|
Hong
Kong – The Rise and the Decline of a Great City
 That
the world’s economic geography changes from time
to time is nothing new and has been a common feature of
human progress and development throughout the ages. Herodotus
already observed in the 5th century BC that, “the
cities that were formerly great, have most of them become
insignificant; and such as are at present powerful, were
weak in olden times”. In fact, it is remarkable how
uneven economic development has been since ancient times
with a great number of cities, countries and civilizations
having flourished and decayed – but at different
times and in different regions of the world.
In early history the major clusters of wealth such as Thebes, Babylon, Persepolis
Nineveh, Bactria, and Samarkand were mostly located around the Nile,
Euphrates and Tigris rivers and along the Silk Road. However, with
the rise of the seafaring Phoenician trading empire a shift in the
centers of prosperity and power toward the Mediterranean Sea took place,
which led at different times to the rise of cities like Athens, Tyre,
Carthage, Alexandria, Rome, and Constantinople, and finally culminated
in the 15th century with the first centers of capitalism – the
Italian trading cities of Venice, Florence, Pisa and Genoa. But, when
the Portuguese Vasco de Gama discovered in 1498 a new trading route
to Asia around the Cape of Good Hope and with the Spanish conquest
of the Americas, trading routes shifted away from the Silk Road and
the Mediterranean Sea, and threw Venice, as Montesquieu observed, into
a corner of the world where it has remained. With the rise of the Portuguese
and Spanish Empires and later with the Dutch trading hegemony the clusters
of wealth shifted to cities like Lisbon, Cadiz, Antwerp and Amsterdam
in Europe, to Goa, Malacca, Macao and Batavia in the East, and to Mexico
City, Potosi, Lima, Bahia and Havana in the Americas.
The
Industrial Revolution and the rise of the British Empire in the
late 18th and early 19th century brought once again huge changes
in the world’s economic geography as cities such as London,
Manchester, Birmingham, Lancaster and Liverpool in England, and
Calcutta in the East displaced the old centers of commerce, which
had flourished under either Spanish, Portuguese or Dutch rule.
Then, in the late 19th century and especially in the 20th century,
the rise of industrial and commercial centers in the US - first
all located along the east coast but then shifting to the Great
Lakes region and the west coast displaced the early English manufacturing
centers.
Clearly, throughout the ages, economic growth and development has been extremely
uneven whereby major changes in the world’s economic geography were driven
by new inventions, discoveries and social events. New inventions such as the
compass, shifted trading routes from land to sea and led in the 15th century
to the discovery voyages, which enlarged the world’s economic sphere
several-fold and relegated the until then rich Mediterranean cities into a
backwater. The construction of canals and the invention of the steam engine,
steel, railroads, tractors, cars and electricity permitted the opening of landlocked
territories for agriculture and industries, which led to the rapid rise of
many totally new manufacturing and commercial centers, which were landlocked,
in the 20th century. New industries frequently also increased the demand for
commodities, which brought prosperity to cities near large resource deposits
such as Manaus for rubber, and to Houston and Dallas for oil.
But throughout history cities did not only become rich because of a favorable
location, which was conducive to trade, the proximity to skilled labor and
abundant resources, which facilitated industrialization and the exploitation
of natural resource, and in the case of Rome through sheer military power.
What were also required were a skilled administration, a well-established legal
and commercial infrastructure, low taxes, and most of all religious tolerance
and freedom, which attracted dynamic minority groups, and scientists, artists,
teachers, philosopher and inventors. Conversely cities decayed because of internal
and social strive, costly military campaigns in order to maintain their trading
empires or other commercial interests, protectionism, their inability to adapt
to changing economic conditions, and intolerance towards minority groups, which
led merchant families or religious minorities to leave.
Competition from the opening of new territories or from new industries as well
as infectious diseases was also frequently an important factor. The Black Death
caused by the Pasteurella pestis, which made its first appearance in Europe
at the port city of Kaffa in 1346 when it was besieged by the Mongol leader
Kipchak Khan Janibeg who catapulted dead bodies into the city (the first recorded
case of biological warfare) quickly spread to all the port cities of the Mediterranean
and European trading centers and reduced in the second half of the 14th century
the European population by close to 40%. The death toll from the plague was
naturally far higher in densely populated trading ports and accelerated their
economic decline. In fact it was only in 1550, more than 200 years after the
outbreak of the pest at Kaffa, that Europe’s population again reached
pre-plague figures, whereby renewed plague epidemics ravaged Venice also in
1575 and 1630. Or consider the economic and social impact of the infectious
diseases, such smallpox and influenza, which were brought along to the Americas
by the conquistadors. Prior to the conquest by Cortez the Mexican civilization
numbered over 20 million, but the Aztecs lacking any acquired immunities to
the new infectious organisms were decimated within 50 years to just 3 million!
We can therefore, see that Hong Kong suffers at present from both a structural
shift in the world’s economic geography and a plague, about whose virulence
and duration little is known. Following the breakdown of the socialist and
communist ideology in China and the Soviet Union, and the end policies of self-reliance
and isolation on the Indian subcontinent the world’s economic sphere
was enlarged by as much as at the time of the discovery voyages, since more
than 3 billion people joined the global market economy and capitalistic system.
This means new competitors for more recent centers of prosperity, such as Hong
Kong, Taiwan, South Korea and Japan, which benefited for as long as China was
a closed society under socialist policies. The same way manufacturing shifted
in the US from the East Coast to the Great Lakes following the construction
of canals and railroads in the 19th century, the opening of China will lead
to a massive relocation of production, commerce and financial markets to the
mainland with Shanghai likely to regain the pivotal position it enjoyed before
the communist takeover, and other provinces undermining the manufacturing sector
of the Taiwanese, South Korean, Japanese and Hong Kong economy.
In addition to this ongoing major change in the world’s economic geography,
which is also taking place in Europe as a result of the breakdown of the Soviet
Union, Hong Kong is now increasingly vulnerable to infectious diseases whose
most fertile breeding ground is located in Southern China where humans mingle
densely with wild and domestic birds, and livestock. Fortunate in the case
of the 1997 bird flu, which could not jump from human to human, and was, therefore,
contained by killing a million chicken, Hong Kong is now faced with its most
serious crisis since the 1967 riots due to the SARS causing virus, which most
likely jumped from pigs to humans but can now also be transmitted among humans.
Surely, Hong Kong will survive both the increased competition from a large
number of new commercial centers in China and the SARS pandemic. But, these
two major outside shocks, which in the case of the increased competition from
China will not go away, and in the case of infectious diseases may recur from
time to time will likely reinforce the relative decline of Hong Kong’ economic
and financial power compared to other cities in Asia and in particular in China.
|
