Why do we say that the UAE can never replace Hong Kong?
Dubai, the second largest emirate of the UAE, has plenty of similarities with Hong Kong. They both developed from the “small fishing villages”. And now they become world-famous trade, logistics, and financial centers. They are part of sovereign states. Hong Kong’s rise as a financial center in the Asia-Pacific region began in the late 1960s, and Dubai was subsequently called “Hong Kong in the Middle East”. With the development of free trade in recent years, both Hong Kong and the UAE have become free trade ports.
Dubai is constantly exploring new economic growth models based on its own resource status and getting rid of its dependence on a single oil economy. At present, only 2% of GDP in Dubai comes from oil and gas, and oil revenue accounts for less than 9% of the total revenue of the Dubai government. Now Dubai chooses to develop its real estate, finance, trade, and tourism as its economic mainstay, and take advantage of its geography to develop air transportation (Emirates Aviation). As an “air transit point”, it connects continents and creates the concept of “the bustling capital of the world”.
Dubai and Hong Kong have many similarities, which is why people often have a contrast on them. Especially at the end of 2019, the “riot” in Hongkong shocked its economy and made people worry about its financial status. Some views believe that the UAE will replace Hong Kong’s status as a “world port”, but why do we say this is impossible?
NO1. Hong Kong’s economic freedom ranks first in the world in 2019
Although we are accepting Hong Kong’s somehow “negatives news” every day since 2020, judging from objective data, we have to recognize Hong Kong’s advantages in the economic environment. In 2019, Hong Kong’s economic freedom ranks first in the world. What does it mean?
The Index of Economic Freedom includes four aspects: legal system, government scale, regulatory efficiency, and market opening. The four are further subdivided into seven items: labor freedom, property rights, judicial effectiveness, government expenditure, financial integrity, currency freedom, and trade freedom.
Hong Kong has ranked first in the global economic freedom index for 25 consecutive years. A good business environment is one of the important reasons for Hong Kong to become a financial center.
We all know that finance is a service industry. It is different from the physical business. The foundation of the service industry is “confidence” and “service foundation.” It takes a long time to prove and establish, rather than change overnight. Or established. This is the accumulation of Hong Kong since its return to development.
NO2. Connected to the mainland China market, the geographical advantage is obvious
Although Hong Kong is located at the southern border of China, it has the Western legal system. As we all know that China has huge purchasing power, this is a priority for foreign companies that flocking to enter the Chinese market. Many internationally renowned companies, such as Prada and Coach, have chosen to list in Hong Kong. For Chinese companies, listing in Hong Kong is more likely to attract foreign investors to raise funds. Therefore, Hong Kong plays an irreplaceable role as the “connecting bridge” between the world and mainland China.
NO3. Hong Kong’s financial services surplus ranks third in the world
The ranking of the world’s top five financial centers in 2019 is New York, London, Hong Kong, Singapore, and Shanghai. The index evaluates and ranks the world’s major financial centers in terms of the business environment, human resources, infrastructure, development level, and international reputation. Although Hong Kong was affected by the turmoil last year, its 178-year history of the insurance industry is recognized to the world. Hong Kong’s mature insurance system is a lot of insurance companies feel like to learn and follow. It has promoted the development of the financial services industry in Hongkong.
NO4. Under the guidance of the new law, Hong Kong will regain peace and continue to prosper
Why is this incident in Hong Kong attracting widespread international attention? Precisely because Hong Kong plays this important function and role. In the short term, there will be challenges in the political situation. But in the long run, Hong Kong’s status as an international financial center cannot be easily replaced. The Third Congress of the 13th National People’s Congress recently passed the Law of the People’s Republic of China on the Maintenance of National Security in the Hong Kong Special Administrative Region. China will maintain the peaceful and stable environment of Hong Kong under the principle of “one country, two systems”. Hong Kong is an inseparable part of China and an irreplaceable international trade center. With the continuous improvement of laws and regulations by the country, Hong Kong will return to the world.