Summing up

Submitted by Andrew Craig-Bennett on Wed, 10/20/2010 - 11:06

Was Hong Kong, as a colony, a success?

"Was the French Revolution a success?"

"It is too early to tell."

Zhou Enlai, speaking 150 years after the event.

I think this question could be asked in different ways:

A success in terms of the original idea – a British trading post in China?

Yes, a moderate success, from 1841 until the end of the Taipings, in the 1860’s when Shanghai replaced it. From then on until WW2 Hong Kong was a “backwater”, not very much use for trading as it had nothing like the access to the hinterland that the Yangtse Valley affords Shanghai. However, Hong Kong had difficulty paying its way during the years from its foundation until the 1860's.

Did Hong Kong make money for Britain?

No; on a rather regular basis, Britain had to subsidise the Hong Kong government. Of course, some profits made in Hong Kong by corporations and by individuals were sent to Britain, but that did not benefit Britain very much.

A success in terms of a naval and military outpost of the British Empire?

No; far from it. Even as a naval base it was a failure – the only form of piracy that the RN did not put down was Chinese piracy, which flourished right next door to Hong Kong in Bias Bay (now Daya Bay).

An economic and commercial success?

Yes, undoubtedly; what was a "barren rock", according to Palmerston, is now one of the world’s finest cities, according to almost everyone.

A success as an entrepot port and a “gateway” between China and the rest of the world?

At different times, yes. Hong Kong was useful to China as a place of stability during times of great stress and upheaval and provided a means for China to trade and acquire hard currency during the early years of the People’s Republic.

As a model for “positive non-interventionism" in economic and fiscal policy”?

Yes, with the proviso that the land lease revenues, which tend to get overlooked, are ultimately unsustainable, and with the proviso that Hong Kong's social security system is imperfect.

As a model for the currency board approach to foreign exchange?

Yes, but there seems to be no way to get out of the committment to the US$ now.

Having said all that, the only real way that this question can be answered is in terms of people.

This is hugely more difficult, and because Hong Kong as a colony lasted for several lifetimes, the answer would be different at different times.

I am not sure that Hong Kong has been a success in terms of those people who had no choice in the matter - i.e. those who were born there. Presumably those who chose to move there (about forty per cent of the population, even quite recently) would say it was a success. But I am bothered by the evident friction between Hong Kongers and other Chinese people. On the other hand, every Hong Konger I know is fiercely proud of the place and its institutions.

One should also consider those who have moved there to work and who at present form Hong Kong's underclass - the army of Filipina, Thai and Indonesian "domestic helpers", perhaps 200,000 strong, who skivvy for the SAR's middle classes. They get a better deal than elsewhere in Asia because there is an enforced minimum wage, but that is a hangover from British paternalism.

On the positive side, Hong Kong is an amazingly law-abiding place - so much so that I have often had to caution friends visiting Britain on, say, the inadvisability of taking the London Underground late at night.

However, some of Hong Kong's institutions - Saturday working, for example (elsewhere in China Saturday is a holiday) - and the low tax rate, which in fact is not as low as it appears when one takes the land lease sales revenues into account - seem to me to have rather little to commend them.

On the positive side, the people of Hong Kong are confident in defending their rights and in stamping out anything that they think might be a corrupt practice - there was an epic row recently when a civil servant joined one of the property companies. This is definitely good.

I am quite bothered by the apparent widening of the gap between haves and have nots, more particularly I think there is a decline in social mobility in Hong Kong, but that's just anecdotal and I have no evidence for it. I suspect that the influence of big business on the Government, always considerable, has tended to increase since the handover.

The late Freddie Clemo, whom I have quoted at various points, summed up Hong Kong's future, three years before the handover, as "China's Monte Carlo" - he was not referring to gambling (that's Macao's role) but to the territory's status as a corporate and personal tax haven, which is the real position of Monaco in Europe. That looks, sixteen years after he said it, to be remarkably prescient.

Conclusion - open verdict.

[David adds: This brings us to the end of Andrew's 38-part history of Hong Kong. If you've missed any of the previous sections, please click here to visit Andrew's introduction. You'll find a list of all 38-parts at the bottom of that page, and also in a menu down the left-hand side of the page.

Thanks again to Andrew for what must have been a lot of work. It's been a very interesting and enjoyable read.]