When Xi Jinping touches down for his first official visit in Hong Kong his week, the city’s police force will be as busy as ever.
Authorities are on high alert for potentially “embarrassing” protests as the Chinese president travels to mark the 20th anniversary of the territory’s return to China after more than a century of British rule. He’ll also inaugurate the new chief executive, Carrie Lam, who is replacing the unpopular Leung Chun-ying.
Mr. Xi’s visit comes as local activists worry about China’s encroachment on the rights of Hong Kongers and the erosion of the “one country, two systems” model that allowed Hong Kong to retain its British-based political and economic systems after the “handover” in 1997. (The so-called “Umbrella Movement” protests in 2014 calling for direct elections paralyzed the city for more than two months.)
But in mid-June, one of the region’s top economic officers in the U.S. visited Atlanta to allay fears that political turmoil would disrupt its economic vitality.
Steve Barclay, director of Hong Kong Economic and Trade Office in New York, reaffirmed the special administrative region’s autonomy and what that means for businesses using Hong Kong as an Asian base.
“Some of you here know a lot about Hong Kong while others know nothing,” he said. “I’ll try to reach the middle ground and explain that 20 years after the handover, despite some recent news reports, there should be no worries about Hong Kong.”
Speaking at a World Trade Center Atlanta luncheon, Mr. Barclay aimed to provide a reality check concerning the economic health of the area, which according to the Heritage Foundation remains the most competitive economy in the world for the 23rd consecutive year.
He also emphasized Hong Kong’s healthy trade relationship with Georgia. The state’s exports to Hong Kong stood at $715 million in 2016, making the city of 7 million people the state’s No. 14 sales destination, ahead of France, Italy and India.
The figures include about $200 million in aerospace products and parts and about the same amount in food, split down the middle between fruit and tree nuts (most likely pecans bound for mainland China) and packaged meat products.
Still, last year saw a sharp drop the state’s exports to the region, down about 22 percent from $913.5 million in 2015.
Mr. Barclay, whose audience also included members of the Hong Kong Association of Atlanta, said the city remains an important financial and physical gateway into the mainland.
“Hong Kong is the connector of China to the outside world and the outside world to China,” he said. “Think of us as the neutral third party.”
David Adelman, a former U.S. ambassador to Singapore and head of Asian government affairs for Goldman Sachs in Hong Kong, told Global Atlanta in a separate interview that he doesn’t see this changing.
“While there have been a few developments worthy of note, it’s not my view that there’s any imminent change coming to the Hong Kong business environment,” Mr. Adelman said, noting that Hong Kong is an important vehicle for testing investment and currency reforms.
Mr. Barclay also invited Georgia businesses to use Hong Kong as a way to reach the Chinese market “without trolling every Chinese city.”
“Remember, there are 40 million mainland Chinese who visit Hong Kong every year. Those are middle class Chinese who are looking for goods and services to bring back home. Let them come to you in Hong Kong and introduce them to your product and services.”
Hong Kong’s economy grew 1.9 percent last year to about $320 billion with an inflation rate of 2.3 percent, he said. It is now setting its sights on innovation and technology, robotics, healthy aging and smart cities, in addition to the traditional industry sectors of finance, logistics and other professional services, he said.
“We are a great start-up hub,” Mr. Barclay said. “You have strict (intellectual property) protection and government support.”
“We have retained a degree of autonomy, which makes us very attractive for businesses,” he says. “For instance, who would rather sign a contract where the dispute and arbitration hearing location is in China or in Hong Kong, which follows the British judicial system?” (One person in the room raised his hand.)
Among Hong Kong’s other attractive factors are that corporate taxes are only levied on income derived in Hong Kong, and the rate is capped at 16.5 percent. Incoming Chief Executive Carrie Lam stated she wants to reduce it, Mr. Barclay said. Personal income tax maxes out at 15 percent.
“There is no sales, VAT, capital gains or whatever other types of taxes you may have, we don’t. We also have strong intellectual property laws; we follow the British common law and we have our own legislature.”
-With reporting from Trevor Williams