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What the Next 25 Years Hold for Hong Kong

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(Bloomberg) -- Hong Kong past, present and future. We asked six leaders in politics, finance, and business what was their most memorable moment in the 25 years since that rainy night when the British governor departed, what the city’s prospects are as a financial center over the next 25 years and what are the opportunities for the next generation of college students and young people. The following are excerpts from the interviews that have been edited for clarity and brevity.

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Leung Chun-ying, Hong Kong’s third chief executive

Leung was a Vice Chairman of the Preparatory Committee for the Establishment of the Hong Kong SAR at the time of the handover, attending the official ceremony with the representatives of the Chinese government. He became chief executive in 2012 and his five-year term saw an increase in civil unrest in the city, including the “Umbrella Revolution” protests in 2014 that paralyzed the city center for 79 days. He also led aggressive housing policies that stung local tycoons. Having stepped down citing family reasons, Leung has remained a vocal critic on Facebook of pro-democracy protests.

I have always promoted the role of Hong Kong as the “super connector,” which enjoins the Mainland of China and the international community. Hong Kong is the most competitive and international of all financial centers in China. It has been broadening its role by bringing in new services such as wealth management, insurance, maritime and aircraft financing. In 25 years’ time, it will be an even bigger and more diverse international finance center.

The city’s defining moment since the handover.

The 2019 riots, when we saw foreigners and foreign flags among the rioters. We also saw British nationals in Hong Kong traveling to Washington D.C., publicly appealing to the US government to sanction China and Hong Kong.

Is the city still a good place for a university graduate to build a career?

Yes. Job prospects are good, unemployment rates low. There is the additional incentive of building a career in the Guangdong cities of the Greater Bay Area. 5% of the Hong Kong population lives permanently on the Mainland of China, not counting those who commute on daily or weekly basis. Therefore, Hong Kong is also a good base for a university graduate to build a career in the Mainland.

Emily Lau, former leader of the Democratic Party

The former BBC journalist was the first woman directly elected to Hong Kong’s Legislative Council in 1991. Lau, 70, won seven direct elections over more than two decades and became leader of what was once the largest opposition party in Hong Kong. On the day of the handover, she was mingling with the crowds in Statue Square talking to people with some other legislators.

It's very difficult to talk about 25 years from now. Things are changing and changing very fast. People are very anxious, whether it is with the political situation or with Covid or with other things. More and more people are leaving H.K. because of deep worries. To be an international financial center there are at least three requirements. First of all, you have to have freedom of money to come in and to go out. And freedom of access to information because that's very important for investors. And of course, you also have to have the freedom of movement of people. I hope people will always have freedom to travel in and out, whether they are Hong Kong residents or not. And I hope the movement of money will also be uninhibited. But freedom of information? We have seen news organizations closed down, journalists arrested. Some journalists resigned from their jobs, many have left Hong Kong. We don't know how things will pan out. That's why it's quite impossible to talk about the next 25 years.

Is the city still a good place for a university graduate to build a career?

Ultimately, it's their decision. But if academia is not free, if the investment community is not free, and the media is not free, how can people be well informed and make decisions, whether it's about their investment, where they put their money, whether they leave or stay here, where to study, what jobs to take. We need young people to be willing and able to express themselves. But do it in a way that will not get you arrested. I would never tell the people of Hong Kong, old or young, the game is over.

John Greenwood, architect of the Hong Kong dollar peg

The former chief economist at Invesco Plc has been a member of the Committee on Currency Board Operations of the Hong Kong Monetary Authority since 1998. In 1983, after the collapse of the Hong Kong dollar, he proposed the currency-board system that is still in operation. After attending the outdoor ceremonial parade in the rain with departing Governor Chris Patten and Prince Charles, Greenwood, now 76, changed into dry clothing, had a celebratory dinner with friends, and went to the Hong Kong Convention Centre for the formal Handover Ceremony at midnight.

I and many others were very optimistic that, at least on the economic front, Hong Kong had the ideal framework — rule of law, private asset markets, stable currency, free movement of capital etc. — for the maintenance of prosperity going forward. There was less certainty and less discussion of the prospects for political and civil liberties.

Hong Kong’s future as a global financial hub.

I fully expect Hong Kong to continue as a major international financial center over the next 25 years. As long as Mainland China does not have fully open capital markets and maintains capital controls, Hong Kong, with its fully open capital markets, its fully convertible currency, and its use of British common law — the preferred legal basis for international transactions — is ideally placed to act as China’s gateway to international capital markets.

The defining moment for Hong Kong in the past 25 years?

The decision in August 1998 by the HKMA to intervene very heavily — to the tune of HK$120 billion — in Hong Kong’s financial markets to defend the HKD/USD peg from speculators’ notorious “double play” (shorting the currency and shorting the stock market). The intervention demonstrated beyond all doubt the Hong Kong authorities’ commitment to maintaining the linked-rate system, and it led very soon afterwards to a series of reforms that transformed the HKMA and the currency board system into the highly open, transparent, and robust system that it is today.

Is the city still a good place for a university graduate to build a career in finance?

Yes, the maintenance of Hong Kong as an international financial center will ensure a wide range of financial markets and ancillary activities — in law, accounting, marketing, research etc. — any one of which would warrant a lifelong career.

Amy Lo Chief Executive, UBS Hong Kong

One of the first female bankers to break through into the top tier of the city’s financial executives, Lo, watched the handover 25 years ago on TV with her family — an emotional moment for her. Co-head of wealth management APAC for UBS Global Wealth Management and head of UBS Hong Kong, Lo has had a front seat in watching the rise in prosperity in China.

