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Who Will Replace Hong Kong?

Mapping the Future of Asia

· China,China Business,Business,Sample

"Who Will Replace Hong Kong?"

is a common question I see international relations specialists and businesses professionals ask alike.

While the once British colony continues to market itself as a global city, the erosion of 'one country, two systems' has alarmed many in the international community. The Sino-British Joint Declaration signed by the United Kingdom and the People's Republic of China was designed to protect the Western-style political-economic system within Hong Kong for fifty years after the handover of the city back to China.

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Then British Prime Minister Margaret Thatcher and Foreign Minister Ji Pengfei after the signing of the Sino-British Joint Declaration in 1984. Photo courtesy of ejinsight.

Hong Kong, once known as a bastion for freedom of expression, rule of law, and free market principles, has seen those values erode within their government institutions in recent years.

Following the government's clampdown on pro-democracy figures in the city after the passage of the controversial National Security Law, international organizations have felt the need to relocate out of Hong Kong in large part due to safety concerns.

In July 2020 the New York Times announced that they were relocating part of their Asia-based digital news operations out of the city and into Seoul, South Korea. The American news paper cited "uncertainty" caused by the National Security Law which springs the need for "contingency plans".

In Seoul the staff at the New York Times will be protected by the Republic of Korea's democratic laws which safeguard freedom of speech.

Even companies that back Beijing's policies have been the subject of criticism. In June China state-affiliated media organization Global Times wrote an article critiquing HSBC for their staggered endorsement of the Hong Kong National Security Law. The nationalistic news paper attacked HSBC for delaying their endorsement of the legislation stating it "should have come earlier".

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HSBC Building in Hong Kong. Photo courtesy of DIGITPOL.

Returning to History

To understand who could replace Hong Kong as an international hub it's important to investigate why Hong Kong rose to predominance in the first place.

After the handover of Hong Kong back to China the city received a special political-economic status. A key advantage the city gained was the ability to efficiently move foreign capital to Hong Kong.

While other Chinese cities such as Shanghai were also provided a special economic status by the Chinese government, Hong Kong's unique political-economic system gave it an edge over its mainland competitors.

Hong Kong's attractive political-economic system made it the go-to destination for companies seeking to take advantage of both the Hong Kong and mainland China market.

With increasing emphasis on the Chinese market, Hong Kong functioned as a gate for global capital entering the mainland; a place where international business could operate in China without feeling like they're behind the Iron Curtain.

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The University of Hong Kong. Photo courtesy of Washington University in St. Louis.

It was not only business that blossomed in the city.

Hong Kong's special status helped sustain its strong education system. Until very recently, all of the top-ranked universities in the People's Republic of China were located in Hong Kong.

Their success was not only known within the Chinese speaking world. The University of Hong Kong and other top universities in the city were regularly ranked among the best colleges in Asia and the world.

A key ingredient that helped so many universities flourish in the city was its open political-economic system that welcomed global interconnectivity and inquiry.

However, the National Security Law jeopardizes the environment that has allowed education in Hong Kong to flourish.

Scholars are becoming uncomfortable researching and discussing sensitive topics. Subjects that were previously acceptable teach and talk about may now land them in trouble under the new law.

The evolving political situation has put Hong Kong's world-renowned status as a global finance and education hub in jeopardy.

Who Are Some of the Alternatives?


Sensing what many perceive as the inevitable downward trajectory of Hong Kong, governments across Asia are seeking ways to fill the vacuum.

The Japanese government is attempting to entice Hong Kong professionals away from the city in order to improve Tokyo's status as a hub for global finance.

Despite Japan's status as the third largest economy in the world, Tokyo has encountered many difficulties with transforming their capital into a global financial hub similar to New York or London.

Obstacles for Tokyo include the city's lack of proficient English speakers and the country's comparatively higher tax rate.


In 2020 Taiwan reported a surge in foreign reporters. This was partially due to China's clampdown on foreign correspondents.

Similar to South Korea, Taiwan's democratic system protects freedom of speech. Reporters in Taiwan have found operating in the country to be easier than in China due to the nation's more open political system.

Additionally, for those who recently left Hong Kong or China, Taiwan also has the added benefit of being a Chinese-speaking nation.


At first glance Singapore appears to be the best positioned to replace Hong Kong as Asia's global city.

Similar to Hong Kong, Singapore is a former British colony. The predominant language used in the country is English and has an open financial system.

Despite the city-state's small size, the country has been able to build a strong education system. Singapore is home to some of the best universities in Asia and the world. QS World Ranking 2021 ranked the National University of Singapore as the 11th best university in the world.

Still, even with such a strong and similar to background to Hong Kong, it would be difficult for Singapore to replicate Hong Kong's previous success.

Analysis: Hong Kong Was a Unique Entity

No city or country can replicate Hong Kong's success. The city served a unique purpose after its handover back to China in 1997.

The special relationship that existed between Hong Kong and mainland China came about in large part because of the power and developmental imbalances that existed between China and the West at the turn of the century.

The People's Republic of China was far more underdeveloped in the 1990s than it is in 2021. The Chinese Communist Party temporarily accepted a Western-style political-economic system in Hong Kong because it furthered their goal of having the West finance China's development.

With China's geopolitical ascension, the importance of maintaining Hong Kong's Western-style system has become increasingly diminished in the eyes of the Chinese Communist Party.

Just this month Chinese authorities arrested over 50 pro-democracy activists. These Hong Kongers, who not so long ago were allowed to protest and run for government, have found themselves in trouble with Beijing.

While the Chinese government will continue to give lip service to 'one country, two systems', the political-economic values that were intended to be enshrined within Hong Kong's institutions for fifty years are being abandoned.

Hong Kong Is Irreplaceable

Beijing is increasingly confident in the alternative socialist political-economic system it has created in the mainland.

Foreign investors have also become more comfortable directly working within mainland China. The same is true for many of the West's top universities which have made strong partnerships and inroads with mainland China universities.

While China was still developing its geopolitical muscle and economic foundations it had little choice but to accept Western norms in Hong Kong in order to attract global capital and education professionals.

Many in the West claim to be concerned with the evolving situation in Hong Kong, but companies across the Western world continue to expand their operations and investment in mainland China.

The Chinese Communist Party has decided to embrace their unique political-economic system in all corners of the People's Republic of China even at the risk of losing arguably their most developed and global city.

For decades Hong Kong has been the gate that helped attract global capital and talent to China. Through transforming Hong Kong's institutions to mirror the mainland's that gate is closing.

There is still time to save Hong Kong's special place in China, but it does not appear Beijing is interested in such a proposal.

About the author:

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Alexander Parini is a lecturer at Hoa Sen University in Ho Chi Minh City, Vietnam. He is a member of the AmCham Vietnam Capital Markets and Financial Services Committee. He graduated with his LLM in International Relations from Peking University in Beijing, China. Before moving to Asia, he worked in US politics and studied Political Science at Portland State University.