Economy

Hong Kong 'directionless'

By Andrew Moody (China Daily)
Updated: 2010-06-28 09:22

Lau, who remains a member of the basic law committee of the National People's Congress Standing Committee and who is a visiting professor at Jinan University and Beijing Business Management College, believes Hong Kong is over-dependent on services, particularly its financial sector.

"Ninety-three per cent of the economy is in services, which makes it very unusual in terms of most economies. We are always compared with Singapore but it has 28 per cent of its GDP (gross domestic product) related to manufacturing," he said.

Lau said Hong Kong's financial sector, although currently weathering the economic crisis well, always remains vulnerable to external shocks.

"You can't put all your eggs in one basket, particularly if that basket is one you can't control," he said.

Lau is also concerned about the huge disparities in wealth emerging in Hong Kong, which he said creates a lot of "social resentment".

He rejects the Hong Kong government's notion that wealth from those who work in the SAR's booming financial sector "trickles down" through the economy.

"Perhaps it trickles down as far as Lan Kwai Fong (the Hong Kong's trendy bar area frequented by high rolling financial workers)," he said chuckling.

He said one of the problems of Hong Kong now was there were few well paid jobs outside financial services.

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"If you look in the recruitment section of the South China Morning Post or go on monster.com, 70 percent of the jobs available are in selling, often low grade commission-based jobs," he said.

He said it was bad news for Hong Kong's graduates who now had difficulty finding good, well-paid jobs.

"Graduates taking these jobs are not getting a good deal. That is why they are very frustrated," he said.

Lau insists Hong Kong is still almost guaranteed a wealthy future because of its proximity to booming China.

"The worst case scenario is it becomes like Vancouver, a nice place for wealthy people to live with a financial center strong in asset management," he said.

"This would be a missed opportunity because it could become a genuine world city, where companies have to have their international and regional headquarters and where east meets west," he said.