I am confident that Hong Kong will continue to stand out as an international city 25 years from now. Hong Kong has displayed strong resilience over the past few decades. With its strong economic fundamentals, we are able to cope with cyclical and structural challenges. Our financial sector system is sound, and we have always been ranked close to New York and London as one of the top financial centers globally.

Hong Kong is a wonderful place for international families in terms of work, living, lifestyle, travelling, education, and more. Despite the uncertainties ahead and short term challenges, Hong Kong’s unique advantages – including our robust legal and regulatory regime, combined with a market-oriented and friendly business environment – will continue to consolidate its status as an international city.

What was the defining moment of Hong Kong in the past 25 years?

One of the crises that changed the lives of so many in Hong Kong was the SARS epidemic in 2003. It was the first time we experienced a health crisis like the one we are going through now. I remember watching the news every day, heartbroken at the number of lives taken by the outbreak. But the community all came together to support each other, particularly the medical staff and those families who had lost their loved ones. Covid-19 brought back a lot of those memories.

Is the city still a good place for a university graduate to build a career?

Yes. Hong Kong is one of the most important hubs for private wealth management in the world, driven by wealth creation within the region, especially in China. First, we are uniquely positioned to connect China and the world. Secondly, we have an unparalleled position as an international financial center. Hong Kong is also an innovation hub. There are many employment opportunities for university graduates in areas such as digital and technology.

When I look back over the past 25 years I’m proud that we, the Hong Kong people, have collectively sustained the city’s prosperity, and we can look forward to a promising future as it continues to evolve.

Allan Zeman, entrepreneur and developer of the Lan Kwai Fong entertainment district

Zeman, 72, built a fortune in the clothing industry before developing Lan Kwai Fong in Central Hong Kong as a dining and entertainment mecca. On the day of the handover, he attended a lunch with Prince Charles on the Royal Yacht Britannia before attending the British ceremony at Tamar Park in the rain and then heading to the Convention Centre for the handover ceremony. In 2011, he was awarded the Grand Bauhinia Medal, Hong Kong’s highest award for lifelong contribution to the city.

That moment, just being in that convention center, was just beyond words. I've lived through the first 25 years, but I believe the next 25 years will be very, very strong. I still remember at the stroke of midnight, when it happened. My suit was soaking, but it was really like being part of history, witnessing the handover and the whole world was watching.

Will Hong Kong still be an international finance center in 25 years’ time?

I think for sure. Hong Kong will be a very strong financial sector. I believe that China will continue to go from strength to strength. They'll be the leading country in the world. And I think as hard as China goes, Hong Kong goes along with it. The Greater Bay Area will be a game changer for Hong Kong. We’re talking about 11 cities, within 1 1/2 hours by high-speed rail from Hong Kong, you're talking about 84 million people and a GDP bigger than South Korea. Hong Kong will be the super connector, the financial center.

What was the defining moment of the past 25 years for you?

There are so many defining moments. I was involved in building Ocean Park. That was pretty special. I've been involved in West Kowloon from the beginning. And of course, the protests in 2019 were also very momentous, that's something I never ever want to experience again. And also Occupy Central when Gloucester Road was blocked for 79 days by these young people. I used to go down every day because it's right near Lan Kwai Fong. And being invited up to China, last July 1 for the 100th anniversary of the Communist Party. And, of course, changing my nationality in 2008 to Chinese, giving up my Canadian passport.

Is the city still a good place for a university graduate to build a career?

I think it’s excellent. As I said earlier, the Greater Bay Area will be a tremendous opportunity for young people. The growth of China will create tremendous opportunities. You're in China, you're part of China. You can live in Hong Kong and still have access to a market of 1.4 billion people. In the past, many young people used to graduate or go to university in the US or UK and stay. If I were 21 again, I'd move out here, because this is where the future is.

Chris Patten, last British Governor of Hong Kong

Dubbed a “Sinner of a Thousand Years” by Beijing for introducing direct elections just before China took over, Patten, now 78 and Chancellor of the University of Oxford, said he felt “deep sadness” while hoping for the best on the night of the handover as he stood in the rain with Prince Charles and watched the British flag lowered.

I was extremely lucky to have the opportunity to serve the people of Hong Kong. I will never forget how kind they were to me. I will never forget how good the civil service were, full of honorable and honest and decent and hardworking people. The whole community was like a Rolls-Royce. It should have just been going on purring away. It was a terrific place. I hope it can one day be so again.

Will Hong Kong remain an international financial center in the next 25 years? Hong Kong has been one of the greatest free cities in the world where people like Allan Zeman managed to make their money. When we left, Hong Kong was the eighth-largest trading community in the world. It had year after year of successful economic growth. I'll be interested to see how that withstands Chinese zero-covid policies and the clampdown on the flow of information in Hong Kong. You can't have a great sophisticated international financial and trading hub if you try to control information.

On the future of the city for students and young people:

It’s tragic that so many good, decent, honest people have left Hong Kong. They see their future clouded by the fact that their children will have a different sort of education, one in which engineering the soul plays the most important part rather than educating children. The Chinese Communist leadership in Beijing has always wanted Hong Kong without Hong Kongers. I hope it will manage to withstand the appalling brutalities of Communism.I am asked again and again by young Hong Kongers whether they should come back to Hong Kong. It’s not an easy answer to give. You can't really expect people to be braver than I would be. Because, like me but with more reasons, they love Hong Kong and hate to see it systematically and vengefully destroyed.

I was attacked by China as though I invented democracy. I wish I’d been able to do more. I think we should have started a bit earlier after the Joint Declaration, certainly to try to put in place a bit more scaffolding to protect people towards greater freedom. I wish we could have done a bit more in developing democracy. I want Hong Kong to be the great, wonderful, open free city that it was, not just for the very rich but for everyone.

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