Club Lunch: Stephen Roach on the Future of Hong Kong

Earlier this year, Stephen Roach published a controversial opinion piece in the Financial Times, headlined “It pains me to say Hong Kong is over.” His case reflected three considerations - the tight economic linkages between Hong Kong and a faltering mainland Chinese economy, the crossfire of the U.S.-China conflict, and the tough political climate in the aftermath of new national security laws enacted by Beijing (2020) and Hong Kong (Article 23 in 2024). It was largely an analytical case, overlaid by geopolitical and domestic political concerns.
Yet it was a particularly painful message for Roach to deliver. Formerly the Hong Kong-based Chairman of Morgan Stanley Asia, he had a prominent role in a city he had come to love over the years. Many of his friends, former colleagues, and clients took great exception to this apparent change of heart. In this talk, Roach will probe the tradeoff between intellectual integrity and personal allegiances, a tradeoff that lies at the heart of a vibrant marketplace for ideas.
Q&A moderated by FCC First Vice President Jennifer Jett.

[@alanc6416]

33:40 this is true, we certainly cannot rely on our comfort zone.

[@ansa336]

How is Milton Friedman policy working for the US?

[@horridohobbies]

Hong Kong has *never* been granted total autonomy. The one country, two systems arrangement gave Hong Kong the power to govern itself, *BUT* anything related to national security fell under the purview of Beijing. In 2019, the Hong Kong riots were driven and supported by external forces (i.e., US intelligence). This was a threat to national security. Basic Law required the Hong Kong Legislative Council to enact a national security law, a responsibility that the LegCo shirked. So, in 2019, Beijing had to step in to correct this oversight. Since the national security law was enacted, all the CIA-backed thugs fled Hong Kong like rats. This is the *only* reason why order and peace was restored to the city. The governance of Hong Kong has not changed. The one country, two systems arrangement is intact. I'm sorry to say that Stephen Roach is simply wrong about this.

[@rickzeng1882]

I agree 100% with constructive criticism, just that in the current political atmosphere it's not easy to tell what is "constructive" among different levels of audience...Stephen talks about Deng Xiaoping's seek of truth, but he was still, to a certain extent, misled during the Tiananmen Sqaure incident. In terms of Hong Kong, I agree that the old paradigm is over, and the elites in Hong Kong are now frozen in face of such change.

[@LouisFobb-zs9hv]

Insightful analysis.

[@harrysung4790]

The fundamental problem is the economic system. Communists have ruled the mainland ofr over 75 years or so. Its per capita GDP is still about 1/2 of Taiwan and 1/3 of Hong Kong. Anyone with any sense would realize which kind of economic system is better. Furthermore, Shanghai is undoubtfully still the most affluent region within the nation, why? because Shanghai once was a internatioanl city leased to many capitalistic nations. Free trade has established its foundation. As soon as those at the highest government position understand the basic economic system, China will be the wealthiest nation in the world. After all, the government's function is to provide better lives for its citizens. The security of a regime is based on its citizens' approval. Supression can work for awhile, in the end, an oppressive government will be overthrown anyway. As for Hong Kong they are killing the goose that lays golden eggs.

[@tsunningwah3471]

enable auto subtitle please

[@atthemoney]

Why was Jennifer Jett so glum?

[@alanc6416]

I think what he said about HK economy correlating with China is true, but why does this correlation seems to be negative in his view? Singapores economy correlate with ASEAN countries, and New York correlates with the US, London correlate with the UK, why is this so surprising all of the sudden? So China has had a few years of downturn and headwind in the next few years, it’s only natural to expect it to recover given time. Why is this over I don’t understand

[@alanc6416]

And forget about Regina Ip, she is certainly not a representative of HK and doesn’t speak for me and many of my peers. You’ve been focusing off the wrong group of persons And if your criticisms are solely targeted at the so called leadership with the likes of Regina, then I can understand your mentality. But you know very well that these so called leaders don’t run HK, and China’s leaders are also not stupid to take their words for it. But it’s a very Chinese gesture to not criticize their subordinates openly and hastily. And sure, HK is not in China’s top 5 priority, and i don’t see anything wrong with that neither. HK people including you I guess, have a habit of making HK the center of the world, but we’re not! And e we don’t have to be. Secondly, HK is not the top 5 priority is a good thing, this means its problems are not urgent and China has some faith that HK can work through most of the problems by itself! How do you see this as a negative thing? Crazy

