The Limited Times

Now you can see non-English news...

【Competitiveness. 3. Is the loss of Hong Kong's status as the freest economy a good thing or a bad thing? |01 Weekly

2020-09-28T09:08:45.289Z


In fact, the indicators used in the index have not kept pace with the times. Deng Xiwei, a professor of economics at the School of Economics and Business Administration of the University of Hong Kong, pointed out that all indicators in the index are centered on the "Washington Consen


weekly

Written by: Chen Xunlin

2020-09-28 17:00

Last update date: 2020-09-28 17:00

In fact, the indicators used in the index have not kept pace with the times.

Deng Xiwei, an economics professor at the School of Economics and Business Administration of the University of Hong Kong, pointed out that all indicators in the index are built around the "Washington Consensus."

The "Washington Consensus" he refers to is a set of political and economic theories that came out in 1989, and is regarded by the outside world as the United States to promote neoliberalism (Neoliberalism) macroeconomic policies to Latin American and Eastern European countries in transition.

To put it simply, the "Washington Consensus" focuses on privatization, liberalization and macro-stability, and emphasizes free markets. Therefore, it promotes a series of policies such as weakening the government. The "Washington Consensus" has also become the policy of some organizations in the United States in the past 30 years. in accordance with.

To undertake the above:

【Competitiveness.

1) Neoliberalism is in crisis, don't be led by economic ranking

【Competitiveness.

2) Why is everyone convinced that there are questions about the research methods of the world economic rankings?

These right-wing economic traditions coincide with the "free economy" and "active non-intervention" advocated by Hong Kong.

Deng Xiwei explained that Hong Kong’s low tax rate has created a friendly environment for trade and foreign investment. In addition, Hong Kong has performed well in some traditional and publicly recognized indicators, such as the legal system and the protection of private property. "From these perspectives, Hong Kong is regarded as a very free economy.

As a small economy, Hong Kong pursues a "big market, small government" and has promoted a social policy of surplus welfare since the colonial period. Therefore, it is expected that Hong Kong ranks first in the index.

Economic development relies on different factors, such as education investment and human capital, to increase productivity. These factors will be affected by economic policies and systems. However, Deng Xiwei bluntly stated that whether it is the neoliberal economic policy program represented by the "Washington Consensus", It is also the economic development factor that ranking institutions value. "These are the legacy left over from the 1980s."

As a small economy, Hong Kong pursues a "big market, small government" and has promoted a social policy of surplus welfare since the colonial period. Therefore, it is expected that Hong Kong ranks first in the index.

(Profile picture)

The economy will go through different cycles and stages of development, such as shifting from heavy industry to light industry, and then to service industry, and whenever economic restructuring and social transformation, the economic policy or economic system of the economy should be very different. "This ranking The pressure and undesirable phenomena brought about is to make the public feel that the economy should follow the relevant indicators at any stage of development." He added that the index may be misleading, but it cannot be blamed on ranking institutions. After all, institutions did not ask the government to follow. The reality is that the pressure brought about by rankings can lead to improper resource allocation or policy orientation in certain economies.

Theoretically, if the economy is in the industrialization stage, if the economy is developed according to those indicators, the growth opportunities will be higher. Deng Xiwei cited as an example, low tariffs and low tax rates can promote trade, attract foreign investment, and at the same time promote competition and increase productivity. Therefore, indicators are not useless. It has certain reference value for economies that are still in the industrialization stage. However, when many economies have long been de-industrialized or manufacturing automation has become a general trend, leading to the emergence of surplus labor, opening up the market at this time may not necessarily be a good way to promote economic growth. On the contrary, it will aggravate the gap between the rich and the poor and the unemployment problem, leading to more social problems.

Free markets and competition can effectively allocate resources, while government intervention and trade market restrictions cause waste and hinder economic growth. Although the policy directions advocated by the "Washington Consensus" are not dogma, they are inevitably regarded as standards by many economies.

These conditions have also been fulfilled in Hong Kong society. The government has been advocating low tax rates and reducing intervention in the labor market under the guise of a "free economy." Many reforms to protect the people's livelihood, such as universal retirement protection and standard working hours, have been implemented indefinitely. Sitting big, the gap between the rich and the poor in Hong Kong has become increasingly serious. After the transfer of after-tax benefits, the Gini coefficient has reached 0.473.

Deng Xiwei said: "The direction of the system advocated by the "Washington Consensus" is correct-the government does not need too much intervention and reduces central decision-making... But when the economy rises from the basic development and the gap between the rich and the poor is getting worse, is it still a small government? You are completely based on the indicators in the 1980s, which cannot keep up with social changes."

The disparity between the rich and the poor in Hong Kong has become increasingly serious. After the transfer of after-tax benefits, the Gini coefficient has reached 0.473.

Many grass-roots snails live in sub-divided houses and the living environment is poor.

(Profile picture)

Standards are controlled by ideology

In fact, different think tanks come from different backgrounds, and their purposes, ideologies and even political parties are also completely different.

For example, the Heritage Foundation is one of the conservative think tanks in the United States. Its organizational philosophy is to promote free enterprise, limited government, individual freedom, traditional American values ​​and a strong national defense, and emphasize policy orientation and initiatives.

In addition to compiling the index, the Heritage Foundation also organizes discussion activities, publishes public policy research reports or papers on people's livelihood, economics, and foreign affairs. It has a leading position in the Republican Party, and many Republican political figures are from the Heritage Foundation.

