The appointment of legislators Jeffrey Lam and Regina Ip to CY’s top policy advisory body probably takes first prize for dullness. Lam is part of the Henry Tang/inherited wealth/bureaucrat camp that CY needs to get on side, while Regina is an opportunist who is perhaps potentially less troublesome in the tent than out of it. In colonial times, Exco had the governor, a pair of guys from HSBC and Swire, the Commander of British Forces and the Chief Secretary – that was about it. Now there are over 30 people in those meetings.
CY’s address consisted in large part of the sort of integration-is-good-for-you/we-need-the-Mainland waffle we don’t want to hear. To the extent that it’s true, we don’t need to be told again and again. To the extent that it’s alarmist, politically correct blather, it’s excruciatingly tedious and insulting to the intelligence. All cities are economically dependent on their hinterlands – so what?
Peel all that stuff away, and CY does hint at something that might be noteworthy (but, we must hasten to add, might not be; so Sphinx-like is the man that you have no clue). He dismissed Hong Kong’s 1960s official pseudo-philosophy of positive noninterventionism as ‘vague and contradictory’, and then similarly rejected the ‘big market, small government’ invented and promoted by his predecessor Donald Tsang. The implication is that government needs to be more proactive, or perhaps should simply stop pretending that it doesn’t intervene in order to do so with greater deliberation and thus, somehow, better.
Unfortunately but typically, the example CY gave was to do with CEPA, the elaborate-looking but mostly vacuous ‘free-trade’ agreement between Hong Kong and the Mainland. A better example could (but again, can’t necessarily) be drawn from his oblique comments on housing.
We often hear that measures to bar property sales to Mainlanders, penalize investors for keeping apartments empty or push developers into building homes suited for local people would offend ‘free market’ principles. Yet in a place where the government owns all the land, a cartel monopolizes and manipulates supply and demand has been magnified by an influx of outsiders with suitcases of cash, where is the free market? There isn’t one. It is distorted, and in such a way as to harm the local population – so you need to re-distort it.
People who drone on endlessly about integration also tend to get hugely excited by the prospect of Hong Kong playing some sort of super-important role in the internationalization of the Renminbi. It seems hard to believe that the Chinese Communist Party, with all its paranoia and semi-xenophobia – plus its need to buy Ferraris for its kids – can ever let go of the control that a closed capital account gives it. To make the currency freely tradable, China’s leaders would have to allow international markets to set either exchange rates (if the currency floats) or interest rates (if they have a peg). For ‘international markets’, read ‘nasty evil foreigners who hate China and aim to prevent the country from rising’.
Still, let’s humour people who think Communists make currencies convertible. Will they use Hong Kong to gradually free the Yuan up? Forbes columnist Cedric Muhammad believes that it will happen in… Africa. He makes some interesting points about, for example, the communities of Africans living and trading in China and the possibilities for RMB mortgages in Africa. Then he comes up with a bombshell: “I believe … that 300 million Chinese will eventually have to move into Africa to alleviate [China’s] demographic nightmare…” He has even identified a CITIC-built housing development in Angola that will host several hundred thousand of them. And he’s written a whole (US$99) report on what would be one of the most historic migrations in human history since our ancestors crossed the Red Sea into Eurasia.
I always assumed that when the demographic pyramid keels over, the rivers catch fire and the pollution starts raining down like volcanic ash, the Chinese would expand into dark, cold, morose but nearby empty places like Mongolia and Siberia. Africa sounds much more fun.