Will Hong Kong’s Star Shine Again? – Analysis


By Elaine Chan

A typical Friday evening in Mong Kok district comes to a hush before midnight. It is the new normal for a district once fused with the buzz and raw energy that was the essence of Hong Kong. 

Yet, it is the old vibe that Hong Kong officials are aspiring to recover. In mid-September, the government launched “Night Vibes Hong Kong,” involving night markets, food stalls, movie screenings and live music events over weekends.

Over the past 12 months, it has rolled out campaigns including a six-month program to bring tourists back and also gone on global roadshows to win back investors. 

The effectiveness of the efforts remains elusive, despite Chief Executive John Lee’s vow to a year ago in his maiden policy speech to go all out to draw back talent and businesses to a city battered by a stringent zero-COVID policy and Beijing’s hardened grip.

Tell the world the good stories of Hong Kong was the mantra, he quipped.

As Lee prepares to make his second policy address this week, analysts say the good stories are few, and the issues that have eroded Hong Kong’s unique competitiveness continue to chip away.

The city’s international financial center and economic hub positions are crumbling under the weight of Beijing’s tightened grip of the special administrative region where the “one country, two systems” principle is taking a new form under Chinese President Xi Jinping.

“Hong Kong’s major indicators – freedom, rule of law, international financial center status, international standards of practices, property market, stock market, government’s financial reserves – are all on the decline, and it is a Hong Kong government problem,” points out Lew Mon-hung, a businessman and former Chinese People’s Political Consultative Conference committee member.

‘Promoting Marxism’

To be exact, it’s a problem stemming from Beijing, Lew says, because Hong Kong’s progress and fate are intricately tied to China’s continuous reforms as they have been the past four decades. 

That path, however, has been stymied by the shift in political climate in the mainland, and the Chinese National People’s Congress’s passing of the National Security Law in June 2020 – bypassing Hong Kong’s legislature – to quell months of anti-government protests.

“In China now, they are promoting Marxism – having gotten into the philosophy of struggle, wolf warrior diplomacy,” which Lew says comes at the expense of economic and thought regressions.

These weighed on the “one country, two systems,” China’s constitutional principle to govern Hong Kong under a mini-constitution called the Basic Law, where the city is allowed freedom of assembly and speech, an independent judiciary and some democratic rights – except in the areas of diplomacy and defense. 

“Beijing reckons that Hong Kong only needs to play an economic role after its return to Chinese rule,” says Hong Kong current affairs commentator Johnny Lau Yui-siu. 

“But Hong Kong people’s view of the world is different from mainland China’s political awareness and consciousness. And Beijing wants Hong Kong to align.” 

Hong Kongers, he says, are outward-looking, used to international practices, free flow of information and speech, unlike their Chinese counterparts who are restricted by the boundaries that the Chinese Communist Party had set. 

As China stalls in its convergence towards international standards, Hong Kong became the by-product of that stagnation, Lau says.

The numbers add up

The numbers tell the same story. China’s exports fell 14.3% and 8.8% in July and August respectively, while Hong Kong’s fell 9.1% and 3.7%. The benchmark stock index has lost about 12% since the beginning of 2023 and Hong Kong’s property prices are forecast to fall 5% for the year, according to a commercial real estate services firm Cushman & Wakefield. 

The uncertainties that keep foreign investors guessing about where the political winds blow in China also reverberate in Hong Kong. China’s crackdown on industries such as the technology sector, as well as its more recent position to let an indebted property industry go into a free fall, have done little to assure investors.

The latest annual survey by the American Chamber of Commerce in Shanghai published in September showed that the percentage of U.S. firms optimistic about their outlook on China over the next five years slid to 52%, the lowest level since the annual report was introduced in 1999.

In Hong Kong, a member sentiment survey by the AmCham in Hong Kong released in March found that American businesses’ three biggest challenges are U.S.-China tensions, a weakening global economy and the overseas perception of Hong Kong, a factor that was previously absent.

“If the HKSAR Govt can reassure international investors that the rule of law will prevail, and the NSL will not put their staff in jeopardy, it will go a long way.  But it is at the moment delivering neither,” says Steve Tsang, director of the SOAS China Institute at SOAS University of London.

