, as China looks to build a blue water navy to protect its shipping lanes, and the US looks to pivot hard into its Asia Pacific neighbourhood.
Despite the brutal conflicts and instability of the Middle East, this region is now the crucible of world affairs. It is raw proof that politics follows the money – the shifting gravity. Follow the money, and you arrive somewhere around the South China Sea.
But economic competition is remorseless, and there is no time to savour success. The front page story on Wednesday’s South China Morning Post was the challenge Hong Kong now faces from the new free trade zone at Shanghai. “Hong Kong needs to develop more quickly or risk being left behind, warns tycoon (Li Ka-shing, Asia’s richest man and an HK champion) …”
“The landmark project signals Beijing’s determination to raise the competitiveness of the mainland economy. It plans to elevate Shanghai’s role in economic reform by loosening controls on capital flows and expanding foreign investment in its free-trade zone, to officially open next week.
Asked if Shanghai would surpass Hong Kong in the next five to 10 years, Li replied: “I do not want to predict. But it will be faster than most people expect.
“It is just like you are running a 1,000-kilometre race. When you run one-third of the race, you see [your competitor] still behind you. But you are already surpassed [by your competitor] in the first half of the race. It is all about the speed.”
Welcome to the geopolitics of the 21st century.