How Pollution May Ruin Hong Kong

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by Paolo von Schirach

January 18, 2007

WASHINGTON – It was reported last December in Hong Kong that members of the British, Canadian, Australian and Japanese chambers of commerce met political leader Donald Tsang to discuss pollution.  Their call follows a warning from the American Chamber of Commerce that fresh investment was being deterred by the thick smog that regularly clouds Hong Kong. “There is widespread concern that the deteriorating environment is adversely affecting the health of our community, our citizens, our children, our businesses and our enviable international status in an increasingly competitive global landscape,” the chambers said in a joint statement.

Pollution has become a hot political issue in Hong Kong as smog levels have risen to often dangerous levels. According to some measurements, poor air quality reduced visibility to less than one kilometer (about half a mile) on more than 50 days last year.

The government says the problem is mostly due to the industrialisation of southern China’s neighbouring Pearl River Delta region, while green groups also blame local coal-burning power stations and diesel-powered buses. AmCham chairman Steve Marcopoto has urged both the local and the neighbouring Guangdong provincial governments to step up efforts to combat the problem. Nearly 80 percent of the 140 top executives polled in a survey felt Hong Kong’s allure was falling, with four out of five knowing professionals who had considered leaving or have already left due to the air quality.

Karl Marx would probably have used the current Hong Kong predicament as an illustration of the ‘contradictions of capitalism’. The economic system that wanted to expand wealth, in the end becomes responsible for increased misery; thus causing its own demise. Marx focused on the inability to spread the riches deriving from the industrial processes introduced in large scale by the capitalists. I am talking about the different but real problem of increased air pollution in Hong Kong (indirectly at least generated by the Hong Kong capitalists) and the possible consequence of eventually shutting down this powerful center of economic prowess.

Several years ago, Great Britain was adamant in its negotiations with Beijing to bring about a post colonial future for Hong Kong that would preserve its special capitalistic status, even after reverting sovereignty back to the then rather communist mainland. During the negotiations, and for some time after Hong Kong had been handed over to the PRC in 1997, the concern was that communist China might have wanted to destroy this western style enclave for ideological reasons; or that it may feel ‘forced’ to do so  in order to avoid any possible capitalist contagion with the rest of China.

But the worst fears political proved to be exaggerated. Hong Kong is not totally free; but its capitalistic economy and special status has been preserved by its new communist masters.

However it would appear that should the demise of this vibrant center of enterprise come about after all, this inglorious outcome will be brought about at the hands of the capitalist leaders of the former British colony, rather than communist machinations.

It appears that the quality of life in Hong Kong is getting progressively worse because of the polluted air that blows into Hong Kong from the Pearl River delta region. Now, this is the region where a large number of manufacturing enterprises were established with Hong Kong capital in order to take advantage of low labor and other costs in mainland China. The Hong Kong capitalists created these industrial plants and own many of them. Focusing on the highest returns, they did not care to spend more money in order to make these productive facilities environmentally friendly, at a time in which the environment did not appear to be a pressing concern, (certainly not in modern Hong Kong).

As a result of this recklessness, we have now an environmental disaster in the region with the unforeseen additional negative consequence of the foul air produced in Guandong getting to Hong Kong, depending on the prevailing winds. Apparently, this air pollution problem, unchecked for many years, has grown progressively. Today, it represents probably the single most significant threat to the continued viability of this city as the unquestioned economic and financial capital of Asia. With all its stellar top competitiveness rankings and applauded economic freedoms, Hong Kong cannot avoid the pollution blowing from a vast industrial region that it created in order to preserve the price competitiveness that it could not possibly maintain because of higher labor costs in the territories.

To make matter worse, The Economist reported recently that food stuff imported into Hong Kong from the mainland appears to have unhealthy concentrations of pollutants and various toxic substances reputed to be carcinogens. So, Hong Kong’s proximity to a high concentration of pollution seems to cause damage at several levels.

Right now it appears that Hong Kong desperately needs the full cooperation of mainland authorities so that, jointly, (probably with massive capital infusions coming from Hong Kong itself) they can drastically reduce the growing deterioration of the environment in the whole region and thus the very ability to live a more normal life in the former colony. We do not hear much about the quality of life for the tens of thousands of workers who toil in the very factories whence the pollution originates. But they can hardly be better than in Hong Kong itself.

The seriousness of the problem for Hong Kong is illustrated by the fact that many international companies are relocating or at least are beginning to consider relocation in more salubrious locales. Many expatriate executives have already moved elsewhere their children, more vulnerable to respiratory afflictions. Should things get worse and should Hong Kong begin to lose at least some of the leading international companies that have made it their Asia headquarters, this may start a general exodus, as the attractiveness of the city rests in large part on the unusual concentration of economic power and talent.

So, unless drastic action is undertaken immediately to reverse the environmental deterioration, it would appear that the Hong Kong capitalists, after all, have been more shortsighted than the Beijing communist leadership.

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