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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: Richard Tsang who wrote (2485)	10/26/1998 3:37:00 AM
From: Tom	Read Replies (1) \| Respond to of 2951

Richard, Very fine. Many thanks! I appreciate your affording us the time, and hope you had a successful trip.

To: Richard Tsang who wrote (2485)	10/26/1998 6:32:00 AM
From: Dayuhan	Respond to of 2951

Richard, Add my thanks for an impressive analysis of a complex situation. For my own part, I have to take issue with those who assume that Shanghai's growth has to be at Hong Kong's expense. I think this falls back on an assumption that since Hong Kong has long been the gateway to China, the opening of another gateway will diminish the importance of Hong Kong, which I do not think is necessarily true. It is fairly obvious that Hong Kong will not match the growth rates of Shanghai. The two are at radically different stages of development, and Shanghai simply has a lot more room for fast short-term growth. Hong Kong is in transition from an industrial to an information economy; Shanghai is just moving into an industrial economy. I don't think it's reasonable to compare them on the same scale. Along the same lines, I don't think the development of unions is necessarily a negative factor. Unions in HK (and the rest of Asia) have a long way to go before they reach the excess of their American and European counterparts. It's easy to forget the role that organized labor can play as an engine of consumption-led growth, breaking resources out of the hands of oligarchs who use them primarily for speculation and putting them in the hands of people who will spend on goods and services. I can think of few things as important for Asia's future as the continued emergence of both a middle class and a consuming working class - a very different animal from the workers who survive on sub-poverty wages in most of today's Asia. I've long thought that the property bubble, while it created huge amounts of paper wealth for a few HK residents, was a bad thing for the city. It forced labor costs up, drove retail prices to a point where HK was no longer worth shopping in, and in general created a huge disincentive to doing business in the city. I for one hope property values remain realistic, and do not succumb to another round of speculation-driven growth. Comments, anyone? Steve