In A Tale of Two Cities, Charles Dickens famously said, “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair.”
I am quoting Dickens in full as these words aptly sum up the topsy-turvy world we now find ourselves in.
The world’s dominant superpower, the United States, is engaging in mortal combat on all fronts against China as its fixated “near-peer” challenger.
Provocative saber-rattling and “salami slicing” confrontations are quickening over Taiwan. Indiscriminate tariffs remain on affordable imports from China, sacrificing the interests of American consumers. A tightening stranglehold is maintained to deny access to high-end semiconductor chips despite collateral damage to American enterprises. China is demonized at every turn of American rhetoric, oblivious to the reality of 128 out of 190 nations worldwide having China as their largest trading partner.
Thanks to climate change, extreme weather conditions, including unprecedented heat waves, droughts, flash floods and wildfires, are ravaging Europe, Africa and Asia. Many of the world’s great rivers, including the Colorado, the Yangtze, and the Rhine, are running dry. Water scarcity is compounding food insecurity, fueling border disputes between nations and peoples. According to James Lovelock, Gaea — or Mother Nature — is exacting revenge against centuries of human ecological follies.
Compounding the ills is the ongoing war in Ukraine. Rallying European Union and NATO countries, the US is engaged in a prolonged proxy war of attrition against Russia, sacrificing Ukrainian blood and cities. Global collateral damage includes energy shortages, supply chain disruptions, and food and energy price hikes, resulting in runaway inflation. The United Kingdom, Germany and other European countries are bracing themselves for an unforgiving winter as gas supplies from Russia are dwindling. Newfound European unity is beginning to fray as people in different countries are unhappy with the pain.
In face of the highest skyrocketing inflation rates in 40 years, the US Federal Reserve has raised interest rates to their highest levels since 1994, threatening economic recessions and stock market doldrums worldwide.
Topping it all is the ongoing COVID-19 pandemic with fast-spreading omicron variants, pitching a more-relaxed “co-existent” approach in some Western countries against China’s “zero-COVID” strategy. Either way, economic growth rates across the globe, China included, have plummeted. Notwithstanding government relief, many jobs and businesses are lost, and people’s belts are tightening.
Yet, despite apocalyptic war, famine, death and pestilence, epochal game-changers are afoot, presenting unbound challenges as well as opportunities for China, including the Hong Kong Special Administrative Region. Blessed with a “one country, two systems” constitutional order, including an independent common law judiciary, Hong Kong has a pivotal role to play in the Guangdong-Hong Kong-Macau Greater Bay Area with a population of 86 million and an aggregate GDP equivalent to more than a tenth of China’s. It’s well-placed to be an international financial and arbitration hub for projects along the Belt and Road Initiative across the globe.
Blessed with a “one country, two systems” constitutional order, including an independent common law judiciary, Hong Kong has a pivotal role to play in the Guangdong-Hong Kong-Macau Greater Bay Area with a population of 86 million and an aggregate GDP equivalent to more than a tenth of China’s. It’s well-placed to be an international financial and arbitration hub for projects along the Belt and Road Initiative across the globe
The following silver linings are instructive.
First, China is a world leader in the “Fourth Industrial Revolution” of ubiquitous digital connectivity, the internet of things, artificial intelligence, big data, robotics, blockchain, 3D printing, driverless cars, drones, remote conferencing, etc. The revolution is set to stimulate a plethora of new economic activities and higher-skilled jobs while displacing some 800 million lower-skilled ones, or a third of the workforce in 42 countries, according to McKinsey.
Second, China is spearheading a “green revolution” spreading across the globe. It’s the world’s top electricity producer from renewable energy sources, double the similar output of the second-ranked US. It’s the world’s largest manufacturer of electric cars and is rapidly expanding fleets of electric public buses. It currently dominates global solar photovoltaic solar panel supply chains. Under the Paris Agreement on Climate Change, China’s goals of reaching carbon emissions peak by 2030 and carbon neutrality by 2060 are within reach. Apart from building a more-beautiful and sustainable China, an added driver for renewables is energy security, minimizing dependence on oil imports via transit “chokepoints” such as the Strait of Malacca controlled by America’s 7th Fleet, and the Strait of Hormuz in the Persian Gulf.
Third, under a 2035 Vision plan, China will nearly double its state-of-the-art 36,000-kilometer high-speed rail network, accounting for two-thirds of the global total, to 70,000 km over the next 15 years. This is designed to link up all cities over half a million people, while an additional 200,000 km of modern railway will connect all towns of 200,000 people and above, however remote. As a result, China’s urbanization rate is expected to increase from 60.6 percent in 2019 to 65 percent, doubling China’s consumer middle class to 800 million by 2035.
Fourth, contrary to some misguided thinking in Western quarters, notwithstanding much lower GDP growth rates in recent years especially in the wake of the pandemic, China has by no means reached the “peak” of its trajectory, as cautioned in their piece of Aug 22 in Foreign Affairs by Oriana Skylar Mastro and Derek Scissors, both senior scholars of the Washington, DC-based American Enterprise Institute. Thanks to the abundance of university graduates in science, technology, engineering, and mathematics (STEM), strength in robotics and digital automation, and domestic and global connectivity including a digital Silk Road, China is well-placed to overcome graying demographics to realize sufficient productivity gains to become the world’s largest economy by 2030 or thereabouts. With a population four times the US’, China only needs per capita productivity more than a quarter of America’s to overtake the US economy.
Fifth, the epoch of Western global hegemony is coming to an end. According to the Organization for Economic Cooperation and Development, the developing world is set to account for nearly 60 percent of world GDP by 2030. Some of the most dynamic developing nations are located in the newly established Regional Comprehensive Economic Partnership, which consists of member nations of the Association of Southeast Asian Nations (ASEAN) and their regional trading partners, representing a third of the world’s GDP and a third of the world’s population. As the world’s largest trader and manufacturer, China is at the core of this largest trading bloc of the globe.
Sixth, some promising pointers beckon but many more could be spotted if one cares to look around —
(a) A fierce global competition for talent is in the air. Hong Kong Chief Executive John Lee Ka-chiu has let drop a “scramble” for top talent. Similarly, Singapore has recently announced flexible long-term work visas to attract more talent. As the world re-emerges from the current rough patch, talents that fit the Fourth Industrial Revolution or the green revolution, for example, are set to be much sought-after.
(b) According to a United Nations report, “World Population Prospects 2022”, the global population could grow more slowly from 8 billion in 2022 to 8.5 billion in 2030, 9.7 billion in 2050, and 10.4 billion in 2100. Countries of sub-Saharan Africa are expected to contribute more than half of the global population increase through 2050. By 2050, a quarter of the world’s people will be African. Coupled with economic growth, the developing world is poised for a dramatic rise in various middle-class strata, resulting in a huge demand for a whole range of food, beverages, apparel, consumer electronics, healthcare, and lifestyle products and services.
(c) As part of the Fourth Industrial Revolution, online e-commerce through livestream-broadcasting has registered great success in helping to lift millions of poor Chinese peasants in the most remote localities out of poverty. This business model should have tremendous potential in the developing world. The holy grail could well be found in Southeast Asia and sub-Saharan Africa, the world’s remaining food basket.
In short, given imagination and determined initiatives, China, including the Hong Kong Special Administrative Region, is well-placed to turn a winter of despair in an upside-down world into a spring of hope and fulfillment in a new era.
The author is an international and independent China strategist; he was previously the director-general of social welfare and Hong Kong’s official chief representative for the United Kingdom, Eastern Europe, Russia, Norway, and Switzerland.
The views do not necessarily reflect those of China Daily.
HONG KONG NEWS