Rebuilding reputation

The chamber has urged Hong Kong chief Lee to provide “straightforward interpretations and applications” of the law in his upcoming policy speech. In its written submission in September to the public consultation for the policy address, the chamber wants Lee to reassure businesses that the law will be applied narrowly and be consistent with the principles of an independent judiciary.

The ramifications of the national security law, which criminalizes any act of secession, subversion, terrorism and collusion with foreign or external forces, have never ceased since it was implemented.

How the Hong Kong government has used the law to change the political and civic institutions in the city has alarmed a wide spectrum of the society. Opposition parties and media outlets were shuttered, while pro-democratic figures have either been arrested or have fled the city.

An earlier post-COVID reopening by longtime rival Singapore didn’t help. Toeing Beijing’s stringent zero-COVID policy was a death knell for Hong Kong as cross-border transactions and exchanges fell to a minimum. 

“One of the most striking indicators that we’ve been looking at is really that the size of the labor force has shrunk quite significantly. A large reason for it has got to do with Hong Kong’s handling of the pandemic,” says Sheana Yue, China economist from Capital Economics. 

The labor force has shrunk to 3.826 million, nearly the same size as it was in 2013, a decade ago.

Wooing investors

Hong Kong officials are traveling the world to woo investors and visitors, while introducing various programs to entice talents to the city.

The spokesperson attributed the city’s disrupted talent inflow to travel restrictions during the pandemic between 2020 and early this year. The intensified global competition for talent didn’t help. 

“The various talent-related initiatives have received positive responses since implementation,” the spokesperson said in an email response to Radio Free Asia.

General estimates are that at least 300,000 Hong Kongers have emigrated. Many of the Hong Kong diaspora are in the United Kingdom, Singapore and Taiwan.

“Taiwan sees Hong Kong’s change as a big failure – a negative example,” says Lau. “Mainland China knows that the ‘one country, two systems’ is no longer a model or draw, but it will still persist in it.” 

Policy address

In his policy speech on Wednesday, Lee is expected to announce the creation of an office to publicize Chinese culture, alongside plans for a Hong Kong anti-war memorial hall, all towards nurturing patriotism, according to reports in pro-government media including Sing Tao Daily and Hong Kong Commercial Daily citing people in the know. 

Lee is also likely to give out HK$20,000 (US$2,556) to new parents with newborn children to persuade Hong Kongers to have children, as a counter to the emigration trend and an aging population.

The economy, flanked by the housing crisis, is also likely to hold center stage. In the weeks of run-up to the address, property agents and investors have called for a relaxation of measures that were implemented to curtail price hikes to revive a sluggish market.

Hong Kong has increasingly veered towards being subsumed into the Greater Bay Area, or the GBA – Beijing’s strategy to promote development of a regional economic bloc that included Macau and nine Chinese cities in the southern Guangdong province.

“Xi made it clear he wanted Hong Kong to be part of GBA in 2017, but he didn’t have time to see to it that this was implemented beyond superficially,” says Tsang at SOAS. 

“After the 2019 protests, Xi has required this to be implemented, so it has. On the current trajectory, Hong Kong’s future is within the GBA – not what many or most people in Hong Kong would have liked.”

Lau says it is only a matter of time before the gap between Hong Kong and China narrows, or even when the divergent political stances converge because the government controls the education system and information flow. “When it becomes all one single structure.” 

Meanwhile, the regular citizens are unimpressed with the various government campaigns to rejuvenate the Hong Kong spirit. Cosmetic, they concluded. 

“Everyone says ‘Night Vibes, Hong Kong’ is a silly idea,” says a Mong Kok resident who gave her name only as Wing. “Look, even the famous Women’s Street, a former night market tourist destination here in Mong Kok, is dead.” 


Radio Free Asia’s mission is to provide accurate and timely news and information to Asian countries whose governments prohibit access to a free press. Content used with the permission of Radio Free Asia, 2025 M St. NW, Suite 300, Washington DC 20036.

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