Realist, not conformist analysis of the latest financial, business and political news

China Should Slap Down Hong Kong Because Economic Liberty

The latest from British academia is that China should slap down on the freedoms of Hong Kong because of the economic liberty the place enjoys.

This is not a joke by the way, nor is it an unkind reading of the point being made. It is the point being made:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Protests in Hong Kong have captured the world’s attention in recent weeks, with demonstrators closing streets and the airport, and Chinese forces amassing near the border with a none too subtle threat of violent reprisal. The protests began in response to a new extradition law, but have spilled over into a general unease about the future of Hong Kong’s special administrative status. This special status sets Hong Kong apart from mainland China in a number of ways. As well as enjoying various social and political freedoms, it has a free market economy and is one of the world’s biggest financial centres. Global finance has attracted a number of Chinese elites but has not benefited a large chunk of Hong Kong society. But if Hong Kong’s protesters succeed in pushing back against the oversight of Beijing, it would serve to reinforce the benefits the elites already enjoy from Hong Kong’s economic arrangements. This parallels the situation in the UK, where financial elites could soon embrace a low-tax, low-regulation future following a no-deal Brexit driven by populist concerns about immigration and inequality. [/perfectpullquote]

That large chunk of Hong Kong society that hasn’t benefited.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Hong Kong/GDP per capita
46,193.61 USD (2017) China/GDP per capita
8,826.99 USD (2017) [/perfectpullquote]

Being 5 times better off isn’t a benefit at all, is it?

Aren’t we lucky with the academia we have?

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Q46
Q46
2 years ago

‘… but has not benefited a large chunk of Hong Kong society.’

Who are free to decamp to the mainland to enjoy the benefits of authoritarianism and central economic planning and control.

Quentin Vole
Quentin Vole
2 years ago

Hong Kong/GDP per capita = 46,193.61 USD (2017)
China/GDP per capita = 8,826.99 USD (2017)

But HK GDP isn’t equally distributed, so that is much worse. Whereas in PRC … oh, hang on …

Jonathan Harston
Jonathan Harston
2 years ago

Not only is Hong Kong’s GDP five times China’s, HK’s income distribution is fairly “flat” (eg very approx. each 10% has 10% of income), whereas China’s is an exponential curve towards the top, bottom 10% has 3% of income, top 10% has 25% of income.

Additionally, HK keeps giving out tax refunds and increasing personal allowances (which disproportionately benefit poorer people), which I don’t see China doing.

Quentin Vole
Quentin Vole
2 years ago

I wouldn’t be surprised to find PRC is more unequal, but it surely can’t be the case that the top 10% in HK (or anywhere else) earn the same as the bottom 10%.

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