[@godzillamothra5983]

The problem with HK is that it grew complacent. They think they will always be a step ahead of Mainland China. They stop being competitive. When China grew richer, and Chinese shoppers started to flood HK, buying up luxury goods and property, driving up the property prices and inflation, HKers were shocked, then turned into resentment, and started to reject their Chinese identity and connection to Mainland. That is a suicide by choice. HK is a gateway to China, without China, HK is gateway to nowhere. I'm pretty sure Stephen has well meaning for HK and China. But unfortunately, his vision for HK and Mainland China is outdated. Current China and HK situation are far different than in the past. For one thing, China and the US relationship has fell into situation that I think beyond saving. China can't count on its past economic model of exporting cheap goods to the US to grow. That's why China is pivoting from export to domestic consumption, from exporting to the west to exporting to the global south, from exporting cheap goods to exporting high margin goods like EVs, smartphones and other electronics, renewable energy etc. This will certainly create conflicts with the G7, the old rich clubs whose members certainly don't want to be replaced by any outsiders even though some of the members in the club don't deserve their seats anymore. Since conflicts are inevitable, why China must keep playing by the same old rules and model? HKers better wake up fast and realize that its future is always tie to China. HK should feel lucky if it can be just "another Chinese city." There are far worse consequences than that. For example, it can end up becoming slum next to Shenzhen.

[@NR-uj3rw]

btw the rich hkers already moved elsewhere, those who remain and those joining the city - will suffer the consequences you mention. hk is always a chinese city, even if it becomes a slum. be proud of your chinese identity,

[@jonathanhart8046]

I have just wasted precious moments of my life listening to an irrelevant old man who doesn't understand the present and has nothing to do with the future.Let's move on please.

[@Ritastresswood]

Please remember the US embassy was sold off in 2019. Colour revolution had failed.

[@jackjhmc820]

Have you ever heard of any prominent economists saying that because of brexit, Britain is uninvestable and that London is over when it has vastly underperformed US market or other markets for years? Stock market returns are not the same as economic growth, or else that would like saying chinese stock marlet going sideways for over a decade would mean zero economic growth over the decade? The real answer is no one has a clue over the future. His call on hong kong is over happened to coincide with the hong kong stock market trough!

[@boobopish]

Because it wouldn’t be true. Have you seen London recently?

[@yeejlilys9742]

The situation facing HK today is created by itself. After HK returned to China, China has given HK free hands to manage its political and economic affairs, which could not find in any other places in the world. But the chaos caused by independence movements, which were supported by western governments, changes everything. Now HK is another Chinese city, which means that HK's territory is China's but not people. If you do not like to live in a Chinese city, feel free to leave. The privilege long enjoyed by people of HK and their pride of free market economy have been long gone, and what even worse is that no one cares what happens in HK.

[@agoodchow]

While China grows and prospers, it is a given and a Sure consequence that HK importance reduces. It is a big alarm to China if it is the contrary.

[@rocketsteel]

Still reminiscing the glory of the past, when the British were running the city. Now that crutch is gone, the people cannot stand on their two feet. HK needs more nannies from the west.

[@tsunningwah3471]

m

[@tsunningwah3471]

b

[@overseaschinese2445]

Roach may have visited HK 4, 5, times in recent past but his views are still stuck in the past/West.

[@agoodchow]

Yes. While China grows and prospers, it is a given and a Sure consequence that HK importance reduces. It is a big alarm to China if it is the contrary.

[@alanc6416]

And when he says HK people doesn’t have the energy of the yesteryears, u don’t know who he’s been talking about but there are always naysayers and there are always proactive people around. At least from the people I meet and the people I see walking around central, especially the newer mandarin speaking hkers, every time I see or speak with any of them breathes enthusiasm and energy. Now it’s not all sunshine and roses they also have doubts, but that’s just life! I don’t know what kind of life he has had but I’m pretty sure it was not smooth sailing at all times! Why so surprised so if the sudden?