Renowned scholar Stephen Roach, a professor at Yale University, recently published a column titled "Yes, the Hong Kong of Old is Over." In the column, Roach downplays Hong Kong's resurgence as the world's top IPO market this year, attributing it solely to support from mainland Chinese companies and the Chinese government. He argues that as the rule of law and press freedom have declined, Hong Kong has transformed from a global financial hub into just another major city in China.
However, his claims reveal a failure to fully recognize the competitive reality of present-day Hong Kong and its historical development. Looking back at Hong Kong's history, it has never existed in isolation from China. During the 1950s to 1970s, entrepreneurs and labor from the mainland laid the foundation for its manufacturing sector, and after the economic reforms, Hong Kong capital became a major beneficiary of China's growth by investing in Guangdong Province. Hong Kong's prosperity has always been closely linked to the vast market of China. The current close relationship between Hong Kong and China is not a new phenomenon.
Roach dismisses the recovery of Hong Kong's IPO market as merely a result of Chinese companies. However, even in the 2000s, when Hong Kong was vying for the top IPO spot globally, many mainland companies were listed there. During that period, major state-owned enterprises such as Industrial and Commercial Bank of China, Bank of China, China Construction Bank, China Life, and PetroChina went public in Hong Kong, helping the city achieve its status as the world's IPO leader.
In the first half of this year, companies like CATL, the world's largest battery manufacturer, AI firm Z.ai, and autonomous driving company Momenta chose to list in Hong Kong, reaffirming the city’s position as the top IPO market. These companies opted for Hong Kong over New York, London, or Singapore, highlighting Hong Kong's unique role in connecting Chinese enterprises with global capital. As more Chinese companies rise to prominence on the global stage and attract international investment, Hong Kong's significance is expected to grow.
Roach's mention of the Hong Kong National Security Law also requires a more nuanced evaluation. While many predicted a mass exodus of foreign capital upon its implementation, the reality has been different. The freedom of capital movement and the legal enforceability of contracts in Hong Kong remain intact. Most international banks and global asset management firms continue to maintain Hong Kong as a key hub.
The reduction of political freedoms in Hong Kong due to the National Security Law is certainly a topic of debate, but it does not necessarily equate to a weakening of its financial functions or urban competitiveness. In fact, some view the restoration of political and social stability, which was disrupted by the prolonged protests in 2019, as a positive development.
Just as present-day Seoul is not the Seoul of the past, and current Beijing is not the Beijing of yesteryear, it is not incorrect to say that the "old Hong Kong" has disappeared. However, this does not mean that Hong Kong is in decline; rather, signs of development are emerging. In the place of the old Hong Kong, a new Hong Kong is taking shape.
* This article has been translated by AI.
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