Hong Kong’s Belt and Road Bid: A Risky Gamble in an Uncertain World?

Hong Kong’s recent announcement to send its largest delegation yet to Kazakhstan and Uzbekistan has sparked interest among observers of the city’s economic fortunes. At first glance, this move appears to be a clever attempt by Hong Kong to strengthen its position as a professional services hub for Belt and Road countries. However, scratch beneath the surface and it reveals a more complex picture – one that highlights both the opportunities and risks inherent in this regional pivot.

A Desperate Search for Growth

Hong Kong’s economy has been struggling for years, with growth rates stagnating and its status as a major financial center under threat from rising competition. The city’s leaders have long touted the Belt and Road Initiative (BRI) as a solution to these problems, promising to unlock new markets and trade opportunities for Hong Kong businesses. However, so far, the economic dividends have been meager at best.

Kazakhstan and Uzbekistan, the two countries on the receiving end of Lee’s delegation, are indeed strategic partners in the BRI. They offer a gateway to Central Asia, a region rich in natural resources and with significant economic potential. But this pivot also raises questions about Hong Kong’s readiness for the challenges ahead.

A Bridge Too Far?

Lau Siu-kai, a consultant at Beijing’s semi-official think tank, the Chinese Association of Hong Kong and Macau Studies, has praised Lee’s decision. According to him, the choice of destinations reflects Hong Kong’s priority of aligning with national strategy – serving as a bridge between the mainland and Central Asia, and positioning itself as a leading provider of professional services for BRI countries.

However, the economic reality on the ground suggests otherwise. Kazakhstan and Uzbekistan are notoriously difficult business environments to navigate, plagued by corruption, bureaucratic red tape, and a lack of transparency. These challenges make it hard for even well-equipped businesses to succeed in these markets.

A Risky Gamble

Hong Kong’s decision to enter this market raises more questions than answers. Is the city prepared to take on the risks associated with operating in this region? Can it really provide the level of professional services required by BRI countries, or is this just a case of wishful thinking?

Moreover, what does this pivot say about Hong Kong’s relationship with mainland China? The city has long been seen as a platform for Chinese businesses to go global, but is this role being leveraged to the advantage of all parties involved? Or are we seeing another example of Beijing’s tendency to use its smaller cities as proxies in its broader economic and strategic ambitions?

What Next for Hong Kong?

As Lee’s delegation prepares to depart for Central Asia, it remains to be seen whether this pivot will yield any meaningful results. The city’s leaders would do well to remember that the BRI is not a panacea for all their economic woes. Rather, it is a complex web of relationships and dependencies that requires careful navigation.

Hong Kong’s future success will depend on its ability to adapt to changing circumstances and seize new opportunities as they arise. In this uncertain world, one thing is clear: there are no easy answers, only hard choices and tougher realities to confront.