The vision of the Heritage Foundation is to build an America that is free, full of opportunities, prosperous, and a flourishing civil society. It believes that retaining and updating the principles and ideas of the founding of the United States and keeping policies consistent with these principles is the most effective way to realize the vision. Will not easily change this image and principle.

For this reason, the concepts it advocates coincide with those of the Hong Kong government, which is why Hong Kong has been among the best for many years.

Although many think tanks provide different opinions and advocacy guidelines, they are all based on local interests, and the rankings are smoothly compiled according to their ideas, but this does not mean that they should be regarded as authority.

The 2001 Nobel Prize in Economics winner Joseph E. Stiglitz wrote "The End of Neo-liberalism?" after the 2008 financial tsunami, reminding that neoliberalism has always served some special interests Political dogma may be selectively used.

The "Washington Consensus" is not simply a traditional Western philosophy of free economics. It also starts from a commercial perspective.

Deng Xiwei pointed out that in the 1980s, many developing countries, including China and India, had not yet opened up free trade. The West’s promotion of the "Washington Consensus" was not only to find deficiencies, but also to seek benefits. For example, after reforms and opening up, developing countries will naturally There will be more business dealings with other countries.

Why does the ranking appear?

Deng Xiwei explained that rankings can influence politicians and even global governments, help the United States to spread the "Washington Consensus" to the world, and increase American soft power. The policies promoted by the "Washington Consensus" in the past, such as low tax rates and open trade, were mostly useful for promoting economic development. Help, but when society undergoes earth-shaking changes, can these factors play the same role?

After many years, social changes are already before our eyes. Many economies, including Hong Kong, have already opened their markets and are no longer dominated by industry. They have even gradually "de-industrialized." Such industrial indicators in the 1980s are no longer in keeping with the times, even The ideas behind the rankings can no longer be regarded as guidelines for promoting and guiding economic policies.

Whenever the ranking is revealed, the SAR Government will always issue a response, welcoming the foundation’s recognition of Hong Kong’s various capabilities.

The picture shows Financial Secretary Chen Maobo.

(Profile picture)

Whenever the rankings are revealed, the SAR government will always issue a response. For example, after the Heritage Foundation issued a report in March this year, the government spokesperson said that although he was disappointed by the ranking decline, he welcomes the foundation to recognize Hong Kong’s advantages and affirms that A dynamic, highly competitive and highly open global financial center.

In addition to blaming the anti-revision movement or affecting Hong Kong’s score in the investment environment, the government also emphasizes that the principle of free market has always been an important consideration for Hong Kong’s policymaking and the cornerstone of Hong Kong’s economy. "It will strive to maintain the inherent fine tradition of the rule of law and judicial independence. A simple tax system and low tax rate will improve the efficiency of the public sector and safeguard a free and open trade system."

As for Hong Kong’s rise to third place in WEF’s global competitiveness ranking, the government welcomes it, saying that the ranking has competitive advantages in areas such as economic stability, infrastructure, and information and communication technology applications. It will continue to serve as a "facilitator" and " "Promoters" give full play to the function of "government to government", explore more business opportunities for Hong Kong, strengthen investment in infrastructure and talents, and provide a favorable environment for the long-term economic development of Hong Kong.

The government obviously regards this as Hong Kong's traditional advantage and consolidates it.

"These rankings will relatively touch the confidence of decision makers, especially when the economy is not good, they will be particularly sensitive."

Deng Xiwei

Deng Xiwei reminded that the index starts from the perspective of investors, not from the perspective of the public, but in reality, investors will not blindly refer to rankings and choose investment locations. He analyzed: "Investors can evaluate different areas of Hong Kong by themselves. For example, business risks and environment, unless the ranking of the economy changes significantly, it will not affect investors’ perceptions in a short time.” The situation is like a university ranking. Students or professors will not suddenly change their views of the university due to the rise or fall of the ranking. , But as the group being scored, it is natural to mind the rankings, because this is the "score" that the public sees. "These rankings will relatively touch the confidence of decision makers, especially when the economy is not good, they will be particularly sensitive." Time has changed. For example, the Hong Kong government is still obsessed with rankings and is obsessed with economic advantages, but ignores some long-standing social problems. People's livelihood has not improved, and the rankings are just self-deception.

The above is excerpted from the 233th issue of "Hong Kong 01" Weekly (September 28, 2020), "Neoliberal Crisis Do Not Be Led by Economic Rankings".

If you want to read the full text, please

click here to

sample the weekly newsletter and browse more in-depth reports.

[Cover Story] Neoliberalism is in crisis, don’t be led by economic rankings

Can the problem of general education be solved by just reviewing textbooks?

Revelation from HSBC to Hong Kong

What is the concept of "no centerline in the Taiwan Strait" that PLA military aircraft frequently fly over?

Zhang Ailing’s 100th birthday is just in panic

Race fire spreads outside the city, Trump "creates panic" to win suburban votes

Hong Kong shows the failure of neoliberal ideals

Lenovo's new sports economy behind "Win the Championship" changes athlete values

Hong Kong Economic Competitiveness Ranking Hong Kong Competitiveness 01 Weekly Report In-depth Report

Source: hk1

All news articles on 2020-09-28

You may like

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.