I am reposting an interview by the Economic Freedom Network (EFN) Asia of Andrew Work (AW). Andrew is the Publisher and Editor-in-Chief of
Harbour Times (HT), the flagship of New Work Media. Before creating the HT, he was the Exec. Director of The Canadian
Chamber of Commerce in Hong Kong for a few years. And before that, he was a co-founder and
founding Exec. Director of The Lion Rock Institute (LRI), Hong Kong’s first free
market think tank, born in 2004.
Andrew holding a copy of the HT, thanks to Olaf K. for this photo. Andrew is a friend since 2004. Met him first time in Michigan for the Mackinac Leadership Conference, then at the Atlas Liberty Forum in Chicago, then in several
meetings in Washington DC, then at the EFN Asia conference in Hong Kong,
October 2004.
Here’s the interview. I omitted the first Q&A.
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EFN: World War II put an end to the opium
trade. How did that affect Hong Kong?
AW: At that point Hong Kong had already established
itself as an important Asian trade center and the people of Hong Kong, their
jobs, incomes and prosperity very much depended on the flow of goods through
the harbour. And this meant that Hong Kong’s DNA remained free of policies
that, for example, aim to protect local industries from foreign competition
through taxation. Hong Kong was always wide-open for trade, only few goods were
subject to import duties. And in some cases abolishing such import duties has
even proved beneficial.
EFN: For example?
AW: Well, a recent example would be the de facto
elimination in 2008 of the import duty on wine. The duty was actually not
abolished, but reduced from 60% to 0%. This has had a tremendous effect: Within
only one year the total value of wine traded in Hong Kong doubled. Practically
overnight the city became Asia’s trade and auction hub for fine wine. This has
turned out to be immensely profitable and has led to the creation of new
infrastructure – such as special warehouses – and jobs. In effect an entirely new
industry sector has emerged within the blink of an eye.
EFN: In Europe we are witnessing a rather emotional
debate about the Transatlantic Trade and Investment Partnership (TTIP). Here in
Asia negotiations over the Trans-Pacific Partnership (TPP) were concluded last
year. In how far are free trade agreements relevant to Hong Kong?
AW: FTAs mainly
deal, and I am simplifying a bit here, with the mutual dismantling of tariff
and non-tariff trade barriers. There’s not much to dismantle in Hong Kong in that
regard. But Hong Kong has negotiated a couple of FTAs during the past few
years, for example the ones with EFTA and Chile, and the Closer Economic
Partnership Agreement (CEPA) with China. While, on the face of it, signing CEPA
didn’t make that much difference at first, its later iterations tackled some
issues of importance to Hong Kong. One example would be the mutual recognition
of academic titles and professional qualifications.
The reduction of barriers within the framework of CEPA
could be beneficial – both for foreign professionals who want to settle in Hong
Kong and for Hong Kongers who wish to offer services in mainland China.
Many restrictions remain on offering services in Hong
Kong. The Medical Council of Hong Kong makes it very hard for foreign
physicians to settle in Hong Kong and offer medical services. The same applies
to foreign lawyers. In my view these are unnecessary restrictions that reduce
consumer options.
As far as TPP is concerned, I am convinced that Hong Kong
will profit immensely, even though it is not a part of the treaty. Hong Kong
very much depends on world trade. If trade is flourishing, Hong Kong prospers.
EFN: What are the long-term prospects of Hong Kong?
AW: That very much depends on how Hong Kong will elect
its Chief Executive (CE). Hong Kong’s constitution, the Basic Law, is in many
regards a fantastic legal document. But unfortunately it vests the Chief
Executive with a lot of power. Let me give you an example: Suppose you want to
file a complaint against the police. You would then turn to the Independent
Police Complaints Council. Its members are appointed by the Chief Executive.
But he [the CE] also appoints the police chief and has the final say on
nominations to the High Court. Furthermore, the Chief Executive appoints the
head of Hong Kong’s anti-corruption commission. This goes to show that too many
institutions depend on the CE, a person who in theory has two masters: The
people of Hong Kong and Beijing. But ultimately all important decisions are
made by Beijing.
EFN: So, in a manner of speaking, very much depends on
whether China understands Hong Kong or not?
AW: Precisely; unfortunately right now it seems that the
leadership in Beijing shows little understanding of Hong Kong. Beijing doesn’t
appreciate that the more they meddle in Hong Kong’s affairs, the more
opposition they will face. Some people might simply decide to pack their stuff
and leave. And these are dire prospects. Hong Kong became rich because the city
was always allowed to do what lay in its interest. Hong Kong experienced rapid
economic growth and lifted millions out of poverty long before China started to
catch up. But this is a view that is not shared on the mainland. In China, the
perception prevails that Hong Kong owes its wealth to China alone. I have the
feeling that, if in doubt, Beijing has more interest in exerting control over
Hong Kong than seeing the city prosper. The thinking seems to be: If China
isn’t perceived as being in full control of Hong Kong, other regions on the
mainland might become restive as well.
See also:
EFN Asia 50, New network member, Center for Indonesian Policy Studies, September 25, 2015
EFN Asia 51, Draft program, Day 1 of Conference 2015, November 05, 2015
EFN Asia 52, The 5 fishbowls of economic freedom in Asia, November 20, 2015
EFN Asia 53, Successful Conference 2015 has ended, November 25, 2015
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