For some reason the great and good feel they need to be able to summarise Hong Kong's economic model in a trite, meaningless phrase. "Positive non-internventionism", "Big market, small government", "Laissez faire", "Hong Kong Disneyland". Hong Kong's economic model is, in reality, a mixture of low direct taxation combined with a set of cartels that collude with the government, a reasonably well-established and free court system (as least as it applies to commerce) and a currency board with fiscal reserves that works because the city is still basically a trading centre who's commerce is largely denominated in US dollars.

But now I'm really getting confused. The other day a geography professor was annoyed at a Nobel prize winning economist's views on why Hong Kong has been so successful. Yesterday a Chinese Communist was telling off Victor Sit (the geography professor) and the Hong Kong government for being too interventionist and not laissez-faire enough:

A senior economist and bureaucrat in Beijing has penned a blistering condemnation of the Hong Kong government in a local Chinese-language newspaper, denouncing the administration for inserting itself into the free market and relying too heavily on the mainland for economic handouts since the 1997 Asian financial crisis.
"Relations between the Hong Kong government and central authorities are not based on market principles, but more upon the desire for greater interests and handouts," wrote Yi Xianrong, a director at the Institute of Finance and Banking of the high-level Chinese Academy of Social Sciences...he called on Hong Kong to hold on to its laissez-faire principles in the process, arguing that those principles had served as a guiding example for the mainland's own dramatic liberalization and development over the past three decades.

The rest of the article summarises the recent debate. Ideology is such an outmoded concept. Luckily Hong Kong has grown to such an extent it should be able to absorb a more "activist" government. And most interestingly The Don's policy speech didn't reveal any new boondoggles. Perhaps it really is all much ado about nothing.

Original URL: Click here to visit original article
Copyright Simon World