Over the last few weeks of protests in Hong Kong, culminating in the violence in the Legco building last week, most people have rightly concluded that:
- at best, the end of the ‘one country two systems’ m.o. will be hastened;
- all the sooner, if the protests don’t fade away as they did after the 2014 Occupy movement; and
- what happens in HK will have a meaningful impact on Taiwan, where next January’s presidential elections may now see the country distance itself further from Beijing with uncertain consequences as to the latter’s subsequent behaviour towards the ‘renegade province’.
I want to take issue, though, with those that argue that HK isn’t that important to China any more, and that the CCP will do what it has to do there without loss or restraint.
It is of course true that since the handover, HK’s share of the combined GDP of China and HK has fallen from about 16 to roughly 3%. And further, HK’s share of total exports has collapsed from over 50 to not much more than 13%. On this basis, you can see HK as a much diminished region on greater China – the consequence largely of the Mainland’s phenomenal growth since 1997.
Yet, as Albert Einstein reportedly opined, not everything that can be counted counts, but not everything that counts can be counted. So, while the GDP and trade significance of HK has dissipated, it retains a crucial role in other respects, largely to do with its modern raison’ d’être, namely as a leading financial centre. Shanghai may be China’s principal financial centre, and China’s many free trade zones may now stand tall over HK, but none of them can really compete with what HK is and does.