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Is Hong Kong a Corporation?

Is Hong Kong a Corporation? / 2018-07-24 / Nick Sallnow-Smith

For the high summer months of July and August I want to offer a pair of articles. The first entitled as above, the second will ask the question “Is Hong Kong a Commune?” (Spoiler alert – the answer in both cases is “no”!)

Now before you answer testily “of course not” to the question I pose, let me offer some thoughts on why I believe many people discuss our city as if it were a corporation. The first step in the erroneous chain of reasoning is to treat Hong Kong as a single entity. It is commonplace to read of Hong Kong’s “lack of competitiveness”; or that Hong Kong is “too expensive”. Some businesses may not be competitive in their segment, some items may be too expensive. Yet others may be very competitive and some very cheap. Hong Kong is not a singularity. But the metaphor of the corporation goes beyond this. Think of the many times you have read comments about Hong Kong’s “workforce”. A company has a “workforce” whereby people are contracted to provide a specific service for a salary. Hong Kong does not employ us. We have entered into no contract with the state. Yet the Administration regularly wrings its metaphorical hands about how to get more housewives/the elderly into the “workforce”, as if the city has a contract to fill and does not have the labour to complete it. The demographic debate is couched in the same terms. “We” need to boost fertility so that the “workforce” does not age too rapidly.

Education policy is framed in the same way. Are our universities producing the right graduates for “Hong Kong’s” purposes? But what are those purposes? The unspoken assumption is that the city’s purposes are somehow unitary and reflect a consensus. This is an error. In a free society, each citizen can have purposes but the city cannot. If the Administration attempts to impose unitary purposes on the rest of us, this is tantamount to a totalitarian society. What each child wishes to study, what direction they wish to follow in life, whether at my age I wish to work or not, whether a mother wishes to take a paid job or not: these are all free choices (or should be). Their aggregate effect should be what characterises Hong Kong, not a top down imposed blueprint.

It grieves me when I see business chambers routinely pleading with Government to come up with a “vision” for the future, with a better “plan” for Hong Kong to make it “competitive”, to give it a “purpose”. Perhaps because in their own businesses these questions make complete sense, they are tempted to project onto public policy the same way of thinking. What they miss is that if a monolithic top down “vision” is imposed on the city, many businesses’ own visions will become much more difficult to achieve. If you are in the IT sector and fail to win a subsidy while you competitor does, for example.

Apart from policy formation, it seems to me that the structure of the Administration itself and the way it goes about its “business” also reflects the “COHK” (or Corporation of Hong Kong) concept. A classic red flag here is the title of our political leader; the “Chief Executive” of Hong Kong. If ever there was an indicator that Hong Kong is run like a corporation, this is surely it. The colonial title of Governor better reflected the proper role here. A “Governor” has the ring of more of a governance role, to ensure that law and order is in place and “the trains run on time”, not an interventionist one. (Oddly, in Mainland China the role of (provincial) Governor remains, and cities have mayors, not CEs.)

Yet Hong Kong’s policy secretaries, together with the CE, seem to behave like a form of Board of Directors for the “COHK”, setting the direction for the corporation, ensuring a workforce is ready to implement it, and reporting to “shareholders” (ie the public) to ask for approval. The fact that the Government itself manages and owns (in part or whole) corporate entities (MTRC, Cyberport, Science Park, etc.) feeds the misunderstanding of the proper role of government.

If this model becomes, if only subconsciously, accepted in the minds of citizens, then the expectation will be widespread in the community that the Government should indeed decide our “direction”, and impose it on all of us. The debate then becomes not whether the government should be seeking to “direct” the city rather than leaving free citizens to make their own decisions, but instead solely about what that top down policy should be, not whether there should be one. Citizens of Hong Hong will have thereby accepted subservience to their government masters. Or, to put it less grandly, they will have delegated to the executives of the COHK, as shareholders do in real corporations, wide ranges of activity that are inappropriate for a diverse community of people who simply happen to be living together in the same geographical area.

The political consequence of this is that, rather than making their own decisions about their lives, many citizens spend their time and energy fighting over what the top down policy should be. How the Board of Directors is selected becomes a huge issue, as it should be in a true corporation. Questions of where the minimum wage should be set; how much the MPF deduction should be; whether bus fares should rise; whether Uber/AirB&B should be “permitted” , what should be taught in government schools and so on? Political division and dissension about any top down policies of this sort is inevitable.

In a real corporation, if you as shareholder do not like the direction taken by the appointed Board, you can sell your shares and invest elsewhere. In a city you cannot do so. You have no exit (unless you have money and a foreign passport).

The metaphor of a corporation for a city is not only wrong but dangerous. Instead of COHK (the Corporation of Hong Kong), let’s please think of ourselves as COHK (the Community of Hong Kong).

Next month I plan to write about a third COHK (the Commune of Hong Kong)!

Best wishes for a freedom-filled summer,

Nick Sallnow-Smith

Chairman

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