Is Hong Kong Chinese?

We all know that Hong Kong was handed back to China with much pomp and a little uncertainty back in 1997. The incredible economic and commercial success of this small but densely populated place was admired by the world and the Chinese promised to grow and nurture it. They have been true to their word and HK is as successful now as it ever was.

There are, of course, those who point at the recent disappearance of the book publishers, the way the mainland Government handled the ‘Umbrella’ protests and even the take over of the main English speaking newspaper by Alibaba as signs of mainland interference. There is also the question of the legislature and the ‘elections’.

However, has business been affected negatively or positively by the handover all these years later? I’d say broadly not at all. If anything the global macroeconomics have impacted Hong Kong better than most of the global financial centres.

Personally,this is no surprise to me. Culturally when the Chinese acquire or encounter anything good they copy it or leave it be. There is, of course, a long term plan but it is not, in my view, world domination. More about Homeland Security. My US friends please take note.

This ‘leave the management to mange’ philosophy is in contrast to the West where ego or national pride seems to get in the way of rational considerations. I have lost count of the number of times I have seen great western business being acquired only for them to have their fundamentals changed – which is what made them great in the first place.

But back to the question is Hong Kong Chinese?

The answer is a Chinese one. Yes and No.

It clearly is Chinese ethnically, though Cantonese not Han. It is nationally too, but having spent so much time in both HK and mainland China, it is very different in almost every way. The language is different, the food is different, the history is different and given HK’s British traditions, its reference points are different.

But to me, the key difference is not how the Chinese see it but how the West does.

Western businesses, even big ones, will often have their China operations run out of HK, In many cases, they won’t have an on the ground operation in China. The justification is often it’s expensive, it’s complicated, it’s unnecessary. The first and second points are certainly true, at least in the short term, but the last one is absolutely wrong.

Chinese businesses will not take western businesses seriously unless they are on the ground permanently in mainland China. That is not to say they can’t have a major operation in HK. It just means they can’t run China from it. I spend much of my working life and most of my waking hours trying to pursuade business to move away from the old school ‘fly in – fly out’ philosophy of managing affairs from Hong Kong. Not only are the distances enormous from Hong Kong to Beijing and Shanghai (political and commercial hearts of mainland China) but the psychologies and thinking is too. Just as we would not expect Frankfurt to run Europe you can’t expect Hing Kong to be the right place from which to run the complexity and enormity which is China.