Hong Kong prospers with free economy -- and huge investment

June 10, 1996|By NEAL R. PEIRCE

HONG KONG -- The freest economy on the face of the globe -- that's how the right-leaning Heritage Foundation ranks Hong Kong. Indeed, any supply-sider would approve the territory's 15 percent personal flat-rate income tax, minimal business regulation, low social welfare spending.

But there's another reason Hong Kong enjoys one of the most dynamic economies the world has ever seen. It's investment: investment in decent housing and entire new towns for its people; investment in mass transit, tunnels and roadways; investment in gargantuan port facilities; in new tourist facilities; in railway lines strengthening the transit routes into the Chinese mainland.

Even with the approach of July 1997, when British rule ends and Chinese starts, Hong Kong is sinking $21 billion into a series of 21st-century investments for a territory of only 6 million people. Chief among them: a new international airport, now being constructed by tens of thousands of workers on a 3,800-acre man-made island just reclaimed from the sea 21 miles from city center.

A high-speed rapid rail line is being built to speed passengers from the terminal into Hong Kong center in 23 minutes. The rails parallel a new six-lane expressway. Both cross the soaring new Tsing Ma Bridge, longest suspension bridge of its kind in the world.

Hong Kong's government has partnered with private firms to build eight new towns -- each filled with dozens of high-rise apartment buildings, shopping, full municipal facilities -- with populations as high as 700,000. Now a ninth new town has been begun near the airport; eventually it will have 460,000 inhabitants.

Thousands of acres of new land are being created along the key waterfronts. A third tunnel is being built under Hong Kong's harbor. Vast investments are going into a fully digitized communications system including the largest teleport in Asia. Billions are being poured into new roads, port facilities, railroad connections.

Is some of the construction going so fast that it's environmentally lax? Are the new towns with their look-alike 38-story apartment houses, rising mushroom-like across the territory, going up too fast to create humane ground-level environments? Yes, quite likely.

But as a magnet for world trade, as the economic capital of a large chunk of China, Hong Kong's doing just what it needs to get ready for the next century.

One's first reaction: that American citistates better get on the stick, invest far more vigorously, or we'll be left behind.

An 80-person delegation of Seattle business and government leaders, visited Hong Kong in May under sponsorship of the Greater Seattle Chamber of Commerce and that region's Trade Development Appliance. Even Seattle, one of America's more progressive regions, seemed dangerously complacent in contrast to the Hong Kong examples.

But the Seattleites found differences deeper than investment readiness. Hong Kong leaders, they noted, see every topic from tourism and conventions to aviation to housing to the port as integral parts of positioning the territory to prosper in international commerce.

They remarked on a ''can-do'' Hong Kong attitude -- don't worry if government or business or a hybrid organization does the job, just get it done.

Interminable debates

Result: There are few of the interminable debates that so often bog down American regions. ''In the time it takes us in Seattle to settle on a big project,'' noted council member Jan Drago, ''the Hong Kongers will have built it, used it for several years, and torn it down for a better version.''

Hong Kong's investment community steps in routinely to finance, in partnership agreements with government, huge chunks of the new infrastructure. Many enterprises -- the entire mass-transit administration with its 10-million-rider-a-day system, for example -- are contracted out wholly to private firms.

Even public housing -- accommodating 52 percent of the population in constantly improved apartment skyscrapers -- is run by an autonomous corporation that turns in a handsome yearly profit.

Indeed, the supply-sider crowd might wonder at the statement of Hong Kong's Tory governor, Chris Patten: ''The housing program is not a consequence of Hong Kong's economic success, it is one of the foundations of that success.''

Bill Stafford, head of Seattle Trade Alliance and grand researcher, planner and impresario of the civic leadership's frequent foreign trips, acknowledges that many points of foreign culture aren't replicable in America.

But there's ''a recurring theme I see everywhere -- in Europe, in Japan, Hong Kong, wherever our trips go,'' he says. ''It's that people of successful regions are willing to make major investments -- in infrastructure, in their future work force. They see, as we don't yet, that the economic game's now global, and that if their governments and businesses don't work collaboratively, their citistates will be losers.''

M?

Neal R. Peirce writes a column on state and urban affairs.

Pub Date: 6/10/96

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