Hong Kong, once again world's freest economy: stability remains key

The Hong Kong Special Administrative Region, while soaking in exuberant celebrations on China’s National Day, stays in perfect peace and order, a hard-earned, well-deserved fruit that residents have been yearning for for years. Last National Day, I remember, Chief Executive Carrie Lam Cheng Yuet-ngor mentioned that "stability has been restored to society while national security has been safeguarded, and our people can continue to enjoy their basic rights and freedoms". As everybody can see, stability is the key, especially in the political domain where social rifts carve the deepest dents in the hearts of peace-loving residents in Hong Kong. Without political stability, economic stability would find nowhere to stand.

Hong Kong, a feisty city of resilience, continues its legendary economic success amid the worst pandemic in history. On Sept 14, Canada-based Fraser Institute once again ranked Hong Kong as the world´s freest economy in the Economic Freedom of the World 2021 Annual Report, relying on data collected in 2019. Hong Kong has been at the top of the annual rankings issued by the Fraser Institute since its first economic freedom report in 1996.

This is more proof of what I mentioned in "HK's development linked to that of the mainland" (Aug 26, China Daily HK Edition): Hong Kong is as strong as ever. The SAR was ranked among the world’s top four financial hubs in March, according to the 29th Global Financial Index. More recently we received further good news from the SAR government: According to revised figures released on Aug 13, Hong Kong’s economy is expected to grow by between 5.5 percent and 6.5 percent this year, compared with an earlier range of 3.5 percent to 5.5 percent, considerably higher growth than initially expected.

The SAR government also raised its year-on-year GDP figure for the second quarter to 7.6 percent from an advanced reading of 7.5 percent, signaling a continuing economic rebound brought on by the easing of the pandemic. In the first quarter of 2021, Hong Kong went from recession to its fastest economic growth in more than 10 years -- a revised figure of 8 percent. The uncertain evolution of the pandemic may hinder the recovery, but the situation looks much better than it did exactly one year ago.

Things have been complicated in Hong Kong these last two years. Since 2019, the city has faced unprecedented economic challenges. Despite Hong Kong being in great shape in 2017 and 2018, the economic situation worsened afterward, as 2019 and 2020 were two of its most challenging years socially and economically because of the monthslong social unrest and the COVID-19 pandemic.

However, it is safe to conclude that Hong Kong’s economy remains resilient despite the huge challenges, showing signs of a gradual resurrection. The figures released by the government last month are a clear example of this gradual resurrection.

What does Hong Kong need to keep thriving? It needs stability. And one of the events that can help Hong Kong become even become more stable is that of the recently held Election Committee Subsector Ordinary Elections, which can be labeled as a milestone in Hong Kong’s electoral system.

These elections follow the "patriots only" move put in practice in late March: On March 30, the Standing Committee of the National People’s Congress of China unanimously adopted amendments to Annex I and Annex II to the Basic Law of the Hong Kong Special Administrative Region.

Under the finalized reform plan, the newly elected Election Committee is entrusted, among others, with the key task of nominating and electing the next chief executive. It is also given two new functions in the electoral system – the nomination of candidates for the Legislative Council election and the election of 40 Legislative Council members.

The recently held election for the 1,500-member Election Committee will be followed by the Legislative Council election on Dec 19, and the chief executive election on March 27, 2022. That is, three very important elections for the future of Hong Kong to be held in less than seven months.

Albeit criticized by many Western media, to me, the electoral reform is not going to undermine the "one country, two systems" principle, but it will enhance it, thus bringing more stability to Hong Kong.

The chief executive said, in an open letter to the people of Hong Kong published on the front page of local newspapers on March 31, that "I firmly believe that by improving the electoral system and implementing ‘patriots administering Hong Kong’, the excessive politicization in society and the internal rift that has torn Hong Kong apart can be effectively mitigated, thereby enhancing the governance capability of the HKSAR."

If we want to see Hong Kong remain as one of the world’s most important financial centers, it needs to remain stable, since this is key. Hong Kong’s economy has been ranked once again as the world’s freest and will quite likely remain so if the situation stays the same. The long-term development of Hong Kong within the Guangdong-Hong Kong-Macao Greater Bay Area blueprint as well as within the national development strategy requires a multifaceted approach: The economic one (by choosing which initiatives are worth pursuing, which is something that the SAR government has been doing remarkably well), but also the stability one, by making sure that Hong Kong remains perfectly stable.

The author works as a fintech adviser and researcher. He has worked as a business analyst for a Hong Kong publicly listed company.

The views do not necessarily reflect those of China Daily.