Hong Kong has to rebuild reputation as financial center

Updated: 2014-11-05 07:30

By Zhou Bajun(HK Edition)

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Hong Kong has to rebuild reputation as financial center

Earlier this year, before "Occupy Central" was officially launched, I wrote two columns about Hong Kong's role as an international financial center.

The first, published on March 5, was titled "A wake up call for all Hongkongers". In it I note that Beijing was replacing Hong Kong as the venue for the Asia-Pacific Economic Cooperation (APEC) Finance Ministers' Meeting. I stressed that this was a clear warning sign from the central government. This was because the "Occupy" campaign was being prepared and security in the city was a major concern. Along with "Occupy", the ongoing political situation was definitely deteriorating. Hong Kong was no longer an appropriate venue for this important international event.

A month later, on April 30, I wrote another column, "Financiers' open letter sends wrong message".

I noted that this "was an unusual episode in Hong Kong's history" as about 70 people from Hong Kong's financial sector published an open letter to President Xi Jinping. They supported the "Occupy" campaign and demanded so-called genuine democracy. I predicted that such attitudes would "severely damage the four great cornerstones of Hong Kong" which made it a leading international financial center. The four great conerstones are: the rule of law; prosperity and stability; the relationship between Hong Kong and the mainland; and the city's global links.

Six months later my prediction has come true. Having suffered over a month of turmoil because of the "Occupy" campaign, which started on Sept 28, the four cornerstones have all suffered. In particular, the rule of law has been defied and violated in an unprecedented manner. The Hong Kong Bar Associaltion expressed its concern on Oct 8, noting that the so-called civil disobedience in Hong Kong "is potentially unlawful". Then on Oct 28, the Bar Association said, "independence of the judiciary and respect for the dignity and authority of the court are fundamental tenets of the concept of the rule of law." It also denounced the protesters' defiance of the High Court's injunction to clear the streets. The Bar Assocation said, "when deliberate defiance of a court order is committed en masse in a combined effort, a direct affront to the rule of law will inevitably result. For the same reason, open calls to disobey a court order applicable to them would undoubtedly constitute an erosion of the rule of law."

Because of the deteriorating situation in Hong Kong, Beijing had to postpone the launch of Shanghai-Hong Kong Stock Connect, a scheme to directly link the Hong Kong and Shanghai stock markets - also known as the "through train". This had been expected to launch on Oct 27.

Zhang Chenghui, director-general of the Finance Research Institute, and a member of the Development Research Center of the State Council told the media on Nov 3 that the regulatory authorities were still assessing the risks involved with the "through train". This highlights the extent of the mainland's concerns about developments in Hong Kong.

Some might argue the fourth cornerstone shouldn't be affected because the "Occupy" campaign, described by Western media as "Umbrella Revolution", is obviously benefiting the West. Nevertheless, this view is illusionary. Entering the 21st century, the irreversible trend has been that the global economic center of gravity has been shifting eastward. If Hong Kong allows its economic and political links with the mainland to deteriorate - which has been happening because of "Occupy" - it will lose much of its appeal to Western investors.

However, Western forces have been blatantly meddling in Hong Kong's internal affairs. Therefore, the Hong Kong government and the city's commercial and financial circles have to be wary of links between Hong Kong and some Western countries. The city's reputation as a stable and efficient international financial center has been tarnished.

The opposition camp is discussing transforming "Occupy" into a so-called "referendum" for "genuine universal suffrage". They believe this would be triggered by the resignation of a few opposition lawmakers. It is likely the opposition won't end "Occupy" in the near future. But Hong Kong people should encourage and support the government in taking decisive action to end "Occupy" - and the sooner the better. Between Oct 25 and Nov 2, 1.83 million Hong Kong residents signed a petition calling for the campaign to end. Mainstream opinion against "Occupy" is now absolutely clear. The government has to take action.

The government and financial community want the "through train" to be approved soon. Therefore, public order in Hong Kong must be restored as soon as possible. In the mid to long term, the government and people of Hong Kong are going to have to rebuild the city's reputation as an international financial center.

The author is a veteran current affairs commentator.

(HK Edition 11/05/2014 page7)