HKUST Business School Magazine

Biz@HKUST Biz@HKUST 16 17 // Cover // Thought Leader Time for Action Now is the time for Hong Kong to capitalize on its unique position, says Nicholas KWAN who leads a team of researchers at the Hong Kong Trade Development Council in providing in-depth analysis and advice on the city’s economic and trade issues. Even though Hong Kong sits on China’s doorstep, it has weathered the US-China trade war well, given the additional impact of the COVID-19 pandemic and the social unrest in 2019-2020 on the economy. This does not mean that Hong Kong can rest on its laurels. Now is the time for the city to capitalize on its unique position and to find new opportunities to change, said Nicholas Kwan, Director of Research, at the Hong Kong Trade Development Council (HKTDC). “If you look back at history, Hong Kong has always been highly resilient,” Kwan says. “Our trade with the US and China declined during the last two years, and the numbers are down. But if you compare our trade performance with everyone else, especially competitors in Asia such as Singapore, Korea, and even Japan, we did well. We were one of the top three in terms of trade growth in the world last year.” Kwan says. A path of growth Despite such a glowing report card, Kwan emphasizes that Hong Kong has not been immune to the effects of the Sino- US trade war. The mounting tension has taken a toll. But the good news is that Hong Kong remains resilient, and is on a path of growth, thanks to the fact that it has diversified into new markets in recent years. “A large amount of the trade between the US and China moved through our ports, so of course we were affected. But we managed to offset that with other trade goods,” Kwan says. “We explored new markets, particularly in Southeast Asia and increasingly in other emerging markets like the Middle East and Africa. At one time we were active in Latin America, and even Eastern Europe,” Kwan adds. Moving forward, Kwan believes Hong Kong is more likely to be affected by domestic events in the short term. To prepare for the long term, the city needs to understand the changes that are happening globally. Moving to a multipolar world Kwan says that the global macro environment is unlike the “old days” when we lived in a peaceful unipolar world where everything followed a relatively predictable course, and everyone simply had to follow the predefined rules. That is no longer the case, he notes. “The world is no longer unipolar, it is multipolar,” he says. As the world becomes more diversified, what used to work in the past will no longer work in the present or the future. Especially in terms of trade and technology, everyone needs to adapt to a more multipolar culture. We will continue to see an increase in the formation of multilateral institutions, Kwan says. Kwan also adds that while some multilateral agreements are effective, others might be a little outdated and in need of modification. However, he believes that there will no longer be a single dominant system. American, European and Chinese systems will all play a part in the future. “I think different sides have to understand that there is no single system that is best for everybody,” Kwan says. Countries will have to work together, and the good thing is that all the major players have an interest in each other’s development. If the US and China continue with the trade war, it will hurt both sides, he notes. Hong Kong remains resilient, and is on a path of growth, thanks to the fact that it has diversified into new markets in recent years Nicholas Kwan Director of Research at the Hong Kong Trade Development Council