Next Magazine (2015/4/2, A002, Second Opinion, Andrew Work)
Join TPP not AIIB
Instead of the China-sponsored Asian Infrastructure Investment Bank (AIIB), Hong Kong should join the US-led Trans-Pacific Partnership (TPP). This is in keeping with our roots as a free port that has created, over the last century and a half, a dynamic economy with a free market ideal for attracting, and developing, global economic players.
Many wondered if Hong Kong, an SAR of China, could join the AIIB; or if that would be another sign of distasteful nationalist dream. However, official announcements that Hong Kong will seek to join suggest blessing from Beijing is secure. It may be a brotherly, albeit extravagant, gesture to get on board with Beijing; but Hong Kong could do better by promoting free trade that benefits all instead of taking part in global financial power struggles.
Beijing’s stated aim in establishing the AIIB is to advance worthy infrastructure projects around Asia. However, the political discussion suggests it is meant to challenge American dominated international organizations like the World Bank and IMF. Members of this new organization will have preferential access to infrastructural contracts based on the relative size of their contributions to its capital.
We should not be playing this game with taxpayer money. Our companies have been building factories and infrastructure across Asia for decades — no preferential ‘development loans‘ required. Our government has no business supporting construction firms pouring concrete in Myanmar or Cambodia. Our taxpayer money should stay where it belongs – right here in Hong Kong.
Instead of spending taxpayer money to help China boost its regional influence by bankrolling the AIIB, Hong Kong should work to promote free trade by expanding its role in multilateral trading organizations like the WTO, the Pacific Basin Economic Council and, more controversially, the US-led TPP that is being formed.
This is controversial as Americans have, initially anyway, decided to sit out the AIIB, while China has been shut out of the TPP, which has the potential to become largest trading bloc since the WTO. As envisioned, it encompasses 12 nations, including G7 nations Canada, Japan and the US, accounting for some 40% of global GDP.
As a free port and the freest economy in the world, Hong Kong would make an exemplary participant of the TPP. Our participation would work for China, too. Some 30 years after its opening, Hong Kong remains China’s most important window on the world; our TPP membership should benefit China’s relatively closed economy by being an enhanced conduit of international trade. China should therefore put aside its differences with the US and encourage Hong Kong to seek TPP membership.
While AIIB may be the flavor of the month, the TPP has been slowly advancing for a decade. If we succeed in becoming a member, we would gain access to exciting growing economies like Chile and Mexico; and regional counterparts like Malaysia and Vietnam.
The question is would Hong Kong be able to join a club that China is explicitly denied membership. Article 116 of the Basic Law says we can, as it gives us the right to “participate in the relevant international organizations and international trade agreements (including preferential trade arrangements).”
To be a true advocate of Hong Kong’s interest, CY Leung should exercise this constitutional right by campaigning to join the TPP. Following Beijing’s lead to play the international corporate welfare game, which is what the AIIB really is, will only squander away taxpayer money. With TPP membership, we – and China – would benefit much more from having greater access to dynamic markets around the Pacific.
The choice in front of CY Leung is clear: Promote global free trade that will benefit Hong Kong – and China, or be a pawn in China’s geopolitical game. It is not a difficult choice to make for anyone who has Hong Kong’s true interest in heart.