Bob CollinsWe can’t imagine there’s a more jaw-dropping video today than this quadcopter video of the protests in Hong Kong.
Its residents spent the night in the street, protesting electoral “reforms” in which China said it will allow Hong Kong to elect its own leaders if they were friendly to Beijing, which took over the region from Great Britain in 1997.
It’s a confrontation that many people saw coming, Time.com notes.
But the real reason why Hong Kong has been so successful is that it is not China. When Hong Kong was handed back to Beijing by Great Britain in 1997, the terms of the deal ensured that the former colony, now called a “special administrative region,” or SAR, of China would maintain the civil liberties it had under British rule.
That separated Hong Kong from the Chinese mainland in key ways. In China, people cannot speak or assemble freely, and the press and courts are under the thumb of the state. But Hong Kongers continued to enjoy a free press and freedom of speech and well-defined rule of law. The formula is called “one country, two systems.”
That held true in the world of economics and finance as well. On the Chinese side of the border, capital flows are restricted, the banking sector is controlled by the state and regulatory systems are weak and arbitrary.
Meanwhile, in Hong Kong, financial regulation is top-notch, capital flows are among the freest in the world, and rule of law is enshrined in a stubbornly independent judicial system. Those attributes have given Hong Kong an insurmountable advantage as an international business hub. Banks from all over the world flocked to Hong Kong, while its nimble sourcing firms orchestrated a global network of supply and production that became known as “borderless manufacturing.”
While there has been much talk of Shanghai overtaking Hong Kong as Asia’s premier financial center, the Chinese metropolis simply cannot compete with Hong Kong’s stellar institutions, regulatory regime and laissez-faire economic outlook.
Related: Hong Kong: 10 things Xi Jinping might be thinking (BBC).
